There used to be a housing ladder which enabled people from all social classes to buy a house and share in the “British Dream” but at the moment, many find themselves on the wrong side of a broken market. Why it happened, and the implications for society.
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Sources:
https://www.economist.com/britain/2024/01/11/the-housing-ladder-1950-2005
https://www.ft.com/content/985a608e-17a3-42ff-abb1-d78a10627a12
https://www.Yougov.co.uk/economy/articles/42453-how-many-people-parents-help-first-home-deposit
https://www.bbc.co.uk/news/business-45084530
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40 Comments
In this video, I looked at impact of immigration on housing. https://www.youtube.com/watch?v=Hy2smgYvnco (one omission from this video)
It’s wrong to examine elements of economic system separately from the whole evolution of capitalism society. It’s evident when you look at the corner stone of capitalism- profit. Anything around us should become an asset and then to end up in rich people pockets. It is called redistribution of wealth and private property until you owe nothing in this world so you become slave again.
No one going to say it? We need 4.3 million council houses to be built… but we let in 700k illegals a year. How long did it take to get to 4.3 million extra immigration and who is always first on the list for a council house. It's not the homeless that's for sure. But hey, can't say that these days as it is considered hate speech… country has gone crazy.
There are massive areas of the UK covered in bungalows and 2-story detached and semi-detached houses. If the planning system simply allowed the free market to work, making it feasible to redevelop these areas into 4 or 5-story Georgian-style terraces, the "housing shortage" would soon be solved and property prices would fall back to sane levels.
A deficit of 4.3m houses. That goes to show how utterly insane our open borders policy is. 4.3m houses equates to concreting over approximately 1250 square miles of countryside – 850sq miles for the houses themselves, 400 for the infrastructure, roads, amenities, etc. That's an area greater than the entire Lake District National Park. Just one reason why this country is now beyond salvage.
We tried to help young people but they wanted wokeness. I`ll sit in my paid off house saying "I told you so.".
The irony of new build developers cutting corners every chance they get blaming their unacceptable rush jobs on “lack of skilled labour” is the biggest crock I’ve seen this decade
There's also a council policy of caring for the elderly in their own homes as this apparently is inexplicably cheaper than operating a care home or small apartments with care on call. This is keeping a lot houses off the market.
Shortage of skilled labour for house building? Who wants to become a tradesman when they will be expected to do their physical job well into their 70s before they can retire?
Wealth inequality is increasing in the UK. The people and companies that own houses will buy more houses. Building more houses is not a solution without careful restrictive policy as most will just be bought by people with most wealth, especially as the population will continue to increase through immigration and historic pension policy. Immigration into the northern hemisphere is forecast to increase massively over the coming decades as climate change has more and more impact. The UK is short of space if we want functioning ecology, food, energy and water security. Compare our population density to other countries. WWII was a good leveler of wealth inequality, but it is not a nice thing to consider. Dignitas and being able to plan one's own death when mental faculty has gone are far more civilised partial solutions and yet UK society still fails to allow it or even talk seriously about it.
Excuses for bad spending habits and no financial planning.
Fractional Reserve Banking, fact or fiction?
Rather than increasing supply (of houses) why not reduce demand by reducing mass immigration that the UK has had over the past 30 years.
Stop importing workers that undercut UK workers so that UK wages will grow. That's exactly why the Tories want immigration ie to keep wages/salaries low.
Punish mental for Brexit. And the washing away white Family units.
I don't get how prices are so high. I live in an affluent area, but the prices are ridiculous. £400,000 for a small ordinary 2 bed, or £500,000 for a small ordinary 3 bed. Who is happy to pay these prices – they are getting ripped off. I don't understand how people on lower wages are paying ridiculous rents. I only managed to get on the housing ladder because I invested into risky assets, if I didn't – I don't know where I'd be right now, probably be paying 80% of my monthly wage on rent to pay someone else's mortgage and stuck in that never ending cycle until I am 71.
Unbridled immigration and the resulting increase in demand is nothing to do with it then?
I'm 49 and earn about £2M annually and save about 30% in HYSA's. I've been reading a lot of articles mentioning how worthless 'cash savings' are in this current unstable economy. Do you suggest I invest in real estate, stocks or Gold?
This country is an embarrassment
I am a youngen and just bought my first home and although I agree the housing prices are insane, to save a deposit isnt as hard as people make it out to be. If you have children before you own a house however then you basically are going to be in rented until someone gives you money or you get a higher paid job so I do sympathise with those in that situation but if you have nothing going on then you should not be in debt firstly, you should be paying board which shouldn't be insane and if you earn lets say 1.5K a month even, you should be able to save a good chunk of money every month, making it possible to save 10k quite reasonable in 1 year, with two people involved thats 20K and a decent deposit. Me and my partner ended up saving a lot more then we needed and in tern invested the rest into the house when we bought it. We are both in our twenties.
It's not impossible to buy but I think a key is that a couple needs to pool their resources. Buying on your own is much harder, as it always was
Supply and demand. 750,000 people chose to come and live here last year and they all need houses
It's not an impossible goal, I was just looking at a nice 2 bed freehold property in a nice area for the low price of £125k.
The only problem is, it's 100 miles from where I live and where I live houses like that would be over £200k and I simply can't stretch that far.
Home ownership is still an achievable dream, but owning a home where you grew up and have roots is another matter.
Nobody can afford a house nowadays. So what has enabled prices to rises so much?
obvious – UK let all foreigner come into the country, including the rich and house prices incresed much more that the income
Your take on the market seems fair and accurate. I personally like Gary Stevenson’s take on the super wealthy partaking in a wealth grab since covid, compounding things further. With this understanding I believe house prices and assets in general may see a sharp rise in the next two to three years. Asset classes being the preserve of the super rich, creating even more wealth inequality.
You can't have net immigration of over 500,000 per year and not have unaffordable house prices. It's simple supply and demand.
I am puzzled, if house prices are at record highs surely it is extremely attractive to build new homes? Why would construction firms not be building homes by the thousands or hundreds of thousands? Are building costs so high that they cannot make money from building homes even at these prices? It just seems really odd as it seems there is a pot of gold waiting for home builders? What am I missing? Are there no entrepreneurs in the UK ready to make money? I am genuinely puzzled at the situation.
Back in the day, when I purchased my first home to live-in; that was in the early 1990s, first mortgages with rates of 10% to 14% and 5% to 6% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.
As a bricklayer in London in 1975, I realised I would never be able to afford get onto the housing ladder, so emigrated the next year. Best move I ever made
Rich people are buying properties renting them out at a mammoth amount. Hence the rich have bought all our assets as gbe government has allowed them to saturate tbe market.
Problem is people in govt have NO IDEA, all these non green belt sites are far more costly to build on because of small numbers, access issues etc and that's before even thinking about the issues with Brownfield developments. Even INCOMPETENT councils require additional car parks to be constructed inside major residential centres as evidently nimby car parking issues are more important that homelessness AND the fact they say net zero is a goal. Britain is a calamity in planning and coupled with virtually unrestrained immigration its going to get a lot worse.
The clue to the problem is on the second word of the phrase "housing market".
It's not meant to be a "market" ffs.
If you have no choice but to live on land which you do not own and on terms dictated by a landlord, you are a Serf. The definition of Serfdom is crystal clear, the only thing missing in the UK context is a requirement by tenants to sow crops, money is paid instead, and in the private rented sector on tenancy terms written to favor the landlord. Short-hold tenancies allow landlords to snap their fingers and require to court to move a tenant out at relatively short notice (the clue is in the name, Short-hold), by force if necessary. Great for the landlord but not exactly an arrangement which a tenant can build a life upon is it. Never mind, the tenant could always just buy a home themselves…….Oh wait, that's out of reasonable reach..
Should the nation need defending again in the future, home owners will be the ones fighting on the battlefields to defend it, since they are the ones with something to defend. I suspect risking your life to defend other people's ability to enjoy something which is denied to you, would be a rather unappealing prospect for the majority.
I’ve just watched a few of your videos and I must say that these video essays are brilliant. Very well researched and put together!
It is not housing anymore, it is an finincal asset.
The reason retirement age is increasing is not because we live longer but because people are longer in debt.
So according to these comments immigration is an issue but not multilandlords who own anywhere between 30-500 properties? The company I used to work for had a client in the SE who had in his possession just under a thousand properties, all rentals.
Your analysis in this and others that you have posted is excellent.. thank you . We need to resolve the in balance we have .. owning a house should not be a goal … , enabling people to raise a family in a secure home rented in the private sector or preferably in the public sector should be an aim and then at if they to chose to buy a house by saving .. that is a life choice as it was before Thatcher … read that comment as you wish .. selling housing … but not building new ones with the receipts … that is the start of our current problem. We have a society which is based on wealth due to the housing market values .. it cannot be right that Doctors cannot have the choice between renting a house and house buying that we had in the 80’s .. Our society has a real problem based on respective wealth due to house inflation .. ( have I done well ..NO all you have done is benefitted by house inflation relative to income ) . I rent , I have owned several houses not at the same time , I have been a landlord … I got divorced .. I lost loads … that is life .. all I ask is to be able to feel secure in my rented home …as do families…
Let the banks control the issuance of the result expect this result
Massive inward movement of people has caused wages to stay low while helping to bump up housing costs – squeezing the working classes at both ends.
GDP is meaningless for those stuck on £12 an hour with no prospect of ever being able to own anything.