Tell that to the millions of people who lost everything in 2008. It feels like history is repeating itself and that we're in a property bubble again.
The Housing Crisis (UK)
- Thread starter Jericholyte2
- Start date
It’s a question of time as is the case with most investments , of which a house is the biggest thing most people will ever “own”.
If you have the financial ability to stick it out you’ll be fine but if not then it’s catastrophic.
Which is why suddenly dropping the value of houses isn’t really an option or a lot of people will be screwed.
Is not to feck over the BTL for shits and giggles. Is not that I want people to suffer. Is that if you make me choose between a collective that can afford to buy a second house vs a collective that they can't and even they will have a more miserable retirement for me is a no brainer
the optimal solution is that everybody wins, but is impossible on the short term, and while it is being fixed on the long term (if ever), more people are being fecked over with no options
10x.... lucky you. not even before taxes
Whenever I've been to a new build estate they look grim. Same cars and same people living in them with the same haircuts. It's like you've walked onto the set of an over budget average netflix show.
Now I feel bad because I have a partner. I was more just taking the piss because it should be easy (or at least easier than it is) to buy if you're single. Congrats for saving up a good deposit though, we are in the same boat kind of. Have deposit and savings ready to go, just not sure what to do with it yet.
But even if you're OK with choosing to screw BTL owners that means the lenders also get screwed over. You cant pick and choose which houses lose their value, and when the lenders start going under the whole economy comes crashing down. What you'd be doing is in essence purposely recreating 2008.
Not to make you feel worse but I actually only have a good sized deposit because my dad died. Sadly I think that's what it's going to take for a lot of millenials to get on the ladder. I doubt I'd be anywhere close to buying a property without that
I do agree there's more than one factor, as I posted earlier the root of the problems today lie in political decsions made 30 years ago, expectations are different now and demographics have changed, there is now more of a need for single occupancy places which has led to houses being divided up in to flats
sorry to hear that mate. Indeed, it's a really rough market.No, i always said that in 2008 instead of giving the money to the banks they would give it to particulars. You get people free of debt and they can pay the banks that they dont get under
As I said on several posts, I said that the government should implement safeties in case that the people would not be able to pay. If they bailed out the banks without batting an eye, I don't see how they couldn't do that
Again, this is in lalala land. I know the solution doesn't lay there and is far more complex that I can even comprehend, let alone be the solution finder, but the reality is that if we want this to be fixed, some eggs will be broken yes or yes to cook the omelette. How many, difficult to know, but there are a lot of people already suffering and it seems to me that we care more about the possibility of a maybe suffering of landlords than the real suffering that an entire generation and the ones to follow or they will not have a place to live when they arrive at retirement age or they will need to work till they physically can't because they still need to pay rent to a poor landlord, bless his/her heart we would not want them to have negative equity
If you spent less time eating avocados you could do the same.
The UK faces 3 problems:
1. Too many people coming in
2. Not enough houses
3. Unproductive economy
If you fix one of those you've a fair chance of the other two fixing themselves. The solution to the housing problem is not to reduce the stock in any one area. That just shifts the problem elsewhere. Make it harder for landlords and they leave the market, then rent shoots up because the demand is still there. Sounds obvious but the government did it anyway.
No mention of how development has stalled because it ain't profitable? We've got a couple of spots near me where they've razed the ground and put up fences for apartment development and simply haven't bothered doing any construction in over a year so you've got these lovely bits of feck all while they sit around and speculate on when's a profitable time to start making homes.
The government should get them in a choke lock and finish 'em off with a DDT but Kier won't because he's a wet noodle
The government should get them in a choke lock and finish 'em off with a DDT but Kier won't because he's a wet noodle
I absolutely not agree on the bolded premise.
Make it harder for BTL (via stop multi property or other measures) and prices of housing will lower and many renters will have access to purchase a house. This will maintain rent prices via substitution existing rent to property or even lowering rent if new housing is built
Also, number 1 and 3 conflates. Immigration is proven that increase productivity. Lower immigration and you lower productivity
was that or Kobe beef
Lower immigration also requires the locals to do the jobs they won't currently do, so you either have to force them to do them or see high inflation in certain sectors of the economy such as food production which would require even more of it to be imported
The BTL question is not really a matter of agreeing or not. It's exactly what has happened in the UK. Less landlords, same demand, higher prices.
And immigration only increases productivity if the labour is skilled or targeted. We shut that supply off with Brexit. Unskilled and uncontrolled migration into the UK has no benefit to productivity and a negative effect on housing.
Not sure your immigration statement holds water.
"And immigration only increases productivity if the labour is skilled or targeted. We shut that supply off with Brexit." - the system before Brexit enabled any EU citizen to work in the UK irrespective of skills or any targeting, so that statement is incorrect.
Legal immigration is now controlled and can be targeted if the Government chooses to do so, Brexit actually enabled that
And no, I wasn't in favour of Brexit in case anyone was wondering
We haven't utilised the capability though. We've had a 6x increase in mid and low skilled job visas since Brexit and net migration is at a record high. Over 700k recorded arrivals and how many houses did we build last year?
I was an economic immigrant to the UK. Moved ~four years ago. Turns out it wasn't a very economic decision at all. I have yet to hear a cogent argument that explains why everyone in the UK is paid like shit. PhDs earn 40k, doctors earn 60k. But prices are relatively high. It just doesn't add up. Why has the market not found an equilibrium through better pay and/ or lower cost of living? Anyone...?
It's no wonder that government has to foot the bill for the difference - you can see it in treasury finances now.
The landlords are not the ones that provides living in a house. The houses are the ones that provide that. If landlords are forced to sell their BTL or/and new houses can't be use as BTL, the house market will lower the price giving access to renters. If we lose the same quantity of renters than the same quantity of houses (Basically substitution of status renters to owners) the rental market remains the same or lower if you increase housing
And no, immigration increase productivity across the board, skilled and none skilled. Period
And you'll need even more immigrants to build those houses!
many of you are forgetting the 800k equity i have in my home and all of the nice material goods i have and if a lot of other people had the same then i wouldn’t be better than them.
The pay in the UK is shit though. I get paid 25% more for doing the same job in Singapore and my wife gets paid double, plus my all-in tax rate is mid-teens here.
surely you are not comparing a fiscal paradise like singapore with a regular country, arent you?
It is very difficult to compare tbh, despite Tory politicians regularly throwing it out there as a benchmark without understanding a thing about the place, beyond taxes are comparatively low.
It more feeds into the wider question about why wages are so low compared to many smaller economies, eg Australia and New Zealand, and why that isn't reflected at all in UK house prices.
The biggest problem is wealth inequality and the hording of assets which housing is now seen as. Until that is answered it's just going to get worse and worse.
I was amazed when I came to England in 2023 that as a registrar in the NHS the practical salary I earn is less than what I earned as a reg in my home country which is a third world country, while the cost of living is exponentially higher here.
For a lot of my life, because of family over here, I always thought that the UK was the place where I would end up settling in the long term, but I have serious doubts about that now.
Every country faces slightly different issues, for UK the following issues are the most pressing in my opinion:
1. Huge unskilled immigration putting pressure on the housing prices
2. Property in UK is seen as a long term investment for rich people from overseas, these homes are then sitting unoccupied (tax such investments through the roof to prevent it). Also, second home owners should also see heavy taxes, because clearly you’re doing it to profit, and home ownership shouldn’t be seen in such a manner. Plenty alternative investment options.
3. Low salaries (wages did not keep up with property price increases) but again it’s a byproduct of huge unskilled immigration
1. Huge unskilled immigration putting pressure on the housing prices
2. Property in UK is seen as a long term investment for rich people from overseas, these homes are then sitting unoccupied (tax such investments through the roof to prevent it). Also, second home owners should also see heavy taxes, because clearly you’re doing it to profit, and home ownership shouldn’t be seen in such a manner. Plenty alternative investment options.
3. Low salaries (wages did not keep up with property price increases) but again it’s a byproduct of huge unskilled immigration
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Why hasn't the salary of skilled people increased though. Only finance and tech salaries seems to have somewhat kept up, everything else is on par with some third world countries.
harder to mechanise and robotise those sectors. slowly happening with ai though.
People tend to underestimate how bad the situation is in the UK. I’ve recently listened to a podcast episode from Ones and Tooze about the so called „Mississipi question“. Let’s say I was genuinely shocked.
I think salary pressures are normally bottom-up, meaning once the lowest start earning more in puts pressure on businesses to pay more to their skilled workers as the gap between lowest and skilled shrinks.
Same in my field in finance, occasionally I would get a recruiter to contact me from the UK to work for a company in London and once they hear what I would expect to be earning in London in order to be better-off than I am currently in Vilnius (given the huge living cost disparity) it more often than not ends up outside their offered salary range and this is city of London we’re talking about.
I assume it’s very expensive to live though? That lack of income tax is presumably made up somewhere by people paying for healthcare, education or other services.
I try not to think about it because it’s probably the one area in my life where I might look back and wonder if I should have made a different decision, and that’s really not a road I want to go down.
Needless to say threads like these end up depressing me
The one area of solace is that I don’t actually have anything tying me to this country, and after training the only country I’m really locked out of working in is the U.S. (And maybe, possibly, hopefully even that is showing signs that it may change by the time I’m done). It would have been nice to not have to possibly think about that again though.I know a couple people who worked in EY back home and now work in EY in London and they’re doing better I think, but I guess it does depend on what you’re coming from.
It just puts more of a spotlight on how bad the salaries in healthcare are in the UK
They’re fortunate that the training is still really good because there will always be people willing to come at least for a few years for that.First off, all that stuff applies for London only. And relative to London cost of living and taxes, I don't think it has kept up for them either. I hear laywers are now getting paid a bomb, because a lot of US law firms are moving into the UK market and pay obscene (by UK standards) amounts. The best graduates are getting offered £150k starting salaries. In tech your only hope is working finding work for US tech giants (a.k.a. FAANG) or perhaps some hedge funds. The average salary for UK-based companies is still pittance though and about 1/3 or 1/4 what you would be paid in tech hubs of the US. For example, I saw adverts from Tesco hiring senior engineers and offering £70k-80k. And I don't want to tell you what the public sector wants to pay you, because if they're not then I am embarrassed on their behalf for the money they're offering.
I don't know what the solution is to the UK problem, but the country is in a state of steady and gradual decline for seemingly decades with no clear way out. It is no surprise Poland is set to surpass it in PPP before the decade is out. High taxes, high cost of living, low salaries, low growth. Terrible combination and no surprise this opens the doors for Farage-like types to exploit.
Comparing salaries across countries is a tricky game. So much to consider. 50k in one country can give you a far better life than 100k of the same currency in another, even when comparing the top 10-15% wealthiest countries (basically OECD). This might not be the case when it comes to Singapore and the UK in particular though.