Property prices in the UK are unsustainable. Average #houseprices in the UK are now over £300,000 and £730,000 in London. The #costofliving in the UK is making it very difficult for many to manage. Very high rent or mortgage payments mean that there is very little money available for other spending in order to help the #economy Moreover many young people know that they will never be able to afford to buy a house.
Since the seventies house prices in London have increased by as much as 1000 times. This is because #london has become the location of choice of very wealthy people from all over the world to buy properties for investment rather than as accommodation.
The UK has always been seen as a stable well-governed country where the rule of law prevails. However, the whole world has seen the incompetence or the government recently and the chaos that #brexit has caused and wealthy investors may well decide to move their money elsewhere.
Therefore, the combination of the cost of living crisis meaning that many people wil be unable to afford their mortgages or rent resulting in repossessions together with a loss of confidence in the UK as a safe haven for wealthy investors is likely to lead to a property crash
21 Comments
Michael, I was born in London and my parents bought their council house in Chigwell, Essex in 1963 for £12,000 and today it was recently sold for £360,000. Yes, London is in a huge property bubble and this will surely crash as you suggest, but houses in the rest of the country are only inflated by say 30% or so. There will be a general price correction but when all fiat currencies collapse as they surely will due to unsustainable Government debt mountains across the Western world, the only sure asset anyone has is their house….
I feel the only way houses prices will collapse is if a) the banks suddenly withdraw access to credit as per 2008 credit crunch (no signs that this will happen), or b) the balance of supply/demand is disrupted, eg, many more homes are built in a short space of time (not gonna happen either)
They haven't built enough homes. House price will never go down. simple as that
Its because of money printing the first plase money go's when it's printed in this country is property THE MONEY IS NO GOOD
Not every one who buys a house is an ordinary person ….the rich have more cash than ever and will always buy assets as they can’t spend all the money they have. One of those assets is housing which is why the cost of housing may not go down….as witnessed by the rise in high end London housing this year.
Property prices won't fall with net immigration running at 750,000. People will cut back on everything else but still pay whatever it takes to have a house over their head. I know people now taking out 40 year mortgages. They are effectively renting from the bank rather than owning. It's crazy but house prices can't go down with this level of demand unless interest rates hit levels that just make payments impossible. There is still enough discretionary income for people to cut into.
Renter myself, would love to see a crash but don't believe it will happen. Next 10 years we will see another 5 -10 million people in the UK at current immigration levels. Are we really going see 2-3 million houses built?
UK – yes.
London – never.
Blame this on the Tories when they removed the Mortgage multiples. Remember when the mortgage loans were strict at 3 x main income plus 1 x partners income ? This restricted people for borrowing way over their heads and still have a life in your new home. Tories came along and scrapped this, 4 x joint income came in, the lenders rubbed their hands along with the house builders and property estate agents. Council houses were sold to the sitting tenants at a vast discount paid for by the U.K. taxpayer, councils were not allowed to rebuild to cover the house that was given away under the right to buy.
House builders are struggling to assemble 150000 new homes every year. There is not enough skilled labour nor materials to build the crazy amount the Labour party is promising in their election statement let alone the land to build on. Nobody wants new estates of densely built cheap houses built all around their borough. The amount of new homes are just keeping pace with immigration. All the time our governments let in more and more people from overseas house prices will remain high due to demand.
Thanks, Michael, for sharing your very interesting personal story. I was really happy to hear you mention about offshore trusts as I believe this is one of the biggest problems as they own most of the best properties in London and don't contribute any tax to the UK economy. It might surprise you to know that between £10 and £100 trillion is held by the mega rich in offshore trusts and London and New York through clever lawyers and accountants are the biggest facilitator of these offshore trusts. My solution would be to have a 1% capital tax on all wealthy individuals (including offshore trusts) that own net assets above £5 million. This would sort out the wealth inequality problem in this country.
I wanted to listen but got halfway, too much waffle, er er er but but but! Godsake! Boring!
18 year property cycle. Like clockwork. Read Fred Harrison on it.
" Tough time because of Brexit " Yawn
Moving home with Charlie’s dad
The only way house prices will drop is if a huge amount of our population decides to leave devils island.
This is too simplistic.
House prices defy gravity and even more so with the combination of low finance costs and recent times cash savings from covid times. Fuelled and funded by above average salary inflation thanks to the demand coming out of covid.
Yes home ownership is expensive, but that is why it is going be reserved for the upper middle classes going forward. Those who can’t afford to buy simply won’t, and thanks to government policy they will end up living in a property owned by some institutional investor.
As soon as the interest rates drop, asset prices with fly. Lots of wealthy people sat on cash getting a nice return, but they will poor into assets when the rates drop.
I’m in a suburban area in the midlands, still properties with multiple buyers round here.
3 bed terrace is 350-400k
4 bed is 400-535k
5 bed 600k plus
Not everyone will own property going forward..but no way house prices will drop thanks to those buying assets, demand due to lack of housing, houses vs population
What BS. High house prices in the UK have F all to do with brexit. Money printing during the lockdowns is what you should be citing.
Makes sense. I was in a highly paid job late 70s. But if I bought a flat, didn’t move in, and sold it a year later, I’d get more money than a year’s salary. (Pity I wasn’t savvy enough at the time.
When you have got Chinese and Africans with a ton of money and the supply is low and the demand very high theres not a chance in the next 20 years that house prices will fall and thats without factoring the numbers of unmentionals that are flooding in faster than British people can breed.
The Office of national Statistics have just stopped producing the House Price Index and passed it to the Land Registry. Why… Because it has been a con for the following reasons:
1. They were only including 15% of UK sales some months and leaving the other 85% that they did not like off the Register for ever.
2. They had the 85% of sales but because they were to much of a drop left them out. Do not say the sales were not in it is a lie.
3. They called a year from July 2022 to July 2023 stating it was a well known statistical tactic to compare one month to another. You can do that but if you compare all sales from July 2022 (or the 15%ish they used in that month) to all the sales in July 2023 (or the 15% they included for that month) and call it a year that is false reporting of house rises. I is 13 calendar months of sales and fraud if any company did it. In statistics a year is 12 but they call a year 13. Fraud if a company did it to overstate their turnover by over a trillion pounds.
4. This led to over-report of the average UK house price by over a trillion since 2008.
5 absolute proof 2023 when they reported 15.5% rise when the true rise was 10.4%. 5.1.% out or 0.4 trillion in a 8.7 Trillian market. That is in one month.
Do not trust my figures do it your self and find the truth.
This is the biggest government cover up in history and no-one cares. I call it the Ponzi scheme.
Stupidly implemented Brexit, privatised industries and services, deregulation of rent controls, immigration also used to keep wages low, RTB, lack of affordable housebuilding, undermining unions so wages don't match inflation, QE benefitting the rich and inflating asset prices as they "invest", Banks putting 85% of QE into mortgages, unfair taxation of wages over CGC corporate tax etc. rich foreigners putting their ill gotten gains in the London property market pushing up prices elsewhere, Tax havens etc etc Mostly Tory policies ever since Thatcher deliberately designed to exacerbate inequality in the interests of the wealthy elite who own the politicians and the press. We need a new kind of politics where voting actually makes a difference to how the economy is organised in favour of ALL the people. Naive? Quite possibly. But don't give up.