London Has Peaked

TheBlueHorse

i bought a house in London 8 months ago. I could not afford the same house today. London has NOT peaked yet. I don't think it ever will.

Physics

cells wrote: »

it will peak at some point as salary multiples just wont keep up

TBH I am surprised we have not reached that point already

It would be interesting to see actual mortgage data for london broken down by price point

who exactly are buying these £800k to £1m homes (terrace homes) and what jobs do they do and their incomes

Salary multiples don't have to keep up if the wealthiest are buying to rent out. Then it's about how many people you can fit in one house.

So I think prices could easily continue to go up, if people in their 40s and 50s start house-sharing.

Jason74

Physics wrote: »

Salary multiples don't have to keep up if the wealthiest are buying to rent out. Then it's about how many people you can fit in one house.

So I think prices could easily continue to go up, if people in their 40s and 50s start house-sharing.

Hopefully we'd legislate to stop that outcome long before it happened. Can't say I'm convinced it would pan out that way though

HAMISH_MCTAVISH

Jason74 wrote: »

Hopefully we'd legislate to stop that outcome long before it happened.

Why?

If people are forced to share housing because of high prices, that is the market working exactly as it should to allocate goods in short supply via price.

The reality is that there are simply not enough houses for everyone that wants one to have one, so many people have to share housing today and that number will keep increasing.

We built just over 100K houses last year, and added 500K people to the population.

It is a mathematical certainty that more people will have to share housing every year this continues, and it's been going on for many years already....

Bubble_and_Squeak

chucknorris wrote: »

Surely (from a property only perspective) this is only good news for us if we were considering buying a holiday home or investment property in Europe? Or am I missing something?

look into cyprus
prices about a third of their peak

Bubble_and_Squeak

TheBlueHorse wrote: »

i bought a house in London 8 months ago. I could not afford the same house today. London has NOT peaked yet. I don't think it ever will.

people once said the same of tulips

Bubble_and_Squeak

HAMISH_MCTAVISH wrote: »

Why?

If people are forced to share housing because of high prices, that is the market working exactly as it should to allocate goods in short supply via price.

The reality is that there are simply not enough houses for everyone that wants one to have one, so many people have to share housing today and that number will keep increasing.

We built just over 100K houses last year, and added 500K people to the population.

It is a mathematical certainty that more people will have to share housing every year this continues, and it's been going on for many years already....

YAY!
HAMISH IS BACK!
has the aberdeen bubble burst yet?

Jason74

HAMISH_MCTAVISH wrote: »

Why?

If people are forced to share housing because of high prices, that is the market working exactly as it should to allocate goods in short supply via price.

The reality is that there are simply not enough houses for everyone that wants one to have one, so many people have to share housing today and that number will keep increasing.

We built just over 100K houses last year, and added 500K people to the population.

It is a mathematical certainty that more people will have to share housing every year this continues, and it's been going on for many years already....

All true and the fact that it is so actually makes my primary point for me. And that is that we should not be relying on "the market" to be the sole (or even dominant) way of dealing with the need to provide the homes we need. The market is a wonderful servant. It's the most efficient way of providing all sorts of wonderful goods and services. From cars, holidays, to the devices we use to have these debates, leaving the market to do its thing provides the best outcome for us all.

But the market is a lousy master. Rely on it to generate outcomes that provide maximum social benefit, and it doesn't work. The (perfectly reasonable) profit motive and drive for efficiency leaves too many people on the wrong side of a crucial dividing line. We recognise this in health and education (for example) and as a society is much better off as a result. We used to recognise it in housing too, (remember that Nye Bevan was minister for Housing and health"), but we've our way in that regard. IMHO, we need to find it again.

cells

Physics wrote: »

Salary multiples don't have to keep up if the wealthiest are buying to rent out. Then it's about how many people you can fit in one house.

So I think prices could easily continue to go up, if people in their 40s and 50s start house-sharing.

I am not convinced London could become a city of HMOs

Surely after a certain age, you would think f.this and just move somewhere cheaper and not have to live 6 to a house.

But what you say has already happened to some degree and probably is still going on today. A shift from Owners to Higher-Density-Multiple-Wage-Renters

But again there is a limit, can London go from 50% owners to 30% owners and 70% renters? Surely not? How could a city of 70% renters not push through a mass building program

cells

padington wrote: »

Usually just normal people that are able to do houses up and bought at the right time or very well paid new comers in the top of the financial, tech or cultural sectors or the children of the very rich who are living in a city that is magentically attracting more wealth and talent for a whole number of reasons and existing in a period of growth.

I understand historical purchases but what maintains the market is current purchases

And I also understand that there are lots of people who earn very good money doing whatever it is they do.

However surely decent homes in inner London (eg 100+sqm terrace homes) outnumber the people earning mega incomes???