The Boomer Legacy I'm afraid to say. Look at the German Elections - Old people voting SpD (Socialists) and young people voting AfD (Populists) Seems the tide is turning - Sadly, in saving their Nations from Islamisation, the younger generation will simultaneously trash their inheritance as lowering migration will drop house prices - Which has to happen - It will just be painful. Hate how Boomers have lived on this artificial growth + inflated pensions only to leave us in a situation of: Collapse or be Conquered.
Exactly. Whilst other countries have economies that produce wealth and sell to the world and bring in money. The UK seems to be obsessed with gaining wealth internally with property investment. A house was once a home and not primarily a traded commodity.
The main reason there’s an economic focus on housing is due to money-printing. I don’t want to hear anyone complaining about people, whether they be residential owners, developers or buy to let landlords, buying property to improve their lot until they acknowledge the reason why people buy such assets. Governments/central banks print money, your savings and buying power decrease as the currency is debased and so assets such as housing inflate. It’s not greedy landlords that are the problem. It’s the sick practice of currency debasement that incentivises people to protect their hard-earned.
My other half looked at me very confused when we came up with our budget and I said to him “you know just because we can buy a house that cost x, doesn’t mean we have to.” You know, just because we can afford a £1000 a month on a mortgage, doesn’t mean we need to get one that big. We could get a cheaper house and use the £200 say that we save every month and overpay on the mortgage. Or just buy loads of takeaways
We had this conversation with our mortgage advisor.. we were going for houses for around 150k because the £700 a month mortgage was comfortable for us.. he couldn't understand why we weren't going for houses that were 250-300 because we could get a mortgage that big... probably more concerned with his commission..
i get what you and he are saying but house prices go up so much each year it is a very good investment, if you can pay it off then you will make a lot of money at the end of it so imo it is worth doing.
@@stealthzi7465 I think nobody denies you can make money, however if it was that great how come banks don't buy up the houses that rise so much? Likely because single family homes are high risk with 1-1 occupancy and the amount of income across a year is not enough to cover 1-2 bad situation that can wipe out that income. Hence why people break up homes and rent out a home in pieces to get more income. In general the maths for paying off a mortgage over 25 years with interest, the expenses across 25 years for that home tends to wipe out any gains afterwards. Even now it was discovered and stated in forbes etc a persons home is not investment after they did the maths. I think it's about what does a person want. If a home kept for short term then value goes up more than usual cool, get your money then get out move onto bigger cash flowing assets like buys apartments blocks that has a 1 to many occupancy rate
There's nothing wrong with Bromley young people would love to live there but as soon as there is a commutable distance between London and a region the house prices become almost equivalent to London.
@@calenwatters5267 Bromley is a highly desirable area to live, Langley Park, Farnborough Park and many other areas in the borough. Compare and contrast with Lambeth, Lewisham, Southwark and parts of Greenwich.
Can't believe the first house I bought Aged 19 in August 1978 for £8.5k was recently sold for £520 k. I saved for the deposit with money from my Saturday supermarket job, then got a mortgage on a 2.5 times my Salary. You'd have to be earning about 150k to purchase that house today under the same conditions.
I'm a Sound engineer and I thought exactly the same! xD I wonder how much cleaner it would sound if he actualy spoke into the damn thing xD Sounds alright enough for a video like this, but it could be waaaaay better
It's pointed at his shoulder but isn't this only half of the matter since micropone patters could mean its picking sound up specifically from one place or all around?
Total value of Uk. £13.3trn. (ONS) Of which property values are £9trn. Property worth more than the combined values of pension funds, stock market capitalisation and savings.
it's Supply and Demand. We've imported millions in the last few years alone. The housing stock hasn't grown by nearly this much. Demand for houses therefore surges, and prices go up. Once people realise it's only going one way, then you get a bubble. Worse still, so many people are invested in this bubble, no party can afford to correct it. Add to this stamp duty and capital gains, which prevents people from moving into more appropriately sized house i.e. Baby boomers downsizing, then the housing market is totally screwed.
You build before accepting people in. Seems like the previous government wanted to accept immigrants and all the tax they bring in. But spend nothing on housing or social programmes. 😂😂
It's not a supply and demand equation. It's more complex. For example ,Lisbon in Portugal has terrible problems with unaffordability yet a huge surplus of housing.
The problem with property is that the banks have a vested interest in making an investment when it should only be allowed as a home. If you remove lending for second homes, if you remove property as an investment then money can be used to do real investing.
And what happens to people who want to rent due to the flexibility it offers? Sorry mate you’re only allowed to buy a house - don’t forget to pay the legal fees and stamp duty land theft.
In 1970...the ratio of average salary to house prices was 3.89. In 2024 it's 7.95....The average house price today is 285,000...a deposit, 5%, is about 14 grand. How many people, who are paying rent, can find that kind of money?
That’s so true, a guy at my work bought his house for £60k in 1990 and said it was about 3.5 x his (single income household) salary. He said now (he is 60) no way could I afford to buy a house today. ‘I don’t know how people live’ he says. Especially when I tell him what I pay per month for my mortgage. Even though we work together and earn the same salary. He is stunned by the cost.
And the sellers, not sure you grasp how this works, rich people own the assets. Banks just loan wannabe rich people money to buy said assets if nobody bought then banks can’t lend 🎉
My thoughts exactly. You’re right about Bromley (I used to live close by) and you’re certainly not getting anything in Sevenoaks between £200k or £300k unless its a 1 bedroom studio flat. These are really popular commuter towns.
@@ACsPianoCorner you’d have to be mad to pay £300k for a shite studio flat, why would anyone do that for the ‘pleasure!???’ Of living and working in an overpopulated, crime ridden, polluted place is beyond me.
It’s similar to where I live. I live inside the M25 bordering Essex, a house is anywhere from £500k -£600+ that is a 3 bed house with a small driveway for maybe 2 cars. Flats are £350k I personally want to move far away eventually but my wife has to remain close to care for her parents. But I will 100% be moving somewhere cheaper. Luckily I bought my first house in 2004 and have moved 4 times buying ‘do-er-up-ers’.
@@Knuckle_Sandwich_Hand_Wraps that’s seriously crap for the money, I’d be gutted. You can get a beautiful barn conversion in the Lake District for that amount, way more space and x100 times better scenery. At least you are keeping your options open though, wish you luck.
@@MrCaterhamr500 If I were to move 2 hours away the cost for a property comes down dramatically, actually, if we moved today, at that distance we could be mortgage free. I would move tomorrow.
There needs to be a limit on mortgages, in my day the limit was very strictly applied, 3 times salary and only one salary, no wive’s income included and 25 year maximum loan period. This capped the potential value of houses, all went pear shaped in the greed of the 80s. House prices would drop to match available mortgages, consequence maybe negative equity but that could be worked around. Finance industry makes billions£££ from maxing out every possible potential of the property market at the expensive of quality of life of mortgage holders. The current system is like feeding a heroin habit, the heroin being the finance industry.
Exactly right. I’ve been saying this for years. It’s so obvious and it was Thatcher’s deregulation that led to the mess we are in today. The only way it can be solved is by a house price crash and a return to that limiter which ensured it remained a buyer’s market constrained by mortgage lenders on a 3-time salary and not a seller’s market created by irresponsible lenders inflating the market lending whatever the seller wants.
@@danielanderson6450 Compare and contrast with Belgium for example, moderate house prices, same if not higher incomes, and a much better quality of life. France, Germany and Luxembourg much the same, not familiar with Nederland or Scandinavia, although Scandinavian countries are reported to be the happiest nations, in the happiness league, U.K. is way down. Average German 20-25% better off than the average Brit.
I live in Sevenoaks and let me tell you that you definitely cannot get a reasonably nice 2 bed flat here for under 300k, that was laughable. It is one of the most popular and most wealthy commuter towns in the South East.
Stealing millions of workers from poor countries during a housing crisis, was always going to lead to problems - still it keeps wages down, and that is all that matters!
As a housing researcher, for once, the correct quotes on Adam Smith, John Stuart Mill and Marx all saw and calculated the rentier Landlord as creating nothing new; they take the surplus from productive labour with no restraint (free market economics bundling Land in with Capital) ) of regulation/taxation with constant adjusting of rentable value to the high utility value of a roof over your head, i.e. everything, meaning people will go without heating, food, electricity to pay the rent. The land is a natural monopoly of place and time. (Winston Churchill 1909 Edinborough speech on Land Monopolies) The land values of the Duke of Westminster properties in London are high because of the closeness of commerce in the 21st Century. That land is not a product that can be created, packed up, and put elsewhere; that would go against the laws of physics of time and place. The way to control land values ( the make-up of house prices = Land Value (LV)+ Construction Cost. Note in the 1930s, LV dropped to 3%, and the average now in the UK is 70%, and in London, it can rise above 90%) is to control the expected growth in rent values, which relates to the property's value, determining the rent needed to beat the other forms of investment. In this case, rent increases always affect property prices as the need for a 3-5% yield (depending on inflation, which relates to interest rates in the present monetarist set-up) is required for an income for the landlord. Otherwise, put the surplus in gov bonds, stocks and shares, which people did between the 1920s-1971 and 1973-1980). This is a complex subject, and it turns out the issue is not that we don't have enough houses (we have pretty much the same per capita as in the 1970s when, in some areas, there was a surplus, albeit slums ready for demolition), but that we have the wrong demographic living in the wrong type of house (ref: the Oxford academic geographer Danny Dorling; All That is Solid). If the Private Rental Sector (PRS) returned to 7% of the market share (presently 19%), this would free up 4 million properties without building one more. When Landlords exit the market, they don't destroy the property; it changes hands to either an owner occupier or back to the local authority/housing association. In the 1920s, the sitting tenants purchased one million properties from their landlords as yields dropped due to rent controls (1915-1988). What landlords and those who followed the law post-1996 entering the buy-to-let market should be angry about is that this idea was a) to inflate the housing market by creating scarcity for first-time buyers, b) further caused the end of government welfare to asset welfarism, great if you have an asset, work till you die if you do not. Now, many middle-class children are entering the workplace with wages that, in real terms, are 35% lower than they should have been in 2024 compared to 2010, and they have no hope of ever buying a property where there is well-paid employment.
This comment is seriously underrated. And just to add, part of the problem is ignorance, mainly of the young and the fact that as Ronald Regan suggested that if you have to explain it, if the subject cannot be accurately condensed into one or two sentences then it won't hit. And so it is with housing theory.
"calculated the rentier Landlord as creating nothing new" Absolute nonsense. Landlords provide housing. You clearly have no grasp whatsoever on anything Most of the rent doesn't even go to the landlord, it goes to council tax, mortgage company, maintenance and repair and so on.
@@dkizxpt-su3ze *"Absolute nonsense. Landlords provide housing. You clearly have no grasp whatsoever on anything"* So landlords build housing do they? Or do they simply swap one opportunity (buying) for a worse one (renting) and charge for that service? *"Most of the rent doesn't even go to the landlord, it goes to council tax, mortgage company, maintenance and repair and so on."* Total bull. Around here the rent for a 2-bed is £1,200pcm or £14400 a year and according to SimplyBusiness the average amortised maintenance & repair cost for a property in the most expensive place in the U.K. to obtain such services (London) is £2300 a year. Given that council tax is usually paid for by the tenant this means that pre-mortgage you're making £12100 gross profit in that example. And as a repayment mortgage gets you a house at the end you can't discount much from that either.
I did not do this when I purchased my house. It would be stupid to borrow max amount. Seriously stupid, the issue was the advisors pushing that. Maybe something to do with certain fees based on loan amounts...
You don't, but at a population level, people tend to, because there's a feedback loop of sellers pricing as high as they can and buyers buying as much house as they are able, because a house is still considered an investment, it's widely assumed by most people that house prices will always go up, and also assume that a capital gain on a more expensive house will be greater than the gain on a cheaper one & effectively their proportion of equity growth is magnified. So they look at what the most they can afford to spend on housing per-month is, assuming interest rates remain fixed. A stupid assumption but one most people make. The increased price part was true in nominal terms at the national average from after the crash after 2008 until about 2022 when interest rates stalled the ridiculous nominal price growth. So anyone who bought at 2010 prices & has spent that entire time building their equity up and their debt down is still in a pretty good position. Anyone who bought the most they could afford in 2022 is probably in for a rough 5 years though.
@@InnuendoXP I really think the IFA need to be brought in to this. I doubt a lot even understand a "normal" environment. I had to flat out tell my one that all I want is a 10 year fixed, price the house to that. I feel for everyone else who didn't think but the whole point of the IFA is to provide accurate opinion. I don't see how they could have when they likely simply did not know.
I commend you as a responsible borrower. No one is forced to borrow and you are 100% right on fees. Lenders are selling a product, cash. The more they sell the more they get paid. Like buying anything its the purchasers responsibility to buy with in their means not the sales persons. Perhaps making it a requirement that all home loans fix the interest rate for 10 years is the solution. This would reduce the amount that can be borrowed and so stabilise house prices although it would be at a lower level.
@@Finderskeepers. I personally think all mortgages should be fixed for life time of the loan. It's an artificial churn made by the market. You could easily deal with the timing issue through early exit fees. Products could differentiate by the ability to port, settle early, offset. It's just another terribly exploitative sector geared to funnel money up and out of our communities.
@@3d1e00 There is no artificial churn as borrowers make the purchase decision not the banks. The cost of of buying and selling property also prohibits that together with the fact liquidity is the biggest issue with property. Mortgages have more liquidity with the ability to assign or securitise. Im keeping it simple by suggesting fixing the rate but you are 100% right and if anything derivates have got more exotic. An interest rate cap is a long standing derivative that would address the issue of porting while avoiding breakage costs should the loan be repaid early but they are rarely available for the retail market because there is no demand. Your approach which is similar to mine is rare. Have this conversation down the pub and people will think we are mad to want a higher rate as an inverted yield curve is very rare even if there is one right now, it only occurs when the market thinks interest rates are on the way down whilst inflation is generally causing upward pressure.
There is a problem to the idea that everyone will/wants/can work from home and therefore that home can be anywhere. There was a big exodus during covid from the cities to the countryside but having spoken with people in the business (developers, council officials and so on) that has since reversed. The reason is that services in the sticks are just not good enough for people used to living in large cities. You can't get UberEats at 2am in most rural areas. Public transport is abysmal. Mobile phone coverage can be patchy. There are no decent shops. I live of the Isle of Wight and can give two recent examples. Firstly a friend who owned a small hotel has just sold up and moved back to Bristol. Why? You have to go to Southampton for decent shops and his wife likes shopping and it became a problem. The second example happened just last night. I was in my local pub when a group of men in their late twenties early thirties came in. They were a good bunch clearly on holiday. The couldn't get their heads around the fact that all our villages takeaways close at 9pm and the pub closes at 11pm. Clearly village life is not for them.
Sutherland is brilliant. But here he is completely out of touch. He doesn’t even slightly rub the causes of the extraordinarily expensive real estate prices in the UK.
It's supply and demand. Mass migration is the reason. So either cut migration numbers or increase the supply to insane levels like 800k new units a year. Getting people to move to Bromley wont solve the issue. It will only put up prices for those who want to live in Bromley. Ita not just London prices that are going through the roof.
I disagree because if people want to live in Bromley then there must be a reason for it. Theres plenty of affordable housing in the UK, the problem is nobody can make a living in those places. Location is everything in real estate, that sets the price not the standard of the house. I was hoping that this new era of remote working would allow people to live where they want but they're trying to rain that in now. Who does that benefit other than landlords in London.
Migration isn’t as mass as you think it is. Media just wants you to think that while the elite carry on doing whats really affecting the market and economy and you’re eating that up lol
So why didnt house prices explode massively when the population was exploding in the 50s and 60s, the population is fairy stagnant at the moment, how can supply and demand be an issue when the demand isnt going up.
The economy is still short of workers. Send all the immigrants home and the economy will collapse further. Immigration isn't the problem. Rising inequality is. Introduce a minimum £15 ph wage. Build council housing. Tax wealth.
Good advice, try go remote as much as possible or move far away from big cities. I have a UK 🇬🇧 wage in Morocco 🇲🇦 so much cheaper we all need to try do the same as much as possible.
That will increase the cost of the housing wherever you all go. For example, in Spain, the housing is going up because loads of UK remote workers are paying more money to rent a place in Spain. That affects to the countries where you all go.
@@aureliomedina460I couldn’t care less of house problem in another country. The main issue in leaving abroad and receiving a salary abroad, is using those money in another economy. Our salaries are spent in UK, that bring revenue to other UK companies and pay others people salaries. Of course doesn’t matter for one person. But if that became a trend needs to be addressed.
One of the big drivers of this is the mortgage system. Mortgages need to be based on the new construction (labour & materials) cost of new houses. Currently typical construction costs are between 25% to 33% of the sales price. There are huge profits made by developers, landbankers, financiers, all paid for by massive mortgages. Which the banks have conjured out of thin air. We should treat loans on houses like cars, if you want to buy a new Mondeo the banks won't lend you 4x the manufacturers price, nor will they lend you even more in 4 years time when it has partly depreciated and worn. We need to unravel the fractional lending system, let house prices fall, improve planning standards (require bigger houses on more land with parking, hobby spaces, garages, bungalows for the elderly). The government need to buy agircultural land at cost, and rent housing at cost. Once the supply of housing exceeds demand, older, low standard housing can be replaced. Instead of family income going to fund the banks and the land industry, we need funds going into utilities, infrastucture. That way the money stays in the real economy and is not siphoned off to global financiers. Also, reduce the number of companies in London, get them to move out and allow more people to work flexibly.
it's Supply and Demand. We've imported millions in the last few years alone. The housing stock hasn't grown by nearly this much. Demand for houses therefore surges, and prices go up. Once people realise it's only going one way, then you get a bubble. Worse still, so many people are invested in this bubble, no party can afford to correct it. If you reduce the demand i.e. fewer people, then all the other issues go away. Your solution above to bad governance is to call for more governance. it's the difference between a free market solution, and a central planning solution. Sadly most people in this country have been indoctrinated into thinking mass immigration benefits anyone but the super rich.
Don't expect government to make a change. The government is in bed with big business. Big business finances politicians, they lobby, they influence the decisions. There's no shortage of homes. If you look around there are lots of properties for rent and for sale. The problem is the asking price. Money nowadays are not related to the real economy, it's just speculation everywhere. The stock market is just speculation, is just an expectation that things are going to get more and more expensive so people buy and hold. The 2008 crisis only problem was Wall Street got too greedy and started lending to people who couldn't pay it back, so the whole structure came crumbling. But if banks just keep on extracting the max amount from people who can afford it... they'll be happy to allow poor people starve on the streets. By the way, government officials and rich people only fall upwards.
I think the reason a lot of people feel like capitalism has failed, is like Rory says, the gains of the areas where it has functioned well and brought prices down have been entirely offset by the massive increase in housing costs
thats not capitalism failing. thats success according to capitalism. capitalism can never fail because it ackowleges that it will always have winners and loosers. even if there are 99% of the people livig in misery and the rest in extreme wealth, that doesnt go at all against the philosophy of capitalism. preocupations with justice or fairness are not important because capitalism is not based on any morality. so, as a capitalist, you never lose
I blame homes under the hammer and all those other shows where houses were seen as a high growth capital investment rather than as a roof over somebody's head.
Get rid of help to buy, get rid if shared ownership, get rid of Lisa, make it easier for landlords to he fined, bring in renters rights, let councils chose their own council tax on 2nd homes, tax large companies who own large swathes of properties. Make owning oroperty less glamorous
The problem is the estate agents. They survive by the percentage they earn from the sale and the vendor want to make profit also so they inflate the property price to hit their target and this in turn pushes up the price of the market year by year .So property prices rise accordingly every year till a 30k flat 20 years ago sells today for 300k .peoples wages dont go up exponentially so the cheap market for first time buyers no longer exists
100% true. The UK estate agents push the price up in every single transaction. Everywhere were demand is high they try to transform each sale in an auction pushing prices up and making people borrow more money. The banks are accomplices of this because they don't turn down valuations or they just do a quick desktop exercise. There should be a limit to overpay vs marketed price.
In 1988 I borrowed at 8% that went up to 16% but that's OK because I had moved to Hastings converting a 1 bed flat in South London to a 3 bed house. And then the trains went on strike and the gulf war pushed the fuel price up. I had to leave the country with negative equity. Maybe I was on the wrong side of the economic coin?
Low interest rates could have had a positive effect if we had taken advantage of them to stimulate construction. Instead we constrained supply and just let prices spiral
That is a factor. But pick your poison. Do you want less immigration, but a smaller (native) workforce paying huge taxes to prop up an increasingly ageing and retired population OR more immigration / young people in the economy, meaning a lower tax burden for all, but housing competition? The ideal solution is more immigration, more births, more houses. Then when the baby boomer generation "goes", immigrants can go home (if they want to), and excess housing can be demolished (if need be). But ulmiately immigration control of the sort the those on the right of politics tend to want would be disastrous for this country (which is why neither the Conservatives or Labour will ever seriously consider it).
Property values have been fueled by the reduction in interest rates. When interst rates rise which they will (due to the budget) property prices will collapse and people will be caught where their loans are bigger than their house value aa happened in 2006-2008. However, it is also limited by supply and a year later they will bounce back. Keeps the roughly 19 year cycle correct.
there are people like richard werner who say money shouldnt be created from thin air for non-productive purposes like houses..perhaps there should be some help for primary residence purchase...or maybe it wouldnt matter if a family home was £15K like in the 1970s
One thing with property is you do pay tax ! It’s just that it is at the beginning of the transaction and often gets bundled into your mortgage. If it’s your primary residence you won’t pay tax on selling but will pay if it is a second property
You don't do it with cars because that asset will just depreciate and depreciate (unless you've got a garage to keep it in mind condition forever!) until it's worth nothing. A house will just go up and down up and down (while ultimately going up overall) forever!
Taxation cannot and never will fix the problem. You need to talk about the root cause: the price housing is not connected to local earnings because so many properties are being purchased using money that was not earned in the UK. Stopping the UK being used to safely hide internationally laundered money would be the most effective solution.
There's lots and lots of reasons why the houses are unaffordable. I can imagine almost a million people flooding the big cities each year who have fuck all money and are dependant on the state to feed and house them is a pretty massive issue as well..
You can’t compare cars and televisions with buying properties. The production costs for televisions technology drops,the cost of building properties gets greater therefore properties always gonna go up.
Another big issue that no one is talking about is how much money young people need to invest into making old houses safe to live in ie new wiring, heating, mould issues, new roofing etc. A lot of 1930s to 1970s houses that go on the market have been left to rot and not looked after. What if there was more incentives help for people to do houses up this would help with families money leftover to spend on other things
Fundamental problem with property ownership in England is still about the class and the meaning of property. Social housing in Europe is not seen as less than owning. Not only that, but social housing renters do make their homes, theirs by upgrading, improving, making it a home to be proud of. In UK, and especially England post Thatcher fiasco, as the worst thing one can experience. One is not quite good enough, or achieved enough, or aspired enough, if we are not in debt in (feels like!) perpetuity. We are currently (2024) a country of 69,138,192, and in England at the 2021 census was about 56,489,800. Just let that sink in. We expect our children to leave home asap! Where are they going to go? Idiots voted for Brexit, so they can’t move that easily and live in a European country. We have more bedrooms that we actually need for just in case… in case of what? Oh, yes… Christmas visitor. We are now beginning to reap the ‘benefits’ of Thatcher’s catastrophic changes to housing policy, e.g. selling all local authority assets, and Tories Brexit fiasco. Unscrupulous private landlords are just a cherry on top. We’ve become slums again. Go back, watch ‘Kathy come home’, few raw, truthful documentaries about our society today, and then consider how good these decisions were. We, in UK decided that everyone can be a landlord, because it was all about the money, especially the profit. We watched vast sums of money being made in property in USA (NOT in Europe!), and copied their greed. Enter, sub-prime mortgages issue - “In the years before the crisis, the behavior of lenders changed dramatically. Lenders offered more and more loans to higher-risk borrowers. Lending standards deteriorated particularly between 2004 and 2007, as the government-sponsored enterprise (GSE) mortgage market share (i.e. the share of Fannie Mae and Freddie Mac, which specialized in conventional, conforming, non-subprime mortgages) declined and private securitizers share grew, rising to more than half of mortgage securitizations.” This led to closures of centuries old banks/companies. We are now in UK, looking to lend beyond 20/25 years. WTF? We no longer see our honest are HOMES. No, they are apparently our ASSETS. Fundamentally they are just few bricks in a specific postal code. We deserve all we get. We created this, or approved this, or just simply jumped on the bandwagon of greed. 👏
Well Rory, the only problem with living in Bromley or Sevenoaks is that the house prices are no different to the cost of housing in Dalston. Then there are the commuting costs.
Entertaining conversation the reason house prices are so dear is because building cost are growing at an equal amount so once it’s been built it’s not gonna go down in value. It’s going to stay at the same value as the replacement cost for it, and we all think that property has gone up much more than everything else. On average, and I mean average over a long period of time, I don’t think this is true. There has been periods of booming prices then-levelling off and in some cases depreciating, but the average over say 50 years is around about the same as the stock market or gold.
My take has been, for many years, that there is not enough supply of affordable houses. Costs are way too high and I think this has a lot to do with the way they're being built. Economies of scale, prefabricate parts and standardise the designs much more. Not everyone cares if their house is "totally unique" to them. Imagine houses being put up in kit form in a matter of weeks rather than waiting monthsor years for one! modularity so you can buy a basic "core module" which you can then expand as your needs and family grow! A system like that could enable houses to be bought and shopped for almost like cars, with online configuators and previews helping your imagination along.
The council house systom in england should never have been broken up there are certin things in a country that private hands should not get their hands on like transport milatry contracts mining of a country's wealth and medical care these type of service's should be controled by the state for the benefit of the tax payers
Somehow, they managed to avoid talking about single most important reason why property values are artificially inflated - restrictive land zoning policies and building restrictions imposed by city planners
London property greed 😂 I'm glad I'm finally out of the big smoke, living in the west country where there is actual housing affordability, equivalantly better pay, better quality of life, better quality of air, the list goes on 😂
Prices are high because there aren't enough to around. supply and demand. We don't have enough houses for the amount of people here and it's as simple as that. We didn't keep up with building and now we're too far behind to catch up.
Supply and demand has always been an issue. We had a lack of housing in the 80s when prices were stable. The reason the prices have rocketed is because of the deregulation of banks which led to cheap credit. Cheap credit led to a massive boom in mortgage lending which drives up a bubble. In just 10 years before financial crash over 80% of new loans went into the housing bubble, and banks pumped over £1tn into it. Supply and demand does have an affect but it’s minimal in housing.
If you did this... Pay £500pm over 12 months for 10 years.. into a goverment backed isa.. You'd get £60.000 basic rate. With an additional 5% interest per year abd an extra £15.000 from the governent for buying within the isa scheme. You'd have 60.000+5000+15.000 totaling. £80.000 to put down on a property. Start ar 20 years old and by 30.. You'd be buying your own property on a mortgage. It's great for new couples. I've got a uk isa, ive had them for many years now and they're great. My little brother is doing the goverment isa for his home.
what we can learn from Australia is, suburban spread don't matter. Housing in the suburbs are even more expensive than city centers there. Because the incumbent house owners in Australia, try to rig the system via artificial zoning laws, to deplete supply
Actually, the faster-than-reasonable rise in house prices subsidised the home owners, i.e. the middle classes (very broadly defined). It made home owners feel much wealthier than their salaries warranted. Now that house prices are disrupting society at every level, the only solution is to reduce them. That will expose the fact that most home owners are far poorer than they think. There is no way to do this without causing a generational disaster. It's important to do this as soon as possible, so that the generation that suffers most from it is the generation that benefited from it before.
Making areas cool Rory is right i live in a place called streatham vale zone 3 twenty minutes to the Victoria 30 minutes to London Bridge local transport is brilliant plenty of buses and trains but horrors of horror 1930s pebble dash housing my new neighbour paid ( young couple ) five hundred and fifteen thousand in my street freehold huge back garden and a big front garden, and quite literally on the other side of streatham common station the same size house is £1.5 million
He was kind of wrong about the car thing. Hire purchase etc has everyone driving a new Mercedes that they will never own outright instead of a 2nd hand Kia they own until it can't be repaired any more. The house stuff was right though. Mortgages push prices up to fictional values and mortgages for 2nd homes or buy to let are just wrong.
Why equate housing to investment when there are better investment products? The issue is access to affordable housing like cheaper rentals. You just need a bigger supply to lower prices.
For prospective new buyers, and private tenants, the rot in the UK housing market was seeded in the mid 90s when the government allowed lenders to offer buy-to-let mortgages.
Two ideas: (I) Nationalise the rail system and do-away with ticketing. Only because the income from ticketing barely covers the admin, maintenance,penalty and/or debt collection costs of itself, nor could it cover the foreigner investor dividends. .and (II) ..put a cap on the amount per sq mtre a house is allowed to be sold, rented or left empty , and any amounts above that is illegal under fraud regulation going back 7 years. Like they do in Berlin....thus making the city less attractive to property profit specualtors, and as a consequence, flats n spaces are used, maintained and lived in, rather than "things ya can flog to make money off of" ...:-) x
Thatcher flogged off the council houses and deregulated banks , gone were the days when you had to manage your money, save a deposit and talk to a bank manager before you got a mortgage . Slowly the multiple crept up to 5 1/2 times salary. Planning rules made it more expensive to build and more expensive. Population growth from migration added to the problems.
An issue not covered is you cannot build a truly affordable house with completely over the top building regulations. The solution after world war 2 was to build cheap prefabricated houses which to a large extent solved the emergency. If we did this again we would go some way to solving the crisis. A radical shift in thinking is what is needed.
Mortgage free at 53. Buy a crap house in a nice street. Live in it for a while, do it up and sell it for a profit. Keep doing that until you can buy outright. Never buy at the highest amount you can afford. If interest rates go up , you're screwed.
Commuter season tickets need to be fixed for those who work from home most of the time. My wife now worries from home and only goes in 2 days a week yet her ticket is not 2/5ths the price.
Its not just about "Making suburbia cool", people dont want to live in and around cities (generally) because they are cool, they want to liive there because thats where the rich people live. Its where all the jobs are and the highest level of opportunity for careers are.
The price is too high, but the main one is the interest. Its more than just interest its compounding! Interest in interest.. I can afford to pay off a 400k house in 15 years. Trouble comes when I spend another 15 years paying money that the bank decided I owe them for lending me the money. Its robbery and I signed the dotted line to agree for it to happen.
People who work for a living D O buy cars that way. In addition to having to stretch financially as hard as they can to afford housing, they also have to do the same thing FOR CARS. And that's mainly SECOND HAND CARS not even new ones because new ones are 'monopoly money' to most people.
None of this makes sense 😂 Bromley and Sevenoaks are mad expensive as it is and Dennis Neilsen's flat is in Highgate, an even more expensive area than Shoreditch. Come on now.
You cant walk away from the housing market, thats the problem. And now we’re told we cant fix it because of all the idiots who have taken on mortgages they cant really afford assuming their house would increase in value. I brought a house and i dont really care if it goes up or down in price. I plan on living here and paying off my mortgage.
Houses are only unaffordable were most want to live ,I could not afford back in the early 80,s in Aberdeen because there was an oil boom on ,moved to devon and I could .Loads of young want to live in hip ,like London and Bristol, my son included and moans they can't afford, that's like me saying I want to live in Central park in America, no chance of me affording that ,cheapest house probably starts at 2 million ,sorry apartment. So many places all over the world that are to expensive for a second time buyer let alone first .
Apple dont like people from different departments knowing what each other are working on as they like everything to be secret, so that buildong design possibly makes sense for them
He’s over complicating the argument….property prices are driven by demand….in rural areas where there are few jobs, houses are cheap, in cities like London where there are lots of highly paid jobs and decent houses are hard to find, houses are very expensive! Economics 101….
The suburbs would be cool if there was work there and affordable transport infrastructure. Not everyone has remote working and those that do want to go to shoreditch
You cannot run an economy on house prices. Unfortunately we have been tied into it for 40 years.
What does this country make any more? It's a net importer of food as well... It's all incredibly dangerous
The Boomer Legacy I'm afraid to say.
Look at the German Elections - Old people voting SpD (Socialists) and young people voting AfD (Populists)
Seems the tide is turning - Sadly, in saving their Nations from Islamisation, the younger generation will simultaneously trash their inheritance as lowering migration will drop house prices - Which has to happen - It will just be painful.
Hate how Boomers have lived on this artificial growth + inflated pensions only to leave us in a situation of: Collapse or be Conquered.
Exactly. Whilst other countries have economies that produce wealth and sell to the world and bring in money. The UK seems to be obsessed with gaining wealth internally with property investment. A house was once a home and not primarily a traded commodity.
Oh you absolutely can.... until everyone figures out that you don't have a real economy... 😬
The main reason there’s an economic focus on housing is due to money-printing. I don’t want to hear anyone complaining about people, whether they be residential owners, developers or buy to let landlords, buying property to improve their lot until they acknowledge the reason why people buy such assets.
Governments/central banks print money, your savings and buying power decrease as the currency is debased and so assets such as housing inflate. It’s not greedy landlords that are the problem. It’s the sick practice of currency debasement that incentivises people to protect their hard-earned.
My other half looked at me very confused when we came up with our budget and I said to him “you know just because we can buy a house that cost x, doesn’t mean we have to.” You know, just because we can afford a £1000 a month on a mortgage, doesn’t mean we need to get one that big. We could get a cheaper house and use the £200 say that we save every month and overpay on the mortgage. Or just buy loads of takeaways
Or use the saved money to buy an income producing business or use it to get products to sell that gets you an income so you can buy stuff if you want.
@@egliptor nah I’m alright for that. Far too much effort!
We had this conversation with our mortgage advisor.. we were going for houses for around 150k because the £700 a month mortgage was comfortable for us.. he couldn't understand why we weren't going for houses that were 250-300 because we could get a mortgage that big... probably more concerned with his commission..
i get what you and he are saying but house prices go up so much each year it is a very good investment, if you can pay it off then you will make a lot of money at the end of it so imo it is worth doing.
@@stealthzi7465 I think nobody denies you can make money, however if it was that great how come banks don't buy up the houses that rise so much?
Likely because single family homes are high risk with 1-1 occupancy and the amount of income across a year is not enough to cover 1-2 bad situation that can wipe out that income. Hence why people break up homes and rent out a home in pieces to get more income.
In general the maths for paying off a mortgage over 25 years with interest, the expenses across 25 years for that home tends to wipe out any gains afterwards.
Even now it was discovered and stated in forbes etc a persons home is not investment after they did the maths. I think it's about what does a person want.
If a home kept for short term then value goes up more than usual cool, get your money then get out move onto bigger cash flowing assets like buys apartments blocks that has a 1 to many occupancy rate
There's nothing wrong with Bromley young people would love to live there but as soon as there is a commutable distance between London and a region the house prices become almost equivalent to London.
Absolutely agree Houses in Bromley near trains, eg Elmer’s end, cost upwards of 600k
Who said there was anything wrong with it
@@calenwatters5267 Bromley is a highly desirable area to live, Langley Park, Farnborough Park and many other areas in the borough. Compare and contrast with Lambeth, Lewisham, Southwark and parts of Greenwich.
@@griefwnl7641still less than London.
Bromley has a strong underbelly of chav. The town centre needs I say more
Can't believe the first house I bought Aged 19 in August 1978 for £8.5k was recently sold for £520 k. I saved for the deposit with money from my Saturday supermarket job, then got a mortgage on a 2.5 times my Salary. You'd have to be earning about 150k to purchase that house today under the same conditions.
Yeah, sounds reasonable, after all im pretty sure every supermarket job today pays 150k/year 😅😂
@@takiherosquires1372 I think that's his point... you can't
Plenty do earn that you would be suprised
Rich areas are much higher then that
Our grandparents complained like us
The range on that microphone is amazing. It's pointed at his shoulder yet it's picking up his voice and still sounds clear as day
I'm a Sound engineer and I thought exactly the same! xD
I wonder how much cleaner it would sound if he actualy spoke into the damn thing xD
Sounds alright enough for a video like this, but it could be waaaaay better
It's pointed at his shoulder but isn't this only half of the matter since micropone patters could mean its picking sound up specifically from one place or all around?
Probably under heavy audio compression to make up the difference.
There is a large hiss on the recording, probably due to having to push levels to hear him properly, not good sound
@@charliehinde1701 what is it called?
Total value of Uk. £13.3trn. (ONS)
Of which property values are £9trn.
Property worth more than the combined values of pension funds, stock market capitalisation and savings.
it's Supply and Demand. We've imported millions in the last few years alone. The housing stock hasn't grown by nearly this much. Demand for houses therefore surges, and prices go up. Once people realise it's only going one way, then you get a bubble. Worse still, so many people are invested in this bubble, no party can afford to correct it.
Add to this stamp duty and capital gains, which prevents people from moving into more appropriately sized house i.e. Baby boomers downsizing, then the housing market is totally screwed.
Well said.
You build before accepting people in. Seems like the previous government wanted to accept immigrants and all the tax they bring in. But spend nothing on housing or social programmes. 😂😂
It's not a supply and demand equation. It's more complex. For example ,Lisbon in Portugal has terrible problems with unaffordability yet a huge surplus of housing.
@johnburrows3385 I need too look into this. Very interesting
@johnburrows3385 Lisbon isn't in the UK!
The problem with property is that the banks have a vested interest in making an investment when it should only be allowed as a home.
If you remove lending for second homes, if you remove property as an investment then money can be used to do real investing.
When is it an investment? For who?
@@hfwwfare you dense?
And what happens to people who want to rent due to the flexibility it offers? Sorry mate you’re only allowed to buy a house - don’t forget to pay the legal fees and stamp duty land theft.
Pmsl real investors ….So what you’re saying is we should just do it your way …. Idiot
Pmsl real investors ….So what you’re saying is we should just do it your way …. Idiot
In 1970...the ratio of average salary to house prices was 3.89. In 2024 it's 7.95....The average house price today is 285,000...a deposit, 5%, is about 14 grand. How many people, who are paying rent, can find that kind of money?
That’s so true, a guy at my work bought his house for £60k in 1990 and said it was about 3.5 x his (single income household) salary. He said now (he is 60) no way could I afford to buy a house today. ‘I don’t know how people live’ he says. Especially when I tell him what I pay per month for my mortgage. Even though we work together and earn the same salary. He is stunned by the cost.
Nailed it. Only the banks benefit from high property prices.
And the sellers, not sure you grasp how this works, rich people own the assets. Banks just loan wannabe rich people money to buy said assets if nobody bought then banks can’t lend 🎉
I live in Bromley and my house cost me £600k, it's not cheap.
My thoughts exactly. You’re right about Bromley (I used to live close by) and you’re certainly not getting anything in Sevenoaks between £200k or £300k unless its a 1 bedroom studio flat. These are really popular commuter towns.
@@ACsPianoCorner you’d have to be mad to pay £300k for a shite studio flat, why would anyone do that for the ‘pleasure!???’ Of living and working in an overpopulated, crime ridden, polluted place is beyond me.
It’s similar to where I live. I live inside the M25 bordering Essex, a house is anywhere from £500k -£600+ that is a 3 bed house with a small driveway for maybe 2 cars. Flats are £350k I personally want to move far away eventually but my wife has to remain close to care for her parents. But I will 100% be moving somewhere cheaper. Luckily I bought my first house in 2004 and have moved 4 times buying ‘do-er-up-ers’.
@@Knuckle_Sandwich_Hand_Wraps that’s seriously crap for the money, I’d be gutted.
You can get a beautiful barn conversion in the Lake District for that amount, way more space and x100 times better scenery. At least you are keeping your options open though, wish you luck.
@@MrCaterhamr500 If I were to move 2 hours away the cost for a property comes down dramatically, actually, if we moved today, at that distance we could be mortgage free. I would move tomorrow.
There needs to be a limit on mortgages, in my day the limit was very strictly applied, 3 times salary and only one salary, no wive’s income included and 25 year maximum loan period. This capped the potential value of houses, all went pear shaped in the greed of the 80s. House prices would drop to match available mortgages, consequence maybe negative equity but that could be worked around. Finance industry makes billions£££ from maxing out every possible potential of the property market at the expensive of quality of life of mortgage holders. The current system is like feeding a heroin habit, the heroin being the finance industry.
The issue there is no one would have a home to live in. Houses need to be somewhat affordable
@@ianross6971 if the supply of money is limited House prices will fall. They did in 2008 but then greed return.
Exactly right. I’ve been saying this for years. It’s so obvious and it was Thatcher’s deregulation that led to the mess we are in today. The only way it can be solved is by a house price crash and a return to that limiter which ensured it remained a buyer’s market constrained by mortgage lenders on a 3-time salary and not a seller’s market created by irresponsible lenders inflating the market lending whatever the seller wants.
@@danielanderson6450 Compare and contrast with Belgium for example, moderate house prices, same if not higher incomes, and a much better quality of life. France, Germany and Luxembourg much the same, not familiar with Nederland or Scandinavia, although Scandinavian countries are reported to be the happiest nations, in the happiness league, U.K. is way down. Average German 20-25% better off than the average Brit.
Doesn't work. See Ireland. The problem is that housing is an investment and because it's an investment, like must go up
Rory is the man ❤
😅 the high "£200,000s".... Thats marketing for you. I think means "around £300,000"...
It's insane and why is this not a bigger talking point, glad Rory talks about this!
Because all the decision makers are in on the rort
I live in Sevenoaks and let me tell you that you definitely cannot get a reasonably nice 2 bed flat here for under 300k, that was laughable. It is one of the most popular and most wealthy commuter towns in the South East.
Agreed we looked at Sevenoaks, but it’s so expensive, ended up in Edenbridge which is a little more reasonable by London suburbs standard
Stealing millions of workers from poor countries during a housing crisis, was always going to lead to problems - still it keeps wages down, and that is all that matters!
So true...Jamaicans, then Indians, just, polish eatern Europeans, and now anyone who can get in....last rinse n repeat n game over
That's the Neo Liberal Capitalist system that people have voted for the past 45 years.
This
They didn’t steal them, they are our replacements.
Gary can't compete against an emigrant because they work harder .
As a housing researcher, for once, the correct quotes on Adam Smith, John Stuart Mill and Marx all saw and calculated the rentier Landlord as creating nothing new; they take the surplus from productive labour with no restraint (free market economics bundling Land in with Capital) ) of regulation/taxation with constant adjusting of rentable value to the high utility value of a roof over your head, i.e. everything, meaning people will go without heating, food, electricity to pay the rent. The land is a natural monopoly of place and time. (Winston Churchill 1909 Edinborough speech on Land Monopolies) The land values of the Duke of Westminster properties in London are high because of the closeness of commerce in the 21st Century. That land is not a product that can be created, packed up, and put elsewhere; that would go against the laws of physics of time and place.
The way to control land values ( the make-up of house prices = Land Value (LV)+ Construction Cost. Note in the 1930s, LV dropped to 3%, and the average now in the UK is 70%, and in London, it can rise above 90%) is to control the expected growth in rent values, which relates to the property's value, determining the rent needed to beat the other forms of investment. In this case, rent increases always affect property prices as the need for a 3-5% yield (depending on inflation, which relates to interest rates in the present monetarist set-up) is required for an income for the landlord. Otherwise, put the surplus in gov bonds, stocks and shares, which people did between the 1920s-1971 and 1973-1980).
This is a complex subject, and it turns out the issue is not that we don't have enough houses (we have pretty much the same per capita as in the 1970s when, in some areas, there was a surplus, albeit slums ready for demolition), but that we have the wrong demographic living in the wrong type of house (ref: the Oxford academic geographer Danny Dorling; All That is Solid). If the Private Rental Sector (PRS) returned to 7% of the market share (presently 19%), this would free up 4 million properties without building one more. When Landlords exit the market, they don't destroy the property; it changes hands to either an owner occupier or back to the local authority/housing association. In the 1920s, the sitting tenants purchased one million properties from their landlords as yields dropped due to rent controls (1915-1988).
What landlords and those who followed the law post-1996 entering the buy-to-let market should be angry about is that this idea was a) to inflate the housing market by creating scarcity for first-time buyers, b) further caused the end of government welfare to asset welfarism, great if you have an asset, work till you die if you do not. Now, many middle-class children are entering the workplace with wages that, in real terms, are 35% lower than they should have been in 2024 compared to 2010, and they have no hope of ever buying a property where there is well-paid employment.
This comment is seriously underrated. And just to add, part of the problem is ignorance, mainly of the young and the fact that as Ronald Regan suggested that if you have to explain it, if the subject cannot be accurately condensed into one or two sentences then it won't hit.
And so it is with housing theory.
"calculated the rentier Landlord as creating nothing new"
Absolute nonsense. Landlords provide housing. You clearly have no grasp whatsoever on anything
Most of the rent doesn't even go to the landlord, it goes to council tax, mortgage company, maintenance and repair and so on.
@@dkizxpt-su3ze *"Absolute nonsense. Landlords provide housing. You clearly have no grasp whatsoever on anything"*
So landlords build housing do they? Or do they simply swap one opportunity (buying) for a worse one (renting) and charge for that service?
*"Most of the rent doesn't even go to the landlord, it goes to council tax, mortgage company, maintenance and repair and so on."*
Total bull. Around here the rent for a 2-bed is £1,200pcm or £14400 a year and according to SimplyBusiness the average amortised maintenance & repair cost for a property in the most expensive place in the U.K. to obtain such services (London) is £2300 a year. Given that council tax is usually paid for by the tenant this means that pre-mortgage you're making £12100 gross profit in that example. And as a repayment mortgage gets you a house at the end you can't discount much from that either.
If they don't buy, no bricklayer wouldn't build. Landlords provide homes. If it's so easy you would do it@@loc4725
Lots space above land
I did not do this when I purchased my house. It would be stupid to borrow max amount. Seriously stupid, the issue was the advisors pushing that. Maybe something to do with certain fees based on loan amounts...
You don't, but at a population level, people tend to, because there's a feedback loop of sellers pricing as high as they can and buyers buying as much house as they are able, because a house is still considered an investment, it's widely assumed by most people that house prices will always go up, and also assume that a capital gain on a more expensive house will be greater than the gain on a cheaper one & effectively their proportion of equity growth is magnified. So they look at what the most they can afford to spend on housing per-month is, assuming interest rates remain fixed. A stupid assumption but one most people make.
The increased price part was true in nominal terms at the national average from after the crash after 2008 until about 2022 when interest rates stalled the ridiculous nominal price growth. So anyone who bought at 2010 prices & has spent that entire time building their equity up and their debt down is still in a pretty good position. Anyone who bought the most they could afford in 2022 is probably in for a rough 5 years though.
@@InnuendoXP I really think the IFA need to be brought in to this. I doubt a lot even understand a "normal" environment. I had to flat out tell my one that all I want is a 10 year fixed, price the house to that. I feel for everyone else who didn't think but the whole point of the IFA is to provide accurate opinion. I don't see how they could have when they likely simply did not know.
I commend you as a responsible borrower. No one is forced to borrow and you are 100% right on fees. Lenders are selling a product, cash. The more they sell the more they get paid. Like buying anything its the purchasers responsibility to buy with in their means not the sales persons. Perhaps making it a requirement that all home loans fix the interest rate for 10 years is the solution. This would reduce the amount that can be borrowed and so stabilise house prices although it would be at a lower level.
@@Finderskeepers. I personally think all mortgages should be fixed for life time of the loan. It's an artificial churn made by the market. You could easily deal with the timing issue through early exit fees. Products could differentiate by the ability to port, settle early, offset. It's just another terribly exploitative sector geared to funnel money up and out of our communities.
@@3d1e00 There is no artificial churn as borrowers make the purchase decision not the banks. The cost of of buying and selling property also prohibits that together with the fact liquidity is the biggest issue with property. Mortgages have more liquidity with the ability to assign or securitise. Im keeping it simple by suggesting fixing the rate but you are 100% right and if anything derivates have got more exotic. An interest rate cap is a long standing derivative that would address the issue of porting while avoiding breakage costs should the loan be repaid early but they are rarely available for the retail market because there is no demand. Your approach which is similar to mine is rare. Have this conversation down the pub and people will think we are mad to want a higher rate as an inverted yield curve is very rare even if there is one right now, it only occurs when the market thinks interest rates are on the way down whilst inflation is generally causing upward pressure.
There is a problem to the idea that everyone will/wants/can work from home and therefore that home can be anywhere. There was a big exodus during covid from the cities to the countryside but having spoken with people in the business (developers, council officials and so on) that has since reversed. The reason is that services in the sticks are just not good enough for people used to living in large cities. You can't get UberEats at 2am in most rural areas. Public transport is abysmal. Mobile phone coverage can be patchy. There are no decent shops.
I live of the Isle of Wight and can give two recent examples. Firstly a friend who owned a small hotel has just sold up and moved back to Bristol. Why? You have to go to Southampton for decent shops and his wife likes shopping and it became a problem. The second example happened just last night. I was in my local pub when a group of men in their late twenties early thirties came in. They were a good bunch clearly on holiday. The couldn't get their heads around the fact that all our villages takeaways close at 9pm and the pub closes at 11pm. Clearly village life is not for them.
Sutherland is brilliant. But here he is completely out of touch. He doesn’t even slightly rub the causes of the extraordinarily expensive real estate prices in the UK.
What do you think the reasons are then
It's supply and demand. Mass migration is the reason.
So either cut migration numbers or increase the supply to insane levels like 800k new units a year.
Getting people to move to Bromley wont solve the issue. It will only put up prices for those who want to live in Bromley. Ita not just London prices that are going through the roof.
I disagree because if people want to live in Bromley then there must be a reason for it. Theres plenty of affordable housing in the UK, the problem is nobody can make a living in those places. Location is everything in real estate, that sets the price not the standard of the house. I was hoping that this new era of remote working would allow people to live where they want but they're trying to rain that in now. Who does that benefit other than landlords in London.
Migration isn’t as mass as you think it is. Media just wants you to think that while the elite carry on doing whats really affecting the market and economy and you’re eating that up lol
So why didnt house prices explode massively when the population was exploding in the 50s and 60s, the population is fairy stagnant at the moment, how can supply and demand be an issue when the demand isnt going up.
The economy is still short of workers. Send all the immigrants home and the economy will collapse further.
Immigration isn't the problem.
Rising inequality is.
Introduce a minimum £15 ph wage. Build council housing. Tax wealth.
@@SamTheManWhoCanTwice There were massive government backed housebuilding programmes back in those days.
They just will not allow enough hoses to be built so supply and demand is completely out of kilter.
Good advice, try go remote as much as possible or move far away from big cities. I have a UK 🇬🇧 wage in Morocco 🇲🇦 so much cheaper we all need to try do the same as much as possible.
but you're in a shithole (morroco)
That will increase the cost of the housing wherever you all go. For example, in Spain, the housing is going up because loads of UK remote workers are paying more money to rent a place in Spain. That affects to the countries where you all go.
@@aureliomedina460I couldn’t care less of house problem in another country. The main issue in leaving abroad and receiving a salary abroad, is using those money in another economy. Our salaries are spent in UK, that bring revenue to other UK companies and pay others people salaries. Of course doesn’t matter for one person. But if that became a trend needs to be addressed.
One of the big drivers of this is the mortgage system. Mortgages need to be based on the new construction (labour & materials) cost of new houses. Currently typical construction costs are between 25% to 33% of the sales price. There are huge profits made by developers, landbankers, financiers, all paid for by massive mortgages. Which the banks have conjured out of thin air. We should treat loans on houses like cars, if you want to buy a new Mondeo the banks won't lend you 4x the manufacturers price, nor will they lend you even more in 4 years time when it has partly depreciated and worn. We need to unravel the fractional lending system, let house prices fall, improve planning standards (require bigger houses on more land with parking, hobby spaces, garages, bungalows for the elderly). The government need to buy agircultural land at cost, and rent housing at cost. Once the supply of housing exceeds demand, older, low standard housing can be replaced. Instead of family income going to fund the banks and the land industry, we need funds going into utilities, infrastucture. That way the money stays in the real economy and is not siphoned off to global financiers.
Also, reduce the number of companies in London, get them to move out and allow more people to work flexibly.
it's Supply and Demand. We've imported millions in the last few years alone. The housing stock hasn't grown by nearly this much. Demand for houses therefore surges, and prices go up. Once people realise it's only going one way, then you get a bubble. Worse still, so many people are invested in this bubble, no party can afford to correct it.
If you reduce the demand i.e. fewer people, then all the other issues go away. Your solution above to bad governance is to call for more governance. it's the difference between a free market solution, and a central planning solution. Sadly most people in this country have been indoctrinated into thinking mass immigration benefits anyone but the super rich.
Don't expect government to make a change. The government is in bed with big business.
Big business finances politicians, they lobby, they influence the decisions.
There's no shortage of homes. If you look around there are lots of properties for rent and for sale. The problem is the asking price.
Money nowadays are not related to the real economy, it's just speculation everywhere.
The stock market is just speculation, is just an expectation that things are going to get more and more expensive so people buy and hold.
The 2008 crisis only problem was Wall Street got too greedy and started lending to people who couldn't pay it back, so the whole structure came crumbling.
But if banks just keep on extracting the max amount from people who can afford it... they'll be happy to allow poor people starve on the streets.
By the way, government officials and rich people only fall upwards.
I think the reason a lot of people feel like capitalism has failed, is like Rory says, the gains of the areas where it has functioned well and brought prices down have been entirely offset by the massive increase in housing costs
thats not capitalism failing. thats success according to capitalism. capitalism can never fail because it ackowleges that it will always have winners and loosers. even if there are 99% of the people livig in misery and the rest in extreme wealth, that doesnt go at all against the philosophy of capitalism. preocupations with justice or fairness are not important because capitalism is not based on any morality. so, as a capitalist, you never lose
Love Rory. Genius quite literally
Never heard of this guy but he makes hearing economics fun. Like hearing good jokes at the bar.
Limited supply. Property is the gold standard.
Its not just the UK, here in NZ property prices are crazy considering the low wages most people are on here.
you can't live in a telly or a Car, so very different.
Ye apples n oranges comparison again.....assets ho up, tv n cars go down to zero, ( rare cars exeption)
Lots of people live in their car.
@@paulcoates3860 The concept of a house as purely an asset is a forced thing over the last 30 years or so.
Van life
Rory would be a great bloke at the pub, great storyteller.
I blame homes under the hammer and all those other shows where houses were seen as a high growth capital investment rather than as a roof over somebody's head.
so..... you want to turn hotels in to apartments as well?
or is there a reason you think that only the rich can rent rooms?
Get rid of help to buy, get rid if shared ownership, get rid of Lisa, make it easier for landlords to he fined, bring in renters rights, let councils chose their own council tax on 2nd homes, tax large companies who own large swathes of properties. Make owning oroperty less glamorous
Very interesting interview.
Rory coming in absolutely on the money. Love it.
I'd quite like an Aston Martin. Not sure if I'd be happy parking it at Tesco though.
As someone who lives in Bromley I didn't realise it was uncool 😅
The problem is the estate agents. They survive by the percentage they earn from the sale and the vendor want to make profit also so they inflate the property price to hit their target and this in turn pushes up the price of the market year by year .So property prices rise accordingly every year till a 30k flat 20 years ago sells today for 300k .peoples wages dont go up exponentially so the cheap market for first time buyers no longer exists
100% true. The UK estate agents push the price up in every single transaction. Everywhere were demand is high they try to transform each sale in an auction pushing prices up and making people borrow more money. The banks are accomplices of this because they don't turn down valuations or they just do a quick desktop exercise. There should be a limit to overpay vs marketed price.
In 1988 I borrowed at 8% that went up to 16% but that's OK because I had moved to Hastings converting a 1 bed flat in South London to a 3 bed house. And then the trains went on strike and the gulf war pushed the fuel price up. I had to leave the country with negative equity. Maybe I was on the wrong side of the economic coin?
Because for as long as I can remember I’ve had people tell me “you need to get into property that’s where the money is.”
Low interest rates could have had a positive effect if we had taken advantage of them to stimulate construction. Instead we constrained supply and just let prices spiral
Nothing to do with adding 1.2 million people every 2 years from abroad then?
That is a factor. But pick your poison. Do you want less immigration, but a smaller (native) workforce paying huge taxes to prop up an increasingly ageing and retired population OR more immigration / young people in the economy, meaning a lower tax burden for all, but housing competition?
The ideal solution is more immigration, more births, more houses. Then when the baby boomer generation "goes", immigrants can go home (if they want to), and excess housing can be demolished (if need be).
But ulmiately immigration control of the sort the those on the right of politics tend to want would be disastrous for this country (which is why neither the Conservatives or Labour will ever seriously consider it).
@@chrisdevine4848 The obvious reason for immigration in the West which intelligent people on the right don't seem to tackle.
@@chrisdevine4848yes because the 1.2 million coming in are working hard on the benefit system
@@reviewassistant6891 - you are misinformed, sir.
@@chrisdevine4848 evidence?
Property values have been fueled by the reduction in interest rates. When interst rates rise which they will (due to the budget) property prices will collapse and people will be caught where their loans are bigger than their house value aa happened in 2006-2008. However, it is also limited by supply and a year later they will bounce back. Keeps the roughly 19 year cycle correct.
what if credit creation loans were only available (or more readily available)for energy saving houses with heatpumps and suchlike
there are people like richard werner who say money shouldnt be created from thin air for non-productive purposes like houses..perhaps there should be some help for primary residence purchase...or maybe it wouldnt matter if a family home was £15K like in the 1970s
one thing is for sure.there shouldnt be credit creation loans for government..there shouldnt be government
One thing with property is you do pay tax ! It’s just that it is at the beginning of the transaction and often gets bundled into your mortgage. If it’s your primary residence you won’t pay tax on selling but will pay if it is a second property
Do you mean interest
@@johnbuffaloiam9741 No he means stamp duty?
@@johnbuffaloiam9741 I mean stamp duty - the “hidden tax” on property transactions
Build more houses.
Build more council houses.
Raise taxes on the workers to pay for houses for the non workers . 😊
It’s simpler than that. It’s greed. And greed is insatiable.
I appreciate the depth of research behind your points. It’s clear you’re speaking from experience, which adds a lot of credibility to the advice.
You don't do it with cars because that asset will just depreciate and depreciate (unless you've got a garage to keep it in mind condition forever!) until it's worth nothing. A house will just go up and down up and down (while ultimately going up overall) forever!
How do small channels get these guests?
Taxation cannot and never will fix the problem. You need to talk about the root cause: the price housing is not connected to local earnings because so many properties are being purchased using money that was not earned in the UK. Stopping the UK being used to safely hide internationally laundered money would be the most effective solution.
There's lots and lots of reasons why the houses are unaffordable. I can imagine almost a million people flooding the big cities each year who have fuck all money and are dependant on the state to feed and house them is a pretty massive issue as well..
They are not unaffordable. They have all been afforded.
You can’t compare cars and televisions with buying properties. The production costs for televisions technology drops,the cost of building properties gets greater therefore properties always gonna go up.
Rory is so Jolly you can’t help but smile
Another big issue that no one is talking about is how much money young people need to invest into making old houses safe to live in ie new wiring, heating, mould issues, new roofing etc. A lot of 1930s to 1970s houses that go on the market have been left to rot and not looked after. What if there was more incentives help for people to do houses up this would help with families money leftover to spend on other things
Fundamental problem with property ownership in England is still about the class and the meaning of property. Social housing in Europe is not seen as less than owning. Not only that, but social housing renters do make their homes, theirs by upgrading, improving, making it a home to be proud of. In UK, and especially England post Thatcher fiasco, as the worst thing one can experience. One is not quite good enough, or achieved enough, or aspired enough, if we are not in debt in (feels like!) perpetuity. We are currently (2024) a country of 69,138,192, and in England at the 2021 census was about 56,489,800. Just let that sink in. We expect our children to leave home asap! Where are they going to go? Idiots voted for Brexit, so they can’t move that easily and live in a European country. We have more bedrooms that we actually need for just in case… in case of what? Oh, yes… Christmas visitor. We are now beginning to reap the ‘benefits’ of Thatcher’s catastrophic changes to housing policy, e.g. selling all local authority assets, and Tories Brexit fiasco. Unscrupulous private landlords are just a cherry on top. We’ve become slums again. Go back, watch ‘Kathy come home’, few raw, truthful documentaries about our society today, and then consider how good these decisions were. We, in UK decided that everyone can be a landlord, because it was all about the money, especially the profit. We watched vast sums of money being made in property in USA (NOT in Europe!), and copied their greed.
Enter, sub-prime mortgages issue - “In the years before the crisis, the behavior of lenders changed dramatically. Lenders offered more and more loans to higher-risk borrowers. Lending standards deteriorated particularly between 2004 and 2007, as the government-sponsored enterprise (GSE) mortgage market share (i.e. the share of Fannie Mae and Freddie Mac, which specialized in conventional, conforming, non-subprime mortgages) declined and private securitizers share grew, rising to more than half of mortgage securitizations.” This led to closures of centuries old banks/companies.
We are now in UK, looking to lend beyond 20/25 years. WTF? We no longer see our honest are HOMES. No, they are apparently our ASSETS. Fundamentally they are just few bricks in a specific postal code. We deserve all we get. We created this, or approved this, or just simply jumped on the bandwagon of greed. 👏
Well Rory, the only problem with living in Bromley or Sevenoaks is that the house prices are no different to the cost of housing in Dalston. Then there are the commuting costs.
This all started with Blair.
Rory Sutherland is so interesting in an entertaining way always good to see him.
Entertaining conversation the reason house prices are so dear is because building cost are growing at an equal amount so once it’s been built it’s not gonna go down in value. It’s going to stay at the same value as the replacement cost for it, and we all think that property has gone up much more than everything else. On average, and I mean average over a long period of time, I don’t think this is true. There has been periods of booming prices then-levelling off and in some cases depreciating, but the average over say 50 years is around about the same as the stock market or gold.
My take has been, for many years, that there is not enough supply of affordable houses. Costs are way too high and I think this has a lot to do with the way they're being built.
Economies of scale, prefabricate parts and standardise the designs much more. Not everyone cares if their house is "totally unique" to them.
Imagine houses being put up in kit form in a matter of weeks rather than waiting monthsor years for one! modularity so you can buy a basic "core module" which you can then expand as your needs and family grow!
A system like that could enable houses to be bought and shopped for almost like cars, with online configuators and previews helping your imagination along.
The idea that the high 200 thousands for a flat in Kent is not expensive, is frankly ridiculous.
The council house systom in england should never have been broken up there are certin things in a country that private hands should not get their hands on like transport milatry contracts mining of a country's wealth and medical care these type of service's should be controled by the state for the benefit of the tax payers
Somehow, they managed to avoid talking about single most important reason why property values are artificially inflated - restrictive land zoning policies and building restrictions imposed by city planners
And Tory MPs who were landlords setting the rules....
Because Buy-to-let is still bloody legal. You should only be allowed to buy a house if you're going to LIVE in it.
London property greed 😂 I'm glad I'm finally out of the big smoke, living in the west country where there is actual housing affordability, equivalantly better pay, better quality of life, better quality of air, the list goes on 😂
Prices are high because there aren't enough to around. supply and demand. We don't have enough houses for the amount of people here and it's as simple as that. We didn't keep up with building and now we're too far behind to catch up.
Supply and demand has always been an issue. We had a lack of housing in the 80s when prices were stable. The reason the prices have rocketed is because of the deregulation of banks which led to cheap credit.
Cheap credit led to a massive boom in mortgage lending which drives up a bubble. In just 10 years before financial crash over 80% of new loans went into the housing bubble, and banks pumped over £1tn into it.
Supply and demand does have an affect but it’s minimal in housing.
If you did this...
Pay £500pm over 12 months for 10 years.. into a goverment backed isa.. You'd get £60.000 basic rate. With an additional 5% interest per year abd an extra £15.000 from the governent for buying within the isa scheme.
You'd have 60.000+5000+15.000 totaling. £80.000 to put down on a property. Start ar 20 years old and by 30.. You'd be buying your own property on a mortgage.
It's great for new couples.
I've got a uk isa, ive had them for many years now and they're great.
My little brother is doing the goverment isa for his home.
Plenty of rich people running to the uk as a safe haven don't care if the property costs 500k or a million.
what we can learn from Australia is, suburban spread don't matter. Housing in the suburbs are even more expensive than city centers there. Because the incumbent house owners in Australia, try to rig the system via artificial zoning laws, to deplete supply
Actually, the faster-than-reasonable rise in house prices subsidised the home owners, i.e. the middle classes (very broadly defined). It made home owners feel much wealthier than their salaries warranted. Now that house prices are disrupting society at every level, the only solution is to reduce them. That will expose the fact that most home owners are far poorer than they think.
There is no way to do this without causing a generational disaster. It's important to do this as soon as possible, so that the generation that suffers most from it is the generation that benefited from it before.
A lot of businesses are trying to grt us back in full time. Bot having it, let is have a but if freedom and trust us
My first house was in suburban Philadelphia, USA. It wasn’t cool but I sold it in 6 days.
Making areas cool Rory is right i live in a place called streatham vale zone 3 twenty minutes to the Victoria 30 minutes to London Bridge local transport is brilliant plenty of buses and trains but horrors of horror 1930s pebble dash housing my new neighbour paid ( young couple ) five hundred and fifteen thousand in my street freehold huge back garden and a big front garden, and quite literally on the other side of streatham common station the same size house is £1.5 million
He was kind of wrong about the car thing. Hire purchase etc has everyone driving a new Mercedes that they will never own outright instead of a 2nd hand Kia they own until it can't be repaired any more. The house stuff was right though. Mortgages push prices up to fictional values and mortgages for 2nd homes or buy to let are just wrong.
Why equate housing to investment when there are better investment products? The issue is access to affordable housing like cheaper rentals. You just need a bigger supply to lower prices.
For prospective new buyers, and private tenants, the rot in the UK housing market was seeded in the mid 90s when the government allowed lenders to offer buy-to-let mortgages.
Two ideas: (I) Nationalise the rail system and do-away with ticketing. Only because the income from ticketing barely covers the admin, maintenance,penalty and/or debt collection costs of itself, nor could it cover the foreigner investor dividends. .and (II) ..put a cap on the amount per sq mtre a house is allowed to be sold, rented or left empty , and any amounts above that is illegal under fraud regulation going back 7 years. Like they do in Berlin....thus making the city less attractive to property profit specualtors, and as a consequence, flats n spaces are used, maintained and lived in, rather than "things ya can flog to make money off of" ...:-) x
Thatcher flogged off the council houses and deregulated banks , gone were the days when you had to manage your money, save a deposit and talk to a bank manager before you got a mortgage . Slowly the multiple crept up to 5 1/2 times salary. Planning rules made it more expensive to build and more expensive. Population growth from migration added to the problems.
An issue not covered is you cannot build a truly affordable house with completely over the top building regulations. The solution after world war 2 was to build cheap prefabricated houses which to a large extent solved the emergency. If we did this again we would go some way to solving the crisis. A radical shift in thinking is what is needed.
Mortgage free at 53. Buy a crap house in a nice street. Live in it for a while, do it up and sell it for a profit. Keep doing that until you can buy outright. Never buy at the highest amount you can afford. If interest rates go up , you're screwed.
People were allowed to buy second properties - that's it, nothing else.
The private landlord screwed up prices so they could live off of rent.
Commuter season tickets need to be fixed for those who work from home most of the time. My wife now worries from home and only goes in 2 days a week yet her ticket is not 2/5ths the price.
And who owns the mortgage debts (ie the property)? The banks ie the super rich.
Its not just about "Making suburbia cool", people dont want to live in and around cities (generally) because they are cool, they want to liive there because thats where the rich people live. Its where all the jobs are and the highest level of opportunity for careers are.
The price is too high, but the main one is the interest. Its more than just interest its compounding! Interest in interest..
I can afford to pay off a 400k house in 15 years. Trouble comes when I spend another 15 years paying money that the bank decided I owe them for lending me the money. Its robbery and I signed the dotted line to agree for it to happen.
People who work for a living D O buy cars that way. In addition to having to stretch financially as hard as they can to afford housing, they also have to do the same thing FOR CARS. And that's mainly SECOND HAND CARS not even new ones because new ones are 'monopoly money' to most people.
None of this makes sense 😂
Bromley and Sevenoaks are mad expensive as it is and Dennis Neilsen's flat is in Highgate, an even more expensive area than Shoreditch.
Come on now.
You cant walk away from the housing market, thats the problem. And now we’re told we cant fix it because of all the idiots who have taken on mortgages they cant really afford assuming their house would increase in value.
I brought a house and i dont really care if it goes up or down in price. I plan on living here and paying off my mortgage.
Houses are only unaffordable were most want to live ,I could not afford back in the early 80,s in Aberdeen because there was an oil boom on ,moved to devon and I could .Loads of young want to live in hip ,like London and Bristol, my son included and moans they can't afford, that's like me saying I want to live in Central park in America, no chance of me affording that ,cheapest house probably starts at 2 million ,sorry apartment. So many places all over the world that are to expensive for a second time buyer let alone first .
Well... want to live and can find a job are different things
Designed limited build, limited stock bulk purchased by investment funds to charge ridiculous rent to fund investment. It's designed
Apple dont like people from different departments knowing what each other are working on as they like everything to be secret, so that buildong design possibly makes sense for them
property in uk has been a issue over 50 years .. why nobody else talks about it .. 1 man can not feed or house his family
He’s over complicating the argument….property prices are driven by demand….in rural areas where there are few jobs, houses are cheap, in cities like London where there are lots of highly paid jobs and decent houses are hard to find, houses are very expensive! Economics 101….
The suburbs would be cool if there was work there and affordable transport infrastructure. Not everyone has remote working and those that do want to go to shoreditch
Rory looks like he's eaten some property. Possibly a 4 bedroom house.
Amen to the land tax and/or property tax. It's the only way to rein in the excesses of all the speculation.
Make sure the land your house sits on its freehold.
Separate the titles and sell your home but lease the land and the air right above.
'The luxuries of today are the necessities of tomorrow'. My headmaster told me this in 1959.