Is property in a bubble?

GreatApe

ukcarper wrote: »

That’s not the complete picture as the median income in London wouldnt buy you a house. The amount of property available also makes a difference.

London prices are set by capital not income
Most of that capital is housing capital

In other words most London buyers as historic London owners. So in effect they are paying yesteryear prices. The teacher who bought a terrace in 1995 for £100,000 can move sideways on a £500,000 house

About 90% of London owners paid prices half or less of current prices
So to maintain prices only 10% about 10% of Londoners need be able to afford.

London is also an international city.
The uk or international singer who hits it big buys a £20m London home and perhaps multiple more £1m homes for their family members and perhaps friends. They don't think now that I've hit it big I'd like to move to Stoke on Trent

Also comparisons are not easy to make from location to location
For instance if you look on the LANs registry you would fond Hackney prices for terrace homes 3-5x the price for Luton terrace homes. However what's missing is that the terrace homes in Luton are typically 60-80sqm while the terrace homes in Hackney are 120-150sqm.

A comparison by floorspace and internal fittings would make prices look less overproced for London.

And of course the biggest hpaiign problem in London is that zone 2 is 40%+ council homes mostly full of pensioners refugees immigrants and locals with jobs that don't really need to be in zone 2. With 40%+ of local properties outside of the private market that means many fewer prpeprtoes to rent and buyin inner London so prices are higher.

If the government just sold down zone 1-3 social prpeprtoes to 10% of the local stock that would put a lod on London prices for maybe a decade. With inflation doing its thing we would have a 30% real crash. Almost no other policy can achieve this. But of xoirzs council properties are sacred cows for the left so a sell down in inner London is unlikely

ukcarper

GreatApe wrote: »

London prices are set by capital not income
Most of that capital is housing capital

In other words most London buyers as historic London owners. So in effect they are paying yesteryear prices. The teacher who bought a terrace in 1995 for £100,000 can move sideways on a £500,000 house

About 90% of London owners paid prices half or less of current prices
So to maintain prices only 10% about 10% of Londoners need be able to afford.

London is also an international city.
The uk or international singer who hits it big buys a £20m London home and perhaps multiple more £1m homes for their family members and perhaps friends. They don't think now that I've hit it big I'd like to move to Stoke on Trent

Also comparisons are not easy to make from location to location
For instance if you look on the LANs registry you would fond Hackney prices for terrace homes 3-5x the price for Luton terrace homes. However what's missing is that the terrace homes in Luton are typically 60-80sqm while the terrace homes in Hackney are 120-150sqm.

A comparison by floorspace and internal fittings would make prices look less overproced for London.

And of course the biggest hpaiign problem in London is that zone 2 is 40%+ council homes mostly full of pensioners refugees immigrants and locals with jobs that don't really need to be in zone 2. With 40%+ of local properties outside of the private market that means many fewer prpeprtoes to rent and buyin inner London so prices are higher.

If the government just sold down zone 1-3 social prpeprtoes to 10% of the local stock that would put a lod on London prices for maybe a decade. With inflation doing its thing we would have a 30% real crash. Almost no other policy can achieve this. But of xoirzs council properties are sacred cows for the left so a sell down in inner London is unlikely

Most of that is true and shows London prices are not solely a function of local income.

GreatApe

westernpromise wrote: »

Who says that all houses in London are bought out of income?

Exactly

Some £600 billion annually is earnt from capital not income
This £600 billion annually is conveniently ignored by the hpc cheerleaders
By comparison there are about 140k London homes sales each year at about £500k each = £70 billion. So annuap capital income exceeds London house sales by almost 10x

What's more this capital income is concentrated in London then the SE and Mich less is in Stoke

This also seems to be evident by the fact that Paris is expensive and so is Frankfurt. Both in countries with a LOT more supply of housing but prices are similar to London. Its similar things at play. The cities of capital have homes set by capital income not labor income.

If anything most the UK is undervalued
Birmingham half the price of Berlin. Doncaster half the price of Düsseldorf.
In parts of the UK you can buy 100 year old homes for less than they cost 100 years ago
Inflation is partly to blame. Sure a house cost £100 a hundred years ago but in real terms one house was worth build cost a hundred years ago and now its worth less than build cost

ukcarper

westernpromise wrote: »

Who says that all houses in London are bought out of income?

Sorry Miss read your post, I dont think its just down to international money I think its simply down to supply and demand meaning only the well off can buy, although international money certainly adds to demand.

economic

ukcarper wrote: »

Miss read your post, I agree its obvious property is affordable to people who buy in London but that doesnt mean they are affordable per se.

You can’t generalise the market being unaffordable when clearly people have been buying at the prices set by the market.

Personally I think there’s nothing wrong with the property market in London. People just love to complain which is so sad and pathetic. Maybe the ones who can’t afford to buy should blame themselves for not being able to buy and do something about it.

ukcarper

economic wrote: »

You can!!!8217;t generalise the market being unaffordable when clearly people have been buying at the prices set by the market.

Personally I think there!!!8217;s nothing wrong with the property market in London. People just love to complain which is so sad and pathetic. Maybe the ones who can!!!8217;t afford to buy should blame themselves for not being able to buy and do something about it.

I think it would be much better if property was affordable to more people and its not ideal when the average flat is 14x median full time earnings and a average terraced house is 20x. Just dont see that its possible to do much about it.

ukcarper

economic wrote: »

You can!!!8217;t generalise the market being unaffordable when clearly people have been buying at the prices set by the market.

Personally I think there!!!8217;s nothing wrong with the property market in London. People just love to complain which is so sad and pathetic. Maybe the ones who can!!!8217;t afford to buy should blame themselves for not being able to buy and do something about it.

This apostrophe thing is strange I have given up using them but when I quote a post the apostrophes in than go wrong. edit, saying that it didnt happen this time. Now it has.

lisyloo

Personally I think there!!!8217;s nothing wrong with the property market in London.

I don't think we should sell houses to foreigners who leave them empty forcing people to have unpleasant commutes when we appear to have a shortage of afforable/appropriate housing in the right place where people work.

Agree about the complaining, there is too much and in many cases effort would be put to better use in tryng to improve ones situation however that doesn't mean we shouldn't be able to comment and debate and have our representatives in parliament raise issues about bad policy and I think a lot of empty house for foreign investment is a bad policy.

enthusiasticsaver

ukcarper wrote: »

This apostrophe thing is strange I have given up using them but when I quote a post the apostrophes in than go wrong. edit, saying that it didnt happen this time. Now it has.

Are you using an apple device? Go to settings then keyboards and turn Smart Keyboard off. It gets rid of the numbers instead of apostrophes etc

enthusiasticsaver

economic wrote: »

You can’t generalise the market being unaffordable when clearly people have been buying at the prices set by the market.

Personally I think there’s nothing wrong with the property market in London. People just love to complain which is so sad and pathetic. Maybe the ones who can’t afford to buy should blame themselves for not being able to buy and do something about it.

Or move away as we did. Silver lining we much prefer to live in Cornwall than London anyway.