Why are house prices still so high?

MobileSaver

AG47 wrote: »

Yes there is a housing crisis, the problem is property is priced too high.

That is blatantly not true as 100,000 people buy and sell residential properties every single month and that figure has been constant for years.

Goldman2020

In and around London and the near Home Counties?

Brown_Bear

I think one reason UK house prices are so high is the English language.
Most young people in Europe speak their own language plus English fluently and probably one other language to a reasonable standard.

So young workers from Europe can easily come to work in the UK - but the English can't do so well abroad.

Once the demand for labour increases again in mainland Europe - i think UK house prices will fall.

Obviously interest rates play a part in affordability, but you still need demand for the housing stock.
You can offer someone the cheapest mortgage in the world, but if they don't want to live in that town they still won't be interested.

Brown_Bear

Goldman2020 wrote: »

I cannot comment on the rest of the UK however I believe there is a housing crisis in and around London and some of the near Home Counties.

Buying a first property whether it is a one bedroom flat or a small house in and around London is out of reach for many especially the young.

Moving away from London for the sole purpose of buying a property is an option but not one that everyone can easily take up for whatever reason.

I think there is a social factor to this. Young people have grown up in an area and don't want to move away from their parents.
If their parents owned their own home, the obvious solution would be for the parents and their offspring to all move somewhere cheaper.
The fact this doesn't seem to happen much (if you believe the media reports) indicates that either:
1. The problem is not that bad.
or
2. The employment prospects for the offspring are much, much better in the expensive areas.
or
3. The parents don't really care - yet.

GreatApe

house prices are never high or low they are always exactly right

In the same way gold prices are never high or low they are always exactly right

Brown_Bear

GreatApe wrote: »

house prices are never high or low they are always exactly right

In the same way gold prices are never high or low they are always exactly right

In free market terms you are correct. Because the price (usually) indicates an open market transaction.

The problem is the social effects of increasing house prices. eg Young people not being able to buy (or rent) where they grew up.

Social discontent influences politicians - who influence the market by law and tax changes etc.

So the market doesn't exist in isolation.

In fact, the UK property market is probably one of the most politically rigged markets in existence. At the moment, the UK govt is massively involved in pushing up house prices. They could half prices overnight if they wanted to.

snowqueen555

Brown_Bear wrote: »

In fact, the UK property market is probably one of the most politically rigged markets in existence. At the moment, the UK govt is massively involved in pushing up house prices. They could half prices overnight if they wanted to.

I agree. I believe they should get rid of help to buy and shared ownership schemes, what was meant to make housing more affordable just allows for bigger profit to be made for the home builders and props up the market.

I also despise these retirement apartments that litter right move and Zoopla. I believe you have ownership until death, then ownership transfers.

GreatApe

Brown_Bear wrote: »

In free market terms you are correct. Because the price (usually) indicates an open market transaction.

The problem is the social effects of increasing house prices. eg Young people not being able to buy (or rent) where they grew up.

Social discontent influences politicians - who influence the market by law and tax changes etc.

So the market doesn't exist in isolation.

In fact, the UK property market is probably one of the most politically rigged markets in existence. At the moment, the UK govt is massively involved in pushing up house prices. They could half prices overnight if they wanted to.

The average uk born citizen already has a free house thanks to their parents and grand parents who will gift/inherit the kid a free house

This is one of the reasons how house prices can be high but also affordable

Anyway despite people saying prices are high 2017 ownership increased by about 250,000 and in 2018 likely more (but the figures are not yet out). If I was to bet I would say 2017-2018-2019&2020 combined will see ownership increase by over 1 million homes so more or less the opposite of what all the crash cheerleaders are saying

ruperts

GreatApe wrote: »

The average uk born citizen already has a free house thanks to their parents and grand parents who will gift/inherit the kid a free house

This is one of the reasons how house prices can be high but also affordable

Anyway despite people saying prices are high 2017 ownership increased by about 250,000 and in 2018 likely more (but the figures are not yet out). If I was to bet I would say 2017-2018-2019&2020 combined will see ownership increase by over 1 million homes so more or less the opposite of what all the crash cheerleaders are saying

Half a house unless they plan to screw their average of one sibling out of their inheritance (which given your comments about gold digging earlier I wouldn't be surprised if you've considered). They'll also have to wait until they're about 60-years-old on average to receive it, which is a bit late for raising a family of their own. Not to mention the real possibility that their parents might want or need to release equity for a variety of reasons.

Brown_Bear

ruperts wrote: »

Half a house unless they plan to screw their average of one sibling out of their inheritance (which given your comments about gold digging earlier I wouldn't be surprised if you've considered). They'll also have to wait until they're about 60-years-old on average to receive it, which is a bit late for raising a family of their own. Not to mention the real possibility that their parents might want or need to release equity for a variety of reasons.

Such as the social care issue - which the govt has failed to confront.