House prices are a national obsession and they make up about half of UK wealth. But what if I were to tell you that house prices are where they were 20 years ago? In this video, I will show you why this statement is true. I will also discuss where we are now with house prices both overall and by region and give you my view of where house prices might be headed in the future.
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49 Comments
Useful insights as usual. For example house price rises linked to wages. But I hope the chair was worth it. 😅
It’s a tricky market right now we just bought a house and had to pay close to asking price to get it. The market might be soft but sellers don’t have to sell as in our case the seller still had a low rate mortgage so they weren’t particularly in a rush to sell. We had to outbid 3 other couples and despite there being more houses on the market many are unsuitable so the main interest is concentrated in a handfull of good properties that have been looked after well. We were shocked how many of the houses we viewed were listed for £1M+ and despite being large brick and mortar desirable houses in desirable locations many of the current occupants (elderly couples) were living in absolute poverty! We are talking interiors not updated for 20-30 years, damp, rotten floors and windows mould everywhere. I wonder how many UK home owners are chuffed with their house returns whilst living in these horrible conditions trying to protect their “investment”.
Omg I always imagined a retired advisor sitting in a flexy spot recliner chair. Sorry. This was as funny as Patrick telling me his favourite flavour of protein shake is curry powder.
This is a poor analysis.
Firstly, ONS figures are rigged, inflation is obviously higher than they say.
Secondly, currency is not money, using the £ as a reference is pointless.
Redo the sums using gold and see how bad houses are.
Or more relevant today, redo against BTC. Then you'll really realise, houses are for living in or mugs.
I understand the need to monetize and to some extent having sponsors which are finance related make sense but this one… look a bit ridiculous and a misplaced ads vs the video content…
@pensioncraft thanks for your analysis. Do you really think inflation will come down given all the global issues and possible food shortage? Thanks
No real growth are you serous. Parents sold a house in 2001 for 330k & now worth over 1 million. My dad was a maths teacher on fairly low salary. This guy is incorrect.
During the inflationary period 1971-81 when interest rates rose from 2% to 20%, house prices rose 5x, not down or flat!
I’d mention a few things though. Firstly there is a disparity between the rate of inflation vs wage inflation. This means house prices are rising against wage caps. Secondly, as an investment, property also includes a “dividend”, ie rent. And rental inflation is massive
Great content as always, thank you
I wouldn't listen to zoolopa and others all have a very small sample and a vested interest.
Prices will slide til next year
The land registry is only reporting on sale prices up to Dec 23 to date and that is showing prices continuing to fall
There’s plenty of supply, house building stats confirm this, we’ve just peaked in terms of affordability. The only investors now are foreign buyers in the capital looking to milk younger generations who are prepared to spend 80% of their income on rent so they can live the city lifestyle.
IF inflation normalises above 2%, rates are unlikely to come lower without a resurgence in inflation, so get used to higher interest rates, and also dont be fooled by Rightmove or Zoopla data. Its skewed, prices "increasing" are only because more expensive (overvalued) "asking prices" properties are being listed. Theyre not representational of all house prices
On the first graph…is that Totalpay…the average for all earners, or full time workers, or household income? Because you have to consider the greater number of people per household in work since 1980. Could very well be that for the *average family*, house prices are actually cheaper now than in 1980 when comparing to household income – & it's household that pays mortgage/is used in affordability calcs.
Average price of house without comparing what type of house , sq meters and locations 🤣 this video is hilarious
You're missing the annual income to house pricing ratio, the housing price correction hasn't even started yet
Like the calm rational explanation of his view wether I agree or disagree , so refreshing to have videos without combatitive tone hysteria or dramatic background music/noise . Feels like a world I want to be in.
😂 theve gone up in price so much you need a six figure salary to buy a house
Put this into context I bought a house in 2017 for £240k I had it valued at 400k last week , if I sold it now I’d walk away with 160k show me a pension or investment that makes that much returns in under 5 years. Cheadle Hulme Stockport 26 most desirable place to live in the uk
14 years ago I sold my house and moved into council housing. I have used most of the capital on exotic holidays. Looking to spend what is left on more of the same. As I have nobody to leave it to.
Great analysis but I think house prices are still overpriced
People who depend on housing to retire are idiots, paying of the debt early is equally as stupid.
Take your spare money, hit the cap of your tax allowance on a Stock & Share ISA 20k tax free. You will have more more liquid assets when you retire than if you payed off that mortgage early.
Whilst I appreciate your video presentations as being rather good & of high quality, you deliberately mislead on 'your' chosen causes for certain economic outcomes. There is NOT an 'Under-Supply' of residential property in the UK, as there are more houses in the UK than ever before in recorded history & by a large margin. There has been & continues to be, an 'Over-Demand' caused by MASS Immigration. However you will not dare to mention that; it's against 'the Agenda' isn't it. The other smaller issue I had was in your tying the inflation rate of residential property to salaries & wages. If you were to 'Dare' to add on top the Quantitative Easing, (read: the legalised counterfeiting of our Fiat currency for the benefit of the 0.1% mega-rich), to the accepted effects of earnings inflation, then you would arrive at figures very close to the inflation of residential property.
I think that YouTube might demonetise any video that dares to expose the truth though, this is a powerful disincentive to speak the truth. I bet that YouTube will yet again, either delete or 'hide' this sort of comment, as they have done many times in the past. Their censorship AI bot is very 'active'.
Thanks for your really helpful videos. This is yet another. But you say interest rates peaked at the time of Liz Truss' 'crazy budget'. That doesn't appear to be supported by the chart which shows a gradual rise to a peak in July 2023. The budget was in November where your chart shows a series of mini peaks but these rates were already falling. have I got this wrong?
Inflation hedging is about maintaining purchasing power. So, yes, houses have done that.
Depends where you bought… My mum bought houses in london in early 2000s, biggest example is one bought for sub 100k and someone has offered over a million for it today.
Your house price hasn't gone up – your pound sterling and salary has gone down! At least its stable though unlike the currency.
Do medium house price instead
I own property but think this is good news. Anything that suggests our children will be able to buy is good news.
Can you please make a video one Dutch style mortgage in uk?
Caption itself is incorrect
From investment perspective thats oretty good as your getting rental income PLUS 1-2% appreciation in house price growth yearly. The rental yield deviates i guess but outside london probably can get 12-15% yield on auction sales. Problem is it rewuires more work than sinply investing a lump if money in a stocks and shares account.
If it is your main home, price is nice but not a big deal if you have to pay more for your next house, until old ate and used for nursing home. If buy to let, plan to ensure you never sell and rental yield is focus, again house prices are nice but doesn’t matter if dont sell. If you are buying for price appreciation, well the risk return in the gain is up to you. In short, live in your home and dont remortgage, and keep buy to lets forever and leave in will.
I do not want to find more about your flexispot haha, but interested in the chair
The key to rising property prices is clearly a factor of supply and demand but the windfall lies in gearing, the debt for equity game. The straight line 'cash' performance of bricks and mortar compared with say gold or performers in the equity market is both revealing and significant. The key is of course that a house represents a roof over our head so the cost of renting a property should be factored into that equation but the facts are often distorted.
the graph you were showing around 5:30 mark is very intresting. I think this up and down nature over the last 15+ years is a lot to do with the max that people can afford. bank lend money based on income and loan leangth so unless mortgages get longer and longer or incomes grow higher and higher I dont think we have much more room for growth in house prices. it looks like they are trying to go up but then hitting a wall of limitation.
I personaly started thinking about buying back when I got my first real job as a painter and decorator on a full time 40 hour contract back in 2022. my almost £30k slary when I went to 3 different banks for mortgage quotes they were between £90k-£120k so obviusly if the avg price is between £250k-£280k I cant get anywhere. at least if they were under £200k you might have been able to find a run down place and then bargin a lower price if demand wanst too high. but thats not the case.
affordability keeps bringing the prices down but avalibility keeps shooting them back up.
its a death loop at this point. and I fear that by the time my girlfreind gets back into work after being long term sick that even both of up on 30-35k wont even be able to afford somwhere live.
UK needs a house market crash. First time buyers are priced of out of the market, lack of housing stock, not in a good position.
I wonder about the rent and the updates of the house (and other "running" costs). I am not sure of the yearly yield. Like if the graph is alone the prices of the house that not incorporate the rent that people may pay the owner in that property during the time. I suspect that there will be as well update of the property or similar and maybe as well other cost such as insurance or interest rates. In the period of time I suspect people may even change the definition of the house, like increasing rooms, splitting the house and so on. So if I am living in that property and considering a 1% increase I think is not bad as I am probably still saving some money on rent minus interest rates on the mortgage, council taxes and upgrades. So I think the final figure will be sensible larger (let say 3%). I guess if we are just seen the initial and final prices, is like to consider the price of and stock (like SSE) without considering the dividends and the fees of the account we keep it. So I am not sure if those numbers are or not included, I suspect not.
*Northern Ireland. Ireland has different housing figures being a different country.
First time buyers should have to pay no Tax Stamp Duty. No Vat on furniture or fixtures for first time buyers, a discount on home insurance. There should be reserve of new build housing for first time buyers who have lived in the UK for at least Five years. A ban on Foreign buyers and a Tax on homes owned by existing non domiciles. There should be a ban on second homes or a Tax on them. There should be a national home building not for profit builder which would continue to build homes during a high rate environment, using prefab construction. Taxes such as Stamp duty and the other new taxes mentioned previously should be ring fenced for the building of new homes.
Have you watched 'Moving home with Charlie' ? He explains in detail why a lot of the housing data cannot be relied on. As a former estate agent, I very much agree with his thinking. I'd be interested to know your thoughts, perhaps you could do the same calculations with a different data set? Keep up the great channel 👍
…what about population declination and house prices?
Property investment doesn’t always work as suggested here. Most investment property is mortgaged. You put £100k in stocks, you may see 10% pa return on that £100k. You put £100k into a property worth 400k. Last 10 year property growth averaged over 5% pa. This is 5% return is on the full property value of 400k, not the £100k put in. Plus you should see additional return in income for rental profits.
Beautiful classic 5 wave elliott pattern in house prices – next stop 50% drop to 4th wave preceding degree
Its just London that affected.
Today's surge in ultra long mortgages is fast becoming the norm and to the extent, that payback is more and more extending well into retirement.
The cause of this is a simple catch22 – sickeningly high house prices, still rising, because there is more and more money handed out in those mortgages. Why? because in order to meet those insane asking prices lenders have gladly…
1) Significantly increased mortgage salary multipliers, and…
2) Significantly increased payback terms
No longer does 21 years at 2.5 x your salary give you enough money to buy a house.
–> THIS IS EXACTLY WHY the UK housing and rental market is COMPLETELY destroyed !!!
–> The ONLY way to reduce house prices is to increase interest rates…once you make these ultra high mortgages unaffordable to the majority, you can rest assure that the majority of sellers will reduce prices. Unfortunately, the BOE won't do this effectively, and certainly not for a long enough time as to be effective. What to do ???
Why do people see house growth as a major accomplishment?
Great video 👍