Unless you own more than one house, ti doesn't matter what it's worth. It's worth one house. If you only own one house you can't sell it and live in the gutter.
Hello, to be honest I think I did my best dedicating ten years to academia and supporting graduate students in their careers, most for the NHS. I decided to leave as I had no other choice if I wanted to buy a warm house for my family. This for me is the reality of the UK economy.
Exactly. Most people who own a house have family members who don't. Even for individuals who won the house price lottery, people who they love, or care about lose.
I personally don't know anyone in the private sector who's had salary increases. In fact most wages I see now in the software engineering industry are back to where they were 6 or 7 years ago. None of my other "professional" friends in other sectors are getting raises. All I hear about are redundencies and potential redundencies. People I know on LinkedIn have been looking for work for ages. The economy is screwed and we are being lied to. I can't speak for every sector, but I suspect the only salary increases are coming from the public sector, which is so incredibly huge now that I can only conclude that the UK is fast becoming a very poor nation.
The IT sector seems to have experienced a particularly heavy reduction in jobs and hiring. Other sectors are more buoyant still. Amazingly many IT roles are still on the shortage occupation list for UK immigration - I can't see any justification for this as there's surely no shortage of British IT professionals at the moment.
The UK has a debt problem. Also the elite class put all their money into assets instead of investing in the UK stock market since 2008. High house prices is bad for an economy as it takes money out of the system and gives it to the few.
Virtual stagnation in some areas of the UK and much lower selling prices than asking prices confirms this. Sellers are not being realistic according to some estate agents . That said some estate agents are leading people up the garden path by over valuing .
From the housebuilding chart at 12:08 it appears that the bulk of the building capacity shortfall comes from the near complete drop off in local authority building - surely this is something that needs discussing? The private sector has remained remarkably consistent
A very informative video. There are no easy solutions to the agony that is the uk housing market. But one thing that is in the government’s gift is to kickstart conveyancing reform. It’s ridiculous that the average time it takes to complete a purchase is 152 days up from 71 in the 80s I believe. The methods used in the process are so slow and archaic.
I gave up the “Dream” of buying in the UK. Won’t put my lifesaving into a LeaseHold crap building! 5 more years then going back to Brazil where I can buy 1 or 2 flats cash with my deposit money in the UK! This country is done!
@@sfactory8253 Better than waiting in line. You see, healthcare is cheap (except imported patent protected expensive drugs). And cause you pay for it, it is on-demand.
I live in the South East and was in West Midlands. I think people are misled. You can search houses sale prices over time on land registry website for free. It can be concerning. Some houses or flats prices haven't moved since 2017...bought 310k and for sale now at same price which means a 25% loss (100k) when adjusting for inflation. Noticed the same where I was before with some house. Guess what? All new built. Now they building around fulling terraced homes at 500k. Don't buy new homes/flats.
Leasehold is a huge scam, but in London unless you have almost £1m to spend, or want to live in Thamesmead, there isn't much other option. London is still a great place to live, there isn't anything that comes close it. If you're not in the position to afford a house for £1m, people are better off renting a flat, and tie up your capital elsewhere. There are still parts of west midlands for example, where you can get a 8-9% BTL yield, in areas that likely will have above average capital appreciation. With labour in, renters rights will only get better.
@tslondon422 yes but also a lot of the new build homes have estate management fees even if technically "freehold". They can hike this as they wish too.
Why would it matter if the house you buy is new or old? The price and function is all that matters. I don’t understand the point you’re making unless you’re saying there’s something fundamentally wrong with new houses. One of the replies mentions leasehold issues which is absolutely valid but that’s a freehold/leasehold issue not the age of the property. Can you explain what you mean?
When adjusted for inflation prices may have fallen since 2017 - but I can’t believe there has been no movement in nominal terms. Please provide the area or postcode.
@@deldia Imagine its just the new developments got really good at scamming people with high maintenance fees, lots of hidden costs etc....And these are generally bigger developments. Meanwhile the older developments are smaller and are already locked in with the older, decent & reasonable maintenance companies.
I don’t have a link for this but, I remember being blown away by a stat about housebuilding that totally changes perspective… the figures quoted are always gross, but in fact there were vast swathes of demolitions in first half of c20, meaning the impressive numbers in 50s, 60s aren’t actually the full story and it’s a lot flatter when looking at net. Be interesting to hear your thoughts in another video.
Right so its going to be even worse for house price growth if Labour hits their target. Because nowadays hardly any houses are demolished because the demand for rental accommodation is so high that people will put up with any old tat to live in. And remember - the rental market and the house buying market are two totally independent markets.
I’m in the process of selling my leasehold flat in London, it’s fallen by about 10% since 2016 in nominal terms, but 30% in real terms. It’s been the worst decision I’ve ever made to buy it, the only saving grace was that cost of debt was so low during this time, it was better than renting. Now cost of debt is high and likely will be for the long term, and flats in london aren’t keeping up with inflation, maybe it’s better to just rent, and stick all your cash into ISAs and SIPPS (total £80k a year) in global equity. Maybe have a BTL property as your primary residence to diversify.
Was that a high-rise perhaps impacted by fire defects post-Grenfell? Personally, I'd never buy a high-rise flat because you're on the hook for any problems with the building fabric, including mechanical and electrical. This can include lifts, which cost a fortune. There is also the dreaded issue of the service charge ballooning out of control.
@@nighttrain1236 Nope 6 floors, wasn't impacted by the cladding restrictions and we got the EWS1 very quickly as there were no remedial works. Freehold houses have risen by 35% in this same period, as it's a rapidly gentrifying part of London. It's not just high-rise thats the problem, its leasehold in general where it's more than a simple conversion or a small self-managed block. The government have done almost nothing to introduce regulations and transparency for building management and freehold companies, both who are predatory companies who are able to profit from leaseholders without real transparency or being held to account by anyone. Many of the big freeholders in the country happen to be landed gentry Lords in the house of parliament, which obviously is a conflict of interest.
We also own a flat in London. It was valued in 2016 at £420k - similar flats in the block are currently on sale for £360k (after many reductions) and still not shifting. We’ve had cladding issues (now resolved thank God), service charge is £244 a month. We’re renting it out and barely make any money on it due to high interest and taxes, desperately want to sell it but can’t afford to have it sat empty while it sits on Rightmove for a year so we are kicking the can and continuing renting it out and remortgaging again.
I bought a Housing association flat in a small block of 10 flats in 2007 for £150k. Sold it in 2022 for £220k. Overall it was better than renting during that period as I bulit up around £140k equity in it. I was lucky to get rid of it just before inflation spiked.
No. If you own only one property, the value of the house you own may drop, but the value of the house you’d want to buy next also falls. The difference is you’re paying your own mortgage and not the landlords.
It would help supply a bit if the thousands of unoccupied houses we have throughout the nation were brought back into use. There are two houses just along the road from me that have been empty for the 10 years I've lived here. This shouldn't be allowed. We should also cut right back on Air B&B type properties, with councils being made to control the amount of holiday lets available in any area. Factory built starter-homes would also assist, as would converting some redundant office blocks into flats.
Where I live in prices have fallen around 15% - 20%. I don’t understand when prices are announced they’re reporting an increase or stagnation. I’m looking at a detached home that would have sold for £450,000 a few years back that’s just been reduced again to £340,000. It needs work but not £110,000 worth of work.
@ That said my point is people two years ago would have snapped it up @ £450k in its current condition. It doesn’t need building work just decorating & upgrading the kitchen & bathroom. You could easily do this under £20k especially if the new owners are willing & able to pick up a paintbrush. It’s structurally in good condition.
But house prices grew 40% from 2020-2022 so it's all relative. Houses dropping is a market correction. We should in reality only be getting house prices growth of 2-5% max a year imo. Otherwise the market becomes too inflated.
@@Loundsify I still think house prices are overinflated considering the current interest rates on offer & climate. My friend who has a buy to let & coming of a fixed term was offered 5.95% fixed which is good considering his standard variable was 9.75%. Given the latest budget and pressure private landlords are facing, cost of living and wages etc, I still think we are yet to see the worst of it. That house I mentioned that's been dropped to £340,000 still isn't selling and we have a new housing estate going up here where the developers are still dropping prices to try & shift them when in reality the whole development would have been sold off plan in a matter of months in 2021-2022 or before. They have homes fully built that are empty & unsold but will not move to the next faze until they have sold the homes released. It's taking them forever to finish the development. Another reason why house prices are being artificiality propped up is builders are restricting supply. The development should have been completed well over a year ago. Also we was going to buy one of the new builds until we realised they wanted to rob us by charging us management fees which is affectively a private council tax on top of council tax.
@@everythingtechnew7400 so I had a new build estate near my mum's growing up and it started work in 2005 and didn't finish until 2014 because of what you said where Devs were sitting on stock until phases had been fully sold to pay for the next phase. I bought the last 3 bed on a phase in 2013 and they gave it to me for £110k asking price was £121k. They didn't explain the management fees at all to me. They mis-sold it to me as I'll have to pay it until the estate was fully finished and adopted by the council. They lied to me and I know 1 day I'll probably get some money back as this stuff always blows up eventually. So I used to pay £45 every 6 months for the up keep of the estate which had 2 parks and other stuff like trees and childrens playgrounds etc. When I sold in 2020 I was paying £60 every 6 months. My friends now are paying £120 every 6 months. There's no limits on what these companies can charge and they always use other companies they own to do other jobs. I think there was 1 where it was replace a swing on a park and they wanted £10k for it lol.
Lots of houses coming to market that were much sort after in the past and rarely came available and would have sold as soon as they came available but now sit without offers. Ive also noticed good homes having sold signs then coming back on the market. Not seen these types of activity for a long time.
The housing market is distorted by the leaseholder crisis. Many cases are flats and one assumes people would usually move up to houses but the rip-off costs associated with leasehold (both Cons & Labour talk about fixing it but no action yet) mean these people don't have the finance to move up or cannot even move at the moment. Leasehold is 25% of the UK homes stock (according to reports) so that leaves 75% to create demand. Until these problems are sorted we have no agreement of where the market will go.
I am glad you brought up regions. The press focus on the South East / London but like you said Ramin, step out that area and house prices are much lower and easier to purchase. Even compared to the lower average incomes outside of London. For me, supply will not keep up with demand so expecting increases in prices.
No chance house prices will go up in real terms. Cost of living increases.. production and service sector competition from Asia will depress wages…. Young people being massively burdened by debt upon leaving education … bank of mum and dad losing equity in their own houses and now feeling the pinch themselves due to all reasons above.. change in mentality of young zoomer buyers who are repulsed by the thought of being burdened for 25 years of payments as a wage slave for a crappy starter home with no hope of moving up the property ladder (they are the tik tok generation)… and lastly AI taking jobs. Nominal house prices will go up slightly each year, but in real terms they will crash. This video is an appeasement to his older viewers. The government will be forced to enter a massive public sector house building program like ok the 60’s because the private sector will not be up to the challenge. Very good in my opinion… because this house price rip off needs to end, people just want decent accommodation at a decent price that allows them to lead the best life.
Interesting point, the only bit I disagree with is the government building houses. They would spend £1m to build a house which a builder would spend £200k. Just not financially feasible, and they don't really give a crap about people who can't live in a house.
The price that matters most to you is the price of your first home after that the prices should have all risen or fallen relative to your current home so up or down sizing will have less of an impact in relative terms to that initial purchase price
Bigger family homes of four bedrooms are taking a real hammering. It is only the smaller homes, that people are downsizing to, that are holding up well in this market.
There's plenty of other labour policies that may have an effect on supply and demand that aren't necessarily being considered, for example changes in taxation on second homes, immigration policy and inheritance taxes on agricultural land. How it plays out I'm not sure, but I think the 1.5 million extra people we've had move to the UK in the last two years will have the greatest effect. Demand is high.
It's extremely important to point out that the phrase 'house prices' is a blunt, unhelpful oversimplification for what's happening to ACTUAL prices of properties which have huge regional variations, variations between leasehold and freehold, and at the 'top of the ladder' segment, per Rightmove, have actually fallen much further than averages. When you say 'house prices' you imply that all home values will move in unison and that never happens.
Honesty, I don't know anyone who has had wage growth higher than inflation. That's in both the private and public sectors. The only way, still, to grow your wage is to job hop. The only wage increases are occurring in the lower wage areas.
Absolutely - but also note that public sector salaries is why less than the private sector for an equivalent job. That being said there is a trade off with pension and stability for public vs private.
@mlguy8376 not in Scotland! Private sector pay is much lower for the equivalent public sector work, at least in the lower skilled areas. An example would be a PA or admin assistant role, the private sector skirts minimum wage for that, but the public sector sits more in the average UK wage scale.
Well, most of the private sector. Im in banking, my role pre pandemic would be in the region of 110k base, now it’s about 140k. That’s pure wage growth. If you have had no growth since 2019, for example, then you’re effectively working for for more than 20% less. Time to look for a new job, don’t be a mug.
@tslondon422 I work in tech, and there's jobs being cut everywhere. Profits are low and investment has been diverted to the AI bubble, sector wide. Not making excuses, just that not all sectors have grown like banks. Just look at banking share prices just now, they're all ballooning.
As a first time buyer sitting on a pale of cash - no way I'm going to buy house now. I see advertised house prices fall continuously in the last 2 years (using tracker extension on Rightmove). Average house price means nothing - they don't tell you the price of a house you want to buy, but transactions on the market. Are those transactions equally distributed around the size/location of the house? Why do you make analysis based on this at all?
Pressure on people like me (live in North of London, work in IT etc.) just grew further with the new budget. I can't afford a mortgage with this interest rate. I probably could but I'm not an idiot to pay the same as the house price to bank as interest over 30 years - this is insane. I'm not on the market as I believe many other first-time buyers.
Better to get that house when you can rather than wait it out. My brother could have bought in the early 2010s with a huge deposit and is still to this day "waiting for the crash". Things will slow for sure but an outright collapse seems unlikely to me.
@HJM49125 correct. There is much talk of a crash. Has been for the last five years. There has been a dip since 2022 but hardly a crash and now they are creeping back up
@@HJM49125 it took 10 years for house prices to absorb near-0 interest rate impact. It make sense that it will take at least 5 years for prices to reflect impact of the new interest rate. I saw old newspapers from 2007 - the prices were almost like today.
In 1997 I sold a house for 28.5k that I paid 37.5k for with a 7.5k deposit. That is a loss of 9k or 24% and a cash loss of £7500 and the cost for selling which was £9000. If someone bought a £285,000 house today with a 75k today and losing another 15k on top. That is going to happen. In fact I bet that has happened already but the nanny state will not allow it to be broadcast. Well it happened to me and stopped my moving ever again.
Most assets will have a margin that you have to overcome before being quids in though, think of it as currency exchange. A mortgage will never be free but generally better than renting.
A fair and even-handed analysis, thanks. If i have one criticism, it's that it's not always clear if you're talking about real or nominal prices (eg @13:30). I'm pretty sure that particular table is nominal, but it wouldn't hurt to make it explicit
Hi @chrisf1600 I do try to make it clear. And I think I did mention that estate agent forecasts are usually nominal because real house price growth sounds so paltry. Thanks, Ramin
I have a potentially naive question: As a homeowner why should I be so concerned with the ebb and flow of home values? If the value of my home goes up, then surely so too will the value of the home I would be looking to buy next, thus negating the real increase in my homes value. Similarly if I'm looking to sell while the market is down, then so too the value of the home I'm trying to purchase will have decreased. Am I missing something?
Generally, when you want to buy a new home you either want a bigger or smaller home, so you would be levering up or down. If you want a bigger home, you want lower house prices, as you need to make up the extra equity with cash or mortgage. If you want to downsize, you want high house prices because you will get more equity out.
Yes, most people are looking to down size or up size. Increases help geriatrics cashing in, falls are in the interests of just about everybody else because the next move will cost less, assuming yoy are buying a better house.
I’m in Florida and the housing market here over the last 7-8 years is unlike anything I’ve ever seen. Homes that were bought for $130K in 2015 are now being sold for $590k. I’m talking about tiny, disgusting, poorly built 950 square foot shit boxes in quiet mediocre neighborhoods. Then you’ve got Better, average sized homes in nicer neighborhoods that were $300K+ 10 years ago selling for $750k+ now. Wild times.
BlackRock etc. are buying up US residential real estate at close to 0% interest rates. In anticipation of CBDCs, Lloyds Bank in the UK aspires to become the UK's largest landlord (also borrowing at close to 0%).
Do you think that the bank of Mum and Dad might stimulate the market a bit? The well off might have been holding back on spending their pensions and using them as an IHT shelter instead. They might think that giving their children the Tax Free Cash to buy a house is an effective tax strategy.
@@Dr.Stacker I meant gift the Tax Free Lump sum from the pension, not gift a house. The cash gift falls outside the Estate after 7 years. The majority of 65 yr olds will survive another 7 years.
The UK is a grossly mismanaged entity, which is bound to have a lot of price volatility around asset prices. The stamp duty and taxes might have to change the incentives to own a second Home That can ruin the private spending on a huge scale
UK house prices are likely similar to the ftse 250 and small caps. Peaked years ago now, and a Labour government will not improve that situation for the better.
With stocks, the issue is that most peopel here would rather invest in crypto or US stocks, than UK stocks, becuase of that they performed badly and now it's a negative cycle as nobody wants to invest BECAUSE of the lack of investment. UK pention funds have reduced holdings in UK stocks by a huge amount, it's only aobut 5% now! A large part of the housing move up, especially in London was all the dirty money being laundered in London, we allowed anyone from abroad to buy our houses with no regulations so they could get rid of their blood money, we even offered a free UK visa to anyone who bought a house at one point, mostly Russian money, but also from corrupt officials in Pakistan and many other countries.
Good observation. I agree. Definitely more buy to let/rental properties on the market. Also EPC for rentals will need to be a minimum of C. Landlords trying to offload those with D or below...
A society that can't provide decent housing at an affordable price has failed. Zero nominal is the way to go, policy wise, to reduce the effects for existing owners. Let inflation gradually eat away at the value whilst increasing wages. ...but markets are schizophrenic, so don't d o gradual. To find the real cost of a home use the BCIS Rebuilding Cost Calculator and add on the land value (as used by insurers).
I live in the southeast and have a small 3 bed end of terrace. As a retiree I view my house as a source of equity to supplement my pension and savings income as I advance in age. A fall in house prices, while not having an immediate effect, could cause difficulties later. The Government demands that I must sell my house so that I could go into a care home. Care home costs are rising, so there could come a time where selling the house would not be sufficient to cover my care home costs even with my pension income. What savings I have left at that time would also be totally absorbed. Certainly, with inheritance tax, there will be nothing left for relatives to fight over when I pass and I will die a pauper. I might not even be able to pay for the funeral, a headstone would be replaced by a piece of wood from the offcut salvage store with my name scrawled on it with a sharpie. Thank you Rachel.
If your income is sufficient now, I will probably remain so. Even if you did need to to go into a care home, the equity in your house would pick up the tab for a while. When it runs out, the council will pay. If you do get to this point, you won't have to worry about iht. So unless you care about leaving something to your kids, I don't see your problem.
Thanks for your forecast, if you feel depressed about it just imagine how the young adults such as myself feel heading into this... by the time I've reached your wisdom the powers that be would've found a dozen other ways to strain any glimmer of hope and ambition :)
@@bikeman123 He's paid into the system for his entire working life, would should he not have a pot of gold left at the end to enjoy or pass onto kids for a better life? Depressing state of affairs.
Some places may fall but surely based on the net migration figures...we need even more than the 30k houses a day they were supposed to be building but haven't even started yet?
Bought a flat in london (victoriana conversion) in 2014, would love to be able to sell it for what I bought if for. Can't feel these demand pressure fro "net migration"
@joannabaker6398 I feel like apartments and flats inhabit a different zone, we had a flat starting 2009/2010 and sold in 2014 for just about what we bought it for. If it had been a house it would have been a different story. Unless the flat is in like the Barbican, I think they receive a more ambivalent level of interest.
Don’t be absurd - 6 months has almost gone and no sign of this 1.5 m homes . There’s no way they will build these houses - it was a lie . Nice to hear your Auntie is still with us and with the Gurkas
Fact, my best mate moved jobs to up north and needed to sell his house. In his street many houses have sold for up to 247K in 2023/24. His is one of the best on the street as he is very well paid and he had to sell for 180K. Prices have tumbled and anyone that buys without 30% the high price of 2023 is a fool with money and has been conned. In my opinion the ONS were part of a Ponzi scheme. They used a statistical 13 month comparison (all sales in July 2023 to all sales in 2024) to report a 12 month rise in house prices and even the Bank of England was in on it. Do the sums yourself and prove me wrong. Inflation went up last month and if it goes up next month they better put up interest rates or we will get boom and bust. This is is rubbish and I bet the person that bought for 247k will be sitting on a 40k loss and lost their 25K deposit if they put down 10%.
Maybe its your area mate, I bought in Nov 21, neighbours just sold 2 months ago for +45K more and thier house is comparable in size but in a lesser state of refurbishment
UK house prices jump 3.7% in November from Financial Time today on the 2nd of Dec. Cost of a typical home risen at its fastest rate of annual growth since November 2022
House prices are area based, most low income areas house prices are flat & have been for at least 2 years, there will be outliers like London & the south east, plus maybe Manchester !
Terrific as usual. The type of property also matters though, there’s variation in performance between say flats vs 100yr old terrace and semi houses. About 10% of new builds are on flood plains, cause the land is cheaper. You have be v careful when buying…
Infill properties on existing plots are a possibility, especially with tax incentives, small eco homes in the one bedroom size but detached might have a large appeal to retirees, who can't get anything in a good area to downsize to (and don't want to pay service charges on apartments). You do have to throw in govn supported apprenticeships in the building trade on a massive scale to back up their building plans even if it means apprentices end up as cheap labour for a few years. Some small plots are blocked by tree preservation orders which need to be removed in cities.
Is your price to income graph based on individual or household income? There are many more two income households now than early 90s, so doesn't make sense to compare prices to average individual incomes
Great video and analysis. But you've left out mortgage lenders. They want to lend as that's how they make their profits and they've been structuring mortgages to improve affordability. Eg offering 40 year terms and lower interest rates with a large fee which makes monthly repayments affordable. House prices depend to some extent on the availability of credit and if that doesn't dry up prices will at least stay level until wages catch up and then they'll start rising again. Bank of mum and dad will also draw more out of their pension to help with a deposit and avoid IHT which is what we're going to do. There are so many variables it's impossible to make any sort of prediction.
Thank you for the video Ramin. I would say that the average house price is not the best metric to look at for investment performance. Geographical influence is so large it would be interesting to see if you could create a housing as an investment by region e.g. South East or in London in real terms. I feel that this might show a different picture.
Labour's commitment to reform planning to the ends of building more homes is as vague as their plans for energy transition under GB Energy. I fear that planning is such as 'wicked problem' that they will only succeed in some minor and piecemeal improvements.
Good analysis. UK has bigger problems due to loss of trade with Europe. There is a serious lack of focus on investment in research and development. The labour constraints as a result of Brexit will further erode investment due to pool of skilled labour especially as further education becomes more and more unaffordable. That will result in fewer jobs increase in crime and flight of skilled labour plus wealth out of the country. In the end I foresee Britain being caught in a loop of stagnation for the foreseeable future until serious policy changes, investment increases and tax reductions. With Brexit the only option moving forward would be a low tax and low regulation economy both of which Truss tried to push and Nigel Farrage will continue to fight for
Just on a final note I want to add that the business rates and costs of running a business in general will cause bigger problems than anyone could predict. Unemployment will increase as a result over the next 5 yrs to what level will again depend on policies.
Blah, blah, blah BREXIT, that's total rubbish mate, it's more to do with poor decision making in parliament still being majorly Remaniacs run and not UK PLC, giving to much money to foreigners and not investing in the UK!?!
😂😂😂 ya loosing £150b in trade not taking inflation into isn’t much. In fact if we got real brexiteers it would be better. What is real Brexit? Explain to me how GDP is calculated? It’s funny how all the brexiteers became experts in economics. But I completely agree once all the immigration has stopped uk will be like the richest country in the world. All problems will go away 😂
Well Labour have an ambitious target and seems to be making the sort of moves with planning that could get them built quicker, we shall see, it all takes time. What is really needed is more council houses and that can only rented, they can be built irrespective of current prices, Angelia Rayner is trying to make that happen. I hope she can.
As long as money is printed by government assets, it will keep going up in price . Material cost and labour is more expensive so building and renovation will cost more . Rent is still money in the bin so house prices will remain high for some time .
Considering the stamp duty tax will raise from 300k up from April 2025 price will drop a bit for sure.. or lot of house will not sell for more months because of the people who can maybe buy don't want to pay so much on stamp duty.. image first home buyer for a 400k house need to save extra 5k min..
Its not going to be a deal breaker though... I was a first time buyer in 2021, paid 420K and just missed out on the covid stamp duty timeframe had to pay 6K. If thats going to put someone off a house then they are clearly not ready for home ownership. The cost of labourers to do any kind of work will give them a nice shock.
@rocko-sh5wi That true mate, I've spent 10K on materials and doing everything except for electrics myself. Roofing, Plumbing, plastering, flooring, kitchen, etc. I managed to pretty renovate entirely to a) keep the cost affordable but also b) I don't trust trades to complete a job to the neccassary quality. Don't get me wrong its been 11 months and I've probably got another 2 months to go. Its not been fun but the results are very satifying. cant wait to put my feet up after this!
I think with the statistics that 800k homes will be coming off ultra low mortgage rates a year for the next 3 years is all you need to know about what will happen. A sizable chunk (spit balling but 10-15%) will not be able to afford the new rates, these people will be forced to sell and many home owners will also stop spending in the economy to keep their homes, meaning a recession is inevitable. 2026 I think will be the worst year.
I have said before and will say again many times - people underestimate the housing market and it's general ability to withstand a downturn. For there to be a significant adjustment you need all 3 of these: High borrowing costs, high unemployment, and an economic recession.
I agree but your only considering the financial aspect of it. With the UK being unrecognisable now other factors are at play, is it worth being in the UK at all anymore, crime up, cost of living up, taxes up, income stagnent etc
'Affordability' is kind of irrelevant when Angela Raynor is pictured hanging onto the arm of Larry Fink of BlackRock as was the case recently. As with the farms, Labour's number 1 job is to get assets into corporations like BlackRocks hands. Own nothing, be unhappy and at the mrecy of the state.
Credit control should never have been abolished in the early 80's by PM Margaret Thatcher. Mortgages were based on one person income, plus sale of council houses. Banks have had it too good since the 80's. Growth is based on investment and income, furthermore it's more than necessary to build more affordable housing for those who cannot afford a mortgage, not to rely on private landlords.
House prices will have 2-3% gains per year due to cost of living (area specific). I’m a doctor and I’m looking to move abroad because there is no chance I’m spending the ridiculous amounts required at the moment.
Hi @sambaker2611 it's a Garmin Fenix. I love it! I retired my old Casio Pro Trek which I've had for about 20 years and which is starting to pack up (one of the buttons doesn't work any longer) but still keep it on my desk. I can't bring myself to throw it away! Thanks, Ramin.
Pension and house are roughly equal in value but I've been contributing to the pension and paying a mortgage my thoughts are that the pension will outperform the rise in house prices as investments always have so maybe 5% increase in housing and 11% for investments (supply and demand) will make housing rise but not nearly as much as investments
I don't see why its not good news if you are looking to sell because odds are you are buying another property so what you are buying has also fallen (or not risen as much).
Yes the price that matters most to you is the price of your first home after that the prices should have all risen or fallen relative to your current home so up or down sizing will have less of an impact in relative terms to that initial purchase price
You don't understand percentages. If your moving up the ladder and your 200k house has gone up 10% then youve made 20k but the 400k house you want to buy has gone up 40k. So you still have to find another 20k. Big houses are getting less affordable and if people cant move up then people cant move onto the ladder.
@@Joe-lb8qn yea your point is fine, i get that. But theyve only gone down if you bought 2 years ago. I bought 10 years ago so theyve just not gone up as much as they had 2 years ago.
The govt doesn't have to convince building companies to build - it simply needs to get out of the way. Before 1947, a mere 7 decades ago, no permission was needed to build at all. Almost all of the housing and other buildings that we see around us was built before that date. It's very nice too! Get back to that; a truly free market. All demand would quickly be provided in that situation, and competitively too. The competition to supply would force increased value for money and innovation in means of supply, including construction methods, materials, design, etc (more prefabricated housing? More portable housing?). New housing would be in the right places too; where people want it, which will mainly be close to services and facilities. Small builders and individuals would be better able to compete with large corporate builders. No more advantage in land banking, no more trickling development onto the market in order to keep prices high.
In what sense? If your running a home and not an btl then surely just the general maintenance, bit like MOT? the odd leaky tap, dodgy circuit breaker, light bulb, roof tile etc. When you buy a house surely your offer factors in the state of repairs required.
Im 38 single and still cannot buy a house in my area, or anywhere really, i have savings i just dont earn enough (35k)i wanted to start saving for a deposit in my early 20`s, in 2007 i was offered a £15000 loan from the bank, which i didnt take, bearing in mind i was only an apprentice earning about 16k.Tthe following year in 08 of course it all went pear shaped and instead of being offered a loan, i was informed i would need up to a 60% deposit to get a mortgage, that crushed me.
and what about people who want or need to rent? Or new graduates moving to a new city, or people relocating for work? I wish people would stop making such stupid comments.
@@nev-dd9jq All right no need to be rude nev. Landlords should be happy with an income stream rather than being greedy and expecting above inflation capital appreciation plus an income stream. Plus, try to reply without being objectionable nev. Just a tip.
@@madeleinebell559 sorry but stupid comments need to be called out and you're clearly in the "landlords = greedy evil parasites" camp. We used to have a healthy robust, competitive, rental market in the UK, where renters had options.... until the government and various pressure groups started a war on landlords through legislation and taxation. And guess what??!! Landlords are selling up, rental prices are going up and renters are now screwed. I'd suggest you familiarise yourself with the economics of being a landlord in 2024 before concluding that we're "greedy."
Housing development nationally is broken, it needs radical change. There is an inherent conflict of interest for the big developers and therefore i think the public sector will need to intervene.
Anyone who thinks unaffordable houses is a good thing is greedy and just wants to keep their equity they think they have gained. They arent thinking about how bad it is for the economy and first time home buyers.
People being upset at house prices falling or house prices relative to wages falling is just buyers remorse. If you were happy with the price you paid for your primary residence when you bought it but not afterward it just that you could have paid less if you'd waited
It's past time for UK property to go back to utility value and for us to start using the future global store of value which is Bitcoin. You will get it at the price you deserve frankly.
Same here, high house prices saps money from the economy. The more you pay on rent and mortgages, the less you spend on lifestyle. The real winners are the banks.
If RIGHT NOW in 2024/2025 you all start getting properly skilled like genuinely personally skilled and using those skills to build lovely detached homes AND train as excellent pushing the limits doctors AND taking account of your part in society you’ll actually find after 5-10 years the countries narrative & vibe begins to change for the better. This is not attacking anybody it’s laying it out plain & simple. If you want more go and become more. Stop eating at McDonald’s and start spending at farm shops instead. Change your habits. There is another world out there of people living in a higher quality mind set which brings a lifestyle which is wonderful, life makes sense. I know I’ll just get ridiculous replied in a UA-cam comments section but I’ve said it anyway.
Of course, the immigrants on the boats have verifiable identities, good stable employment and a good credit rating, so I'm sure the banks are ready to lend the 6x their salaries.
Where is the growth coming from here Future forecasts considered as assuming no recession in the Forecast therefore doesn’t account for weak growth and higher unemployment rates currently rising significantly layoffs and job losses increasing means zero income growth
It's a disservice to your audience to use 'national average' figures, which are susceptible to many different mix movements, to define 'house prices'. Also, there's no ability to scrutinise their calculations.
If you are looking at property to protect your wealth then you should consider Bitcoin. No more renters, no holding taxes, no repairs, not subject to local market demand or changes in the area. Houses are built every day which dilutes the value of your home. Invest in property if you can get the best houses otherwise I would say avoid it.
You will definitely remove my comments but here goes.... Sometimes I really wonder how disconnected you appear from the real world.... I am in and around the property market in the midlands and have been for 20 years..... The only area where there has been any price survival is lower down in the small semi market..... where they appear to attract a lot of downsisers and not particularly 1st time buyers who are still struggling without huge chunks of equity being taken from their parents houses for deposits..... All of the froth has been blown away.... the reality is that we are in a new paradigm.... interest rates will never return to the nonsense of the 15 years prior and properties will no longer be the cash cow....INFLATION IS HERE TO STAY ....... 15 years of printing phoney money has bubbled everything and we are definitely on the brink of a financial crash.... Vanguard and Blockrock are waiting in the wings and very soon they will take advantage of all that will unfold.... I'm sorry for being harsh but you're a permanent bull and rely on charts which are doctored....
People using property as an investment has been part of what's caused the market to be so grotesquely distorted in the first place. Everyone who invested in property has been making out like bandits for decades, is that not enough?
I’m a homeowner. I don’t want any house price growth. I want to live in an economy which rewards real contributions to society.
Unless you own more than one house, ti doesn't matter what it's worth. It's worth one house. If you only own one house you can't sell it and live in the gutter.
Hello, to be honest I think I did my best dedicating ten years to academia and supporting graduate students in their careers, most for the NHS.
I decided to leave as I had no other choice if I wanted to buy a warm house for my family.
This for me is the reality of the UK economy.
Me too, I want to see both my children in affordable housing. I would take a hit on the price of my house to see this.
Tell us you voted Labour without telling us you voted for Labour
Exactly. Most people who own a house have family members who don't. Even for individuals who won the house price lottery, people who they love, or care about lose.
I personally don't know anyone in the private sector who's had salary increases. In fact most wages I see now in the software engineering industry are back to where they were 6 or 7 years ago. None of my other "professional" friends in other sectors are getting raises. All I hear about are redundencies and potential redundencies. People I know on LinkedIn have been looking for work for ages. The economy is screwed and we are being lied to.
I can't speak for every sector, but I suspect the only salary increases are coming from the public sector, which is so incredibly huge now that I can only conclude that the UK is fast becoming a very poor nation.
The IT sector seems to have experienced a particularly heavy reduction in jobs and hiring. Other sectors are more buoyant still. Amazingly many IT roles are still on the shortage occupation list for UK immigration - I can't see any justification for this as there's surely no shortage of British IT professionals at the moment.
The UK has a debt problem. Also the elite class put all their money into assets instead of investing in the UK stock market since 2008. High house prices is bad for an economy as it takes money out of the system and gives it to the few.
@@vkman34 I dunno I look on indeed and there's so many IT jobs my way currently.
@@Loundsify you have to be careful about advertised jobs because nowadays many aren't real.
@@vkman34 there's been a huge amount of Indian immigration, lots of which are for the IT sector. This will of course surpress wage growth.
Virtual stagnation in some areas of the UK and much lower selling prices than asking prices confirms this. Sellers are not being realistic according to some estate agents . That said some estate agents are leading people up the garden path by over valuing .
Agreed - on Rightmove its reduced after reduced after reduced, houses been on there for months not selling etc.
Estate agents are listing 10-15% above market sold prices because they know buyers are going to want to knock £20-50k off asking. 😅
@@Loundsify Yes probably but does that attract buyers ?
@@SarahWalker-Smith nope, all those properties are taking 6 months+ to sell or don't even sell as they just keep getting reduced.
@@Loundsify Is their best chance to price low and attract competing offers ?
From the housebuilding chart at 12:08 it appears that the bulk of the building capacity shortfall comes from the near complete drop off in local authority building - surely this is something that needs discussing?
The private sector has remained remarkably consistent
10:40 sure relative to inflation they haven't went up but wages have fallen relative to inflation which is a real problem in the UK
@@Pegaroo_ Very true. I earn nominally almost what I earned 15 years ago, unfortunately.
A very informative video. There are no easy solutions to the agony that is the uk housing market. But one thing that is in the government’s gift is to kickstart conveyancing reform. It’s ridiculous that the average time it takes to complete a purchase is 152 days up from 71 in the 80s I believe. The methods used in the process are so slow and archaic.
And to top it off a buyer could pull out of a chain the day before exchange.
My daughter bought in Wales last year, offer accepted to moving in 5 weeks ? why so long in England, fewer conveyancers ?
@Loundsify Or the government could increase stamp duty 3 months into the purchase when you've already spent £4k in legal and survey fees.
I gave up the “Dream” of buying in the UK. Won’t put my lifesaving into a LeaseHold crap building! 5 more years then going back to Brazil where I can buy 1 or 2 flats cash with my deposit money in the UK! This country is done!
And healthcare ? What's the Brazilian version of the NHS like ?
@@sfactory8253 Better than waiting in line. You see, healthcare is cheap (except imported patent protected expensive drugs). And cause you pay for it, it is on-demand.
Same here! After working in high academia in the UK for a decade I came to the same conclusion.
Bye
Good riddance.
I live in the South East and was in West Midlands. I think people are misled. You can search houses sale prices over time on land registry website for free. It can be concerning. Some houses or flats prices haven't moved since 2017...bought 310k and for sale now at same price which means a 25% loss (100k) when adjusting for inflation. Noticed the same where I was before with some house. Guess what? All new built. Now they building around fulling terraced homes at 500k. Don't buy new homes/flats.
Leasehold is a huge scam, but in London unless you have almost £1m to spend, or want to live in Thamesmead, there isn't much other option. London is still a great place to live, there isn't anything that comes close it. If you're not in the position to afford a house for £1m, people are better off renting a flat, and tie up your capital elsewhere. There are still parts of west midlands for example, where you can get a 8-9% BTL yield, in areas that likely will have above average capital appreciation. With labour in, renters rights will only get better.
@tslondon422 yes but also a lot of the new build homes have estate management fees even if technically "freehold". They can hike this as they wish too.
Why would it matter if the house you buy is new or old? The price and function is all that matters. I don’t understand the point you’re making unless you’re saying there’s something fundamentally wrong with new houses. One of the replies mentions leasehold issues which is absolutely valid but that’s a freehold/leasehold issue not the age of the property. Can you explain what you mean?
When adjusted for inflation prices may have fallen since 2017 - but I can’t believe there has been no movement in nominal terms.
Please provide the area or postcode.
@@deldia Imagine its just the new developments got really good at scamming people with high maintenance fees, lots of hidden costs etc....And these are generally bigger developments. Meanwhile the older developments are smaller and are already locked in with the older, decent & reasonable maintenance companies.
I don’t have a link for this but, I remember being blown away by a stat about housebuilding that totally changes perspective… the figures quoted are always gross, but in fact there were vast swathes of demolitions in first half of c20, meaning the impressive numbers in 50s, 60s aren’t actually the full story and it’s a lot flatter when looking at net.
Be interesting to hear your thoughts in another video.
Right so its going to be even worse for house price growth if Labour hits their target. Because nowadays hardly any houses are demolished because the demand for rental accommodation is so high that people will put up with any old tat to live in. And remember - the rental market and the house buying market are two totally independent markets.
Interesting. I wonder if the death rate of the Boomer generation over the next 10 -15 years will ease the need for new development.
I’m in the process of selling my leasehold flat in London, it’s fallen by about 10% since 2016 in nominal terms, but 30% in real terms. It’s been the worst decision I’ve ever made to buy it, the only saving grace was that cost of debt was so low during this time, it was better than renting. Now cost of debt is high and likely will be for the long term, and flats in london aren’t keeping up with inflation, maybe it’s better to just rent, and stick all your cash into ISAs and SIPPS (total £80k a year) in global equity. Maybe have a BTL property as your primary residence to diversify.
Was that a high-rise perhaps impacted by fire defects post-Grenfell? Personally, I'd never buy a high-rise flat because you're on the hook for any problems with the building fabric, including mechanical and electrical. This can include lifts, which cost a fortune. There is also the dreaded issue of the service charge ballooning out of control.
@@nighttrain1236 Nope 6 floors, wasn't impacted by the cladding restrictions and we got the EWS1 very quickly as there were no remedial works. Freehold houses have risen by 35% in this same period, as it's a rapidly gentrifying part of London.
It's not just high-rise thats the problem, its leasehold in general where it's more than a simple conversion or a small self-managed block. The government have done almost nothing to introduce regulations and transparency for building management and freehold companies, both who are predatory companies who are able to profit from leaseholders without real transparency or being held to account by anyone. Many of the big freeholders in the country happen to be landed gentry Lords in the house of parliament, which obviously is a conflict of interest.
We also own a flat in London. It was valued in 2016 at £420k - similar flats in the block are currently on sale for £360k (after many reductions) and still not shifting. We’ve had cladding issues (now resolved thank God), service charge is £244 a month. We’re renting it out and barely make any money on it due to high interest and taxes, desperately want to sell it but can’t afford to have it sat empty while it sits on Rightmove for a year so we are kicking the can and continuing renting it out and remortgaging again.
I bought a Housing association flat in a small block of 10 flats in 2007 for £150k. Sold it in 2022 for £220k. Overall it was better than renting during that period as I bulit up around £140k equity in it. I was lucky to get rid of it just before inflation spiked.
No. If you own only one property, the value of the house you own may drop, but the value of the house you’d want to buy next also falls. The difference is you’re paying your own mortgage and not the landlords.
It would help supply a bit if the thousands of unoccupied houses we have throughout the nation were brought back into use. There are two houses just along the road from me that have been empty for the 10 years I've lived here. This shouldn't be allowed. We should also cut right back on Air B&B type properties, with councils being made to control the amount of holiday lets available in any area. Factory built starter-homes would also assist, as would converting some redundant office blocks into flats.
Where I live in prices have fallen around 15% - 20%. I don’t understand when prices are announced they’re reporting an increase or stagnation. I’m looking at a detached home that would have sold for £450,000 a few years back that’s just been reduced again to £340,000. It needs work but not £110,000 worth of work.
the cost of building work is now bonkers, and therefore people aren't buying 'doer-uppers.'
£110k won't get you anything these days I'm afraid.
@ That said my point is people two years ago would have snapped it up @ £450k in its current condition. It doesn’t need building work just decorating & upgrading the kitchen & bathroom. You could easily do this under £20k especially if the new owners are willing & able to pick up a paintbrush. It’s structurally in good condition.
But house prices grew 40% from 2020-2022 so it's all relative. Houses dropping is a market correction. We should in reality only be getting house prices growth of 2-5% max a year imo. Otherwise the market becomes too inflated.
@@Loundsify I still think house prices are overinflated considering the current interest rates on offer & climate. My friend who has a buy to let & coming of a fixed term was offered 5.95% fixed which is good considering his standard variable was 9.75%. Given the latest budget and pressure private landlords are facing, cost of living and wages etc, I still think we are yet to see the worst of it. That house I mentioned that's been dropped to £340,000 still isn't selling and we have a new housing estate going up here where the developers are still dropping prices to try & shift them when in reality the whole development would have been sold off plan in a matter of months in 2021-2022 or before. They have homes fully built that are empty & unsold but will not move to the next faze until they have sold the homes released. It's taking them forever to finish the development. Another reason why house prices are being artificiality propped up is builders are restricting supply. The development should have been completed well over a year ago. Also we was going to buy one of the new builds until we realised they wanted to rob us by charging us management fees which is affectively a private council tax on top of council tax.
@@everythingtechnew7400 so I had a new build estate near my mum's growing up and it started work in 2005 and didn't finish until 2014 because of what you said where Devs were sitting on stock until phases had been fully sold to pay for the next phase. I bought the last 3 bed on a phase in 2013 and they gave it to me for £110k asking price was £121k. They didn't explain the management fees at all to me. They mis-sold it to me as I'll have to pay it until the estate was fully finished and adopted by the council. They lied to me and I know 1 day I'll probably get some money back as this stuff always blows up eventually. So I used to pay £45 every 6 months for the up keep of the estate which had 2 parks and other stuff like trees and childrens playgrounds etc. When I sold in 2020 I was paying £60 every 6 months. My friends now are paying £120 every 6 months. There's no limits on what these companies can charge and they always use other companies they own to do other jobs. I think there was 1 where it was replace a swing on a park and they wanted £10k for it lol.
Lots of houses coming to market that were much sort after in the past and rarely came available and would have sold as soon as they came available but now sit without offers. Ive also noticed good homes having sold signs then coming back on the market. Not seen these types of activity for a long time.
When have you seen this before?
Textbook confirmation bias.
The housing market is distorted by the leaseholder crisis. Many cases are flats and one assumes people would usually move up to houses but the rip-off costs associated with leasehold (both Cons & Labour talk about fixing it but no action yet) mean these people don't have the finance to move up or cannot even move at the moment. Leasehold is 25% of the UK homes stock (according to reports) so that leaves 75% to create demand. Until these problems are sorted we have no agreement of where the market will go.
I am glad you brought up regions. The press focus on the South East / London but like you said Ramin, step out that area and house prices are much lower and easier to purchase. Even compared to the lower average incomes outside of London.
For me, supply will not keep up with demand so expecting increases in prices.
No chance house prices will go up in real terms. Cost of living increases.. production and service sector competition from Asia will depress wages…. Young people being massively burdened by debt upon leaving education … bank of mum and dad losing equity in their own houses and now feeling the pinch themselves due to all reasons above.. change in mentality of young zoomer buyers who are repulsed by the thought of being burdened for 25 years of payments as a wage slave for a crappy starter home with no hope of moving up the property ladder (they are the tik tok generation)… and lastly AI taking jobs. Nominal house prices will go up slightly each year, but in real terms they will crash. This video is an appeasement to his older viewers. The government will be forced to enter a massive public sector house building program like ok the 60’s because the private sector will not be up to the challenge. Very good in my opinion… because this house price rip off needs to end, people just want decent accommodation at a decent price that allows them to lead the best life.
I think you are wrong.
@ please explain why.
Interesting point, the only bit I disagree with is the government building houses. They would spend £1m to build a house which a builder would spend £200k. Just not financially feasible, and they don't really give a crap about people who can't live in a house.
The price that matters most to you is the price of your first home after that the prices should have all risen or fallen relative to your current home so up or down sizing will have less of an impact in relative terms to that initial purchase price
Bigger family homes of four bedrooms are taking a real hammering. It is only the smaller homes, that people are downsizing to, that are holding up well in this market.
Incorrect, when prices are rising the differentials widen. When prices fall they get closer.
100k is as close to 200k as 150k is to 300k you are both missing the in relative terms bit
There's plenty of other labour policies that may have an effect on supply and demand that aren't necessarily being considered, for example changes in taxation on second homes, immigration policy and inheritance taxes on agricultural land. How it plays out I'm not sure, but I think the 1.5 million extra people we've had move to the UK in the last two years will have the greatest effect. Demand is high.
It's extremely important to point out that the phrase 'house prices' is a blunt, unhelpful oversimplification for what's happening to ACTUAL prices of properties which have huge regional variations, variations between leasehold and freehold, and at the 'top of the ladder' segment, per Rightmove, have actually fallen much further than averages. When you say 'house prices' you imply that all home values will move in unison and that never happens.
Honesty, I don't know anyone who has had wage growth higher than inflation. That's in both the private and public sectors. The only way, still, to grow your wage is to job hop. The only wage increases are occurring in the lower wage areas.
Absolutely - but also note that public sector salaries is why less than the private sector for an equivalent job. That being said there is a trade off with pension and stability for public vs private.
@mlguy8376 not in Scotland! Private sector pay is much lower for the equivalent public sector work, at least in the lower skilled areas. An example would be a PA or admin assistant role, the private sector skirts minimum wage for that, but the public sector sits more in the average UK wage scale.
Well, most of the private sector. Im in banking, my role pre pandemic would be in the region of 110k base, now it’s about 140k. That’s pure wage growth. If you have had no growth since 2019, for example, then you’re effectively working for for more than 20% less. Time to look for a new job, don’t be a mug.
@tslondon422 I work in tech, and there's jobs being cut everywhere. Profits are low and investment has been diverted to the AI bubble, sector wide. Not making excuses, just that not all sectors have grown like banks. Just look at banking share prices just now, they're all ballooning.
@@TheLinkedList I work in tech too and confirm. I heard that in both: Finance and IT salary growth is way below the country-average.
As a first time buyer sitting on a pale of cash - no way I'm going to buy house now. I see advertised house prices fall continuously in the last 2 years (using tracker extension on Rightmove). Average house price means nothing - they don't tell you the price of a house you want to buy, but transactions on the market. Are those transactions equally distributed around the size/location of the house? Why do you make analysis based on this at all?
Pressure on people like me (live in North of London, work in IT etc.) just grew further with the new budget. I can't afford a mortgage with this interest rate. I probably could but I'm not an idiot to pay the same as the house price to bank as interest over 30 years - this is insane. I'm not on the market as I believe many other first-time buyers.
If you want to buy, wait black rock is going to crash the market to buy up
Better to get that house when you can rather than wait it out. My brother could have bought in the early 2010s with a huge deposit and is still to this day "waiting for the crash". Things will slow for sure but an outright collapse seems unlikely to me.
@HJM49125 correct. There is much talk of a crash. Has been for the last five years. There has been a dip since 2022 but hardly a crash and now they are creeping back up
@@HJM49125 it took 10 years for house prices to absorb near-0 interest rate impact. It make sense that it will take at least 5 years for prices to reflect impact of the new interest rate. I saw old newspapers from 2007 - the prices were almost like today.
In 1997 I sold a house for 28.5k that I paid 37.5k for with a 7.5k deposit. That is a loss of 9k or 24% and a cash loss of £7500 and the cost for selling which was £9000. If someone bought a £285,000 house today with a 75k today and losing another 15k on top. That is going to happen. In fact I bet that has happened already but the nanny state will not allow it to be broadcast. Well it happened to me and stopped my moving ever again.
Most assets will have a margin that you have to overcome before being quids in though, think of it as currency exchange. A mortgage will never be free but generally better than renting.
A fair and even-handed analysis, thanks. If i have one criticism, it's that it's not always clear if you're talking about real or nominal prices (eg @13:30). I'm pretty sure that particular table is nominal, but it wouldn't hurt to make it explicit
Hi @chrisf1600 I do try to make it clear. And I think I did mention that estate agent forecasts are usually nominal because real house price growth sounds so paltry. Thanks, Ramin
I have a potentially naive question:
As a homeowner why should I be so concerned with the ebb and flow of home values?
If the value of my home goes up, then surely so too will the value of the home I would be looking to buy next, thus negating the real increase in my homes value.
Similarly if I'm looking to sell while the market is down, then so too the value of the home I'm trying to purchase will have decreased.
Am I missing something?
Generally, when you want to buy a new home you either want a bigger or smaller home, so you would be levering up or down. If you want a bigger home, you want lower house prices, as you need to make up the extra equity with cash or mortgage. If you want to downsize, you want high house prices because you will get more equity out.
Yes, most people are looking to down size or up size. Increases help geriatrics cashing in, falls are in the interests of just about everybody else because the next move will cost less, assuming yoy are buying a better house.
We need publicly owned house builder but only for building social housing. These private and commercial builders will not do it.
Will get sold off as soon as Tories get their hands on it!
@ thats the danger
@@BAmalakas 14 years, jaysus
This is the only answer.
Why only social though? Why not also build for the working man?
I’m in Florida and the housing market here over the last 7-8 years is unlike anything I’ve ever seen. Homes that were bought for $130K in 2015 are now being sold for $590k. I’m talking about tiny, disgusting, poorly built 950 square foot shit boxes in quiet mediocre neighborhoods. Then you’ve got Better, average sized homes in nicer neighborhoods that were $300K+ 10 years ago selling for $750k+ now. Wild times.
It's a truly disgusting sheep shearing operation and if you can please avoid.
Exactly. Those who say timing the market is not important are delusional. Timing with property is exceptionally important.
BlackRock etc. are buying up US residential real estate at close to 0% interest rates. In anticipation of CBDCs, Lloyds Bank in the UK aspires to become the UK's largest landlord (also borrowing at close to 0%).
Stamp duty in the UK has risen. Inaccurate. Different rates in Scotland.
Do you think that the bank of Mum and Dad might stimulate the market a bit? The well off might have been holding back on spending their pensions and using them as an IHT shelter instead. They might think that giving their children the Tax Free Cash to buy a house is an effective tax strategy.
Excuse my naivety but how does one gift a house to thier offspring without any tax implications? Licking my lips with excitement
@@Dr.Stacker I meant gift the Tax Free Lump sum from the pension, not gift a house. The cash gift falls outside the Estate after 7 years. The majority of 65 yr olds will survive another 7 years.
The UK is a grossly mismanaged entity, which is bound to have a lot of price volatility around asset prices.
The stamp duty and taxes might have to change the incentives to own a second Home
That can ruin the private spending on a huge scale
UK house prices are likely similar to the ftse 250 and small caps. Peaked years ago now, and a Labour government will not improve that situation for the better.
With stocks, the issue is that most peopel here would rather invest in crypto or US stocks, than UK stocks, becuase of that they performed badly and now it's a negative cycle as nobody wants to invest BECAUSE of the lack of investment. UK pention funds have reduced holdings in UK stocks by a huge amount, it's only aobut 5% now!
A large part of the housing move up, especially in London was all the dirty money being laundered in London, we allowed anyone from abroad to buy our houses with no regulations so they could get rid of their blood money, we even offered a free UK visa to anyone who bought a house at one point, mostly Russian money, but also from corrupt officials in Pakistan and many other countries.
The UK housing market sounds like a Netflix series: lots of drama, but no satisfying resolution.
The zoopla and rightmove data is misleading as it refers to sales not completions so its really unreliable
Do most sales fail to complete? Otherwise, how is it wildly unreliable?
Land registry needs rapid modernisation. Stuck in dark ages.
Brilliant! Any thoughts on the rental sector?
The supply also comes from btl to owner occupied sell off, that's an increasing % of the houses coming onto the market now
Good observation. I agree. Definitely more buy to let/rental properties on the market. Also EPC for rentals will need to be a minimum of C. Landlords trying to offload those with D or below...
A society that can't provide decent housing at an affordable price has failed.
Zero nominal is the way to go, policy wise, to reduce the effects for existing owners. Let inflation gradually eat away at the value whilst increasing wages. ...but markets are schizophrenic, so don't d o gradual.
To find the real cost of a home use the BCIS Rebuilding Cost Calculator and add on the land value (as used by insurers).
I live in the southeast and have a small 3 bed end of terrace. As a retiree I view my house as a source of equity to supplement my pension and savings income as I advance in age. A fall in house prices, while not having an immediate effect, could cause difficulties later. The Government demands that I must sell my house so that I could go into a care home. Care home costs are rising, so there could come a time where selling the house would not be sufficient to cover my care home costs even with my pension income. What savings I have left at that time would also be totally absorbed. Certainly, with inheritance tax, there will be nothing left for relatives to fight over when I pass and I will die a pauper. I might not even be able to pay for the funeral, a headstone would be replaced by a piece of wood from the offcut salvage store with my name scrawled on it with a sharpie. Thank you Rachel.
Give it away now and go on benefits, sorted.
If your income is sufficient now, I will probably remain so. Even if you did need to to go into a care home, the equity in your house would pick up the tab for a while. When it runs out, the council will pay. If you do get to this point, you won't have to worry about iht. So unless you care about leaving something to your kids, I don't see your problem.
cheer up!
Thanks for your forecast, if you feel depressed about it just imagine how the young adults such as myself feel heading into this... by the time I've reached your wisdom the powers that be would've found a dozen other ways to strain any glimmer of hope and ambition :)
@@bikeman123 He's paid into the system for his entire working life, would should he not have a pot of gold left at the end to enjoy or pass onto kids for a better life? Depressing state of affairs.
Thank you for doing such a high quality videos every time!
Some places may fall but surely based on the net migration figures...we need even more than the 30k houses a day they were supposed to be building but haven't even started yet?
Bought a flat in london (victoriana conversion) in 2014, would love to be able to sell it for what I bought if for. Can't feel these demand pressure fro "net migration"
You know houses are going to drop to pre covid or less.
@joannabaker6398 I feel like apartments and flats inhabit a different zone, we had a flat starting 2009/2010 and sold in 2014 for just about what we bought it for. If it had been a house it would have been a different story. Unless the flat is in like the Barbican, I think they receive a more ambivalent level of interest.
Labour promised to build 1.5 million houses in 5 years. And I have an Aunty in the Gurkhas.
Don’t be absurd - 6 months has almost gone and no sign of this 1.5 m homes . There’s no way they will build these houses - it was a lie . Nice to hear your Auntie is still with us and with the Gurkas
My Dear Chap! You really are the limit! lol.
Always good analysis. Thanks
My pleasure @jackiechan8840
Fact, my best mate moved jobs to up north and needed to sell his house. In his street many houses have sold for up to 247K in 2023/24. His is one of the best on the street as he is very well paid and he had to sell for 180K. Prices have tumbled and anyone that buys without 30% the high price of 2023 is a fool with money and has been conned. In my opinion the ONS were part of a Ponzi scheme. They used a statistical 13 month comparison (all sales in July 2023 to all sales in 2024) to report a 12 month rise in house prices and even the Bank of England was in on it. Do the sums yourself and prove me wrong. Inflation went up last month and if it goes up next month they better put up interest rates or we will get boom and bust. This is is rubbish and I bet the person that bought for 247k will be sitting on a 40k loss and lost their 25K deposit if they put down 10%.
Maybe its your area mate, I bought in Nov 21, neighbours just sold 2 months ago for +45K more and thier house is comparable in size but in a lesser state of refurbishment
UK house prices jump 3.7% in November from Financial Time today on the 2nd of Dec.
Cost of a typical home risen at its fastest rate of annual growth since November 2022
House prices are area based, most low income areas house prices are flat & have been for at least 2 years, there will be outliers like London & the south east, plus maybe Manchester !
Dream on.
Terrific as usual. The type of property also matters though, there’s variation in performance between say flats vs 100yr old terrace and semi houses. About 10% of new builds are on flood plains, cause the land is cheaper. You have be v careful when buying…
Infill properties on existing plots are a possibility, especially with tax incentives, small eco homes in the one bedroom size but detached might have a large appeal to retirees, who can't get anything in a good area to downsize to (and don't want to pay service charges on apartments). You do have to throw in govn supported apprenticeships in the building trade on a massive scale to back up their building plans even if it means apprentices end up as cheap labour for a few years. Some small plots are blocked by tree preservation orders which need to be removed in cities.
Is your price to income graph based on individual or household income? There are many more two income households now than early 90s, so doesn't make sense to compare prices to average individual incomes
Great video and analysis. But you've left out mortgage lenders. They want to lend as that's how they make their profits and they've been structuring mortgages to improve affordability.
Eg offering 40 year terms and lower interest rates with a large fee which makes monthly repayments affordable. House prices depend to some extent on the availability of credit and if that doesn't dry up prices will at least stay level until wages catch up and then they'll start rising again.
Bank of mum and dad will also draw more out of their pension to help with a deposit and avoid IHT which is what we're going to do.
There are so many variables it's impossible to make any sort of prediction.
Reported today that according to Nationwide house prices grew at the fastest annual pace for two years in November.
The OBR that wonderful organisation who routinely get everything wrong
So who do you trust for your figures then?
Thank you for the video Ramin. I would say that the average house price is not the best metric to look at for investment performance. Geographical influence is so large it would be interesting to see if you could create a housing as an investment by region e.g. South East or in London in real terms. I feel that this might show a different picture.
Thanks for sharing @BeastProSHADOW
Labour's commitment to reform planning to the ends of building more homes is as vague as their plans for energy transition under GB Energy.
I fear that planning is such as 'wicked problem' that they will only succeed in some minor and piecemeal improvements.
Thanks!
No problem! @yashin2068
Real estate should be treated like a commodity and not be treated like an asset.
Good analysis. UK has bigger problems due to loss of trade with Europe. There is a serious lack of focus on investment in research and development. The labour constraints as a result of Brexit will further erode investment due to pool of skilled labour especially as further education becomes more and more unaffordable. That will result in fewer jobs increase in crime and flight of skilled labour plus wealth out of the country. In the end I foresee Britain being caught in a loop of stagnation for the foreseeable future until serious policy changes, investment increases and tax reductions. With Brexit the only option moving forward would be a low tax and low regulation economy both of which Truss tried to push and Nigel Farrage will continue to fight for
Just on a final note I want to add that the business rates and costs of running a business in general will cause bigger problems than anyone could predict. Unemployment will increase as a result over the next 5 yrs to what level will again depend on policies.
Blah, blah, blah BREXIT, that's total rubbish mate, it's more to do with poor decision making in parliament still being majorly Remaniacs run and not UK PLC, giving to much money to foreigners and not investing in the UK!?!
😂😂😂 ya loosing £150b in trade not taking inflation into isn’t much. In fact if we got real brexiteers it would be better. What is real Brexit? Explain to me how GDP is calculated? It’s funny how all the brexiteers became experts in economics. But I completely agree once all the immigration has stopped uk will be like the richest country in the world. All problems will go away 😂
Well Labour have an ambitious target and seems to be making the sort of moves with planning that could get them built quicker, we shall see, it all takes time. What is really needed is more council houses and that can only rented, they can be built irrespective of current prices, Angelia Rayner is trying to make that happen. I hope she can.
As long as money is printed by government assets, it will keep going up in price .
Material cost and labour is more expensive so building and renovation will cost more .
Rent is still money in the bin so house prices will remain high for some time .
Considering the stamp duty tax will raise from 300k up from April 2025 price will drop a bit for sure.. or lot of house will not sell for more months because of the people who can maybe buy don't want to pay so much on stamp duty.. image first home buyer for a 400k house need to save extra 5k min..
Its not going to be a deal breaker though... I was a first time buyer in 2021, paid 420K and just missed out on the covid stamp duty timeframe had to pay 6K. If thats going to put someone off a house then they are clearly not ready for home ownership. The cost of labourers to do any kind of work will give them a nice shock.
@rocko-sh5wi That true mate, I've spent 10K on materials and doing everything except for electrics myself. Roofing, Plumbing, plastering, flooring, kitchen, etc. I managed to pretty renovate entirely to a) keep the cost affordable but also b) I don't trust trades to complete a job to the neccassary quality. Don't get me wrong its been 11 months and I've probably got another 2 months to go. Its not been fun but the results are very satifying. cant wait to put my feet up after this!
I think with the statistics that 800k homes will be coming off ultra low mortgage rates a year for the next 3 years is all you need to know about what will happen. A sizable chunk (spit balling but 10-15%) will not be able to afford the new rates, these people will be forced to sell and many home owners will also stop spending in the economy to keep their homes, meaning a recession is inevitable. 2026 I think will be the worst year.
That's GB only, not the UK, though; as usual!?
I have said before and will say again many times - people underestimate the housing market and it's general ability to withstand a downturn.
For there to be a significant adjustment you need all 3 of these: High borrowing costs, high unemployment, and an economic recession.
I agree but your only considering the financial aspect of it. With the UK being unrecognisable now other factors are at play, is it worth being in the UK at all anymore, crime up, cost of living up, taxes up, income stagnent etc
I think the challenge for the UK is that inflation is increasing and growth is declining, and I expect that to continue over the next few years
'Affordability' is kind of irrelevant when Angela Raynor is pictured hanging onto the arm of Larry Fink of BlackRock as was the case recently. As with the farms, Labour's number 1 job is to get assets into corporations like BlackRocks hands.
Own nothing, be unhappy and at the mrecy of the state.
...yeah I think we should give the tories another 14 years 'fair crack of the whip' etc etc
Credit control should never have been abolished in the early 80's by PM Margaret Thatcher. Mortgages were based on one person income, plus sale of council houses. Banks have had it too good since the 80's. Growth is based on investment and income, furthermore it's more than necessary to build more affordable housing for those who cannot afford a mortgage, not to rely on private landlords.
House prices will have 2-3% gains per year due to cost of living (area specific). I’m a doctor and I’m looking to move abroad because there is no chance I’m spending the ridiculous amounts required at the moment.
Is it true that Britain’s tax code is the longest, with over 21,000 pages and 10 million words?
What watch is he wearing?
Hi @sambaker2611 it's a Garmin Fenix. I love it! I retired my old Casio Pro Trek which I've had for about 20 years and which is starting to pack up (one of the buttons doesn't work any longer) but still keep it on my desk. I can't bring myself to throw it away! Thanks, Ramin.
Pension and house are roughly equal in value but I've been contributing to the pension and paying a mortgage my thoughts are that the pension will outperform the rise in house prices as investments always have so maybe 5% increase in housing and 11% for investments (supply and demand) will make housing rise but not nearly as much as investments
I doubt it
I don't see why its not good news if you are looking to sell because odds are you are buying another property so what you are buying has also fallen (or not risen as much).
Yes the price that matters most to you is the price of your first home after that the prices should have all risen or fallen relative to your current home so up or down sizing will have less of an impact in relative terms to that initial purchase price
You don't understand percentages. If your moving up the ladder and your 200k house has gone up 10% then youve made 20k but the 400k house you want to buy has gone up 40k. So you still have to find another 20k. Big houses are getting less affordable and if people cant move up then people cant move onto the ladder.
@ now do the maths when house prices are going down, which was where the discussion started.
@@Coppice1 yes but relatively the 2nd is twice the price of the first at both time frames
@@Joe-lb8qn yea your point is fine, i get that. But theyve only gone down if you bought 2 years ago. I bought 10 years ago so theyve just not gone up as much as they had 2 years ago.
The govt doesn't have to convince building companies to build - it simply needs to get out of the way. Before 1947, a mere 7 decades ago, no permission was needed to build at all. Almost all of the housing and other buildings that we see around us was built before that date. It's very nice too! Get back to that; a truly free market. All demand would quickly be provided in that situation, and competitively too. The competition to supply would force increased value for money and innovation in means of supply, including construction methods, materials, design, etc (more prefabricated housing? More portable housing?). New housing would be in the right places too; where people want it, which will mainly be close to services and facilities. Small builders and individuals would be better able to compete with large corporate builders. No more advantage in land banking, no more trickling development onto the market in order to keep prices high.
Houses have been a terrible investment for 25 years. Not gonna change.
Buying a property is one thing. Running it is quite another. It’s almost like signing up to a lifetime of debt.
In what sense? If your running a home and not an btl then surely just the general maintenance, bit like MOT? the odd leaky tap, dodgy circuit breaker, light bulb, roof tile etc. When you buy a house surely your offer factors in the state of repairs required.
@ utilities, finance etc.
Home values are declining in every state.
Im 38 single and still cannot buy a house in my area, or anywhere really, i have savings i just dont earn enough (35k)i wanted to start saving for a deposit in my early 20`s, in 2007 i was offered a £15000 loan from the bank, which i didnt take, bearing in mind i was only an apprentice earning about 16k.Tthe following year in 08 of course it all went pear shaped and instead of being offered a loan, i was informed i would need up to a 60% deposit to get a mortgage, that crushed me.
We need to stop seeing homes as an investment and start seeing them as somewhere to live.
and what about people who want or need to rent? Or new graduates moving to a new city, or people relocating for work? I wish people would stop making such stupid comments.
@@nev-dd9jq All right no need to be rude nev. Landlords should be happy with an income stream rather than being greedy and expecting above inflation capital appreciation plus an income stream. Plus, try to reply without being objectionable nev. Just a tip.
@@madeleinebell559 sorry but stupid comments need to be called out and you're clearly in the "landlords = greedy evil parasites" camp.
We used to have a healthy robust, competitive, rental market in the UK, where renters had options.... until the government and various pressure groups started a war on landlords through legislation and taxation. And guess what??!! Landlords are selling up, rental prices are going up and renters are now screwed.
I'd suggest you familiarise yourself with the economics of being a landlord in 2024 before concluding that we're "greedy."
Housing development nationally is broken, it needs radical change. There is an inherent conflict of interest for the big developers and therefore i think the public sector will need to intervene.
No chance with the population going up a million a year
@rocko-sh5wi Very very few
I'm looking to downsize in the near future but won't if I'm penalised with stamp duty
Anyone who thinks unaffordable houses is a good thing is greedy and just wants to keep their equity they think they have gained. They arent thinking about how bad it is for the economy and first time home buyers.
People being upset at house prices falling or house prices relative to wages falling is just buyers remorse. If you were happy with the price you paid for your primary residence when you bought it but not afterward it just that you could have paid less if you'd waited
It's past time for UK property to go back to utility value and for us to start using the future global store of value which is Bitcoin. You will get it at the price you deserve frankly.
Loosing money on an inflation adjusted basis.
My home is not an investment it’s where I live with my family.
Couldn’t give a rats ass what happens to house prices
Same here, high house prices saps money from the economy. The more you pay on rent and mortgages, the less you spend on lifestyle. The real winners are the banks.
You should.
If RIGHT NOW in 2024/2025 you all start getting properly skilled like genuinely personally skilled and using those skills to build lovely detached homes AND train as excellent pushing the limits doctors AND taking account of your part in society you’ll actually find after 5-10 years the countries narrative & vibe begins to change for the better.
This is not attacking anybody it’s laying it out plain & simple. If you want more go and become more. Stop eating at McDonald’s and start spending at farm shops instead.
Change your habits. There is another world out there of people living in a higher quality mind set which brings a lifestyle which is wonderful, life makes sense.
I know I’ll just get ridiculous replied in a UA-cam comments section but I’ve said it anyway.
So sell the house . Buy QYLD for 12% income and rent as rents are around 3 - ...4% of value i think
talking about house prices without mentioning net migration and foreign buyers is wild
Typing a sentence without a full stop is wild.
what about them? what's your analysis
Of course, the immigrants on the boats have verifiable identities, good stable employment and a good credit rating, so I'm sure the banks are ready to lend the 6x their salaries.
@@tslondon422 letting 1 million indians in every year raises house prices it's not rocket science
Where is the growth coming from here Future forecasts considered as assuming no recession in the Forecast therefore doesn’t account for weak growth and higher unemployment rates currently rising significantly layoffs and job losses increasing means zero income growth
hopefully no 1 sells so they dnt pay tax
Councils need to move to self build + 3D printing.
Are you looking to get more sponsored from other company, please let me know. Thanks.
It's a disservice to your audience to use 'national average' figures, which are susceptible to many different mix movements, to define 'house prices'. Also, there's no ability to scrutinise their calculations.
Sorry you said “if the economy continues to grow pretty well”
Uuuuuh, wot? 😂
Goodbye disposable income. Nice knowing you.
Now you have to release an extra video. All those UK related videos does not count. Your channel is global :)
Rents are going up and Up and UP
who is the elephant baby behind you?
Hi @balazsKelemenUK that was a gift from my partner Laura when she went to the Zoo. Thanks, Ramin.
If you are looking at property to protect your wealth then you should consider Bitcoin. No more renters, no holding taxes, no repairs, not subject to local market demand or changes in the area. Houses are built every day which dilutes the value of your home. Invest in property if you can get the best houses otherwise I would say avoid it.
You will definitely remove my comments but here goes.... Sometimes I really wonder how disconnected you appear from the real world.... I am in and around the property market in the midlands and have been for 20 years..... The only area where there has been any price survival is lower down in the small semi market..... where they appear to attract a lot of downsisers and not particularly 1st time buyers who are still struggling without huge chunks of equity being taken from their parents houses for deposits..... All of the froth has been blown away.... the reality is that we are in a new paradigm.... interest rates will never return to the nonsense of the 15 years prior and properties will no longer be the cash cow....INFLATION IS HERE TO STAY ....... 15 years of printing phoney money has bubbled everything and we are definitely on the brink of a financial crash.... Vanguard and Blockrock are waiting in the wings and very soon they will take advantage of all that will unfold.... I'm sorry for being harsh but you're a permanent bull and rely on charts which are doctored....
Dump it...
I would like less people so we don't need more house building.
Rule 1: Do no invest in the UK 😂
People using property as an investment has been part of what's caused the market to be so grotesquely distorted in the first place.
Everyone who invested in property has been making out like bandits for decades, is that not enough?
Rule 2: Refer to rule 1