How can house prices be so high it's so unfair on the young stars

floridaman

Well said. At least someone understands here.

This country is going down the pan. How anyone can not admit house prices are at a crazy level is beyound me.

ukcarper

92203 wrote: »

Houses are not at a historic low from a cost perspective. The cost of serving a mortgage (interest rates) is at a historical low, so your statement only applies to people who got on the ladder pre-boom. They not only benefit from having significantly less capital to repay, but also better mortgage rates due to a lower LTV.

For people who didn't own a property before the boom and as a consequence didn't get gifted a significant sum of tax free unearned money, your statement simply doesn't ring true. In many instances, post-boom buyers are having to pay twice as much for the same house.

Ultimately, this means that those who buy a house today will have to earn more, have better jobs, and ultimately work harder than someone who brought an equivalent house pre-boom

Welcome to the inter-generational apartheid of Great Britain.

I suppose that's depends on when pre boom they bought.

Idiophreak

CLAPTON wrote: »

how does this make more properties without building?

There are more properties *for sale*, which increases supply, meaning prices should fall...In just the same way building would increase supply...

92203

ukcarper wrote: »

I suppose that's depends on when pre boom they bought.

Anyone who brought between 1993 and the early 00's would have been able to afford a nicer house than their equivalent counterpart buying during or after the boom leading up to the financial crisis.

House prices in relation to wages are higher than ever.

ukcarper

92203 wrote: »

Anyone who brought between 1993 and the early 00's would have been able to afford a nicer house than their equivalent counterpart buying during or after the boom leading up to the financial crisis.

Aside from the housing boom of the late 80s/early 90s, house price to earnings ratios have generally been much lower, and consequently housing more affordable.

They weren't the only booms property boomed in the early 70s and early 80s. Prices in the period you refer to were the lowest in relation to earnings since the war. The long term earnings to house price ratio is just over 4x compared to just over 5x now.



For most of the 70s and 80s mortgage rates were at least twice what they are now.



A 25 year mortgage of £100k mortgage at 8% costs £780 a month, a £125k mortgage at 4% costs £667.

CLAPTON

Idiophreak wrote: »

There are more properties *for sale*, which increases supply, meaning prices should fall...In just the same way building would increase supply...

so where will the people live that used to reside in those rented houses?
on the street?

Conrad

Building more will barely make a ripple in the ocean. More migrants will be attracted to new resources, the effect of more supply will be vanishingly small.

We live in a popular densely populated island, high prices are just a function of this, accept it and know once your on the ladder you too will tend to benefit in the way millions of us have.

floridaman

So what should the young do who work hard but can't afford a house? Someone on 20k for example should they just rent forever?

ukcarper

floridaman wrote: »

So what should the young do who work hard but can't afford a house? Someone on 20k for example should they just rent forever?

I suppose it depends where they live £100k will get you a nice house in many parts of country. In the London and South East harder but then when I first bought in the 70s I was earning about equivalent of £35k and I couldn't afford to buy in outer London where I worked and had to move a further 20 miles out to buy.

Idiophreak

CLAPTON wrote: »

so where will the people live that used to reside in those rented houses?
on the street?

No, in houses *that they've bought*, in council rentals, or in houses people buy for market speculation.

The idea is that there's a bunch of people renting houses who want to buy houses, but can't afford it. Hence this discussion.

If you force a lot of the people renting their houses to sell, house prices would fall and the renters that live there would be able to afford to buy.