Property prices thread

[Tamas]

I am starting to see prices trickling down in the automatic alerts I am getting - there's more within our absolute limit the alarm is set to, and there seems to be more non-vomit inducing properties on sale in that bracket. Nothing dramatic yet, but getting there. But right now is probably the worst time to buy; mortgage rates are up significantly but it hasn't had its full effect on the prices yet.

[Josquius]

Are things bad enough to offset the "savings" of renting vs. Paying a mortgage?

What time scale are you thinking for it being a good time to try?

[Tamas]

Are things bad enough to offset the "savings" of renting vs. Paying a mortgage?

What time scale are you thinking for it being a good time to try?

I am not saying a property market collapse is anything near a certainty (in this country in particular a lot of effort will be spent to avert it) but we are seeing the post-2008 financial system -which fuelled the current bubble- under great duress which finds the UK in a particularly vulnerable position (compared to other first-tier economies). If there is going to be a bubble collapse within a timeframe that still lets me complete mortgage payments before retirement, it is going to be the next year or so.

So I want us to wait until spring/summer next year and assess the situation. 

[Sheilbh]

There's a bit of a post-covid bubble - especially in some areas of the country (not London) - but since 2008, not so much:


My interpretation is that there's a bit of bubble-ness, there's a bit of an impact from financialisation but that doesn't explain the 1997-2008 increase. What does is increased demand from a growing population and very constrained supply from not building enough houses. So even when I see doomsday scenarios like a 30% fall in property values, that takes us back to, what, 2018 levels?

I've said it before but I think the key shift and what we should aim to fix is the 1997-2008 one (including improving wages):


Edit: Also I think the sky-rocketing of rents in the last decade are maybe more of a bubble supported by low interest rates - but also indicate, to me, decades of under-supply coming to roost.

Edit: Also relevant and a little worrying:

[Josquius]

I see the bubble around the country as pure musical chairs with remote work moving forward a decade or two in just a few years due to covid.. Loads of people with good jobs suddenly unchained from the office (largely in London) and free to live where they want.
No data to hand but locally I do notice prices going up most in rail accessable and coastal spots.

[Josquius]

Terrible terrible news unfolding 

https://www.theguardian.com/money/2022/nov/28/uk-homeowners-forced-to-settle-for-below-asking-price-zoopla-says

[Tamas]

Terrible terrible news unfolding 

https://www.theguardian.com/money/2022/nov/28/uk-homeowners-forced-to-settle-for-below-asking-price-zoopla-says

The government will soon step in, I am sure.

[Tamas]

Most unsurprising news of the month, the British governments extends for a year the scheme giving state guarantees to banks for handing out 5% deposit mortgages.

The government is extending the mortgage guarantee scheme, which helps buyers with small deposits get on the property ladder as higher borrowing costs threaten to put the brakes on the UK housing market in 2023.

The scheme, launched in April 2021, was billed as a way of helping turn generation rent into "generation buy". It had been due to finish this month but the government said it would now run until the end of next year. The Treasury said the scheme had helped more than 24,000 households across the UK, with first-time buyers behind 85% of the transactions.

The initiative supports banks and building societies that offer 95% loans, meaning buyers only have to raise 5% themselves, on a house worth up to £600,000. These high loan-to-value (LTV) products are predominantly used by first-time buyers who, given the breakneck growth in house prices seen in recent years, struggle to raise a deposit.

[Josquius]

I don't think there's anyone here on that train, but you always see certain folks keen to blame the housing crisis on immigration....You cannot see attachments on this board. You cannot see attachments on this board.

[Sheilbh]

I think there's a link - population growth in the last 20 years has been at the highest level since the post-war baby boom. Immigration is part of that. At the same time we have not built enough houses and are building at about half the rate we were during the baby boom.

My take from that is more that I don't think you can be pro-immigration and NIMBY (Lib Dems ). Similarly from a more conservative side I don't think you can be pro-family and NIMBY because of the impact housing has on people coupling up, having kids etc. Those options will lead to crisis at some point.

Although I think the radicalised Tory pensioner base of being anti-immigration, hating the under-65s and NIMBYism is (evilly) coherent.

Semi-related, via the Institut Paris Region - this really surprised me (big driver in London is primarily international migration):

[Valmy]

My take from that is more that I don't think you can be pro-immigration and NIMBY (Lib Dems ).

I mean you can be if you want to support landlords.

[Richard Hakluyt]

Then there is Labour, in favour of good public services but strangely reticent about taxation 

[Josquius]

I think there's a link - population growth in the last 20 years has been at the highest level since the post-war baby boom. Immigration is part of that. At the same time we have not built enough houses and are building at about half the rate we were during the baby boom.

My take from that is more that I don't think you can be pro-immigration and NIMBY (Lib Dems ). Similarly from a more conservative side I don't think you can be pro-family and NIMBY because of the impact housing has on people coupling up, having kids etc. Those options will lead to crisis at some point.

Taken alone looking at figures since the 90s suggests there is a link.
However correlation doesn't necessarily equal causation and by comparing to the 50s/60s when we had a similar rate of population growth you don't see the same happening.
This suggests something else other than population growth is at work- namely not building enough.

[Sheilbh]

Taken alone looking at figures since the 90s suggests there is a link.
However correlation doesn't necessarily equal causation and by comparing to the 50s/60s when we had a similar rate of population growth you don't see the same happening.
This suggests something else other than population growth is at work- namely not building enough.

But isn't it the interaction of both?

If you have net emigration, as we did until the 90s, and relatively low to no population growth, as in the 70s-90s, then you don't need to build much new housing each year.

[Valmy]

I have to admit the constant claim by Brits that Britain is shit had a lot more credibility back in the 70s-90s before everybody started wanting to move there.