UK House Prices Finally Start Falling: What Next?
HTML-код
- Опубликовано: 8 фев 2025
- Sign up to Imprint (with a 7-day free trial and 20% off an annual plan): imprintapp.com...
TLDR Newspaper Announcement Video: • TLDR News has a Huge N...
Buy the TLDR Newspaper: tldrnews.co.uk...
UK house prices defied rate hikes but are now falling rapidly, raising concerns. This video delves into the reasons and future prospects.
Housing Crisis Explainer:
• Why Are Houses Unaffor...
Further Reading:
worksinprogres...
🎞 TikTok: / tldrnews
💡 Got a Topic Suggestion? - forms.gle/mahE...
Support TLDR on Patreon: / tldrnews
Donate by PayPal: tldrnews.co.uk...
Our mission is to explain news and politics in an impartial, efficient, and accessible way, balancing import and interest while fostering independent thought.
TLDR is a completely independent & privately owned media company that's not afraid to tackle the issues we think are most important. The channel is run by a small group of young people, with us hoping to pass on our enthusiasm for politics to other young people. We are primarily fan sourced with most of our funding coming from donations and ad revenue. No shady corporations, no one telling us what to say. We can't wait to grow further and help more people get informed. Help support us by subscribing, engaging and sharing. Thanks!
1. www.economicsh...
2. www.schroders....
3. www.nber.org/p...
4. www.bbc.co.uk/...
5. www.ft.com/con...
6. www.bloomberg....
7. www.bankofengl...
8. www.bloomberg....
9. www.bloomberg....
10. www.bloomberg....
11. www.ft.com/con...
12. www.ft.com/con...
13. www.ft.com/con...
The fact that there is already an excessive amount of demand awaiting its absorption, despite how everyone is frightened and calling the crash, is another reason why it is less likely to occur that way. 2008 saw no one, at least not the broad public, making this forecast, as I'll explain below. The ownership rate was noted to have peaked in 2004 in the other comment. Having previously peaked in the second quarter of 2020, we are currently at the median level. Between 2008 and 2012, it dropped by 3%, and by the second quarter of 2020, it had dropped from 68 to 65.
You're not doing anything wrong; the problem is that you don't have the knowledge needed to succeed in a challenging market. Only highly qualified professionals who had to experience the 2008 financial crisis could hope to earn a high salary in these challenging conditions.
@@TomD226 Recently, I've been considering the possibility of speaking with consultants. I need guidance because I'm an adult, but I'm not sure if their services would be all that helpful.
@lowcostfresh2266 Actually, I'm not sure if I'm allowed to mention this, but I'd recommend looking up Laurel Dell Sroufe because she was a big deal in 2020. She manages my portfolio and serves as both my coach and my manager.
@@TomD226 Thank you for this tip. It was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her résumé.
Our society has become obsessed with everything increasing in value as opposed to staying stable... and in the last 60 years we've seen how our economic system is crumbling and needs to be propped up artificially
In most aspects of modern life we're at war with the uncomfortable reality of things. Trying to pretend one thing is another thing and that problems don't exist. The housing bubble is just one small sud in the colossal reality bubble we've built for ourselves and heaven help us when that one pops...
Value increasing is the artificial part here, which also has active, negative propping up elements. The affordability part has been neglected. Artifical correction will only ever be as useful as minimum wage raises- the effect is fast-diminishing and everyone uses it as an excuse to ramp up their profiteering. The pricing, profiteering and asymmetric information are what needs to be addressed.
@@Bushflareany evidence?
"opposed to staying stable" Well things staying stable means less overall mobility in general. Modern economies focus on growth because that is the best guarantor that people can change their lives on an individual scale and within their lifetimes for the better. Remember, before the Industrial Revolution, society, economy and prices were generally stable for centuries, but that also meant most of everyone remained within the social and economic parameters into which they were born.
@@serebii666 Not really, the reason we need continuous growth is because all new money is created as debt. All economic growth is simply how much new debt has been created . The new growth is needed to cover inflation which is in turn needed to reduce the dragging effect of the interest that has to be paid on all previously created money. There is no money in the system that is not without debt. If we stop growing, or contract the interest on debt will eventually overwhelm us.
Oh no, an estimated 10% drop in prices after a 207% increase in the last 20 years. These poor poor home owners!
It won't be 10%, it will be a lot more. And bear in mind it's a percentage off of your 207% total. Which if it's 25% down is a lot of money.
@@Paul-zu2hewell, it likley won't be more than 10% off the sticker price. But yes, once you factor in inflation the prices will be 30-40% lower than they "should be"
Also this crash has been happening for over 12 months now.
@@Grandude77 why won't it 'likely be'? Says who? You?
If you only bought your house last year then yes, poor home owners!!
@@andyquattro8748 I think that's more stupid homeowner than poor ;) I cannot understand what would posess someone to buy a house in 2022.
My parents paid £65,000 for a 3 bed semi detached, that same house is now worth £250,000. There is absolutely zero chance of me ever owning property.
what about if they die,
@@leeyo5494 I have siblings, and there was a messy divorce. I will barely get enough for a deposit on a mortgage with stupid high interest rates let alone a reasonable one.
May as well squat in someone elses home
In which year?
250k isn’t bad is it ? In the US housing is 416k on average. Canadians it’s like 900k CAD. We are fucked in North America. The housing bubble is really high here
You know it's bad when under 35's are hoping for a housing crash so they can finally get on the ladder themselves
Isn’t house prices collapsing a good thing? People will afford a house and the elite would lose a huge amount of money. Also, if you own a gun and shoot the elite, the prices won’t jack back up
Oh 100% wanting this house of cards to not only come crashing down but to spontaneously combust
You mean under 45s . If you weren't well into your carrier by 2002 you got fucked and rent trapped.
@@avancalledrupert5130 you mean 2008
@@avancalledrupert5130 I learnt a trade in 2002, after 5 years I started a business. I took risks, made decisions that improved my prospects. I bought a house in 2011, so it is possible. I was 29 in 2002 with no money, a criminal record, and I was sleeping in a car. Wish I’d learnt a trade straight from school, instead of getting into trouble, it’s the best decision I’ve ever made.
I don't live in the UK but I face a similar problem in Malta. Me and my brother will face a big challenge in finding a house or even a home. Prices for a house average at about 450k. One may opt to rent an appartment but thats not cheap either. My father tells me just 20 years ago, houses were 200k cheaper than they are today and about 10-12 years before that, houses costed about the same as a car.
Hey man, I'm from Malta as well and I work in iGaming so in theory I should be able to afford a place of my own.
Nope!
If I was Maltese I'd stay with my parents to save as much money as possible and invest to be able to afford a place of my own 😂
It will be interesting to find out how the fall is spread between the different types of housing, like say entry level homes vs semi-detached
I hope they continue to fall prices have been far too much for so long now
I would think that higher end homes will be dropping in price faster, while smaller and starter homes remain more stable as people downsize into them.
@@llanieliowe794That would be good for you, I assume. Imagine you have bought your home last year.
@@zedtrek Honestly, I don't really have much sympathy for those who have already bought their homes last year.
For first time buyers they will be paying the same amount but may have more interest in the next 5 years, which isn't huge
It's only those who bought second homes or homes they wanted to rent/sell who will be affected and I have the opposite of simply to these people they deserve what they are getting a lot of them don't even live in this country, the rich are the problem here they are the most selfish people and were the ones who caused this issue with their greediness anyway
The data is quite available for this information, especially geographically. The average drop in house prices is heavily influenced by London and the south. Scotland and N. England have had price rises
wait so, prices are falling but interest rates are rising, meaning loans are less affordable for lower income people?
wouldnt this actually cause a shrinking of middle class home owners, with a lack of increase in lower class home owners, leaving only upper class people being able to afford the upfront costs or interest rates?
Yes.
Well, you can afford a good tent, if you take a loan. Not sure if you can pitch it to your convenience though.
Yep. It's mostly cash buyers/investors propping up the market right now.
@@jamessmith1652 that's not a market. It's a protectorate . To keep peasents out. A market which provides no housing for people is not fit for purpose.
The prices will go straight back up when interest rates fall again cause the excessive demand due to mass migration hasn't actually dropped.
If the 30% crash mostly comes off the most expensive housing, that's not good enough. We need 200k houses to go down to 160, to give back the missing bottom rungs of the ladder. To destroy the captive rental market and force it to be competetive, instead of extortive.
Nothing like wanting to destroy a market which keeps a great many people out of poverty when they are retired.
@@SaintGerbilUK At the cost of having the young live hand to mouth and not have kids.
@@Hession0Drasha young people don't have money that's part of being young, but you get more as you gain experience.
People are starting their careers later so of course don't get up to their earning potential until much later in life.
It's the consequences of their own decisions, where as you want to destroy people and choose winners and losers.
@@SaintGerbilUK my father had a mortgage on a house when he was 22, he'd paid it off by the time he was 30. A starter home now takes 30+ years to pay off. If you live with your parents for untill 25 or 30, to be able to have saved a deposit in the first place. If you pay rent you have to wait for experienced level pay to kick in, to be able to save anything. When does that start, 35? 40? To be able to try and have a family. Having subsidised a pensioner for the first 15 years of your working life, not even counting taxes. With nothing to show for it, apart from work experience. 😑 if that's all there is, what's the point of living in the uk?
@@Hession0Drasha that's nonsense it's been standard for a mortgage to take 25 years for 40 years or more, sure there are 30 year mortgages now that's due to rising housing prices. If your father paid his mortgage off in 8 years, he either won the lottery or is lying.
And you're welcome to leave whenever.
The housing bubble has to burst simply because those sitting on properties at the moment planning to use the capital raised from the sales to pay for their old age care bills will not be able to sell these properties to the younger generation because the vast bulk of the younger generation through reasons of rent and rent hikes and wage stagnation cannot afford to save for a deposit. Therefore a lot of these houses being sat on by boomers will either not raise the hoped for sum or will prove unsaleable
Doesn’t work in countries with massive inequality as the 10% of the population with 60% of the wealth can afford to put multiple homes as investments. If you reduce inequality, or restrict mass investment by a small minority, then it’ll put downwards pressure on the market. Growing Inequality is exacerbating issue for housing. Check out Gary’s economics, he explains this in detail
Countries will simply increase immigration rates as a means to prop up housing prices.
It's a zero sum game, we are creating a world that is actively hostile to anything living in it.
Multiple homes will only go so far. If the majority of the population can’t afford or don’t want to pay that much for it, then prices will fall (as has been happening).
They cannot save for a deposit yet they can spend money like pi*s on restaurant meals, wine bars, nightclubs, takeaways, £1000 I-phones, brand name clothes, Gucci handbags, £300 pair of shoes and dirty weekends in Ibiza. Give us a break please. This younger generation want to live the life of Riley yet don't want to face the reality of their own actions. Stop blaming everyone else and take a hard look in the mirror. The world does not owe you a living.
@@stevenhull5025 Not every young person spends like that 95% of them are struggling. Do not believe everything you read in far right anti-youth rags like the Daily Express
The effects of the downturn are beginning to sink in. People are being impacted by the long-term decline in property prices and the housing market. I recently sold my house in the Sacramento area, and I want to invest my lump-sum profit in the stock market before prices start to rise again. Is now the right moment to buy or not?
Over the past three years, I have been working with a professional who has provided daily guidance on my investment decisions. With their expert analysis, I have realized gains of over $1 million. Their insights have helped me avoid losses and capitalize on market breakthroughs, particularly during downtrends.
I'm been guided by "Margaret Johnson Arndt." who is widely recognized for her competence and expertise in the financial market. She has a thorough understanding of portfolio diversification and is regarded as an authority in this field.
For the future of next generation... it has to burst!
For the current generation.*
X is already screwed; millennials poorer; boomers might inherit or become wage slaves!
Current generation, not future. Late-Millennials and early Gen-Z are already getting fucked. There won't _be_ much of a next generation if the current generation doesn't have the financial stability required for having children.
I'm beginning to think treating housing as a commodity was a mistake
We don't treat housing as a commodity. Housing IS a commodity. There's not enough room for everyone to have the house they'd like in the place they'd like it. Space is finite.
Reality doesn't change just because it'd be convenient if it did. You gotta accept the limits we're working with.
@@Bushflare housing is a resource, but that doesn't mean it has to be a commodity.
@@matthewparker9276 SHELTER is a resource. HOUSING is a commodity.
If all people want is a roof over their heads then we can just build blocks of flats for everyone to live in but that's not what drives the housing market because people want MORE than shelter. They want comfort, amenities, and proximity to work.
@@BushflareI accept that.
The problem here is that we have to buy a limited options and try to beat the demand from richer population that is willing to buy multiple properties. And that is what I think the original poster was writing about. Some people have multiple properties, some have nothing and can be sure of nothing - if you rent, you may be priced out soon enough and will have to downsize. Or if the house is sold, you have to move out.
@@Bushflare "If all people want is a roof over their heads then we can just build blocks of flats for everyone to live in" thats what we did after WW2, and even those hovels are extortionate in price now
The decline in house prices isn't because of more affordable housing coming to the market. It's because of the high interest rates forcing owners to sell because they can't afford the mortgage anymore. Landlords are also selling because rent is too high for people to pay and the cost is too high for landlords to just sit on an empty property. I tell you, good news will only come when more affordable housing is put on the market. That is the only time when prices will actually fall. As long as the Conservative is in government then there will never be any good news.
Rubbish. Landlords are selling because they borrowed money to buy the property on interest only fixed mortgages which are now due to increase. The rent the tenant pays will not be enough to cover the new mortgage repayment. Hence the landlord has no option but to sell. Another reason is the new regulations due soon prohibiting landlords serving a section 21 notice, allowing pets and basically losing more control over their own properties. EPC's are another nail in the landlords coffin. Expect a massive shortfall of rental properties on the market resulting in even higher rents.
housing prices declining is what causes housing to become more affordable
Section 24 has also stopped landlords claiming mortgage interest as an expense so landlords are paying more tax on their rental income which has forced landlords to increase rents.
You didn’t mention the fact that banks don’t want to lend money for mortgages to first time buyers because they see them as too big of a risk
If people are downsizing homes they're not increasing the overall supply of housing; they're shifting the supply to bigger expensive homes which new homeowners can't afford anyway.
Lowering house prices by raising interest rates doesn't make them more affordable; it just makes banks wealthier.
Brits upset at housing affordability ought to consider what pressures are raising housing demand so high despite low birth rates among the English.
Nail on the head. With a national birthrate of 1.6 .... since 1970's , it would mean that for 40 grandparents, there are 32 Parents and then 26 Children.
26 children take up a lot less space than 40 grandparents. also a reminder that the 1970's WAS two full generations ago.... (children born to 25year old parents)
"The money goes to landlords as opposed to productive companies" what nonsense. Letting agents, NICEIC electrical certificates, gas certificates, inventories, builders, boiler engineers, roofers, plumbers, carpet cleaners, window cleaners, gardeners, mortgage brokers, solicitors. During construction there are party wall surveyors, all tradesmen, architects, structural engineers, building control surveyors and utilities companies. Landlords employ huge numbers of people and now thanks to the Consocialists we can't put mortgage payments against our tax unlike a "productive company".
The housing data is on a 6 month lag. House prices have already fallen at least 5 more like 10-15%. Some are predicting we won’t see a real bottom til 2025.
Inflation has been over 10% relative to peak prices, so if prices had not moved they would have gone down 10%+ in inflation adjusted terms. Any drops above this are even more.
Even on a wage adjusted basis there's been a much bigger drop in prices than the raw £ figure shows
Are you saying a drop from 8 to 12x average salary to 6 to 10 will make housing affordable?
@@rok1475 We just need a new normal of house prices fall by 5% each year.
I hope they drop 50 percent or more
Agreed from peak to now, already down 10 to 15 %, depends on area but even if interest rate remains the same for UK, there are millions coming to renew their mortgage from around 2 % IR to around 6 %,. And guess why BOE put a brake on IR? Have they noticed a recession already arrived? Job cuts.? Holding my breath, next year will drop another 15%, provided the Financial market doesn't go bust in 2024.
Downsizing does not increase supply. If I buy one house and sell one house, the net supply changes by zero.
I usually enjoy these videos that help explain economics in simpler terms for the average Joe to understand, but you’ve done us all a massive disservice by not mentioning how house prices got so high to begin with.
The reason why the UK housing market is so inflated, and the reason why prices WILL NOT drop drastically is because of the lack of house building over the past 3 or more decades. Compounding the issue, the government has not replenished stock of the council houses they’ve sold during that same period. Additionally, due to the weak Sterling, property prices are very enticing to overseas “investors”.
Mark my words, house prices cannot and will not drop precipitously.
Help to buy schemes, stamp duty holidays, or even a new round of quantative easing. Every time you think the housing market is finished they manage to find a new way of keeping it artificially propped up. Often with 100s of billions of pounds of tax payers money.
The government needs to keep real estate prices going upwards as it's the main driver of economic growth aka new money creation through loans and mortgages
And mass-immigration - that's the number 1 driver behind the explosion in house prices since the 1990s.
If a Tory Govt fails to keep house prices up, they will lose votes.
@@michaelstimpson1137 and stamp duty income
@@michaelstimpson1137 When the main source of your country's GDP are internal loans you know it's time to leave :D.
Baron Munchausen pulled himself out of a mire by his own hair, but will that help in real life I wonder :D
I wonder when did UK decide that producing and exporting things is inefficient compared to juggling numbers in an office
House prices might drop back to 2018 levels before continuing up again.
Some first time buyers with no debt and enough cash saved will benefit from this but it's hardly the gamechanger people in the comments are acting like.
If we want to solve the long term trend we need to build more homes in high demand areas and reduce immigration.
Also this fall in prices will hurt renters as landlords are faced with higher mortgage interest and may react by selling their property or charging higher rent.
@@jmiller7209since when does anyone care about renters bruh
house prices need to fall. to afford to rent a medicore flat in a lot of places, you need to work a job that pays a bunch more than minimum wage (which is rough because a lot of areas only have service jobs or super high competition office jobs). in my area, the rent on council flats went up about £200 a month in the past 5 or so years. Obviously differs depending on the street, but still.
If you bothered working harder at school and had good grades then you could have progressed to higher education resulting in better paid employment and not mediocre minimum wage jobs. The trouble is, so many whine about their circumstances instead of getting off their butts and doing something about it.
@@stevenhull5025 The thing is that unless we automate everything, then there will be people required to do these jobs. Some people are not able to enter into higher education, for whatever reason, and telling them that they should have tried harder is not constructive or helpful. The idea that people working minimum wage jobs don't deserve to have a comfortable or dignified life (where I would hope that we would agree that being able to house, feed and clothe yourself is a bare minimum) just because they didn't enter into higher education is a very sad life view.
@@stevenhull5025You about as smart as that idiot who ate glue at school
*Home owners* " I bloody hope it doesn't crash "
*Renters* " Pleaaase crash it needs to happen*
Arguably it'll end up being somewhere in the middle and both sides won't be happy.
Disagree I'm a home owner and I want it to crash so badly. Because my next house percentage wise will fall more and I have a HTB scheme so I'll pay back less. I have more to gain by them coming down
This is not good for the rental market, prices are going up 10% YoY and landlords are selling up - reducing the stock and increasing competition.
It's not about the normal owners, it's about the landlords
@spacechannelfiver
If a landlord sells, who are they selling to?
They either selling to another landlord, which means no change.
Or they are selling to an owner-occupier, which means one less person trying to rent in addition to the one less house available for rent. It's a wash.
(They could also sell to someone moving from owned home to owned home, but that just means the same maths can be done on the buyer's previous house instead)
There are plenty of things that can impact property prices, but landlords selling has only a minimal impact.
If the market crashes its not like renters will be able to afford a house anyway, as banks won't loan anyone money to buy a house. Also a house price crash will no doubt come with an economic crash and that will impact employment, further reducing the likelihood renters can buy a house as well.
UK needs to increase its supply of quality housing, and gradually improve the salary to house price ratio, either by raising salaries at a faster rate, or reducing the rate at which house prices increases.
The chart they show makes it look like house prices have been dropping since Aug ‘22. If you look closely, the chart measures inflation. The line which shows the earliest point at which prices STOPPED RISING, (not falling), is Nationwide in the middle of January. Two of the other three don’t show prices even stagnating until April and August. The most recent ONS figures on that graph don’t even show them dropping at all. I’m not saying TLDR are wrong, just that lines going down from left to right don’t automatically paint a fair picture.
This is silly. The video clearly says prices were still rising in June and when the graph comes up the voiceover says "In the past couple of months prices started declining". It also makes logical sense that for a price trend to lower, increase needs to slow down, then stagnate, then decrease happens.
The only way this is confusing is if you watch the video with the sound off and then don't know how to read a graph, in which case this video is indeed challenging. Yet being challenging is required to get anywhere close to the full picture.
@@guillaumeguinard4470 I explained in my comment, I know perfectly well how to read a graph, but there is a known practice in all walks of analysis of designing graphs, that at first glance, paint the picture the graph designer wants to show. The graph used is a derivative. The same information on a graph of prices, (not change in prices), wouldn’t show immediate left-to-right decline, rather prices rising over most of the graphs area, only to slow slightly on the very right. I’m not saying they’re wrong, just that they’re using the data the way they want to. If you’re unaware of this common practice, then you are either inexperienced or naive. I never said it was confusing, I wasn’t confused. I saw through their attempts to spin a narrative.
Yep, this should really have been made clearer in the graph
Make it illegal for a household to own more than two homes
Why?? If I can only buy 2 then I can only help ONE FAMILY have a home as they are unable to buy their own due to a number of factors. ie: Lack of capital for a deposit, bad credit score or whatever. If I can buy 10 houses then I can help NINE homeless families instead of only one. So your big idea of making it illegal will only cause more homelessness. Not very smart of you.
@@stevenhull5025
Landlords are asset hoarders; they do not help; maybe you can rent one or two houses as you gain wealth though your life but after that it becomes toxic and takes from investment into productive capital enterprises.
There should be an absolute limit of say 1 million in housing assets, if not don't be surprised if your tenants decide that housing prices will go down very quickly if landlords are put to the Guillotine.
@@stevenhull5025You’re overlooking the fucking problem. Most people who buy multiple houses are either only keeping the houses for themself or to be landlords. You would be the exception, not the rule.
Make it illegal for umbrella corporations to own more than 2 non commercial units, with large appartment blocks being the only exception. (you cannot service a large appartment block asking for unanimous decisions from all the residents. it just needs a 'lord' of the land to do it)
I don't understand why falling house proces would EVER be a bad thing for anyone other than people wanting to sell for a big profit. I get wanting to move into a another house but other than that.... cry me a RIVER
Watch as no matter how low house prices go interest rates will keep going up to reduce inflation. This is because asset prices such as shares or houses do not count towards inflation which is a measure of money in the economy
Inflation isn't a direct function of money in circulation. If it was managing inflation would be much easier.
@@matthewparker9276It's not measured by the BOE, some would say for political reasosns. It's backfiring on them now.
Anyone would think that theoretic wealth and unlimited growth were unsustainable.
Who knew 🤷♂
You mean to tell me that a planet with finite space and resources *can't* sustain a system that relies on perpetual, infinite growth?? Shocking!
"theoretic wealth and unlimited growth were unsustainable." All wealth is theoretic. But it depends on what you mean by "unlimited". Things gain value because we believe they do, and human wants and desires are bottomless. You can certainly attempt to grow economies forever, the limit is not value, but physical scarcity like raw materials (but not really since we are on the cusp of space mining), physical space (land on Earth is finite) and human resources (population stagnation which can however be counteracted, it is limited by individual choice).
For the situation in the UK, it is a case of over a decade of Government austerity not investing is the basic social services and infrastructure that allows for growth, all the while population kept growing, but without additional building.
That's the mentality of brits these days. They always want to have the cake and eat it. It's not only the government's fault, it's also the population's fault for voting for these politicians, and also not putting enough value in hard skills.
The UK wealth is derived from banks and other sorts of services that are mainly fluff or caters only to the rich. No tangible value. The population can't do maths or code or engineer. It's a zombie economy propped up by the super rich
@@serebii666 Not all wealth. When you are hungry, having access to food becomes very real. When you are cold, having access to heat becomes very real. When it is raining, access to space under a roof becomes very real. You quickly understand true wealth.
Wealth that does not exists is where everyone goes to the bank and asks to withdraw everything the bank says they own just to find the bank is now doing a runner.
Unlimited growth is where people want more than than what they had last year which was already more than they were willing to put in. At some point this unreal wealth has to meet the very real reality. House prices continue to rise without limit to the point where no one can get enough money together to afford to buy it but no one can drop the price low enough to afford to sell it. This is because the actual worth of the house is far lower than the theoretical value that has been placed upon it. No one handed over actual tangible wealth to purchase the building. The people with the mortgage don't own the house. They are renting it off the bank with the possibility that they might own it one day. The bank doesn't own it either as they didn't part with any real wealth. They acquired it through the clever use of selling debt.
So this fantasy accelerates off into the sunset leaving behind the very real unsatisfied need for food, heat, and shelter.
Unlimited growth is sustainable and possible. Just not forever. We can have unlimited economic growth in society but we can’t expect to avoid recessions forever. Recessions reallocate misplaced capital. But if we got rid of social security/ pensions for the old then even with the aging crisis in the west we could still have unlimited growth
My rent went up literally as this video came out. Just got the e-mail a few hours ago from the letting agent. Still can't afford to buy, bit of lose-lose for most of my generation.
House price fell, big wealthy individuals and company buy up houses, rent them out again for profit and drive up prices again.
It's called capitalism.
Maybe you should set up a company with some angel investors and join the bandwagon.
Im not expecting a miricle. The BoE has shown inconsistent management over the last 7 years.
Simple answer… No.
Residential cake in rough slices:
40% no mortgage, owned 25 years or more.
25% purchased with cash
35% purchased by mortgage
So mortgage interest rates actually only affects one third of property at most.
The problem isn’t the cost of housing, that is simply the symptom. The problem is supply.
Lease reform on 1-3 bed flats would enable a million flats to be mortgageable by a legal regulated lease extension framework. Also not enough practical family houses are being built.
I don’t want a bubble burst, I want a bubble implosion. Make houses worth so little that people can buy it like they’d buy a new car
Lots of fixed mortgages have not rolled over yet, ie most of them.
Looks like we live in a Tories sweet dream. Housing for their kids, rents collected from everyone else. Same with education, jobs, dental and medical treatment. Run everything that the tories do through this filter and you will understand them. The last Labour government failed to undo these aspects of the Thatcher years. Lets hope starmers future government gets its act together.
Let's hope. I wouldn't bet on it tho :|
Labour started this in the Blair years. Prices were rock bottom under Major.
@jamessmith1652 the problem is more wage suppression than house price inflation. Labour shares the blame but the majority belongs to the tories.
3:15 expensive housing is also ultimately paid by employers through wages.
Any company that wants to invest in the UK will have to pay sufficiently enough to cover someones rent or mortage (as well as other living costs), so as these rise, they'll make the cost of labour uncompetitively expensive compared to places where rent is cheaper.
This would require wages to actually keep up with costs which they don't
In theory, not in practice.
When I got cancer I got a critical illness insurance payout that would have paid off our mortgage on our flat. But, if we did that and then later tried to buy a house the mortgage deal would be rubbish compared to the one we have now. So we are keeping the current deal so we can transfer it to a house one day. When, I don't know, because houses cost so much and our maintenance costs are so high that we would struggle to both sell and buy.
Also if we paid off the mortgage we wouldn't have the security of this large nest egg in case we need it for something else.
The benefit of not paying the interest is not such a benefit compared to the alternatives.
I am a Japanese. I think it would be a good idea for people living in Europe and America to look into the collapse of Japan's economic bubble starting at 1990. Before 1993, stock and real estate prices began to fall, but many people, myself included, saw it as a buying opportunity, as the economy was good and people spent a lot of money. However, after 1993 Japan's economy and people's mind really cooled down. After all, over 10 years, the price of real estate has decreased by 1/5.
Hello just letting you know, you just say "I am Japanese".
It's racist towards Japanese people to say things like "a Japanese"
@@billytheripper4It's also racist to expect perfect use of English from someone whose native language has a completely different root and structure. The way we use "a" doesn't exist in Japanese so someone who speaks it natively might misuse it.
@@AcanthaDante I think it's quicker if OP just checks his a privilege before writing hurtful comments
Real sold house prices are never "live". It takes a few months for the actual prices paid to be reflected in statistics. The recent drop is from house that probably sold in March-April this year.
It is simple: As long as there is enough demand, prices won’t fall that much.
You should do a video looking at how a government change 8 years ago caused Canadian housing to go up to insane levels where most can't afford a home. I believe Canada is the riskiest housing market in the G20.
House price/rent/mortgage should be included in how inflation is calculated/taken into consideration when setting bank rates.
Simple solution, build more houses. The whole problem started when they introduced those green belt policies among others that makes very difficult to build new houses where are needed. The sector is now an oligopoly because only huge companies with very strong financial muscle can operate in an extremelly overregulated market. There is not a single new development proposed that it is rejected by the neighbours. Of course, if you need permission from Tesco to build a new supermarket next to them, what are they going to say?. The politicians have interests in tht housing market too, so dont expect them to easy the regutalation. For what, to stop making them richer?.
If in a country, the ones that decided if more houses are build are the same ones that profits from increases of prices in the housing market, how are you going to solve the problem with the only real solution of building more houses?.
I agree as long as it doesn’t go too far and destroys a lot of countryside
This is good, housing should not be a commodity
Wether it should or should not be it IS a commodity because it can never exist in sufficient abundance. Hence we need to manage the market to both reflect the value of property and mitigate the influence of economic predators.
No it's classified as an asset class good for saving like stocks & shares and thus when it goes up or down its not included in the inflation rate.. Which is why the Bank of England is going to keep putting up rates
Council houses are a de-commodified version of housing
@@Bushflare Wrong again. It can be managed in sufficient abundance. There are options to introduce more flats and remove one family dwellings, if needed to be. Previously, the government was managing the housing. Now it is a government (public+councils) and private companies. That is even less effective management as each entity must work with each other.
@@nothereandthereanywhere
A fair criticism. Allow me to revise.
It cannot exist in sufficient abundance if you're unwilling to control the increase in population or force the population to accept an unreasonable decrease in the quality of their living standards.
The price of houses will only fall when the supply of housing exceeds the demand for housing, people downsizing because they cannot afford the increased mortgage costs does not reduce the demand for housing it just reduces the price at which those people seek to acquire houses. Housebuilding at current levels will continue to cause a shortfall in supply and will maintain absurd levels of property prices and extortionate rents for those unable to have the option of home ownership. The sale of council houses was a disastrous policy if it did not include replacement of equivalent housing commensurate with population growth
Owning a property. Waste of time. Worked through cancer, years on dialysis to keep a home and roof over my head. Never eligible for ant support. Now nearly 60 and disabled told by a labour council to shut up. Sell my home and rent because I complained of their tenant partying non stop for 5 months all night long. Smashing the tenancy up late at night. Threatening me with beatings and burning my property down. So after working through 32 years long term illness it was all a waste of time. My property lost all value now.
This is arguably the biggest issue in the UK right now but instead of working to solve this the tories want to scapegoat asylum seekers & get "tougher" on immigration
I think the falling prices are exclusively positive if a balance sheet recession happens in the housing sector then investors will just diversify elsewhere, and before anyone starts there is more than enough housing it just isn't affordable the hope has always been that by making more that the price would come down with supply but with the way MP's are (not in my backyard) this would never have happened. There IS one downside I'm worried about though most of the pricing for anything you've ever bought has been priced intentionally based on how much money you have left over after necessary expenses (like utilities, HOUSING and sustenance) they always want to get that £300~ a month that they estimate MOST people have to spend so conceivably a housing crash could see the prices of everything else go up BUT most business that are engaged on a global level likely wouldn't make this change it'd be too big a risk and with more money to go around they'd likely bank on sales quantity instead by leaving prices the same. I really believe that it's all positive.
there's a supply shortage
we've been building a fraction of what we used to, while population has been growing faster and faster
We bought in 2019 and let's just say we got very lucky for a number of reasons. A lot of our friends just missed the window for buying before covid craziness, and frankly even if it hurts some, including myself, it needs to happen to correct a broken system. Plus I could be wrong, but I think homeowners, younger ones at least, could also see a benefit from falling prices when looking to buy the next house as that next place will have presumably fallen by a similar amount. And I genuinely believe that, our equity's not tied up in the mortgage so even if they fell we'd still be making a profit. Interest rates need to be this high unfortunately, it's prices that need to come down.
We need a strong pound as we're a net importer.
Except for London.
I dont believe it will be buyers market on houses & apartments anytime soon...
Bit of an error spreading a misconception about the housing supply increase in this one.
People selling their home to downsize into a smaller (more affordable) property do not increase the overall supply, since they will be buying a smaller place to replace the one they sold. This means one property added, and one removed from the supply.
What it does do, however, is drain a lot of money from people into the banks through fees and re-mortgages at higher interest that benefit banks, and skew the supply of larger properties versus smaller ones. Specifically, having lots of large properties nobody can afford available and fewer of the affordable ones the demand is high for, which can be deceptive when looking at statistics.
Let's see how further the prices will drop. Sell low and buy low or wait till prices go up to sell high and buy high. interest rates should drop to 4% mid next year.
The ONS today stated that house prices went up 5% in August 23. This is misleading. Asking prices may well have gone up, but selling prices are a completely different thing. This lagging indicator will be clear in Q1 2024.
I have been working 2 jobs and I get taxes about half of it on both salaries. Making my second job less profitable and I still cannot buy an house. It is 2 full time jobs, not part time
5:05 Because there are more or the same number of people trying to buy the same or less number of houses. The "pie" is the same size and you are trying to slice more that keeps prices up.
Housing costs are sticky because, surprise-surpise, people have to live somewhere. It is not like fancy restaurants or new clothes, which you can skip on if you are low on money.
I live in a middle of the table area in terms of house prices. Prices have fallen here by at least 10% from their 2022 peak, perhaps even getting close to 15%. This will have put some people into negative equity already. If prices continue to drop and reach a 25% drop from their 2022 peak then negative equity and repossession rates will start to tick up rapidy. This will accelerate the price drop further and then we're into a vicious cycle all the way to a financial crisis. But this time there's no money in the public purse to bail things out.
Let it burn
Isn't it fun! If housing prices don't go down, people can't afford to live. If housing prices go down, the economy crashes.
Sorry guys, but the Economy demands sacrifices.
@@fnorgen
But hey. At least GDP go up! Big number good!
I'm personally glad house prices are falling. It's finally giving a chance for the working class to get on the ladder
Thank god. Buying housing for speculation should straight up be illegal. We wouldn't be in this mess if we weren't squeezing the working class for everything they're worth.
The cure for all problems is a cascading tax. This will force people to only own 1 property not 2, 4 or more
Downsizing doesn't increase supply since the number of homes is still fixed -the seller immediately buys a (smaller) house. It's zero sum until something is actually built.
Or leaves this earth. But we're living longer.
Won't there be a larger supply of larger homes tho?
@@chopstikku887 Some could be made into flats.
@@chopstikku887 Yes, but average house price is based on total homes. So big houses might get cheaper (more supply) while small homes get more expensive (more demand) so the average price won't necessarily fall.
During the ad read the echo became really noticeable. Perhaps look at laying/hanging acoustic blankets around the set to reduce/stop the echo.
One of the guys that The Big Short was about has recently shorted the housing market again. The financial sector is making all the same mistakes as 2008. Its probably about to happen again.
Moving with Charlie youtube channel provides a far more accurate picture of the UK housing market.
Much of the data the mainstream media and some other youtube channels rely on are at least 6 months out of date.
Spot on
There are a lot of solutions for this problem and it is a growing MAJOR problem worldwide,
Governments can build houses and sell them with %0 interest rate in a long term with little monthly payments, to prevent people trying to profit from the houses, these houses can be sold to people with no house at first.
Because even if demand decrease, since the supply is same the prices won't really change unless there's a huge crisis or something so all you have to do is give the lower-mid income people an opportunity to purchase a home.
This will boost the economy and decrease the inflation.
At 1% interest rate on mortgage:
A house priced £200,000 (£20,000 deposit) - monthly cost: £827 (20 years mortgage). Interests payed to bank: £150.
At 5.25% interest rate on mortgage this house's price would have to go down to £143,000 (30% down) to maintain monthly cost at the same level (£827). Interests payed to bank: £537/month.
Anything less than 30% price drop makes buying a house more expensive than a year ago.
Also - much more money will end up in a bank's pocket (over 3 times more). Meaning less money in the pocket of a seler. Meaning less money to stimulate the economy.
Are we all happy to own nothing, yet?
But land registry data is behind. Data is not July but more like January and February. 🤷🏽♀️
problem seems to be that many like me who are selling up and downsizing, the bigger houses are going down more, the smaller houses and staying the same. so basically all that happens is i lose money.
Well you're not really losing anything unless you go into negative equity. You're just not getting as much on your expected return on investment. That's not really losing, it's poor risk management.
You can't lose what you didn't have! A valuation is just that & unless you sold right at the peak, everyone is in the same boat.
I sold my second home which I bought at auction and renovated in Aug 2022. Since then property has lost value. Timing is everything in the property game.
@@danunpronounceable8559 im having to do this because i now have to work part time to home school my disabled son because he cant get a school space. but sure, poor risk management?
i should still be able to buy something outright with my equity in this, being mortgage free at 48 isnt too bad for someone at poor risk management tho eh? :P
House Prices may well fall but it will do nothing for the inflation. Why? Because M1 money that is used to calculate the inflation rate only tracks money in the 'real economy', it ignores changes in the value of stocks & shares or fixed assets like housing.
To track that you need M3 money.
But that hasn't been used since the late seventies & early eighties
In the UK we switched from M3 to M1 money. Under right wing third wave/neo-Tory Labour Prime Minister Tony Blur & Gordon Brown. A few years later Labour was announcing it had cured inflation!
A shame, really. Under Blair Labour was actually becoming an electable force so if they had continued to improve they might have become a respectable party by now. Instead Corbyn came about to resurrect Old Labour and it took half a decade of fighting to get him and the cancer her grew back out of the Labour Party. Now they're behind where they were before Blair took office but hey... maybe in time they'll continue to improve like this?
(I doubt it though. Labour will probably forever be swinging between unelectable monsters like Corbyn and smiling diet-Tories like Starmer.)
Labour's biggest blunder. Tories can be excused as we expect nothing better from them.
Most Frist time buyers still don't have any chance because rates are very high and priced two. They will have a hard time to get approved for a mortgage or loan, yet alone because able to purchase even when prices continue to fall.v
Everything that is happening now is strictly bad for those who don't own their home. Currently, increased interest rates make buying houses less appealing, so nobody does that. However, as soon as house prices drop and/or the interest is reduced, those who did not buy before will all immediately start trying again, causing the prices to spike again. Unless the goal is to keep interest high for long enough that half the middle class loses their starting capital to inflation...
The problem of scarcity cannot be solved by shuffling around numbers. If there are 10 seats and 15 people, at least 5 will be left standing one way or another.
Why is everyone looking for cheaper houses going to lower the prices of the houses or the demand? Same amount of people live in houses. Selling their houses (so being bought by other people or funds as an investment) seems to me, irrelevant to lower house prices (I am thinking of renting).
Building investors must look fifty years ahead. Demographics says there will be a housing glut in the future. Landlords will have trouble getting their money out. This is aggravated by government increasing the costs by regulation. Money not spent on bricks & labor is useless. Some may be necessary, but not what all OCED are facing.
With all the remote working these days I wonder why people as so focused on London.
2 years rent in London will buy you a house in areas of County Durham outright.
2 years rent in London will buy you a house in quite a few Lancashire mill towns outright.
It's mad how a few weeks of 1 or 2% reductions in house prices causes such a frenzy of excitement, considering that for 99.9% of the last 30 years house prices have been growing at 2, 3, 4% or more. It's like Hermes knocks 1p off of its £25,000 handbag and everyone loses their shit. Mental.
how can housing 'availability' be considered in isolation from renting? Rent has gone up higher than house prices, it's about three or more times pre-pandemic levels
Housing prices go up, prices come down. The government is not smart enough to bring them down nor take them up.
They didn't go up in June. They went up 6 months before in December, cos those land registry figures are lagged ....by about 6 months
Anyone claiming prices will only drop 10% do not have your best interests at heart, thats for sure.
What next? They will probably think of some ridiculous scheme to keep them artificially inflated.
Anything even slightly Trussonomics will not end well. The few sensible options they have go against every typical instinct of the Tory party
This will not end well 🙁
What like spending 50 years refusing to build new homes as the population increases? Selling off council housing to individuals thst is then bought by large commercial companies?
@@somecuriositieshelp to buy schemes, stamp duty holidays, or even a new round of quantative easing. Every time you think the housing market is finished they manage to find a new way of keeping it artificially propped up. Often with 100s of billions of pounds of tax payers money.
@@jim-es8qk Yep. Decrease supply whilst effectively artificially inflating demand.
Im not even a socialist but the conservatives are a cancer that has metastasised throughout this nation and its economy.
@@jim-es8qk aka more Trussonomics, which I further emphasise will not end well!
How do you expect it to fall when you have labor shortages in builder sector. All the while you have 700k people / yr net migration into UK.
Those 700k need to sleep somewhere, meaning theyll pay whatever in rent. Which in turn will hike up rents and consequentially prices. Noone cares if rate of financing is 10% if you can rent out a 100k flat for 2k / month.
If prices are going down, but interest rates are high, then it's roughly as expensive to buy as before? Otherwise there'd be an increase in demand, driving prices back up?
4:10 Forgot to mention that Builders are affected. Now it's more expansive to build houses. Construction is affected. Lenders/Bank provide the money to build houses...so, offer reduce or houses will cost more.
Houses are built for £100k each. The building companies are pirates that don't compete with each other. They make most of their profits on the artificial speculative price of their land banking, and to keep it so, drip feed the market.
does that mean we;re in a cycle?
if builders are affected , how will we be able to build more houses ? (isnt building more the sustainable solution?)
Two problems: the lack of new builds and the lack of affordable land to build on.
Its the land thats the problem, 80%+ of the cost of a new devlopment is the cost of the land it was built on, despite only less then 5% of the UK land mass having human declopment built on it.
Major problem is this country is being swamped by half the third world.
I personally think that it is excellent that home prices are failing. Hopefully they will fall to around 4x thea average salary. This means people will be able to afford a home.
The banks will buy them up before the normies get their hands on any
The slow reaction of prices to the intrest increase could be explained by a rush of people trying to lock in fixed rate mortgage deals before rates increase even more?
£250,000 for a 3 bed semi detached is just unrealistic. That’s 10+ years of not spending any money with most people’s wages. The maths just don’t add up
If there is two of you then its 5 years.
“House prices went up in June” proceeds to show graph of housing prices declining 😂nice
This is all clickbsit garbage
It's upside down world now
You slipped between median and mean in first minute? Median house 4x median salary vs mean house 9x mean salary. You are not comparing the same thing, message might be correct but the difference between mean and median is important
"Hike rates, as is expected" - who are you? It was around 50/50 for at least 2 weeks up until the announcement.
Raising prices are bad.
Stagnant prices are bad.
Falling prices are bad.
We're screwed no matter what...
European Central Bank kept interest rates way too long down, now things started to break
Why are fixed rate mortgages still even as popular as they are in the UK? Seems like they would avoid them after what happened in the US.
It’s bursting right now, house prices don’t crash they slide.
Great opportunity to buy then.
@@stevenhull5025 yes it is except mortgage repayments will also go up, inflation is decimating your earnings and in the long run will still cost more.
With such a high influx of people ( 600,000 in 2 years), i wouldnt imagine prices will fall much
But....how does that help renters 🤨, it seems there is way too much focus on landlords/ladies...😑🙄
Lower house prices means lower rent (but inflation isn’t good for maintenance costs)
@@MrStruggle0not necessarily
Financial literacy in this country is well and truly fucked. This isn't rocket science, you shouldn't need someone to hold you hand and explain everything to you like a child.
Of the boneheaded ideas Sunak has proposed so far, maybe compulsory maths isn't so bad, oh, and throw in compulsory econs to at least the AS level as well.
@@krislove1167
Honestly, all of that seems like pissing in the wind without compulsory critical-thinking skills lessons at the primary level.
@@krislove1167The A-level maths syllabus doesn't include anything about financial literacy.
Anyway, I'd argue that any sort of 'mandatory financial literacy' classes would be better off taught in Key Stage 4 (y'know, GCSE age group) as, in this country, full-time education is only mandatory until age 16 (there is the option of doing an apprenticeship/traineeship instead of A-levels until one is 18)
Personally I think 10% but that will recover within a year or two. Yes base rate is makings things hard but we have also had very high wage growth, time base rate goes down soon be back up again. Also builders will just stop building new builds if a drop cutting the supply
I hope that there will be another housing crash soon 🙏. Current house prices are too high for people to purchase their first homes or to start family. With current housing policy and slow housing development, allowing properties to be an asset class for investment/wealth accumulation is unconscionable. Yes, it will be painful, but such correction is necessary and long overdue.
Demand for first housing cannot drop because it's an inelastic good. You can't treat housing like some generic product.
In amaerica. The bank providing the mortgage owns the house. So if your property drops, and you sell, they take the loss.
Interesting! Does that affect the mortgage interest rate you are offered?
Exactly what happens here. If prices drop to below the price of the mortgage the homeowner is in negative equity. If mortgage payments are missed the bank can repossess the property and the homeowner loses their deposit. The bank loses nothing. In fact, during the first 10 years of a mortgage only interest has been paid not capital. Therefore, the bank has had interest payments, the buyers deposit and now a house which they will auction off.
This is news? In my area actual selling prices (not asked for ) have been falling for at least TWO MONTHS.
Now the government should encourage them to fall more by allowing local councils to buy in bulk at 3% the 'market' value then refurb (if needed) and convert to social stock. Even that 3% is just an overhead fee. Any owner occupiers with a mortgage will have their debt cleared. Not paid off my the government. Actually annulled. And tenants living in a BTL / HMO can stay there at discounted affordable rent. If the property is in a mess, then it will be refurbed in less than 4 months. Any overleveraged landlords will have to pay back the debt. If they cannot, it will be written down but they will still have to pay some back. Not to banks, but the government.