The Halifax (which is a trading division of the Bank of Scotland, which is, in turn, a subsidiary of Lloyds Banking Group) has reported this morning that:
The UK housing market started the year on a positive note, with average prices rising by +0.7% in January, more than recovering the slight dip of -0.2% in December. This increase pushed the average property price to a new record high of £299,138.
They added:
As things stand, mortgage rates are likely to hover between 4% and 5% in 2025, influenced by both global financial markets and domestic monetary policy. Over the past year, buyers have been getting used to this new normal, understanding that rates are unlikely to return to the historical lows of 1%.
But the fundamental issue in the housing market remains the lack of supply. This long-term trend, coupled with a gradual improvement in affordability, should support further modest house price growth this year.
It so happens I have spent some time talking to estate agents of late. This is not what they are telling me.
They are reporting four things:
- Young, first-time buyers cannot afford to buy.
- The buy-to-let market is in reverse, with more sellers than buyers.
- There is an ample supply of property for sale, but not enough people are willing or able to buy them.
- The market is very slow as a result.
This, I stress, may just be in East Anglia, where the conversations took place. I do, however, doubt it. I think this is a general trend, which makes the spin from the Halifax look to be wrong for three reasons.
Firstly, a shortage of supply is not the problem in the housing market. A shortage of affordable supply is.
Second, people are not getting used to high interest rates. Large numbers of people are not able to afford to buy to get the opportunity to pay any interest rate because those rates are so over-inflated. The comment made by the Halifax comes from a position of decided privilege.
Third, looking more broadly, there is a housing crisis, whatever the price of properties for sale, but it is in the rental sector, where the situation is getting increasingly desperate.
And what is the government doing about this? Precisely nothing, as far as I can work out. When they could be tackling this problem nationwide, they are instead obsessing with building fantasy projects such as a third airport at Heathrow, for which the airport has not even applied for planning permission, and nuclear reactors, which no one knows will work. That is how out of touch with reality they are.
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What was the story when MacMillan was housing minister, travelling the country himself trying desperately to find the building materials that he needed to build 3000 houses a year.
Where is the political drive to do that?
He built 300,000 houses a year?
The housing market gives the middle class a way of making money and lets them think they are successful capitalists and so they don’t rock the boat for the rich kleptocrats and asset strippers, and also allows them to be condescending of those below them.
The problem is now getting that the market is topping out, many of those who have just about struggled to get a starter home or flat now cannot afford to move up the so called ladder as the differential cost is now too high.
Gary Stevenson was saying in a recent podcast that he thought house prices would rise substantially over the next 5 years….his basic thesis is that people on lower and middle incomes buy goods and services…they spend their money, as you often say…but the wealthy buy assets and as inequality increases and the wealthy are getting ever more wealthy asset prices will rise…
Maybe
I did not finish that one.
Your last line is ‘That is how out of touch with reality they are’.
‘They’ appear to be the controlling members of the government and their inner circle. ‘They’ will also include major donors – directors of pension companies and investing entities including big pharma (See today’s other post “Are drug companies putting profits ahead of curing people?”)
Their ‘reality’ seems to ignore the climate change that has already occurred and is predicted to get very, very much worse. It is a ‘reality’ ignores widespread extinction of species. Extinction! All dead and gone forever!
Their reality ignores, for example, Lord Stern’s ‘Sustainable Futures Report’ (2009) which stated “Billions will die”.
It is a reality that ignores not just the needs of children – their own included – as well as the majority of the present generation, but, quite possibly, the needs of all future generations as well.
‘They’ somehow manage to know that carbon dioxide is a major cause of climate change and yet – they encourage ownership of numerous homes and vehicles and multiple foreign holidays, they encourage high speed fossil-fuel-powered racing, and international sport on a scale that appears to know no limits.
They revel in advertising that promotes such things and is often, in essence, deceptive.
The press and the BBC use news as entertainment and are irresponsible by failing to make the connection with climate hazards and viable policy options.
What’s to be done?
It could start with an individual in a position of influence – perhaps Ed Miliband or Clive Lewis – taking a public stand for the principle that ordinary people and the future of our children matter.
Multiple ownership of homes, and homes larger than the needs of the occupants could be taxed to release housing for those currently in need, as well as for those who will, in the near future, be made homeless by fire, river floods, or inundation by sea water.
Travel: motoring speeds could easily be limited – ‘From midnight tonight’ – to reduce emissions. See for example, Professor Kevin Anderson 3/12/2023
https://braveneweurope.com/kevin-anderson-a-habitable-earth-can-no-longer-afford-the-rich-and-that-could-mean-me-and-you Or ‘Comparing the plane and train to China & back.’ 2014
Slow and low- the way to go: a systems view of travel emissions – Research Explorer The University of Manchester
The ethics and the practicalities are aligned. What are those with power waiting for?
There was a good article on this by George Monbiot in The Guardian recently… “The proportion of homes bought as “additional dwellings” (second homes, holiday homes, Airbnbs, buy to lets, and so on) has risen since 2016 from around 15% of the total to 45% by 2023.” – https://www.theguardian.com/commentisfree/2025/jan/26/labour-building-housing-market-private-developers
The UK doesn’t really have a housing crisis – it has an inequality crisis. Both in terms of its own history – the UK has more rooms per person now that it has ever had in the past – and in comparison with other countries that have higher demand but lower prices – what makes housing unaffordable to most ordinary Brits is that the wealthy are in the process of cornering the market.
All not surprising since Labour Party members don’t make meaningful policy anymore only Starmer’s inside shills for the rich do. The Labour Party is effectively now dead in the water! Only ignoramuses vote for it!
Thanks for your reinterpretation of the article, shows the treatment of homes as a commodity by banks/lenders. I read elsewhere, as you state here, that there are plenty of homes, either empty, unused or second homes:
https://www.actiononemptyhomes.org/news/empty-homes-have-risen-again-in-2024
https://www.telegraph.co.uk/news/2023/09/09/second-home-surge-decade/
I know Angela Raynor talked up building new houses – all MPs seem capable of us the emptiest of slogans (that make them sound thick) – with seemingly no understanding of the problem. The historical data is perhaps illuminating to some extent:
https://www.statista.com/statistics/746101/completion-of-new-dwellings-uk/
Affordability is key, the move away from local authority building is profound and coincides with housing becoming a store of (escalating) value, and eventually a free good, a source of “passive” income, earned by someone else and a home bought out of rent (buy-to-let).
Affordability could be achieved by:
Increasing wages
Decreasing house prices
Decreasing rents
Decreasing borrowing costs
So, the neoliberals see the solution: a glut in supply, more sellers than buyers are needed. But, as you say, those who want to buy, can’t already, and another million houses costing £300k won’t increase sales. And whilst people are renting they can’t save, and rents are unavoidable and also unaffordable (landlords monopolise tenants – homes are not discretionary). Market-based solutions have nowhere to go – housebuilders won’t oversupply, and oversupply damages ecosystems to no useful purpose. The governing duopoly are out of ideas, because the solution would require genuine government – ending most buy-to-let if not all; requiring professional training, certification and registration of all landlords, rent controls (again); reducing interest rates; banning most second homes (especially holiday homes); changes to land management and ownership (taxing large estates, ending subsidies of the same), supporting/forcing the use of empty and unused homes or accelerating the sale of the same.
Can I come at this from a different angle?
I have one btl property, (no mortgage) let for slightly less than the local housing allowance, to a young lady who could not afford to buy, or to pay “affordable” rent. I usually send her a post Christmas rent rebate. She looks after the flat, I try and look after her.
My main question is – how can my tenant be protected in any new arrangement? What is just and sustainable for her? 1 bedroom flats are scarce in that market town. Any solution must protect her home.
Could I sell to a social landlord preferably a council (below market price – perhaps at a nil-profit price that removes my capital gains liability) and for her tenancy to become properly protected as a social tenancy?? Would there be guarantees that they would not sell the flat to some less than savoury housing association with a v well paid CEO? Would they even contemplate a leasehold flat (small block, we all share the freehold). Would the other freeholders allow a social landlord to buy in? Would a council keep up with the maintenance as well as we do, given their terrible finances? Maybe I’m a better landlord than a cash strapped council?
Without government money and legal change, things won’t improve.
On 2nd homes in tourist areas eg Cornwall – how to manage conflicting interests of locals who need homes, tourist industry who need accomodation, trying to encourage tourists whose spending benefits local businesses not just property owners who live elsewhere, the environment that needs protection – accepting that the current situation is horrendous.
It would be great if these issues could be resolved at a granular level, and discussed and decided collectively, instead of, as is currently happening, Lords (who are landlords) are tabling amendments to the renter’s bill that favour themselves (in the guise of general concern, of course). I can imagine a situation where no one needs to rent in the private sector, or ever say that they can’t afford a place to live. It’s doable, bug the govt chooses not to. Ideally, your questions could be discussed and decided collectively. I too would like to see an end to unethical opportunities to exploit, for anyone, especially for life’s essentials like a home, it’s sickening. I have young friends who are paying disgusting levels of rent.
Would you be able to lease it to your local Council or a housing association?
As we currently, like it or not, seem to live in a world managed/controlled by a Neoliberal elite, plus their acolytes, might it stimulate our “democratic representatives/delegates” if their pay were connected to rates of homelessness and food bank use?
It won’t happen
The housing crisis has many manifeststions, many reflecting market dysfunctions One many commentators here will recognise is that we build lots of new, low density boxes and few smaller property for older people to downsize a live within more central areas within the communities they, families and friends, already live. So they end up as ‘house blockers’. That’s the sort of problem Labour’s housing and related planning policies might be able to help address.
As for the fundamentals is useful to step back an look at the macro issues they may be at play. My take is that since the 1980’s housing has become an asset class within a neo liberal economy that has seen increasing wealth inequality, and the ability to access capital (borrow). Over simplifying, poor people spend and rich people hoard. An effect of that ‘hoarding’ has been to drive up the price of certain assets. Notably share prices and house prices. Both standing at record highs. On the other side of the coin, against a backdrop of a growing population there has been a relative under investment in national infrastructure and capability. The legacy one generation passes on to the next. So we have degraded water and sewage systems, school and hospital buildings long needing replacement which support the quality of the environment, education and health we handover.
Stepping back even further. Housing is one area where data helps us take the longview. Go back far enough and we find that, in less equal times, housing was even less affordable than today.
https://www.schroders.com/en-gb/uk/individual/insights/what-174-years-of-data-tell-us-about-house-price-affordability-in-the-uk/
“A positive note… average prices rising”
Positive for whom?
Speculators, those with assets to grow.
Negative for most other people. Even those in houses who would otherwise not want to see their assets dwindle won’t be making a loss or negative equity surely would not suffer if the average dropped.
I have been thinking for a long time that any workable solution to the housing crisis will necessitate a crash in the housing market. If prices do come down, people will lose what they believed to be investments, and that’s a “crash”. If governments actually deliver on promises to build new houses that will flood the market and should force prices down, which also means a “crash”. If nothing changes and people are unable to get a home to build their life around, that will have massive economic impact, and then you’ve got a wider economic disruption. I see no solution that gets people into homes and also retains the value stored/invested in the housing market.
From what you are saying, It sounds like there is now enough supply to meet the demand, but prices are not falling to reflect this. Of course they are not, because people have been led to believe that housing properties are an investment that will only ever go up in value, and allowing prices to crash down would be an admission that this whole market has been based on a lie all along. It’s irrational behaviour, but how long can it last? I fear far too long because once you’ve already got a home, you’re safe and have a place to live. Even if you want to sell, you most likely don’t need to settle for a low asking price right away as your existing house can be used as collateral on a loan to buy your next one.
The people who suffer are those on low incomes, stuck renting who would like to buy, first time buyers, young families, and councils desperate for social housing stock. But who cares about them? Not the banks, and it doesn’t appear the government either.
We should not be surprised that the media mis-represent the truth when it comes to the housing “market”. They have been doing this for years, and they are part of the problem.
For them, reporting house prices on the up = Good.
For them the social consequences of this and insecurity for those left behind = Don’t care.
As someone who is facing a lifetime of renting, I can say that the obsession with housing and making money from it disgusts me. I honestly don’t know if it is worth having a long retirement if the end result of it is that most — or all! — of your pension ends up in the pocket of a landlord.
Of the many social crises that we have building up — and there are many — one is older people forced into a lifetime of renting because they missed out on getting “on the ladder.” This is due to house price inflation being many times CPI and salary increases.
https://www.housing.org.uk/globalassets/files/resource-files/older-people-in-the-private-rented-sector—nhf-research-report—2023.pdf
It is a scandal that is not even being discussed.
I did a little calculation recently.
Let’s say you are about to retire on the UK state pension — no private pension or investments to fall back on, and you are a renter.
Full new state pension — £11,973 per year — 2025.
Basic state pension — £9175.40 per year — 2025.
You rent a one-bed flat in London — current average rent — £2100 a month — £25,200.00 a year.
As the Americans say — you do the math.
Now I know that London is an exception, but property to rent is expensive everywhere now. The sums don’t add up, do they? And while there are other benefits, like housing benefit, they all come with strings attached. The biggest string in the future is neoliberal Labour and Tory looking to cutback further on benefits.
And let’s add up all the other things that we have no choice to pay for like council tax, gas and electricity, water rates and food — all increasing in price way above CPI inflation. They are prone to greedflation because it is a NEED. All the things we need just to live.
And yes, the one thing that is never discussed when it comes to housing, the elephant in the room, is affordability. That is the crisis, and I think it will only get worse. I’m not looking forward to retirement, I doubt I can afford it, but my landlord will do well.
I live in a part of Birmingham with a high concentration of rental properties, catering to both students and social housing. We desperately need to address the issue of landlord/agency responsibility. Local landlords often feign ignorance, hiding behind the agents, most of whom are outright liars and rogues. If you manage to contact a landlord (which is very difficult), they deflect complaints by saying the agent handles the property, claiming either no knowledge of the situation or pretending to be unaware. Only legal threats or public embarrassment get their attention.
Having lived in the area for a long time, I’ve learned that agents generally categorize landlords into three types:
“Do nothing” – maximizing profit.
“Minimum effort” – maintaining the property just enough to keep it safe.
“Hands-off” – simply collecting rent (with varying degrees of involvement and property quality).
Social housing landlords often seem to believe (likely influenced by agents) that the substantial profits they generate from government funding are justified because they provide an essential social service. Many operate with the mindset that we should be grateful they are enriching themselves, both in assets and financially, through state benefits.
Over half of the rental properties gradually become uninhabitable and squalid, until they can no longer be rented, even to the “Exempt Sector.” At that point, they undergo complete renovations, often bending the rules regarding minimum space and room sizes.
This occurs while private rents have almost tripled in the last ten years. In the exempt sector, authorities are paying approximately six times the yield compared to ten years ago.
Thanks for saying it out loud. There is no shortage of housing.
So building more won’t fix rising prices.
Since tautology works, I will repeat myself again about what Homes England gets up to in its ‘funding’ of affordable housing.
In the current Affordable Housing Programme for the above institution which does the government’s bidding, the grant rates for acquisitions from the market (houses already counted into the national housing stock) are much higher (this is outside London BTW) than the grant rates for new build – additions to the current total stock which are half and less the value of acquisitions in the face of a ‘housing crisis’ – a shortage of homes.
If I did not work in the sector, I would also like to put in an FOI on Homes England’s ‘Help to Buy’ policy which I think should be investigated by a parliamentary committee and the NAO to see what the average grant rate for that was too and who got it.
Your government is corrupt.
It starves new homes of money to address the shortage problem which helps push up the cost of new build and fills party coffers with developer donations, yet is content to just move existing housing around in the market enabling estate agents, banks and home owners to profit. It is also a way to compensate developers for s.106 affordable housing, where 11% of new build has to be given to affordable.
The market wins in both cases. When will the public realise that the market is not here to solve no other problem than how to make more and more money?
Disgraceful.
Send me the FoI
Slightly off topic, but only slightly. Locally to me here in Somerset, it seems that a lot of properties that are selling are being sold by beneficiaries of estates, as the “Baby Boomers” are beginning to die-off en masse (to put it bluntly). Several bungalows sold hereabouts certainly fall into that class of transactions. Most of these properties haven’t been ‘updated’ for two or three decades.
The other thing is that such properties are often full of “stuff” that no-one wants, not even charity shops, and this, in itself, is a tremendous problem. Speaking personally, my own mother is a dreadful hoarder and her property is full of terrible examples of the “landfill economy” she has lived through. Elizabeth Anker, from Vermont, has written a good essay about this, and it’s well-worth reading https://by-my-solitary-hearth.net/2025/02/04/the-daily-4-february-2025/
My “collecting vice” happens to be classical music CDs. I’ll admit to having far too many, but I salve my conscience by pointing out that 90%+ of these were originally bought by now deceased baby boomers in the 1980s, 90s, and 00s. So, some “stuff” is being recycled by me in a small way.
As to what happens to my collection when I die remains to be seen – I’m sure my kids won’t want my “library”!
I had to clear my step mother’s / late father’s flat year. A great deal went to a tip. Photos were carefully sorted. Some books and odd mementos were kept. The best furniture was recycled. But it was sad to take so much they had valued apart when we saw no value in it.
In my techno-optimism days I hope that waste sites become the new gold mines. We are discovering bacteria that eats plastic, we are progressing in creating new enzymes that can do the same. We are slowly progressing in building nanometer sized machines that potentially could take apart waste into its constituent atoms, and then use those atoms to build new things. We know this is scientifically possible – we ourselves are made up of atoms that are pulled together by tiny machines (our cells) into a whole human. The question is when.
If we can solve the scientific and engineering challenges for nanotechnology, then all the waste the world has produced over the years becomes ultimately recyclable. If only the Musks of this world, rather than fantasising about a million people on Mars, devoted their money and effort into real practical waste management solutions.
If only….
I agree with your assessment, Richard, even though I am currently managing the sale of a property on behalf of the executors, and the estate agent is trying to get me to reduce the price. But that’s because it is a retirement apartment at less than £100,000. The agent tells me that there is no shortage of buyers in the area for properties in the £1 million bracket. Anything much less struggles, of which there is plentiful supply but dearth of buyers.
We are living in a weird world
If we all ‘agree’ that inflation is bad, why is it that house price inflation is suddenly good? It isn’t. In 1990 shortly before we got married we bought our first flat in Central Edinburgh. It was cheap because it had been rented for 20 years as a student flat and was in a very poor state, plus the building was awaiting a major repair due to leaks in the roof (a typical Edinburgh tenement where it required the Council to force the 12 flat owners to agree by using a compulsory repair notice and making them pay up), so we got it for £39,000. Lounge, kitchen, double bed and single bed, bathroom and toilet (Victorian with the tank high up and a pull chain, which we kept). At the time a University Lecturer got about £20,000 pa.
Move forward to today and the same flat would cost getting on for £300,000. I know it was sold about 15 years ago for £190,000, and after renovating it all we had sold it for £71,000 in 1998. Meanwhile a top of the scale University Lecturer gets £51,000. So wages up x 2.5, flat up x 7.9. If we were starting out now even with our combined income (back in 1990 it was just my income), we would not get a mortgage large enough to afford that small flat. I should also point out our combined income would be more than double median earnings in Scotland (£30,000). So that means probably 70-80% of the population could not afford even a starter flat.
I think what the UK needs is not ‘more houses’ per se, we need more easily affordable council houses. It was probably always the case that a third of the population either could not afford to buy, OR that buying was not suitable. For example, if you have to move often. To be genuinely affordable that would need the rents set at around 10% of median earnings, so around £3000 pa. Council houses should be easy to finance – the house is an asset that provides security for the borrowing and the rent covers the interest and repayments. It should also be accompanied by a change in the law on Compulsory Purchase. Councils should be able to purchase land at its current use value (e.g. agricultural or derelict), and not at some landowner’s ludicrously inflated ‘hope’ value. That was all provided for in the 1976 Community Land Act, which was the very first thing Thatcher repealed in 1979.
Given 30% of adults taken care of in the new Council Homes sector, then private rental demand would collapse just as it did in the 1950s and 1960s, and homes for sale would experience a gradual deflation of their real value.
Thanks Tim
I could not now afford my first flat in Tooting
‘If we all ‘agree’ that inflation is bad, why is it that house price inflation is suddenly good?’
Tim Rideout rises a good question. But this is not as sudden as he suggests. It’s been happening for years. I have to use 1999 poll tax valuations in our rent calcs for social housing and honestly, the variations are huge between now and 1999.
A house is both an asset (a store of wealth) and a good.
But which attribute is driving up the price?
As a good, the more we make of it drives down the price (the economies of scale); as a good we can consume it ourselves – live in it. As an asset we can borrow against it, secure credit even though we may not own it outright; we can rent it out; simply buy to watch the value go up and sell and buy another. An attribute of an asset is that no matter how much of it is made, unlike a good the price will go up because of the expectation that the price will increase.
I think there is a discrete relationship between income and pension value trends and house price movements – housing’s asset value is now ranked above its use value (as accommodation, which keeps people off the streets).
The values placed on housing for sale reflect its FINANCIAL potency for the owner in a world of falling incomes in work and post work incomes. Housing’s more basic function as shelter, plays second fiddle to the spending power a house gives you.
Therefore shelter has been financialised. Shelter is now a tool for consuming more, but at the margins it will also enable lower income home owning house holds to stay viable in the economy but this means more debt because home ‘ownership’ (or more accurately incremental home ownership through a mortgage) enables household to leverage above their income.
A deleveraging of the debt potential of housing by reducing prices/values would have huge consequences and would need to be managed carefully.
For me the message is clear: the housing market is not about housing people; it’s about selling access to asset wealth and fuelling the credit market. The provision of shelter in society has been captured by capital and exploited unsparingly.
And it stinks.
Agreed
Of all the posts on this subject I think Dr Tim has totally hit the nail on the head. For too long the housing ‘market’ has prevailed, not surprising under a Tory govt, but most disappointing under a so called Labour Govt. The Green party has long campaigned for more council housing, and eco improvements to existing stock.
About 25/30 years ago when zero emission housing was first discussed, developers like Barrats contributed to a competitive site based at the Building Research Centre in Watford showcasing what were then considered to be ‘Net Zero’ homes.
At the time LED lighting had not been developed for domestic application, and white goods manufacturers were still only at the design stage of lower consumption models, air or ground sourced heat pumps or solar panels were barely mentioned, let alone grey water or localised reed bed sewerage management systems.
So, most of the net zero application was in the fabric of the building, larger windows to reduce the need for extra high wattage lighting, some well established Passive House measures, super insulation and innovative measures to keep the building warm in winter and cool in summer. Hours had been spent by building designers, scientists and product developers in drawing up new building regulations that would reset the standards of building construction sustainability.
If that curve of developing Net Zero houses had continued we would be in a very different place right now, with many more sustainable homes having been built. But David Cameron’s “cut the green crap”, and Eric Pickles slashing his way through innovative sustainable building regs means that what we have in all new building estates since 2000 are barely eco friendly, or cheap to run.
One of the huge issues that has been ignored in all this time, is the cost of running a household, be it purchased, commercially or socially rented. As the price of housing has seen exceptional growth, the fabric of the buildings have failed to advance along the technological advances that are available. So the cost of running the household has been vulnerable to price hikes in gas, electricity, water and infrastructure services, along with the entirely criminal growth in leasing and maintenance charges.
So, what am I saying here?
The whole housing shebang needs root and branch review and reform. We must take the ‘market’ out of the planning process, and ensure that councils have the resources to properly plan housing solutions based on local and national needs. Building regs need to be supercharged to provide sustainability and slash running cost affordability.
Passive Haus standards and regulations reduce energy consumption and cost by 95%. Just imagine, every new home built to save 95% energy consumption, reducing our national CO2 emissions at a stroke.
Local authorities could finally be dealing with their housing waiting lists because they have stipulated the vastly improved ratios of social housing to private development.
The consequent reduction in council’s budgets for renting private housing and ‘hotel’ accommodation.
The subsequent improvements in the wellbeing of newly accommodated homeless households and the subsequent benefit to local health budgets. ETC ETC
So yes, I agree, simply building more houses does nothing for the pressing needs of a dysfunctional neo liberal ‘market’, it’s all part of the seismic paradigm shift we need to redefine what a progressive future needs to look like for our nation and our people.
Oh, I don’t think there is any doubt that the new small ‘modular’ reactors will work. The basic technologies involved in the planned designs aren’t particularly novel.
The big problem is that they haven’t been built or tested yet! They haven’t even built the factory where the prototypes are to manufactured!
Betting the house on a technology which has no fixed date to be even developed in the first place seems bloody stupid to me. Which makes Labour’s decision to back it to the hilt entirely obvious, because bloody stupid seems to be their stock in trade.
China are building larger reactors based on designs which have successfully operated for decades, with an aim of 5 years from spades in the ground to operation. The RR design foresees a 4-ish year build time for a reactor with a third of the output.
People simply seem to forget that ‘owning’ a house is just a form of consumption. One has to heat, eat, and pay local taxes whilst living in it, and those costs really don’t change much (in fact, they can increase) when one ‘retires’. I get a sense that the housing ‘market’ is teetering on the edge of a big drop in the notional values of houses, simply on an affordability basis. The 82-year old mortgage broker (!) that I recommend certainly thinks so, and he has 62 years of experience in the market in Bristol & Somerset. After all, your house is merely ‘worth’ what someone else is prepared to pay you for it, and they are almost always selling a house, too.
We last moved house in 2010. Back then the ‘housing market’ was moribund, and the property we wanted to buy as a family home had been for sale for some time at £525,000. We put our house on the market at £30,000 less than the estate agent recommended (much to his horror) and sold it within a week. mainly because of this – and a serious threat to collapse a property ‘chain’ involving multiple sales and purchases (we were told that 37 properties were involved at one point, which is ridiculous) – we ended up paying £390,000 for the home we now live in.
According to the local estate agents, the our house is now worth £850,000, which is rot. I fully expect to sell the house for about the same amount we paid in inflation-adjusted terms. According to the BoE inflation calculator, that’s about £591,000. The ephemeral difference between estate agent ‘valuations’ and ‘real-world’, inflation-adjusted values can, and I think, will, vanish like a puff of smoke. At least, I hope so.
Much to agree with
What is so frustrating, is it seems to be relatively easy to be a bad landlord, follow the market and make money. Legislation (because legislators tend to be landlords, and any renting MPs do is subsidised by HMG) is weak.
But trying to NOT make money, and be socially responsible, as an individual or small group of individuals, is quite difficult, with legislating making it harder, not easier.
I have experience of my own BTL (see my post above), plus an investment with others (involving joint Muslim, Jewish, Christian & non-religious individuals) via an LLP, in providing refugee housing to help with the Syrian Vulnerable Person scheme, a similar scheme involving church trust money to build a small housing unit in a back garden for a vulnerable tenant, a scheme with a national charity doing similar work to provide supported temporary housing – they are all trying and succeeding in providing good quality supported housing with good quality social support – but each scheme had to overcome a lot of bureaucratic obstacles.
It seems as if it would be so much easier just to follow the Rachman model!
There is a need for disruptive creativity, radical change, but change that doesn’t damage lots of the vulnerable people along the way to housing heaven!
It must be very frustrating working within the current system, when you long for something so much better.
It’s so easily applied and a truism for me, that you can make no sense of nonsense.
We sold, under Thatcher, social housing with the Right To Buy policy. Councils were not allowed to re-invest in social housing and monies made went back to the treasury. So? Hampshire has opted out of local council? Have we given up on local council? Obviously their right to buy has been curtailed by poor investments and that comes back to government. However my council has been quite fortunate. I believe that is because there has been no vested interests!
Personally I feel that it will be truly sad to lose local council.
Especially as my local council has tried to restrict Houses Of Multiple Occupancy. Whilst developers are turning family homes from 2 bed 4-7 bed. Developers have worked out that they can do this without council consent. Any arbitration can quite easily be taken up with someone in Swansea that just signs it off as it’s meeting government needs for housing. How the hell can we complain ? I think we have all seen complaints from Cornwall to Brighton.
Greater governance of local council is an absolute necessity. They should not be party run. Maybe there are greater councils of people.
Rising wealth inequality is now also inter-generational. We’ve had decades of property and asset prices rising faster than real wages, which haven’t risen much in recent decades. The result, young people find it increasingly difficult to buy a home and rents are also increasingly in unaffordable particularly in big cities. The balance between asset ownership, where wealth is increasingly generated for the holders of those assets, and wage earners is broken. Taxing wealth is essential although we can arm wrestle over the best approach.
Firstly, It’s quite incredible to think that your anecdotal conversations with a handful of people in the depths of East Anglia, provide more useful market experience than thousands of conversations undertaken on a country-wide basis by a national entity.
Secondly, referring to interest rates at 4-5% as ‘high’ demonstrates a massive lack of understanding of the history of interests rates and the need for real interest rates to encourage savers and investors.
Finally, the imbalance between supply and demand is driven by policies that you support – higher costs on landlords, highly restrictive planning permissions and a significant increase in demand to the high levels of immigration. Necessarily therefore permissions are been given in inappropriate places (flood plains etc) which can lead to issues at certain times (not linked to climate change, as some would like to claim).
Your whole narrative is inconsistent with itself let alone with known and independent facts.
Oh dear….
I never pretended I was not using a different methodology, precisely because the insights provided were different.
And as for interest rates, if you knew anything about these you would know a) high rates discourage investment b ) savings do not fund investment and c ) the current proper real interest rate based on 800 year trends is 0.5%. https://www.bankofengland.co.uk/-/media/boe/files/working-paper/2020/eight-centuries-of-global-real-interest-rates-r-g-and-the-suprasecular-decline-1311-2018
Your other comment is just drivel.