This is cherry picking stats to fit the agenda. The numbers here don't stack up. House price to earnings are unsustainable. House prices to disposable income after tax and living costs will be even further off the scale. House price pumping videos don't make for a better life. Young people are now living with their parents into their 30's and 40's.
Innequality has gone up since 2004. How much of those wages that have beaten inflation, have gone to the average person? House prices are less affordable now than in 2004 for the average person.
Property prices need to come down, pay isn't going up as quick as property prices, I'm a homeowner, but the next generations can't get on the property ladder, mortgages should be based on 2.5 times the highest persons earnings, not 12 or so times, rent prices should be capped though no government would ever do that because they're renting out property, I'm grateful that I never had children, it's going to be extremely hard for the next generations
@@QBR1234 I don't know whether you're a parent or not, I'm not, but looking at the next generations, in some cases known as generation rent, they don't stand a chance of getting on the property ladder, if you cast your mind back to the the early/mid 2000's, people were buying and selling property, moving 3 or 4 times a year because property was going up at such a high rate, then we had the crash in 2008 which had to happen, but then many people had properties that they bought to let, rents went out of control, but no one thought of the next generations, only the profits they were making, now this generation are struggling to find enough money to pay for the rent, they could afford to save, a mortgage would be cheaper than rent, but they can't because rent is so high, property has become over inflated and it's going to bite people on the backside when they want to sell or downsize and no one can afford to buy their property and you find someone living on their own in a big property, barely able to pay to heat the property, pay the council tax etc, it's going to catch up eventually, the bubble has got to burst sometime, I'm lucky, I bought small, I bought cheap, I don't intend to move, I've lived in the same place since 1996, I didn't buy for profit, I bought for a roof over my head, I've spent a fortune on making the place my own, how do I value my property? A lot less than an estate agent valued it, if I was looking to buy, there's bigger properties on the market for less than the price my place was valued at, you may ask why I got it valued, it was just out of curiosity, I have no intention of moving
The real investors are not dumb. Invest only into you believe will grow significantly. Which housing is not anymore. Doesn't matter if the bubble burst now or later.
I am to understand that the price of gold has outpaced house price inflation over the last 20 years, but there are no tenants, stamp duty, maintenance, or mortgages to deal with. Infact I just looked it up 1kg of gold in August 2004 was approx £7000 per kg 1kg of gold in amAugust 2024 is worth £61,223 per kg So if I had bought 4kg with my deposit for a house cash £28000, I would now have £244,892 hassle free. A gross profit of £216,892 It's a little different if you buy a house to live in as 4 gold bars don't offer much protection from the weather
@matth8145 no I got it mate, I was just referencing an alternative.... I have plenty of houses so am well aware of house price inflation and how things all go up with inflation, houses are restricted in price because of wages paid and affordability of people that can afford to buy them, this is why the relationship between income and house prices is as it is in the videos graph. Gold however is not limited by wages so can inflate in price way beyond the affordability of the masses that need a home. Most people that view this video will most likely be looking for an investment that can achieve a passive income. I think you missed the point of the comment mate.
With property you can leverage, Gold you can’t. Both are good but the power of leverage combined with real lower terms property prices mean that I’m going with property this year.
@Finance-Food-and-Freetime On a 75% 25% mortgage, there is currently a very low yield. Wait until the new government attacks landlords, then there will be even less yield and a punishment for selling.
Whoever drew the upward bending trendline on that graph needn't worry: they've obviously got their talent in abstract artistic fantasy as a career fallback option 😂
Houses are still selling I got in a bidding war with 3 other buyers and they all outbid me, the price went over the askin price, there are so many cash buyers out there and that must mean something, ,where I live the houses go on the market and are sold by dinner time, so when I see doom warnings I see a different thing I’m glad because anybodys portfolios are booming and that’s a good thing surely
@@PsychicPisces yes very true I’m up north houses tend to be a bit cheaper, but rents are high and a three bedroom house is the same amount of work wherever it is
The South Wales valleys are where cash is king. The auction houses are full of ex rental properties where the old landlords have just upped and left their properties in the hands of the mortgage companies.
We live in houses, and that's what confuses people between price and value. Fact is houses are a terrible investment with a load of bother attatched. You'd have been better buying gold, and let's not mention Bitcoin, or landlords will be jumping out of windows.
Are you talking about asking prices or sold prices. The majority of homes have sold for under asking price over the last year, some by a considerable percentage.
House prices are so high that many people in well paid jobs cannot afford to buy without parental help or a win on the lottery. Large construction companies have resorted to Shared Ownership to tempt desperate couples to buy. In fact this along with 35 or 40 year mortgages. Shared Ownership is like buying a portion of a property with a friend ; but quite the opposite as certainly not a friend but a company that sets the Rules and becomes your worst nightmare. How any Government ( Red or Blue ) has allowed this practice to become the norm is disgraceful. When a purchaser it is Caveat Emptor ( buyer beware ) as prices can go up or down . Logic says the only way is DOWN and any rise will be daft.
The interesting part is @3:53 where you’ve adjusted earnings for inflation. Let’s assume your calculations are correct, I have no reason to doubt them. So, we have a situation, where if we merely close our bubble of concern, around the UK £ values of wages paid over, there’s a modest increase of about 12% let’s say. Well and good, the numbers, the money, sat in isolation, seem mildly beneficial. Now try actually buying something with that money. And the ‘average’ has become more and more detached from the pay level most people get - in other words, fewer people have a lot of pay, and many have been left behind. So the average pay level, hides the fact that even more people as a percentage of the population, will gasp at how high the average is. When I got paid £28k in the 1990’s, I recall distinctly, I had ‘just about’ reached the ‘average pay’ for the UK worker. Previously I had considered this unobtainable, things merely went right for a few years - it later went wrong, don’t worry. And as the average pay has lurched upwards, you’re not talking take-home pay either. These figures, ignore the fact that a lot more people run into higher income tax, as they hit the average pay up at around £37,400 as of 2024 I believe. And, pensions are much less generous in general, so what your pound buys for your longer-term prosperity, has been having the legs cut from under it. Defined contributions vs Defined Benefit, isn’t it? And property is a special case unfortunately. I sold a modest property way back in 2009, and it cost me nearly five grand. Just legal fees, a changed practice of what Council Tax was charged on an empty property, and so on (renovation needs were extensive). That was almost 10% of the property value at that time. At the lower end of the property market, the ‘fixed costs’ are relatively huge. There is no ‘broader shoulders carry the biggest burden’ in this. Or at least, it’s not fully linked to the sale price. Then there’s another unseen bit of whittling at the value of what you buy, this applies peculiarly again, to the UK property market. There are many, many more private landlords than back in the pre-2000 era. I’d call it flooded. Almost every single one, has done the cheapest, most cost-effective ‘fix’ or repair, or replacement, for whatever aspect needed altering, and this means the quality of what’s in there, and of repairs, is down on what people who ‘bought for life’ would have done. Manky outdated electrics, cheap nasty floor panels badly nailed down instead of floorboards, apparently heat-resistant panels behind hobs in kitchens, simply glued onto the wall, and a special mention to the shoddiest area of all, laminate flooring…cheap, tacky, thin, flooring, easily damaged by water ingress, and the fitment so bad, there’s a bounce to it in summer when it swells in dimensions! It’s shabby cr@p you’re buying a lot of the time, is my point. Owner-buyers, put more money in, rightly or wrongly emphasising the durability and longevity and quality aspect. Letting on an amateur, untrained basis, with limited repair knowledge, leaves either the work to the variable skills of the landlord/investor, or to whomever they choose as their contractor who will know full-well what’s wanted ie cheap, cheap and cheap. The bandwagon, is always safer if you are able to not sell when hard years arrive, same as stocks and shares. In my case, we were hit by health issues of the main earner, a lack of employer support (ie a very short period of sick pay even for cancer), and the government slapped a new legislative barb on the low-end rental market. This was the so-called ‘spare room’ tax. In practice, strapped councils or benefits staff didn’t check a property of a claimant, until they announced they were moving. Quickly, everyone realised this - and promptly, tenants on benefits ceased to move. We were stuck wanting to let a property, and the only buyer was another landlord, who could afford to sit on it til matters changed. Same as shares. If you get forced to sell - and a total absence of any tenants to look at a beautiful 3-bed property meant we were - the market rips a premium off you for that. Valuation was £85k. We sold at £55k. I concluded the same as with shares, by the time you are in the ‘right’ circumstances to safely renovate and let a property, you won;t be needing to do so! But, others will manage it. Just beware of applying methods of making money, that worked in the past, to the future. The lack of aspiration in young people to bid to rent a home, let alone buy one, is not to be underestimated. Take care all, this is merely my experience.
Property prices will BOOM as soon as interest rates go to 3 or 4%. The rich are buying up assets. This is what will increase prices and also built up demand from the last 2 years.
Prices will slow, stop or drop in many areas of London. But up north prices will rise to equalise as up north its safer, cheaper and friendlier. Plus from the Midlands we can access the countryside and mountains very quickly.
Property prices have crashed in Wales apparently with the surge of owners wanting to sell due second homes council tax rises and possible CGT changes- hope this does not get translated to England
Nice video…I agree with the idea of silent crash…we had massive inflation the past few years but house prices stagnated whereas you would expect them to go as general prices rises….so if rates fall to 2-3% then for sure house prices will start increasing again since we now have higher wages..
The "average wage" is GDP divided by the population. It's bogus, as, if you have large wealth disparity, that figure increases, without the actual average wage increasing at all. if you are actually looking for the most common uk wage, it would be minimum wage at just over 20,000, because if you want to make the most money, you want to pay your workers the least and if you are over leveraging your business due to long term low interest rates and they suddenly increase, taking money from your workers is the first port of call. What are they gonna do. They can't afford homes, rent or consumer goods, on mass. The profits you make from your home is directly linked to the number of house purchases increasing demand and so therefore the price of your assets. If that demand fails, because People are facing joblessness and their wages HAVEN'T outstripped inflation, that insecurity drives them out of the housing market and into the rental market. Once the rental market is controlled by the government, you will be forced to sell your home, because you won't be able to profit from the rent. (People cant afford it anyway). This floods the already over saturated market and everyone, from building firms to banks, homeowners, pensioners and stock holders watch the inevitable decline of the uk economy. Many will flee these conditions, but will realise very quickly that it's a global economic recession and conditions will only be marginally better elsewhere. Then, whats left of British wealth will be placed into growing the manufacturing sector and many will regret ever getting rid of it.
I have been saying this for years. Many of the high profile property experts out there fail to acknowledge/understand inflation adjusted prices. Perhaps because it doesnt fit their agenda/business plan.
London skew. In London the prices have gone up more than wages, on other areas not so much. The ONS has a page, housing affordability in England and Wales 2022 which has a regional price to earnings multiple map from 1997-2022
Whatever inflation calcs are you using? That's the problem I can see here. £405 - £514, over 21 years is nowhere near beating real inflation, not even over the past 3/4 years largely due to all the c#vid QE. You'd need about double today of around £900 to equate to £450 in '03
I asked Chatgpt, which took inflation over that period as 2.5% (I wish) and came up with £680 adjusted for inflation. Not quite sure what's going on with this video. When you now consider interest rates are higher and factor in other costs I'm not remotely convinced wages have outstripped house prices.
I’ve tried explaining this theory and people don’t get it. Minimum wage in 2003 was £4.20 so a minimum wage worker would need to work 29761 hours to pay for a £125,000 house. Now in 2024 the minimum wage is £11.44 and a minimum wage worker has to work 23164 hours to pay for the same house. When I put the rent up on my flat it was £550 a month when minimum £7.83 in 2018. I asked for an extra £100 a month in 2022 when the minimum wage was £9.50. In real money terms her rent is less so she has to work marginally less time to pay her rent.
The real issue isn't just the number of hours needed to buy a house, but whether people can actually save anything at all after covering the cost of living. Goods and services have been inflated much faster
Inflation-adjusted house prices remaining relatively constant are irrelevant unless your inflation-adjusted earnings are also relatively constant or higher.
No. Because there is no bubble overall. The true problem is that wages for 'ordinary' people have remained stagnant for thirty years and that has resulted in their being priced out of the market. For sellers, given the status of houses as an asset class, there is still a market as the wealthy look for somewhere for their ever increasing stack of Scrouge McDuck gold to go. Houses prices have not particularly inflated - after all, to keep pace with inflation the price tag of a house has to, roughly speaking, double every ten years.
Wages haven't kept up with inflation. The figures I see for a median full time worker in 2003 was £21,124 and for 2024 £35,880. Using BoE inflation calculator £21,124 is worth about £36,776 in 2024, almost £1000 more. The difference between my figures and the video's may be due to average vs median or maybe people work longer hours now?
Blah blah blah. Property is selling just fine around me and prices are still the same, every week I hear the bubble is going to burst and nothing happens.
Firstly, we haven’t just seen a bubble… we have seen real time inflation and interest rates reflected in activity… you are seeing the bottom end of the most ridiculous UK property “actual” bubble this country has ever seen!
@@CROSSNSHOOTso if he wants to make money on buying property DON’T believe him when says property prices are falling. That’s a sales tactic to create FOMO
The analysis of house prices adjusted for inflation ignores the increases in interest rates. Average standard variable rate (mortgages) was 7.98% in July 2024 compared to ~4% through 2009-2022. Property may indeed be "cheaper" in real terms but if interest rates are much higher, as they are at the moment, nobody will buy this cheap property as it will be too expensive in terms of payments. A bad investment decision. Methinks this channel is trying to "talk the market up"! (source, House of Commons Library report "Household Debt: Key Economic Indicators")
Grifter. I’m guessing there’s no conflict of interest between someone saying property prices are falling and at the same time makes their money buying properties 💩
wtf a u talking about? houses are cheaper in 2003??? man In Liverpool u can get house in 2003 for just 10k, now this houses 110k... cheaper? salaries nearly the same.
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Value of a property is actually zero if you can't actually sell it. It's pretty hard to sell a property right now!
This is cherry picking stats to fit the agenda. The numbers here don't stack up. House price to earnings are unsustainable. House prices to disposable income after tax and living costs will be even further off the scale. House price pumping videos don't make for a better life. Young people are now living with their parents into their 30's and 40's.
Innequality has gone up since 2004. How much of those wages that have beaten inflation, have gone to the average person? House prices are less affordable now than in 2004 for the average person.
Property prices need to come down, pay isn't going up as quick as property prices, I'm a homeowner, but the next generations can't get on the property ladder, mortgages should be based on 2.5 times the highest persons earnings, not 12 or so times, rent prices should be capped though no government would ever do that because they're renting out property, I'm grateful that I never had children, it's going to be extremely hard for the next generations
But governments depend on property tax.
Need to move away from this stupid country and raise a family else where. Why not have children just for the sake of this stupid country??
Did you not understand the video? Prices have not gone up in comparison to everything else you buy, or wages, so why on earth should they come down?
@@QBR1234 I don't know whether you're a parent or not, I'm not, but looking at the next generations, in some cases known as generation rent, they don't stand a chance of getting on the property ladder, if you cast your mind back to the the early/mid 2000's, people were buying and selling property, moving 3 or 4 times a year because property was going up at such a high rate, then we had the crash in 2008 which had to happen, but then many people had properties that they bought to let, rents went out of control, but no one thought of the next generations, only the profits they were making, now this generation are struggling to find enough money to pay for the rent, they could afford to save, a mortgage would be cheaper than rent, but they can't because rent is so high, property has become over inflated and it's going to bite people on the backside when they want to sell or downsize and no one can afford to buy their property and you find someone living on their own in a big property, barely able to pay to heat the property, pay the council tax etc, it's going to catch up eventually, the bubble has got to burst sometime, I'm lucky, I bought small, I bought cheap, I don't intend to move, I've lived in the same place since 1996, I didn't buy for profit, I bought for a roof over my head, I've spent a fortune on making the place my own, how do I value my property? A lot less than an estate agent valued it, if I was looking to buy, there's bigger properties on the market for less than the price my place was valued at, you may ask why I got it valued, it was just out of curiosity, I have no intention of moving
Why invest in physical real assets in a country with deep structure problems and a stagnating economy?
@@matth8145 More poor people that can't afford stuff doesn't increase demand.
The real investors are not dumb. Invest only into you believe will grow significantly. Which housing is not anymore. Doesn't matter if the bubble burst now or later.
I don’t see any stagnation I’m struggling to buy property because there are so many buyers out there,
Oh, did that come from your crystal ball?
because everything you said is wrong. Duh.
I am to understand that the price of gold has outpaced house price inflation over the last 20 years, but there are no tenants, stamp duty, maintenance, or mortgages to deal with.
Infact I just looked it up
1kg of gold in August 2004 was approx £7000 per kg
1kg of gold in amAugust 2024 is worth £61,223 per kg
So if I had bought 4kg with my deposit for a house cash £28000, I would now have £244,892 hassle free.
A gross profit of £216,892
It's a little different if you buy a house to live in as 4 gold bars don't offer much protection from the weather
@matth8145 no I got it mate, I was just referencing an alternative.... I have plenty of houses so am well aware of house price inflation and how things all go up with inflation, houses are restricted in price because of wages paid and affordability of people that can afford to buy them, this is why the relationship between income and house prices is as it is in the videos graph.
Gold however is not limited by wages so can inflate in price way beyond the affordability of the masses that need a home. Most people that view this video will most likely be looking for an investment that can achieve a passive income. I think you missed the point of the comment mate.
With property you can leverage, Gold you can’t. Both are good but the power of leverage combined with real lower terms property prices mean that I’m going with property this year.
Well, gold is unreactive and you can hammer it incredibly thin. Maybe you can make a tent?
No yield
@Finance-Food-and-Freetime
On a 75% 25% mortgage, there is currently a very low yield. Wait until the new government attacks landlords, then there will be even less yield and a punishment for selling.
Whoever drew the upward bending trendline on that graph needn't worry: they've obviously got their talent in abstract artistic fantasy as a career fallback option 😂
Houses are still selling I got in a bidding war with 3 other buyers and they all outbid me, the price went over the askin price, there are so many cash buyers out there and that must mean something, ,where I live the houses go on the market and are sold by dinner time, so when I see doom warnings I see a different thing I’m glad because anybodys portfolios are booming and that’s a good thing surely
Depends where in the country you are
@@PsychicPisces yes very true I’m up north houses tend to be a bit cheaper, but rents are high and a three bedroom house is the same amount of work wherever it is
@@youtubeman5033 Yes, I’m in London, so that wouldn’t be the case here 😂
@@PsychicPisces I can imagine London is very expensive which would make things difficult, at the moment,
The South Wales valleys are where cash is king. The auction houses are full of ex rental properties where the old landlords have just upped and left their properties in the hands of the mortgage companies.
We live in houses, and that's what confuses people between price and value.
Fact is houses are a terrible investment with a load of bother attatched.
You'd have been better buying gold, and let's not mention Bitcoin, or landlords will be jumping out of windows.
Are you talking about asking prices or sold prices. The majority of homes have sold for under asking price over the last year, some by a considerable percentage.
Also in my country a lot are there unsold for years.
Estate agents are trying their luck
I would imagine the data is compiled from land registry data, which will be sold prices, as asking prices are only advertised not registered when sold
House prices are so high that many people in well paid jobs cannot afford to buy without parental help or a win on the lottery. Large construction companies have resorted to Shared Ownership to tempt desperate couples to buy. In fact this along with 35 or 40 year mortgages. Shared Ownership is like buying a portion of a property with a friend ; but quite the opposite as certainly not a friend but a company that sets the Rules and becomes your worst nightmare. How any Government ( Red or Blue ) has allowed this practice to become the norm is disgraceful. When a purchaser it is Caveat Emptor ( buyer beware ) as prices can go up or down . Logic says the only way is DOWN and any rise will be daft.
@@barneysayer9110 One would hope so, but they don't tend to use data from Halifax and Rightmove etc instead.
7:00 I think you missed out the interest charged on the mortgage, how much would that have been?
The interesting part is @3:53 where you’ve adjusted earnings for inflation. Let’s assume your calculations are correct, I have no reason to doubt them. So, we have a situation, where if we merely close our bubble of concern, around the UK £ values of wages paid over, there’s a modest increase of about 12% let’s say. Well and good, the numbers, the money, sat in isolation, seem mildly beneficial. Now try actually buying something with that money. And the ‘average’ has become more and more detached from the pay level most people get - in other words, fewer people have a lot of pay, and many have been left behind. So the average pay level, hides the fact that even more people as a percentage of the population, will gasp at how high the average is. When I got paid £28k in the 1990’s, I recall distinctly, I had ‘just about’ reached the ‘average pay’ for the UK worker. Previously I had considered this unobtainable, things merely went right for a few years - it later went wrong, don’t worry.
And as the average pay has lurched upwards, you’re not talking take-home pay either. These figures, ignore the fact that a lot more people run into higher income tax, as they hit the average pay up at around £37,400 as of 2024 I believe. And, pensions are much less generous in general, so what your pound buys for your longer-term prosperity, has been having the legs cut from under it. Defined contributions vs Defined Benefit, isn’t it?
And property is a special case unfortunately. I sold a modest property way back in 2009, and it cost me nearly five grand. Just legal fees, a changed practice of what Council Tax was charged on an empty property, and so on (renovation needs were extensive). That was almost 10% of the property value at that time. At the lower end of the property market, the ‘fixed costs’ are relatively huge. There is no ‘broader shoulders carry the biggest burden’ in this. Or at least, it’s not fully linked to the sale price.
Then there’s another unseen bit of whittling at the value of what you buy, this applies peculiarly again, to the UK property market. There are many, many more private landlords than back in the pre-2000 era. I’d call it flooded. Almost every single one, has done the cheapest, most cost-effective ‘fix’ or repair, or replacement, for whatever aspect needed altering, and this means the quality of what’s in there, and of repairs, is down on what people who ‘bought for life’ would have done.
Manky outdated electrics, cheap nasty floor panels badly nailed down instead of floorboards, apparently heat-resistant panels behind hobs in kitchens, simply glued onto the wall, and a special mention to the shoddiest area of all, laminate flooring…cheap, tacky, thin, flooring, easily damaged by water ingress, and the fitment so bad, there’s a bounce to it in summer when it swells in dimensions! It’s shabby cr@p you’re buying a lot of the time, is my point. Owner-buyers, put more money in, rightly or wrongly emphasising the durability and longevity and quality aspect. Letting on an amateur, untrained basis, with limited repair knowledge, leaves either the work to the variable skills of the landlord/investor, or to whomever they choose as their contractor who will know full-well what’s wanted ie cheap, cheap and cheap.
The bandwagon, is always safer if you are able to not sell when hard years arrive, same as stocks and shares. In my case, we were hit by health issues of the main earner, a lack of employer support (ie a very short period of sick pay even for cancer), and the government slapped a new legislative barb on the low-end rental market. This was the so-called ‘spare room’ tax. In practice, strapped councils or benefits staff didn’t check a property of a claimant, until they announced they were moving. Quickly, everyone realised this - and promptly, tenants on benefits ceased to move. We were stuck wanting to let a property, and the only buyer was another landlord, who could afford to sit on it til matters changed. Same as shares. If you get forced to sell - and a total absence of any tenants to look at a beautiful 3-bed property meant we were - the market rips a premium off you for that. Valuation was £85k. We sold at £55k.
I concluded the same as with shares, by the time you are in the ‘right’ circumstances to safely renovate and let a property, you won;t be needing to do so! But, others will manage it. Just beware of applying methods of making money, that worked in the past, to the future. The lack of aspiration in young people to bid to rent a home, let alone buy one, is not to be underestimated. Take care all, this is merely my experience.
The big issue is that many people’s wages eg in Finance / Accounting / Banking are not much higher than 20 years ago.
no sh#t
That's good!!!!
Property prices will BOOM as soon as interest rates go to 3 or 4%. The rich are buying up assets. This is what will increase prices and also built up demand from the last 2 years.
Prices will slow, stop or drop in many areas of London. But up north prices will rise to equalise as up north its safer, cheaper and friendlier. Plus from the Midlands we can access the countryside and mountains very quickly.
Property prices have crashed in Wales apparently with the surge of owners wanting to sell due second homes council tax rises and possible CGT changes- hope this does not get translated to England
Nice video…I agree with the idea of silent crash…we had massive inflation the past few years but house prices stagnated whereas you would expect them to go as general prices rises….so if rates fall to 2-3% then for sure house prices will start increasing again since we now have higher wages..
This is not real life. A lot of people are struggling to buy and also many people are struggling to sell. The average salary is a joke.
The "average wage" is GDP divided by the population. It's bogus, as, if you have large wealth disparity, that figure increases, without the actual average wage increasing at all. if you are actually looking for the most common uk wage, it would be minimum wage at just over 20,000, because if you want to make the most money, you want to pay your workers the least and if you are over leveraging your business due to long term low interest rates and they suddenly increase, taking money from your workers is the first port of call. What are they gonna do. They can't afford homes, rent or consumer goods, on mass. The profits you make from your home is directly linked to the number of house purchases increasing demand and so therefore the price of your assets. If that demand fails, because People are facing joblessness and their wages HAVEN'T outstripped inflation, that insecurity drives them out of the housing market and into the rental market. Once the rental market is controlled by the government, you will be forced to sell your home, because you won't be able to profit from the rent. (People cant afford it anyway). This floods the already over saturated market and everyone, from building firms to banks, homeowners, pensioners and stock holders watch the inevitable decline of the uk economy. Many will flee these conditions, but will realise very quickly that it's a global economic recession and conditions will only be marginally better elsewhere. Then, whats left of British wealth will be placed into growing the manufacturing sector and many will regret ever getting rid of it.
I have been saying this for years. Many of the high profile property experts out there fail to acknowledge/understand inflation adjusted prices. Perhaps because it doesnt fit their agenda/business plan.
Estate agents over valuing most of the time doesn't help
Thanks for the video. Where’s the link to the breakdown of each region?
Good, let them fall. When I downsize it saves me money and I also pay less stamp duty! About time it became more affordable for youngsters too.
If real prices and real wages are about the same, how has the price/earnings ratio increased so much?
London skew.
In London the prices have gone up more than wages, on other areas not so much.
The ONS has a page, housing affordability in England and Wales 2022 which has a regional price to earnings multiple map from 1997-2022
Whatever inflation calcs are you using? That's the problem I can see here. £405 - £514, over 21 years is nowhere near beating real inflation, not even over the past 3/4 years largely due to all the c#vid QE. You'd need about double today of around £900 to equate to £450 in '03
I asked Chatgpt, which took inflation over that period as 2.5% (I wish) and came up with £680 adjusted for inflation. Not quite sure what's going on with this video. When you now consider interest rates are higher and factor in other costs I'm not remotely convinced wages have outstripped house prices.
@@sllabres1 real wage was about 200£ in 2003, adjusted for inflation - 450£ in current prices. Is it to hard to understand?
I’ve tried explaining this theory and people don’t get it. Minimum wage in 2003 was £4.20 so a minimum wage worker would need to work 29761 hours to pay for a £125,000 house. Now in 2024 the minimum wage is £11.44 and a minimum wage worker has to work 23164 hours to pay for the same house.
When I put the rent up on my flat it was £550 a month when minimum £7.83 in 2018. I asked for an extra £100 a month in 2022 when the minimum wage was £9.50. In real money terms her rent is less so she has to work marginally less time to pay her rent.
The real issue isn't just the number of hours needed to buy a house, but whether people can actually save anything at all after covering the cost of living. Goods and services have been inflated much faster
But that house that was 125 in 2003 is now 270, so the number of hours is now much higher 💁♂️
House inflation happens last....youve had food..energy..rtc...get ready for house prices 2028 is 2008, what happend after it. A year or 2
Essentially this shows that in 20 properties will be worth less that what people pay for them
Inflation-adjusted house prices remaining relatively constant are irrelevant unless your inflation-adjusted earnings are also relatively constant or higher.
No you can't use inflation like that! Does your inflation include rents doubling? What's your inflation based on? A hand full of consumer goods?
No. Because there is no bubble overall.
The true problem is that wages for 'ordinary' people have remained stagnant for thirty years and that has resulted in their being priced out of the market. For sellers, given the status of houses as an asset class, there is still a market as the wealthy look for somewhere for their ever increasing stack of Scrouge McDuck gold to go.
Houses prices have not particularly inflated - after all, to keep pace with inflation the price tag of a house has to, roughly speaking, double every ten years.
Perhaps changing UK to England in the title would be more honest.
so will they cone down nominally?
what is the point in real house prices fall if real wages do not grow?
Wages haven't kept up with inflation. The figures I see for a median full time worker in 2003 was £21,124 and for 2024 £35,880. Using BoE inflation calculator £21,124 is worth about £36,776 in 2024, almost £1000 more. The difference between my figures and the video's may be due to average vs median or maybe people work longer hours now?
It will be good for train drivers struggling to get onto the Mansion market.
I think the figures are exaggerated based on my experience.
If you're using GB News as your reference point for news, prepare to be wrong!
Squatting will increase, i imagine.
The plant behind your right shoulder has been poorly potted, would it be possible tht you can re-pot this plant ??? Lol 😅😅😂
Blah blah blah.
Property is selling just fine around me and prices are still the same, every week I hear the bubble is going to burst and nothing happens.
You should only measure property prices in ounces of GOLD!
Uk has decoupled from EU, and global supply chain has started to move from China. Get ready for problems. 100 yr chart might be more informative.
How about 18 years cycles? It should happen 2026. In this case, will it not happen then?
Again another video with no video link to watch next
You buy house you buy problems, crypto don't need maintenance, buble need to pop
Don't bother owning a home in the UK. It's a total con.
Firstly, we haven’t just seen a bubble… we have seen real time inflation and interest rates reflected in activity… you are seeing the bottom end of the most ridiculous UK property “actual” bubble this country has ever seen!
property pumper in disguise
It’s not really disguise-they have a podcast on property
@@CROSSNSHOOTso if he wants to make money on buying property DON’T believe him when says property prices are falling. That’s a sales tactic to create FOMO
The analysis of house prices adjusted for inflation ignores the increases in interest rates. Average standard variable rate (mortgages) was 7.98% in July 2024 compared to ~4% through 2009-2022. Property may indeed be "cheaper" in real terms but if interest rates are much higher, as they are at the moment, nobody will buy this cheap property as it will be too expensive in terms of payments. A bad investment decision. Methinks this channel is trying to "talk the market up"!
(source, House of Commons Library report "Household Debt: Key Economic Indicators")
What proportion of mortgages are on standard variable rate? I would assume not many…
Lol, no.
Grifter. I’m guessing there’s no conflict of interest between someone saying property prices are falling and at the same time makes their money buying properties 💩
So basically anyone planning to sell their home should double their asking price.
Down with usury! Yes, to Islam!
wtf a u talking about? houses are cheaper in 2003??? man In Liverpool u can get house in 2003 for just 10k, now this houses 110k... cheaper? salaries nearly the same.