House price increases. Is everyone absolutely loaded?

Flatulentoldgoat

I just don't get it. I've tried to break it down into simple terms but it still makes no sense. Yes, I know the stamp duty holiday has a part to play but when that ends will we see some sort of cliff edge and then a crash? No, I highly doubt it. Probably a small dip and after 2-4 years that'll have all recovered plus more. And there's more chance of Boris being able to tell us all how many kiddies he's popped out than interest rates going up. No way in HELL.

When you've got houses that were around 200k last year now going for 25-40k more, that's amazing. But where's all this money coming from, where are all these happy people with such deep pockets springing up from. Surely it can't all be stamp duty? And not everyone can work from home. Hello tradesmen, bus drivers, nurses, binmen, mechanics, train drivers, shop keepers, chefs, etc etc etc.

Look, I'm reading about an economy that's had the most massive down turn in like 300 years. Covid. Brexit (whatever you think about it) you've had millions on Furlough. And yet, it seems like there's this class of people who are drowning in gravy buying everything in sight no viewing required. You've got blinkin' foodbanks everywhere, Oxfam running out of clothes, inflation shooting up.

Yet. Everyone. Is. Rich Rich Rich.

All the local estate agents are going wild, driving around this town 70 miles to the West of London every street is a sea of 'Sold' signs. Few 'To Let' but they are like the outliers.

Gave up house hunting ages ago and I'm a well above average earner. I feel utterly hopeless about it and to those who are even less fortunate than me god so help them.

Keswick1uk

Probably higher mortgage multiples being given. People who were renting and sat waiting saved even more deposit during the pandemic and had more time on their hands to look and an incentive to. People wanting to move from more expensive cities to cheaper rural areas.

My house in Cornwall is probably worth (at top of this peak) 550k, half acre, parking and sea view. How much would that be in Surrey or London? So, although it's gone up up up stupidly, it's still cheap to.some.people.

....until life goes back to normal (if it does)

Keswick1uk

Obviously no sea view in Surrey or London! It's not a sky scraper lol

Flatulentoldgoat

Cornwall is obviously a nice place and no disrespect to it, but 550k is seriously London money. No way should that it comparable (in general terms) to London. That would buy you something respectable in nicer parts such as Wimbledon and Ealing. Less space obviously but you've got a world of career prospects, amenities, culture, activities etc. It's a world class city as the prices usually reflect that although I can't argue it suffers greatly from foreign investors jacking the baseline up artificially.

Salemicus

For an awful lot of people, the past year-plus has seen their incomes unaffected, but their expenditures drastically reduced - no restaurants, nightclubs, foreign holidays, etc. So yes, they are "loaded," at least relatively speaking. Many of these people are probably using their new-found savings to buy a home, or upsize.

There's nothing mysterious about it. There's been a very large downturn, yes, but it's affected the economy very unevenly, with some sectors decimated, and others actually benefitting. Not everyone is buying a new house. There were a little under 700k house sales all last year. Even assuming that was entirely couples, it's still less than 3% of the population. This is a large enough country that some people can be on furlough and others can be thriving. 

Grumpy_chap

And probably not half an acre in London!

hazyjo

Not everyone is a FTB. Some are downsizing, some are buying with partners, some have inheritances, others have been gifted money, some have managed to save unexpectedly by being furloughed or wfh...

Always been the same really.

lookstraightahead

Easy. They're borrowing more. They're feeling confident because interest rates are so low. They're getting more from their buyers who also feel this same hysteria.

Scary. I think it is anyway.

panic buying always comes with consequences.

user1977

And I expect much of it also just the release of the pent-up demand from those who for various reasons haven't been able to buy (or sell) over the previous year or so.

Keswick1uk

Flatulentoldgoat said:

Cornwall is obviously a nice place and no disrespect to it, but 550k is seriously London money. No way should that it comparable (in general terms) to London. That would buy you something respectable in nicer parts such as Wimbledon and Ealing. Less space obviously but you've got a world of career prospects, amenities, culture, activities etc. It's a world class city as the prices usually reflect that although I can't argue it suffers greatly from foreign investors jacking the baseline up artificially.

Exactly! We are cheap and people are leaving the cities to come here. I'm not saying we are comparable and agree we shouldn't be! But it's a reason in the pandemic rises were going stupid. A house nearby me went on the market one Friday and by the Monday had 150 interested parties and why people can afford to bid and pay more for it. That's one reason why prices have been going stupid (which was the OPs question).

Flatulentoldgoat

lookstraightahead said:

Easy. They're borrowing more. They're feeling confident because interest rates are so low. They're getting more from their buyers who also feel this same hysteria.

Scary. I think it is anyway.

panic buying always comes with consequences.

Hello 2008? Sounds like that all over again but perhaps over here rather than the US.