Why are house prices so expensive in the south east

CLAPTON

Herzlos wrote: »

No idea what you are trying to say: so I won't guess because I might be accused of putting words into your mouth



but this seems the most incomprehensible.

Herzlos wrote:

We have sufficient houses.

Sapphire

Why is the south-east – and London in particular – so expensive? Because it is a major financial centre, to which people from all over Britain are drawn. This has been the case for hundreds of years during which London has been the centre of commerce and trade (in various ways) for the entire country. It in fact grew the most as a commercial centre after the Great Fire in 1666. Obviously, the more of a draw it has been for people hoping to earn money, the more expensive it has become.

I'd add that there was such an influx of people from around the country during the Georgian and Victorian periods that people literally lived and died on the streets in Victorian London. There's one well-documented case of something like 40-odd Irishmen living in a single room somewhere in the East End. Due to the recognition in the 1660s that the prevailing winds in London were from west to east (they moved in the opposite direction, curiously, during the Great Fire), more affluent people moved to the west of London so as to avoid the noxious fumes of industry that emanated from the east. After the Fire, any toxic industries/crafts that poisoned the air were also moved from central London to east London.

Today, the area of influx has increased to the whole of the south-east (though London is still the most crowded), because of the ease of commuting from outside London by comparison to pre-car times, when carriages and carts took days to complete journeys that are so much shorter today.

London was always expensive compared with other areas of the country, if you take into account things like very high interest rates, much lower wages (and few 'benefits') and difficulties in obtaining mortgages at various times. The additional factor that has made prices even higher than they would otherwise be is that London property has been allowed to develop into a speculative bubble. It is bought as an 'investment', often by foreigners – and not just in the traditionally very expensive areas. London property has been changed into a 'market', rather than a means for most people to acquire a home in London. The many 'luxury' new-builds are priced accordingly, with prices starting very high and going up to staggering amounts of a million and more.

Herzlos

CLAPTON wrote: »

but this seems the most incomprehensible.

What part of the 3 words don't you understand?

CLAPTON

Herzlos wrote: »

What part of the 3 words don't you understand?

Herzlos wrote:

Steady or gradually declining (Vs inflation) prices would be the best option presented, though to be fair we just need a massive introduction of starter homes - 1 or 2 bedroom small places that people can actually afford ,

Herzlos wrote:

We have sufficient houses.

just a little confusing

[Deleted User]

Because it's populated by enough people earning enough money to purchase the houses and sustain the market. It's also got plenty of people with rich parents who will assist with purchases. Combine this with a large dense population and a limited stock of houses and you get sky-high prices.

If the North was full of people earning much more money, the house prices would also rise.

CLAPTON

ringo_24601 wrote: »

If the North was full of people earning much more money, the house prices would also rise.

No

it would depend upon the interplay of supply and demand.
If there was a lot of people with a lot of money and a shortage of houses then prices indeed would rise : if there was plenty of supply then price would not price appreciably.

Herzlos

CLAPTON wrote: »

just a little confusing

Yeah, I guess, it's a complex issue.

We have enough housing to handle the current influx of migrants, it's maybe not ideal and a bit expensive. Banning migration until we built enough is pointless, because we have enough.

Longer term, we need to be building enough to keep up with demand, and more importantly, we need to be building the right kinds of housing. Building luxury villas when people want/need smaller starter homes is partly why the housing market is such a mess.

So again, the problem and solutions have nothing to do with foreigners, and everything to do with planning, investment and infrastructure. Freezing migration is a red herring that will have nothing like the impact that the government doing it's job would.

Migration good. Government bad. Make sense?

[Deleted User]

CLAPTON wrote: »

No

it would depend upon the interplay of supply and demand.
If there was a lot of people with a lot of money and a shortage of houses then prices indeed would rise : if there was plenty of supply then price would not price appreciably.

Supply and demand means nothing if the salaries of people in an area aren't sufficient to raise the mortgages to buy houses. If the bottom end of the market is chopped off, then it halts the rest of the market from growing.

Carl31

ringo_24601 wrote: »

Supply and demand means nothing if the salaries of people in an area aren't sufficient to raise the mortgages to buy houses. If the bottom end of the market is chopped off, then it halts the rest of the market from growing.

but if salaries remained the same, but suddenly everyone decided Burnley was the place to live in the UK, those with money from all over would flock there, and raise prices, it just means people locally would be priced out, their salaries wouldn't have any effect

CLAPTON

Herzlos wrote: »

Yeah, I guess, it's a complex issue.

We have enough housing to handle the current influx of migrants, it's maybe not ideal and a bit expensive. Banning migration until we built enough is pointless, because we have enough.

in london and the SE owner occupation is falling and the average age of FTB is into the thirties.
many well paid couples in their 30s can't afford a family sized house in order to have children.
Family sized houses are being subdivided into flats which are often then in multifamily occupation: going back to the sixties.

I think this is because we have a housing shortage : the fact than terrace houses cost upwards of £1 million seems to indicate a severe shortage.
I'm not arguing that the situation is the same elsewhere.

Longer term, we need to be building enough to keep up with demand, and more importantly, we need to be building the right kinds of housing. Building luxury villas when people want/need smaller starter homes is partly why the housing market is such a mess.

the facts don't support this : builders don't build houses that can't be sold

Unless you believe that we currently have a surplus of 3-4-5 bedded houses then building mostly 1-2 bed starter homes does raise the issue of where young people will move to in 10 years time when they want children.

So again, the problem and solutions have nothing to do with foreigners, and everything to do with planning, investment and infrastructure. Freezing migration is a red herring that will have nothing like the impact that the government doing it's job would.

Migration good. Government bad. Make sense?

In London there are 3-4 million foreigners : it is inconceivable that they don't have a massive impact on price and availability.

I do agree the planning rules imposed by successive governments have been most harmful.