Because so many people overpaid for homes even while loan rates were low, I believe there will be a housing catastrophe because these people are in debt. If housing costs continue to drop and, for whatever reason, they can no longer afford the property and it goes into foreclosure, they have no equity since, even if they try to sell, they will not make any money. I believe that many individuals will experience this, especially given the impending mass layoffs and rapidly rising living expenses.
I advise you to invest in stocks to balance out your real estate, Even the worst recessions offer wonderful buying opportunities in the markets if you're cautious. Volatility can also result in excellent short-term buy and sell opportunities. This is not financial advice, but buy now because cash is definitely not king right now!
Soon, cheap homes won't be cheap anymore because prices today will look like dips tomorrow. I think inflation will cause panic until the Fed tightens its grip even more. You can't just pull the band-aid Off half way. Booms and busts are the ups and downs of the economy, and they will affect any investments. If you are at a crossroads or need honest advice on the best steps to take right now, it is best to get counsel from a financial expert.
Thanks for sharing. I searched for her full name, found her website immediately, reviewed her credentials, and did my due diligence before reaching out to her.
It doesn't make homeowners wealthy, though, they just _feel_ wealthier when they see house prices going up. However, to get that money they'd have to sell their house, which they need to live in. It makes _landlords_ wealthier, and that's about it. It's perhaps worth noting that a _lot_ of Tory MPs are landlords. Coincidentally, they also voted down a bill that would require landlords to ensure that the properties they rent out are fit for human habitation.
When you are German and knows how bad the housing crisis is over here and still get referenced as a better case. It must be really horrible on the island.
I mean, I wouldnt say that its a good comparison. Germany has a lower number of houses in total because of our prevsilant renting culture, so a 3% rise is less than a 2% rise in the UK
Families are moving to poorer parts of the UK to buy homes, because they can't afford to live in the places they grew up in. Where I live in Swansea the average working family (both parents working) makes £33,000 a year. And a 3bed house will cost you about £85,000 in a bad neighborhood, £120,000 in an average neighborhood, and £180,000+ in a posh neighborhood. This is extremely good value. About as low as it gets in a city, outside Scotland. If you go two hours up the motorway to Bristol 1 bedroom flats start at about £120,000, and three bedroom houses are £250,000+. The closer you get to London, the more absurd it gets. Want to live in central London? I hope you have £500,000 for a studio apartment.
@@joshuaparrott2458 Except not, housing is not the only investment. It is even shown that you can earn more money through smart stock or ETF investments. We also have a lot more renter protection and regulation than countries in the anglo sphere and it only got bad in the biggest cities, when regulations were abolished and social housing sold in the early 2000s. Vienna is the perfect example how you can have a stable and affordable living expenses with your population being almost only renters
I live in cornwall and locals are being priced out of the area so many second homes here that locals can no longer afford abs have to move. Or house owners kick out there local renters because it’s more profitable to make it a holiday let
There should be some protection for local residents in areas where this is happening as it's disgusting that they're being priced out of their own areas by people rich enough to buy and second house
@@faves2064 absolutely there should be. But the Conservatives are actively promoting second home buying, so unfortunately you won't be getting such policy from this government. Sader still, it looks like we no longer have an opposition focused on this issue.
@@michaelwhitaker4372 it's just maddening that this is promoted when there's a housing crisis going on. Usual rich getting richer nastiness while the torys divert their voter's attention to blame foreigners and the EU
@@jm-je4tl i live in birmingham and there are parts of 'brum' with properties that have been empty for ages yet there are homeless people living on the streets.
I’m living in London. Every time I go house browsing, I can only cry, because houses are generally in the 400K to 1M range. The cheapest houses are more than 10X my annual salary. Even renting is a extremely unreasonable, I have to give up about 60% of my salary on the rent alone, only for a basic tiny studio apartment.
yeah man. I moved up north 2 years ago. Instead of paying 650 (bills included) for a room in a share house, me and a mate pay 500 rent (around 700 with bills) for a 2 bed house. So I pay 350 and there's just us two in the house.
1M only in London ? In villages in Luxembourg houses are already 1.4M. And in the city between 3M to 7M average for houses depending on area of the city
@@THEREALZENFORCE My job is in London, and I don’t have a Visa. I only just started working as well, so I don’t really have the ability to just pack my bags and leave just yet. There is a potential that my job might become remote at some point, which would open me up to more options.
quote - Why Are Houses Unaffordable in Britain? To ensure more people rent to keep the haves having more than the have nots. The entire system needs changing!!!
They should lower the hurdles to do self-builds. Alot of younger people want to build their own because its cheaper. Tiny homes, biohomes etc. But when you get into the legalities its a nightmare
It’s the cost of the land that matters, the actual buildings are usually not worth much. My home - the building itself - was valued at cost at about £100k. The land is worth 15x that.
When one looks at the houses in Europe, there are so many individual styles, most often from self-build. In the UK (unless one has a lot of money) one has to purchas e a standard house from one of the big developers (and thank oneself for just being lucky and actually getting a property).
I'm of the older generation living in a flat long since paid off, but I'm feeling anything but smug, instead I'm very angry. I bought my London flat on my own when I was a primary school teacher and I was able to afford it. Now, two teachers would not be able to afford it. Along with this is the degrading of language associated with housing : every new development is "luxury", "Manhattan Style", "boutique", "designer" (particulary ridiculous as every building is designed) etc. Then we are told that in every development there must be a number of "affordable" flats. Meaningless, because a person earning the average wage has no chance whatsoever of being able to "afford" one, and even at that price, it seems that the number of "affordable" flats in a development has been allowed to shrink. The amount of social housing in London has dramatically fallen since my purchase, and many people who had lived in an area all their lives have been forced to relocate away from friends and support networks. It's all so unfair, but I see no chance of change because those in power are all too happy to let this continue, although they may shed crocodile tears from time to time.
The result of foreign investment in the UK and also banks generating digital cash for mortgages with no back-up. In reality banks should destroy every time there is a repayment to each digitally created loan and keep interest. But they obviosuly don’t do this. This system increased the affordability of home buying in the last 30 years coupled with foreign investment. If everyone actually sold their houses and decided to take cash and move abroad, the system would break down, but they know clearly people wouldnt do this so it is a perfect place to hide inflation due to digitally generated cash. Another example is the stock market. So in summary 2-3 % pay rise you get (if that...) every year based on Retail Price Index, they should factor in this HIDDEN inflation in housing market. People now have to take mortgages as couples rather singles as they did 10-20 years ago. Granted the interest rate in 1990 was 15% and probably you had to pay similar monthly payments. They managed to offset this price increase by reducing the interest rates, but how much further can they do this ? Surely you cannot have negative interest rates. The whole system is broken and in the future we will need to have 100 year mortgages to pass affordability...
I worked on some developments in London, I forget where but I walked past it when I was there once, an old cinema turned into ridiculously expensive apartments, right across the road were council like flats. I believe there was a big uproar about it all and rightly so, a surprising amount of developments in London are aimed at the foreign wealthy markets.
Of course a video on the possible solutions is needed.... Was actually hoping that you would cover the topic in a bit more detail. Btw I think another reason for the housing shortage and sudden increase in prices this year was the stamp duty holiday, low interest rates and most importantly the practice of banks giving interest only mortgage due to which people who already home owners are buying a second property to let out, As the rents cover the mortgage repayment with neat a couple hundred pounds in profit. Thus increasing the house prices unrealistically.
Under Thatcher we also had the deregulation of the banks and with that, under John Major the start of Buy to Let which really took off under Tony Blair, including himself. This created additional demand for house purchasing. Then of course in the last year with have had Sunak's special house price hike of over 10%. The interest only mortgage is the second speculative stage by the banks in Minsky's Financial Instability Hypothesis which then slips into the third Ponzi stage and an inevitable crash. Politicians seem to become increasingly incompetent with each passing decade, and we already know that this is only going to end in tears.
According to an article in the Guardian in 2017, 1 in 10 UK adults owned a second home whilst simultaneously 4 in 10 UK adults owned no property whatsoever. And of that half (52%) of all the assets held in additional properties is held by the baby boomers, born 1946-65, and a further quarter (25%) by generation X, born 1966-80. There isn’t a lack of properties in this country. There are enough house for every homeless person and every single person or family to live. The problem is the distribution of housing, both in terms of singular individuals owning multiple properties as well as the fact that people want to live in specific areas and not all houses are where the majority of people desire to live. Something needs doing about it but I can’t see this government or the opposition doing anything about it anytime soon.
@@arghjayem Sure, there are enough properties, except a large chunk of them are rented out. So are you saying we should somehow confiscate those properties and give them to the person currently renting?
Low interest rates are designed to generate tax without actively putting tax up. If interest rates were high everyone would save in their bank and not spend their money thus not stimulating the economy. If you want interest rates higher then expect tax rates higher which is unpopular in conservative government especially since the main target for tax is now the extremely wealthy. The simple issue is that no one wants to build houses. It wouldn't matter for low interests if a lower percentage of overall houses were renting. However local governments don't like that because it brings their land value down especially if the external estates are incredibly successful which they will be because of low mortgage rates.
Right to buy was the problem. Sell low with no penalties to then sell on cashing in on that profit BUT WORSE don’t replace stock. I can say that as a) grandparents and aunts had houses in East London, grandparents wouldn’t buy despite children trying to buy on their behalf but aunts did but however stayed until passing away. B) I looked to buy with my fiancée between 1986-1988 and all were ex council and priced the same as non ex council. West London then Essex. We would turn up for a viewing to be told ‘sold’. Mental. My daughter has a part buy part buy rent property, she’s disabled and works, bought 2010. System is broken. My sister joined the buy for profit game and bugged the life out of me. In 33 years we have moved once. A house should be for living in, not short term profit. My opinion, I won’t reply or engage.
I live in a garage which I've worked on myself and I pay £60 a month in rent, I've spent about £2000 to make it livable. I dont have running water or electricity, but I have alternatives, but the fact is it wouldnt be hard for the council to connect this if they wanted to, however they wont because the houing market is a racket. Consider how many years a mortgage takes to pay off and you'll understand why no politician wants to allow people to build their own homes. You have to work at least 40 hours a week to afford to make payments, and you have to work for around 40 years to clear the mortgage. People are a resource which is simply too valuable and the housing market and the motor industry is the key to keeping peole in the rat race. Building more houses is not the solution. I live in britain and they are always building more houses. The fact is there is too much money to be made in construction. Heres a breakdown of salaries per hour and jobs on a construction site. Labourer £9 Forklift £14-18 Dumper £15 Excavator £20 + Manager/forman £25+ Bricklayer £20+ Carpenter £20+ Electrician £20+ These are just some to name a few but should give you an idea of what to expect and you have to add to the health and safety inspector, slingers etc etc. Construction always run over budget costs are cut as much as possible, contractors cut corners so they can bill for more hours etc etc, list of problems go on. What should essentially cost around £50k costs the end buyer £100 because of inflation, and I don't mean standard economic inflation, I mean the fact that these people are straight up willing to sell you plasterboard homes for the price of a stone house. The houses are of poor quality and many new builds fail inspections upon completion. The solution is to let people build their own homes but corruption is never going to let that happen.
This channel seems to have a left wing ideology (which historically harms the poorest the most) and are clearly economically illiterate, so not the best creators to ask to create such a series. Try reasonTV or reading Thomas Sowell’s book “housing book and bust” which is brilliant (and available as audio)
Increase building social housing. Pay for it by investing (or increased targeted taxing haha) in large scale multiple housing developers. So while the crisis lasts the government gets more income through the latter to build more social housing. Eventually the ROI on these investments should go down, which means the increase in social housing has had the proper effect.
Easy to have a global project homes for all we have means and technology! but toxic oil banking people in power of us and would not make money then loss power! We have the technology and fiscal modelling for green homes for all. 1980 worked on a theoretical project greening London homes for all! but we have a toxic system mmmm time for global change
End the state. Without state violence there's no more bribes, delays waiting for third party permission, no support for land ownership or unilateral contracts, finance not provided by QE.
@@ConsumerWatchdogUK Erm.. why not? The key thing with problems created by the government is not that it has been created by the government but how it has been created by the government.
the solution is alternative accommodation. I live in a garage and whilst it doesnt have electricity or water the council could connect that if they wanted to. But they wont because its not in their interest to allow me to afford to live without having to work.
Young people?! I'm 43, earn about the national average, but because I'm single and rent, there's no way I'll ever be able to afford a deposit, let alone be able to move somewhere bigger than the studio I'm in unless I lipsticks and move somewhere cheaper where, as per, there's less jobs and worse salaries.
@Henry Gill-Pratt uh no. People in the countryside oppose any and all development. This country is entrenched in the "I've got mine so you can f*ck off mentality"
The wider issue here is why the desire to own. Consistently my non real estate portfolio has out preformed the housing I own, by some considerable margin. Anyone with a compounding clue can tell you 5% a year since 1993 will kill any house gain in any area in the UK. The UK has this insane desire to want to own. I own for diversification it's easier to dump property into my daughters trusts than other assets but if you don't need to own then borrow to invest elsewhere. You won't listen no-one will. Non residential outpacers about 60,000 per million per year.
@@JakeyG-eq1un It affects young people the least other than those who already have houses. This video totally missed a key point that the government has factored in, birth rate, if it's below 2 the population is shrinking, it's currently 1.6 per woman so for young people this opens up a massive opportunity in 10-20 years.
Personal property is stability and freedom. This monopolisation of property by a handful of rich investors, landlords and corporations will make the average person less stable, less free and more powerless than ever before. If this goes any further, we will need a revolution, there can be no other way.
Voting for Leftists caused this problem, and even after a revolution there will be Leftists eager to implement the same "caring" (read: stupid) policies that caused the problem in the first place.
@@oneillnandie7999 Doesn't matter what party the current PM is in. News media have too many citizens "believe" that moving away from Leftist ideals is "mean". So basically the problem can't be solved with common sense. Restructure the green belt? MEAN ! Reduce regulation to make new housing builds more doable? MEAN ! The Leftist philosophy, of "caring", is only about superficially showing there is care. If consequences lead to more hardship, well that's okay, we'll care about you at that time then. The Left is quite content with giving a man a fish, if said man promises not to learn how to fish.
Politicans know the solutions, they just lack courage and it wont benefit them politically. Reduce immigration numbers, raise capital gains tax on second houses, restrict foreign buyers by putting high taxes, and put in place rent control scheme like in Sweden
@@tinthings314 there are no solutions palatable to all parts of the electorate. FTB - wants prices to fall. Homeowners, landlords, pension funds, builders - want them to stay the same or go up.
@@alizaidi2893 This. It's hardly rocket science. The older generation wants to keep their houses expensive, they don't care about us. Even though they all bought their houses cheap.
I wasn't looking at the screen when you said the price of a house was £104 and I was like ????? until I looked up and realised it was £104k and the audio is just wrong lmao
You missed out all the demand side factors pushing prices up such as how housing is taxed, the financial credit system, domestic (landlords), corporations, and wealthy foreign investors buying up housing (especially in London) etc. It's not all about supply and just building wherever we can, its as much a distribution crisis as it is a supply one.
@@reheyesd8666 how about there be BOTH options. Social housing should of stayed at a certain percentage of that of private developments. But it didn't, people in the 80's brought up their council homes in their droves but the governments since then never reinvested that money into more social housing. Leading to a supply and demand issue. You have high demand but low supply, meaning the houses that being built become more expensive. And the houses being built are private leading to insane mortgage costs or high rent costs from a private landlord. If we had had a steady supply of BOTH social and private developments there wouldn't be this crisis. The right to buy scheme was a good one in principle but in practise it was a long term disaster and totally mismanged by all preceeding governments.
All my neighbours live in council houses and refuse to buy them for extremely cheap price because anything happens they call the number an council solves it. While anything happens to my house that I'll be paying off for next 25 years, I pay for it. The country is full of leeches and crooks who exploit the system whether rich or poor
@@raukoring What you are explaining there is a wage issue. Those people have become comfortable paying rent and more than likely couldn't afford to buy those houses and pay for the up keep themselves. Those people are probably living pay check to pay check and you expect them to take out a mortgage? When more than likely their jobs are not secure enough and their pay isn't high enough. This is what people say about wage stagnation. Prices for everything have continued to rise but wages haven't kept up at the same pace. Capitalism and consumerism 1 O 1.
@@Fezzy976 my neighbour can buy his council house for 40K. the same house I bought for 145K. They're exactly the same houses mirror attached to each other. I'm a non skilled warehouse worker, pay my taxes NI, never asked for any benefits even when I was eligible because I don't consider that my money, I didn't earn them and as I'm not a cripple and can earn my money I save what I can and do overtimes. What I'm saying is I paid 145K+ interest while the neighbour refuse to pay 40K cuz if his boiler goes down, he calls the number and they bring a new one. If my boiler goes down, my bank account looses £2.000. if his roof breaks down, he calls the number. If my roof breaks down, I use all my savings/take a loan. I don't care he can't save his money. Other neighbour who works part time, spends evenings in jacuzzi in his council backyard with his unemployed wife while I'm in work thinking how can I support my future child while this guy has three kids I've no idea where he gets money for them from his part time unskilled job. Other neighbour living with his "ex" wife and new born, while officially renting other house. It's worth for him to send £250 every month to some people who put him on their rent so that his wife can be claiming single unemployed mother money living on her own.. while he lives with her. I could go on. Just saying. Tons of leeches here. Would be awesome to loose both the thieves from top AND from bottom
When I started my PhD in 2014 I had an argument with a guest lecturer saying that young people don't want to own houses and I was wrong. We liked the flexibility he said. Twak
Yeah, you're right. What a pathetic excuse from the same sort of people who potentially had contributed in deprivation of young people of their potential own homes.
I do think part of the issue is people owning multiple homes with the intention of renting and treating them as investments. The problem with that is no economic benefit is produced when you are renting out and you are essentially increasing the house prices by holding up houses that could potentially be bought.
Landlordism is basically using someone else's labour and hard work to pay your mortgage. It's quite disgusting. Not every landlord is bad or malicious, but the concept itself is quite fucked.
But they also play an essential role, What are you going to do if you need to work somewhere else in the country for a year? A) sell your house, and buy another B) short term rent C) buy a 2nd house D) Live in a hotel I can understand some level of Landlord hate, but I would argue Mum and Dad who buy a 2nd home to rent / holiday let out to supplement their retirement income or whatever, is not the issue. The consistent manipulation of supply, and incentives like “help to buy” are more to blame IMO.
Aiming a product at students and young professionals not ready to settle down is also a efficient way to supply accommodation for these segments. Rent is less an issue in Germany where there is better public transport, better state provision, strategic planning and higher density of housing apartments. So it’s not renting and landlordism.
@@TwistyThreeFifty well ok. But there are people who are British and who want to buy houses to rent them - or do what the hell they desire with their private property. What about them?
@@HhhGgg-iy1mk What about them? If everyone has a house, the 'buy to let' market will collapse. Much like the creation of the motor car caused the horse drawn carriage market to crash.
I would be interested in seeing how much of the housing stock is being rented vs owned by the dweller and how much of the original council housing stock that was sold off is now in the hands of landlords rather than ex council tenants.
If you have the right to buy you also get the right to sell later on. A policy that by itself would not have caused the housing crisis. Giving people access to buying their own homes helped many working class get on the housing market, offering social mobility and security over their own lives. Immigration, a lack of new house building and quantitative easing driving fixed assets higher unfortunately made demand and speculation of the existing housing stock cloud out the success of this policy. People often blame landlords for the cause of the housing crisis, but in reality the rise of buy to let’s is a symptom that exacerbates the crisis but not a cause.
@@jackhopewell1745 40% of former council houses sold under Right to Buy are now private rental. It's helped to lock a generation out of housing and pushed back social mobility. Housing has become an investment which has pushed prices up.
@@jackhopewell1745 We are building a lot of new houses though, see the housebuilding figures since 2010. Lets say we suddenly grant planning permission for 100,000 more houses per year than we currently have, where are we going to find the capability to build them? Are we going to magic builders out of thin air? They can't build much faster than they are doing. I agree about low interest rates, but it's very hard to raise them without meaning that a lot of people can no longer afford their mortgage. We need a significant council house building scheme, an end to right to buy and buy to let mortgages, rent controls and a limit on the number of homes you can own. House prices need to stagnate and allow wages to catch up.
@@Lennon6412 you need to understand the purpose of the policy before declaring it disastrous. The idea was to allow the government to replace its ageing, outdated and high maintenance housing stock, allow tenants to buy but only after a qualifying period, then let the local authorities use said proceeds to build new more modern affordable housing. The concept of the policy was good however the execution was bad once the local authorities decided to put the onus for affordable housing on the private sector via the local planners and pocketed the proceeds. In summary good idea poorly executed.
That's the other thing that wasn't mentioned in the video, that a lot more people who own their own house who are obviously middle-aged-retired are living much longer, which a) delays the availability of existing houses coming free for people in their 20s/30s and b) means that the house prices keeps rising for the extra 15-20 years they live in it. Plus C) just cause you are lucky to have a house become available that someone who was in their 80s/90s even lived in. Chances are they wouldn't have done much to it for decades since retiring, so their is the added cost of doing it up so upgrade and modernize it properly. My Parents are pretty old now and well into retirement, but are both healthy and spritely still could easily last another 10-15 years, so it won't be of any real benefit to me by the age I'll be as and when that happens, more of a random 'bonus' in the 2nd half of my life. So I may end up selling it and putting the money into savings/investments/pension plan for when I get too old to work anymore. and it's not like anyone is chucking £50-60k a year jobs at people in their 20-30s either to allow them to get on the ladder, so it's either lots of debt in one go, or somehow budget and worry about every penny for 20-25 years and have no life enjoyment. (and who wants to make that kind of commitment at 21)
The people with parents that also had to rent won't be getting a house at all unless people like you rent it to them. And yet you complain about your life..
what makes the whole thing worse is that landlords are buying up what few "affordable" houses/flats that young couples would potentially be able to afford and then renting them out way over priced.
That is true, it's happening throughout Greater Manchester. The rents are ridiculous but demand is high, so we end up paying two thirds of our salaries on rent, unless you are fortunate to get somewhere, at slightly more reasonable rent! Even though 1500 is common monthly rent, that does not guarantee we won't be begging and chasing for basic maintenance work to be done. Greedy, immoral landlord and agents are aplenty!
@@jeremybiggs8413 rent caps can make the problem worse long term . rent control has already been studied to have a negative effect on long term housing supply
Pray that pod sleeping as seen in San Francisco, where you rent a bed to sleep in, with dozens of other people and no space to yourself, is not presented as the solution and does not start creeping into our island. I don't know if that would be in line with the laws here but you know our future is absolutely bleak, miserable, and in poverty if it gets established here.
@@samuelboczek1834 But thats fine. inflation will shrink the size of the mortgage. My interest rate is 1.8% So on a £400k mortgage interest would only be £600/month. If that £500k house is worth a million in 10 years it will soon look like a great deal. Low interest rates are the key, it costs almost nothing to borrow money these days. The price of the house is irrelevant if it goes up the only thing that matters is qualifying for the mortgage terms.
People have been told to buy properties as an investment. In Germany they call it "Beton-Gold". Low interest rates incentivise people to become private investors. And those private investors compete with those people who are actually looking for a place to live, artificially increasing the demand. Investors tend to have way more money than your average young couple or family. They can easily outbid young and poorer folks, buy the property and then put it on the market with increased rent. They don't care much about the mortgages due to low interest rates and mainly because it will be payed off by their tenants either way. Since banks don't give them much interest rates, more and more wealthy people have transferred their money into the property market, expecting high returns year after year. And to be able to keep that up, prices need to increase forever at this rate. Something, which is unsustainable and only benefits the investors.
@@maythesciencebewithyou It is also very socially acceptable to "invest" in property. People who do that seem to be respectful society members. But these returns on investment have to come from somewhere. And they come from people unable to get on the property ladder. Nobody seems to have a problem with this -- "that's capitalism for you, babe" Same people who would snub buying a Primark t-shirt because "it's exploitation, the workers are not even paid minimal wages! shame!" seem to be OK with the fact that those people who will pay off their BTL mortgages by their rent -- i.e. money which they would otherwise spend building their own equity -- will not be saving for their own property. It's capitalism, baby! Not exploitation at the smallest!... Except it totally is. "Why don't these people buy their properties if they don't want to rent forever!" Because they won't be able to. Worse even, a toxic advice to invest in property to provide for your old age. "How dare you attack house prices growth? We have invested into property to fund our retirements!" Keeping schtum that these money are drained off other people, who also deserve to have their houses. If that's not exploitation, I don't know what is. Those who will rent forever will somehow have to pay for their pensions by their own earnings.
The result of foreign investment in the UK and also banks generating digital cash for mortgages with no back-up. In reality banks should destroy every time there is a repayment to each digitally created loan and keep interest. But they obviosuly don’t do this. This system increased the affordability of home buying in the last 30 years coupled with foreign investment. If everyone actually sold their houses and decided to take cash and move abroad, the system would break down, but they know clearly people wouldnt do this so it is a perfect place to hide inflation due to digitally generated cash. Another example is the stock market. So in summary 2-3 % pay rise you get (if that...) every year based on Retail Price Index, they should factor in this HIDDEN inflation in housing market. People now have to take mortgages as couples rather singles as they did 10-20 years ago. Granted the interest rate in 1990 was 15% and probably you had to pay similar monthly payments. They managed to offset this price increase by reducing the interest rates, but how much further can they do this ? Surely you cannot have negative interest rates. The whole system is broken and in the future we will need to have 100 year mortgages to pass affordability...
I can't even imagine how lucky people who expect to inherit a home from their parents must feel, while trying to be a first-time owner in your family is like trying to climb mount fuji with a broken leg
I'm dreading it, what my mother inherited is worth a lot of money but the houses and few old farm buildings are in ruins. She had to pay £100,000 plus just in taxes to keep living in the same place she always has lived, by the time it gets to me and my brother the only way to pay the tax would be to sell the lot which is not something we want to do... My grandad bought it in the 50s for a few hundred quid to farm the land and in the coming decades it'll all be gone thanks to the appalling tax system we have, you're even taxed in death
I hear you. All my family are either living in a housing association area (my grandparents) or council house (my mother.) I knew growing up hearing about how much they wished they could have afforded a home of their own. And how my mother feels guilty that she is unable to leave anything to me. This made owning my own home a dream of mine. A place I could look after my grandparents and my mum whenever the time comes. Unfortunately it is starting to look like just that - an unattainable dream. I've saved and worked since I was 17 y/o (now 23), I just don't see the point of trying anymore. What a time to be alive ay.
Inheritance is a gamble because of social care. The average person without a savvy accountant cannot, if they even wanted to, avoid care costs for elderly parents. Our bill, a charge on ma in laws house, was £130K. My disabled sister aged 56 has had a charge put on her house for the cost of a stair lift and wet room. This will only increase so inheritance is not to be relied upon,
@@freyachristina1340 33 years old, me and my partner are in the process of buying our own home. Don't give up. Your income will grow, you're still young.
OK so, I think there's been a little bit of oversimplification of the greenbelts here. Most people know it's farms, we like farms, we'd prefer to still have them in the fertile areas around which our cities were historically built.
Completely agree - although farms aren't lush green forests bursting with ecodiversity, they are useful for growing food and as you say are much more attractive than having a load of des reses or apartment block 2 inches from your front door.
@@andreaslind6338 More of the land in the north is less arable and more grazing or forest. Most of the green belt around Manchester are woods, meadows and moorland.
@@thomasczthomash1859 plenty up north, Wales and Scottish borders. Not included is also second homes and empty rentals. Buy-to-rent will earn more through rent than their mortgage and upkeep, maintaining higher rents than mortgages.
@@AWest-ns3dl While most of our new stock is lapped up by BTL landlords, I'm afraid no amount of refurbished abandoned properties will do it. The BTL landlords are called "investors" but in reality they, like vampires, are sucking housing away from those who should be able to buy it -- but can't -- their money availability does not depend on house prices much, as they pay off their mortgages with someone else's broken hope money. First time buyers, however, don't have unlimited resources. And all these ideas, like help to buy, or allowing to use "the bank of mum and dad" (even this is attacked by some banks who demand to see the own income source from FTB's and call it "responsible lending"), or offering 30-40 years mortgages (sad and disgusting travesty sucking money from unhappy poor people their entire working life with ridiculous amount of interest to pay for it) -- they only try to cater to existing unfair "market" conditions.
Two very important things missing from this video: 1) The section in inequality forgot rent-seeking: The younger generation are being bled dry by high rents, so can't "just cut out the avocado toast" to get a deposit. But gives a nice income for a landlord to buy another property to rent... 2) The section on 'why' missed un-built homes (I don't know the technical term): in England, developers are just squatting on land where houses have permission to be built - over a million home apparently. It's deliberate supply restriction. This was discussed at a tangent, but didn't mention the landowners are actively not developing land with building permission. Personally, 2) should come before any discussion on Green Belt and planning law. There are a million homes that could be built without any changes, they just aren't being.
I've talked to an architect who confirms 2). There's a point at which people need to accept that the free market is simply not gonna provide the best outcomes in all situations. Society needs housing, and the big developers holding land to increase demand is doing sweet FA to help anything except making them money. Housing and land is an asset for a country and companies need to be encouraged to be productive for society, with regulation, penalties, taxes etc. Same goes for multi-home ownership.
Exactly this. I work in the industry (though mainly for Local Authority clients) and the issue is that developers will always want to keep supply low as it means high profits. Then they attack the planning system for low housing delivery when they are more part of the reason. The tactics developers use to get out of paying affordable housing is frankly disgusting and they need to be held accountable. The real solution is for the Government to build houses again, which is what I advise to all my Local Authority clients.
2) is a myth, I'm afraid. 1) Is a real major problem - you can't save for a deposit to get on the housing ladder as you're spending all your money on, erm, paying someone else's mortgage.
@@chrisgardner4326 developers can only get away with this if it is too difficult for competition to enter the market. The solution is to make it easier for new competition to come in and disrupt these predatory practices.
@@willbxtn Move in with family or friends, or rent a cheaper house/apartment. If you don't like the terms and conditions of renting a house, don't sign the contract. Take some responsibility.
I know the used car market wasn't exactly a crisis but it was a major concern for many of us. Dealerships were buying cars back at higher than the customer paid so they could flip them for a lot more
You've missed the absolute biggest driver of house price increase: interest rates. With rates falling so low, it makes monthly payments lower, driving up prices. This comes at the expense of higher initial capital requirement, causing that divide.
This is mostly true, although interest rates only matter if supply is limited. If supply is limited house prices get bid up to a point where it is marginally affordable - which is determined by monthly repayments and thus interest rates. If the market were well supplied then the price would not get pushed up to the edge of affordability
This doesn't make much sense, actually. You are suggesting that borrowing costs are so low that the housing market is flooded with more buyers than sellers. That's not the case for even a 4% SVR keeps most people off the housing ladder...mortgages have to be maintained and the reality is most people are struggling. So, what might be closer to the truth is that whilst prices have been rising (for years), real wages have been trending downwards (for years). What everyone is seeing now is the gap between prices and the inability of working people to keep up. In actual fact, when no one can afford to buy, there is no housing market; maybe that is the real crisis.
@@GRYL180 rates are 1.45% for a mortgage (at least where i live in europe)... so yeah it is rates. If you have a somewhat decent jobs you can easily borrow 200-300k. Add savings and parents lending a helping hand and you have a recipe for everyone to fomo buy.
@@__Wanderer Exactly. When I bought my first place in 1990 I was paying over 12% mortgage interest. If I was looking now, with 2/3% interest rates and similar income I could afford to bid far higher on the same property so pushing prices up significantly.
The biggest step we can take against the crisis? Voting out the party that is purposely not trying to fix it, but enacting just enough superficial policies to make it look like they're not completely ignoring it
In short don't vote for the conservative party. In the last 10 years they effectively cut the NHS budget by 20%. This means less nurses and less doctors.
@@paxundpeace9970 Wrong, large scale immigration caused by Labour party policy caused the majority of the housing crisis. Why would voting for the same failed policies make it better? Not that the Tories have done anything to sort out immigration.
So, instead we should do nothing other than keep voting tory, a party that deliberately skews housing policy to pre-existing homeowners because they know that's their core voted demographic? Good solution! Well done, you've solved it 😂👍
@@ReD_738 true man, but a good mortgage broker can do wonders, and looking into having a guarantor can also help a lot. It’s difficult dont get me wrong
Another reason for the spike in house prices in the last 2 years is because of Grenfell Tower, there are a million apartments that cannot be sold or bought in the UK right now because of the fire safety scandal, therefore people can’t buy cheaper apartments so they have to buy houses
no, its simply this, the greatest gen found oil energy, they used the oil to take over the world and multiply like rabbits on heat, then the boomers they bred were the first here, they took everything, then their kids had nothing, the end.
I was forced to buy a house in Winchester in 2017 because of my new born at the time , buying that house was the biggest mistake of my life ! The house was overpriced and small ! Luckily I just sold that house and we are moving to Auvergne in France we bought a farm house for 35k with 250 sqm2 and 1 acre of land . What we bought in France the equivalent in Winchester is probably worth 1 or 2m £. House prices in the UK makes no sense at all
@@robfodder5575 I'm French and My wife is English because we are married she has double nationality ! I mean if you want to buy a property in France and beat the 90 day rule it's probably best if you invest in a flat cheaper and you can rent it out in the summer and enjoy in the winter for ski season
Imagine joining a game of Monopoly, where all the properties are owned already. Your parents scrimp and save the odd pound they manage to avoid paying on their way round, but all they have to show for it is Old Kent Road. 'Hang on,' you say, 'How am I supposed to get on the property ladder if I pay all my wages on rent, transport and utilities?' 'It's a matter of Hard Work, young person,' the owner of the whole back row (plus hotels) tells you. 'I didn't get where I am today without Hard Work. Okay, so my parents gifted me a fair amount, but that's only right, after all the Hard Work they did.' The system is set up to keep the rich getting ever richer, and the plebs hanging on by their finger nails. Every time anyone says 'Let's rethink the rules' they are shot to pieces. So, do we continue playing the game with the rules the way they are, so things never change, or do we do what is in our power as a democracy, and rewrite them so that nobody gets super-rich, but everyone is able to do more than just survive?
@@stevenjoy3537 Oh, my saviour! Thank you, now I know to 'better myself'. It means Hard Work, right, the thing that always pays off? So I'll go to university like all Hard Workers do, get a job, pay rent for a decade or so while I save what I can to buy a run-down house in the arse-end of nowhere with the leaky roof next to the crack den and the ex-convict who beats his wife and shouts abuse through the walls. Nice place to raise children! Speaking of which, now I live a hundred miles from family and friends, what do I do for the impromptu help with childcare that every family needs? Of course it's possible to take such a path, but why should we have to just to make people who are already excessively rich even more money? It's the system, stupid. 'Self betterment' is just another bullshit tory slogan, it's the system that needs to be improved, not the individual.
@@ClickHere4Naruto How much is left of the median income each month post income tax, minus rent, minus food and utilities, transport, council tax etc? How long does it take to save £20k? As for buying to let, then you're part of the problem. Good work!
M XP. are you off your rocker? This is not a game of monopoly where you can't build anymore. It has to do with the government keeping the banking sector afloat through mortgages. The uk needs 1 000 000 more houses this year.
M XP. are you off your rocker? This is not a game of monopoly where you can't build anymore. It has to do with the government keeping the banking sector afloat through mortgages. The uk needs 1 000 000 more houses this year.
Yeah and other people want to settle down in Monaco. Why do people think they (over other people) have a special right to live in the most expensive cities in the world when they cannot afford it. So you want all the luxury, comfort, infrastructures, metro, airports, restaurants, cinemas, sportscenters, swimming halls, etc of expensive cities while the middle class lives far from the city in villages.
@@pjani14 "people of all incomes need to live and work in these cities." NO, they don't, they can like me live outside the city and commute to work to the city. Especially in the last 20 years where public transportations is fast and environmental friendly. And nowadays there is also remote work (Télé travail), so many jobs can be done from home. You are not entitled to city life if you cannot afford to live there.
The solution is to make rental properties a bad investment. There are enough homes, they are just not owned by the people living in them. You can see this easily enough because while house prices may double, the amount of homeless doesn't double. Tax residential land which isn't your primary residence at an enormous rate. Make holding land as attractive as hot sick. Gear up the government to buy a new set of social housing stock for the people who do need to rent when properties get dumped to market.
Ah yes, because when you can't afford a place of your own you must automatically end up on the street rather than suffering other forms of reduced living standards such as being forced to live with parents until you're 30 or live in a house share for an amount of money that should normally be able to afford you an entire house to yourself. Rented or owned, there are not enough properties to house the current UK population. Simple as that.
@@Hashterix "there are not enough properties to house the current UK population" then where the fock are they living in? Their shoes? Unless half the UK is homeless and i haven't noticed, there's enough roofs to cover us all. Problem is who owns the houses? My landlord owns 6 of them, 2 inherited and the rest mortgaged and he's a small fry i reckon. Rory is right taxation on rental homes should be progressive until your third property is no longer profitable to rent. Your free capitalism will make the majority of the population unfree. No one needs more than 3 houses.
@@Hashterix totally incorrect. There are more than enough houses out there for everyone in the UK. It's jist that most houses are owned by a few. Be it landlords or large companies. The government could easily regulate this by progressive taxation and by building affordable houses that only first-time buyers can purchase with no sale or rent clause for a number of years. Of course this will never happen as the interest is not to help the young generation but to fleech the people.
@@mdo stupid argument. Yes there are enough, there are enough houses in the world to house everyone. In fact, there are hundreds of millions of empty properties!! Can you believe it?! Problem solved! No. It's not that simple and we understand the world doesn't work like a child thinks it does, do we. Those houses are not where the population is. The demand is high in specific areas. What's your solution? We move thousands of people to live in derelict mining towns that have lots of empty houses but no jobs? Or perhaps we should move all the homeless into the millions of empty properties in China. Oh, how easy and simple of a solution 👏👏👏 It's supply and demand, it always has been and it always will be. Also, just to highlight how disengaged you are from reality, those schemes you suggested do actually exist, and they do not help whatsoever, they only push prices even higher because the DEMAND is so high anyone who wants to buy has to stretch themselves financially to their limit because if they don't then the next person does.
@@alexc7367 oh yes, you're right, because nobody needs a house do they, everyone can just live in a bedroom and they can share a kitchen and bathroom; heck, they can even share a bedroom! How do you determine there are not enough houses? How about the fact you cannot afford it because there's always someone ready to fill any space that comes up and keeps the market inflated. You go where there is more supply and less demand and houses get cheaper, that is a fact. If a landlord owns a house does that mean nobody lives in it?? No, it means it's more likely to be lived in as efficiently as possible, as in nobody is going to pay extra for space they don't need. All my peers, ALL of them, lived with their parents until age 27+. And you are telling me that there is enough housing. Go pull that rod out of your arse.
When I bought my first house in 1980 I was told keep your monthly mortgage payments equal to one weeks pay and you will be alright. Further more, the large house builders/developers buy land and sit on it waiting for house prices to rise before building.
Housing supply cannot keep up with demand, therefore boost demand with Help to Buy. Another brilliant Osborne idea from the man who flatlined the economic recovery.
@@warmachineuk Shows that it´s not a simple "not enough supply" issue. There are houses and many houses even in downtown London that are long term vacant.
Really the ECB and BOE have been printing stupid amounts of money none stop since the 2008 financial crash and inflation has struggled to get anywhere near the 2% target until recently
06:12 Your 'three reasons' is really three _mechanisms_ and ignores the actual _reason_ for the housing crisis. The _reason_ is that every UK government from Thatcher onwards (including 'new' Labour) has aggressively pursued policies aimed at increasing house prices. This really only benefits the rich, and has a particularly detrimental effect on the poor, as you note in the video. However, governments have managed to convince home-owners that their house going up in price means that they are getting richer. They're not, because that increase is only realised when you _sell_ your house, but you'll still need somewhere to live - which will be more expensive because house prices keep going up. Even if you are 'downsizing' after the kids grow up and move out, so your new smaller house is cheaper than your old larger house, chances are you're going to sink the difference into deposits for your kids' houses - which are more expensive than they should be. Really, it only works once you die: you can leave a more expensive asset to your beneficiaries. However, (1) that doesn't do _you_ any good, and (2) if it still just gets swallowed up by your beneficiaries having to spend more buying their own homes, it's still the same problem - just their problem rather than yours. Until people realise that house prices going up is a bad thing, not a good thing, the housing problem is just going to keep getting worse.
And don't we forget that when people die, and their houses are (due to rising house prices) now worth above IHT threshold, the Government starts to lap their value from the inheritance receivers at 40% above threshold. But of course those people who are comfortably planning their life, have already established trusts to forgo IHT and shirk their part onto someone else's shoulder. Oh, and you have to pay the tax first, then only you can receive the inheritance. My former boss, a simple man, who once inherited a modest 2-bed house after his mom's death in London, had to take a bridge loan against his own house (basically second mortgage) from his bank to pay the tax first, and then - only then - could he receive the house, then sell it and pay off the loan... receiving probably only about 3/4 of what the house was worth.
It's just not the UK. There is a massive housing crisis in the US as well. Homelessness, as well as the price of owning a home, is skyrocketing and wages are dipping, making it harder and harder to afford a house nowadays.
Watched a bit on just one of the many reasons for the US housing issues: large companies, like hedge funds, are buying entire neighbourhoods and are renting them. Typical issues like not fixing things tenants need fixed, suing when a tenant stops paying rent after something hasn't been fixed, etc. Doesn't seem like a great deal 😑 Some of these areas are bought before normal folks can even view a property, perhaps before they even hear of it. If you ask me a lot of property-related issues are getting out of hand. At what point does it become as bad as lets say the issue with insulin, especially in the US? Seems pretty messed up all in all.
@@rafalpotasz True. Also China and Chinese oligarchs are buying up giant chunks of property in America. There needs to be some kind of legislation against that.
its everywhere guys.... here from Bratislava, Slovakia.... 800 square feet (70m square), new aparatment, between 250-350k €.... 50 year old ones for 200k €....
Worst thing is that you are trapped in a rat race: you spend most of your salary on the rent, cannot save any money, therefore will never have enough for a deposit. What will happen when you retire and your pension barely covers the rent? We will have most of nation living on benefits, if we can afford, which I doubt
Totally agree , I can afford my rent , I can afford mortgage but can’t save enough for a deposit and that is frustrating, I’m in a cycle I can’t get out of .....
I hate NIMBYism. In America, regulations are the reason for housing crisis. We should allow development no matter what locals say: tower blocks next to your house are ugly, but homelessness is uglier.
Nowhere does he raise the question of the effect of mass migration. I can't help thinking if you import a population explosion it will exacerbate such problems.
Had to scroll way down the comments to see this elephant in the room. Mass immigration without infrastructure scaling is wreaking untold misery on many fronts.
UK is not the only country that has seen mass migration, yet it's the country that can't handle it in reasonable way. Migration is a contributing factor but there are other bigger reasons like land ownership and building approvals mentioned in video. Elsewhere an ordinary citizen can buy plot of land fairly easily and build house on it, hence why in certain countries self-build dominates the market. UK rather prefers stuffing pockets of big developers with money. Another stupid idea that I can't understand is the land lease business in UK. You can own a house or flat but you don't own land that it stands on byt rather pay some lord or some big corporation to use that land. Insane!
I saw a great tweet from someone who said 'The bank says I can't afford afford $900 a month for a mortgage, so I pay $1400 a month in rent instead'. I think that beautifully sums up the issue.
@@mitsterful What the bank is actually saying is because the buyer doesn't have the necessary cash to convert to equity that the risk level is too high to lend against. Banks are not charities and high risk lending on a wide scale in the housing market partly resulted in the 2008 economic crash. The rental risk isn't necessarily owned by a bank but the landlord who is responsible and therefore offsets his/her own risk on a case by case basis. Ultimately another bank may be in the equation but they don't have sole ownership of the risk and therefore it is safer.
@@mitsterful The person probably couldn't afford $900 per month, which is why the $1400 they are paying in rent unsustainable. Assuming they can't find a cheaper property (unlikely) wouldn't be suprised if they have to get a flat mate or move back in with parents.
@@tomtimtomtim You make a good point. However, it still highlights an issue that people pay more for rent than they would a mortgage, making it harder to save for a deposit on a house and being stuck in a renting cycle. People are being told their finances are too risky because they don't have enough, or they're too unstable, so they have to rent instead which costs more and is worse for stability anyway.
As someone who moved to the UK recently, the housing situation is intolerable. The British live in crappy houses and most don't even realise it because they've never lived abroad. You tell them it's because of the Green Belt and they don't understand or care. Extremely frustrating.
You know what I do if I find a foreign country intolerable? I go home. Obvious, no? And it's not because of the Green Belt, it's because of mass immigration pushing down working class wages and pushing up house prices. Simple supply and demand.
@@edwardkenworthy7013 it's both mass immigration and the green belt. Mass immigration increases demand for houses while the green belt reduces supply. You can have one policy or another, but not both. The state is artificially increasing house prices, in other words, which benefits the wealthy and home owners at the expense of everyone else.
@@chemicalwasted3450 First, the Green Belt doesn't reduce supply, but it does limit growth, and that's a good thing: this is a green and pleasant land, not a concreted over land. Second, immigration also suppresses working class wages making it even harder for them to afford to buy a house. In other word you are part of the problem and if you find it intolerable you could help solve two problems in one go.
@@edwardkenworthy7013 You can keep the land green but it will cost you millions in increased home prices; everything in life is a trade off. As for mass immigration, nothing is stopping the working classes from voting a right wing party into power except their own lack of political will.
Same here in Ontario. Where I live, in 2003 a home could be worth $220,000. Now in 2021, it's 1.2 million. .. that's MILLION. Fixer Upper homes are going for over $600,000. Sellers are selling townhouses for $499,000 and walking away with $750,000. That's $250,000 OVER asking price. The price of homes in my area has increased 50% (!!!) in the last year. So now we've got foreign investors living in other countries buying homes and renting them to canadians. Insane.
there isent a housing crisis the problem is most of the new houses that are being built are unobtainable for first time buyers or for working class people and there isent enough low cost housing yet government still build new houses that are expensive and hardy anyone can afford
@@danielwebb8402 ill give you an example - were i live there is 141 new homes being built all of which are between 294k and 435k to buy - there are 19 affordable housing aswell how is that fair . for the houses ur gunna need at least 45k deposit minimum . the average salary for people in that are isent even 45k if we take the rule of thumb 20% of income thats 5 years just for the deposit ur looking about 30 - 40 years before you own the house its ridiculous
@@kirkwilson72 Agree deposits is the problem / pinch point today. Not the monthly mortgage payments. You can, and should be, able to get 95% mortgages. So you'd need 15k for a 300k property. Or 5k a year / 400 a month saving for 3 years. That doesn't sound unreasonable to me. Having a 90% LTV for first time buyers is a large hurdle. Completely agree. How many homes out of those 141 do you think is "fair" for them to sell at a loss / less than they could? Why is it their job to be a charity? I don't understand why they have to sell any at a government prescribed cost.
@@andreasgregorfrank9057 Your mistaken. State dept is accumulated due borrowing at low interest rates and printing money and lending out more money to wealth investors increases inflation, but government bonds are bought by the central banks at low yield keeping inflation down UK 2020 0.85%. If you are saying inflation / borrowing / lending keeps house prices high, you clearly have no idea what you are talking about pal. Ill explain: Their is a high demand in the UK housing sector due to couples starting families in population increases ( High demand and low supply drives up prices ). On top of this, Rich private investors have bided out any first time buyers and have rented them. This in effect leaves houses remaining out of the buying market ever putting more strain on demand as little few their are snatched up, thus driving demand through the roof machining homes for average income people near impossible without going to bank dept. The solutions is simple: Slow down printing money, laws on private investors homes like ( an investor can only buy x amount for any one year ) & government build more homes. This will increase supply and demand drops of thus price of homes become more affordable. Any questions?
Ban all new buy to let, force councils to build a number of new homes, or hold design competitions for new high density patterned housing, like Paris or Edinburgh, there are solutions. It is infuriating that they don't grab the bull by the horns on this one.
@@andreasgregorfrank9057 high levels of capital investment is actually great, but people using it to pay for housing is a terrible waste because housing doesn't produce anything, so instead of building long term growth, it's hollow.
Not quite the Government are always building homes. But when you think of the housing market as a racket you understand why it will never change. People will always need accommodation this is an inflexible commodity and therefore people can be exploited. The truth is people pay sometimes a mortgage for 40 years, to do this they have to get a job. This is how the economy works. Therefore if you could build a house which required only 5years to pay off what would be the incentive to work
The inequality is staggering really, do they realise the damage this is doing? People are just carrying on as normal when all it boils down to is greed.
That sounds like a lot but that is only 0.38% of the UK population each year. Consider as well many immigrants tend to live in 'denser' housing structures (i.e. HMOs or smaller houses with many residents generally). I am not for nor against immigration but you need to put the numbers in perspective.
Doesn't matter if it's immigration, ex pats, birth rates. We are an island country. England is running out of fresh water. We don't make our own food and if finance sector move out of London are economy is exposed for the fraud it is. Were walking off a cliff.
@@bleddynwolf8463 There is a huge difference between spare £12k and £12k savings! If I have a £12k spear to throw around, I would suspect to have more than £12k saved. Still, £12k would not be a hard number to reach in a family of two as long as they work ANY job that guarantees 40 hours a week (which is the actually problem in the UK).
Lenders rarely offer the 5% scheme, they think you're a credit risk. Or they offer you a crazy expensive interest rate for it. But yes, if you can save £12k while spending all your money on rent and council tax and living costs, you are very wealthy and the system is rigged in your favour to leech money off everyone else. It's a very subtle form of legal serfdom
Interest rates are currently very low, compared to historical values. I remember a time when they went as high as 17%. The flip side is that interest on savings is extremely low. ☹️
@@stevelamprou No (though you never know, won't be buying a house for a good 8 years so rate could be anything by then), I just expected it to get a mention
People living with their parents into late 30s or 40s will become the norm, however as a home owner myself I personally think people who own their own property and decide to buy another house solely to just rent out, I've heared of cases where some people own 3-4 other houses solely to rent them out and I think that just takes away an opportunity for a first time buyer
Of course you are correct but this is a country of free enterprise & people lap it up. How can we change that mentality when the controllers of society are that way inclined ?
New money is created when loan is granted. Loans going into real estate means newly created currency goes to real estate. As more currency chases same number of houses, prices go up. Case closed.
@@Snugggg there’s more vacant homes than homeless people. Property developers own the land and have planning permission to build around 1,000,000 new houses but don’t so the prices continue to rise. An increasing number of homes are being bought by landlords, including about 40% of all the social/ counsel houses that were sold off. I think there’s a few more details but I can’t remember them right now.
There's also the housing market in London, which has had a knock on effect nationally. Desirable properties in the centre of town have been bought up by Oligarchs, Sheikhs and International Property Investment Syndicates over a number of years. This has fuelled a boom, driving up prices for everyone across the whole city. The Covid Lockdown has seen an exodus of Londoners to the regions, able to cash in on the value of their sold London homes, in turn driving up the cost of housing in the places they move to. At a time when the economy is on its knees, Estate Agents are quietly having a party. Some people are saying that this will inevitably lead to a burst bubble, but I suspect that the price of property might just remain out of reach for most, as long as the population continues to increase, in proportion to the number of houses being built.
I work in construction and i can tell you why the uk hasn’t built enough houses. Its because of greedy investors and contractors who offer such low rates coz they don’t want to see their profit margins drop. Thus leaving us with too much work with too little time and money to complete it efficiently, then we feel over worked and undervalued.
I really appreciate how clear and accessible all of TLDR's explainer videos are. Articles and videos you can actually understand on these seriously complicated topics (without doing loads of confused googling) are so hard to come by - a solutions video would be great!
9:23 "DAMN YOU, THATCHER!!!" Whenever I watch/read about politics/policies of the UK, current big socio-economic issues seem to always be due to the policies made under the Thatcher administration.
The main driver for the increase in house prices since 1990 is historically low interest rates. When I bought my first flat in 1990 mortgage interest rates were about 12% whereas now 2-3%. Therefore a buyer can afford to borrow far more so pushing prices up and so increase the multiple of house price to earnings. If interest rates rise significantly in coming years just watch as house price growth falls or prices drop.
Not entirely, because even though interest rates are low, the bank will still not loan you more than about 4x salary. The low interest rates do help to inflate the price, but it's not the driving force behind the insane increase in prices. Remember, the bottom of the market is always what holds up the rest, and the demand to live in the UK (particularly the south east) boomed from the late 90s onwards when Tony Blair opened the door to mass migration. 30k net turned into 300k net, every single person needing a room to live in. In London, a room alone can rent for £600 to £800 a month (slightly less now due to covid reducing demand), and suddenly a standard 4 bedroom house is grossing £3k a month. Now let's do the maths. £3k a month or £36k a year makes for a value of £720k when you consider a 5% ROI is a good return (and in London you often expect lower returns than that, 2 or 3%, because people want the stability). That value is entirely propped up by the market rate those rooms achieve, and the fact that as long as you advertise at market rate you are practically guaranteed to fill them within a month.
@@broadleyboy2 yes they do, I took out a mortgage last year. They also factor in your spending to make sure you'll be able to make the payments but it's still done on a multiple of your income to determine what you can afford.
@@broadleyboy2 And that is even worse, because their ways of calculating said affordability often deem perfectly capable people = unable to afford. They think they're doing a good service to people, protecting them from unaffordable purchases. As a reality they often entomb these same people's legs into renting ground forever.
Because everything goes up with inflation, including the Governments wages, whilst most people are still stuck earning minimum wage that isn't high enough for the modern world's prices anymore
Maybe this is wishful thinking, but seeing this as a worldwide problem, perhaps it's time to enforce that housing should not be following the rules of supply and demand.
Too right. The free-market optimises for financial gain, and it's not like people have much choice to turn-down housing. When you can't 'vote with your wallet', all of the power to decide the price in with the seller. Plus, it just forces this cycle of 'higher house prices -> Less spending power -> harder to buy -> more renters -> Less spending power -> harder to buy...'. We've got to cut the problem at its core.
I don't want to be hasty, but the thing about increased profits from a dominated developing market and a decrease in social housing sounds like intentional conservative policies to me... And the thing about it working to the benefit of the more wealthy and to the detriment of the poor.
@@loc4725 I wonder why. I guess with the liberal democrat coilition it was pretty clear who was in charge. But with Labour, I'm not sure, why didn't they do something about it. Also, what do you mean by Labour didn't notion? Social housing is a Labour policy, as far as I'm aware.
yeh, it's about investment capital = people with moneys need to store and grow their moneys so they buy the reliable and steadily appreciate on value = feeding the cycle = more people and investment capital firms invest = more the prices grow. This is happening in every country on Earth. Don't forget that this is problem only for the world poor. The world rich (there's 50 humans who own as much as the poor 50% of all humans on Earth combined) - these guys benefit greatly from this trend...!
@@thesudaneseprince9675 The Lib Dems' showed their true colours when they were in coalition I'm afraid. Liberal & Democrat but only on the outside... You're also right about Labour, but politics has changed. There was a time when all generations, both young _and_ old wanted a better country *for everyone* . That's why even though it was the young that mainly benefited social housing became a feature of the British political landscape. But fast forward to today and those younger generations are now the old and they don't have the same values of those that came before. And most importantly they vote. So the problem is twofold: younger generations don't vote in sufficient numbers to matter and the current older generations seem to only think of themselves. And this therefore leads to political parties trying to woo the older, voting generation by giving them fantastic gifts like being able to buy their council home at a massive discount whilst at the same time eschewing the younger, mostly non-voting generation who are left to fend for themselves in an increasingly hostile environment. So to answer your question Labour simply adapted to the times. And their MP's were very happy to go along with it.
@@iamnotgonnagiveyoumyname1373 you've got to crack a few eggs to make an omelette. I'm sorry your friends will have some negative affects but this is a massive societal problem, I have no sympathy for 3+ house owners. It'd be like Amazon complaining about tax.
@@iamnotgonnagiveyoumyname1373 Because he is probably an angry teenager who understandably doesnt have a full grasp of things yet, and is scared at stepping into the scary reality of being worse off than his parents. He is obviously ignorant here, but we just need to try talk through and support, explain the economics and not get drawn into the anger.
This is really more of an issue for poorer people rather than the middle class, who have parents and/or grand-parents to chip in a few tens of thousands. In any case, this is only a problem because Britain does not have a culture of renting. In the 1970s working class people aimed to find public housing to rent, not homes to buy - that only changed when Thatcher introduced the right to buy rules. Britain's obsession with house buying is causing this problem. The solution is to build more social housing and have better and more regulated private renting.
This explains a thing or two. My town used it have a lot of green areas. Over the past decade, all of them have been filled up with tiny, badly put together houses. No improvements have been made to the road network and as a result the town get's grid locked with traffic. If only those houses were any good. I had a displasure of living in a modern build. The house was not even 5 years old at the time, but there were cracks in the walls and all window frames were loose, like you could grab a closed window and shake it. You could always feel draft going around the frames. Newer ones are even worse. A colleague bought one of them, they had 2 burst pipes and a lot of damage in the first 6 months.
Honestly that disgusts me, I am going to study architecture next year at university, and the construction agency cant even find a balance between sustainability and cost. A Modern house costs a lot less than other types of constructions as the only thing which causes it to be priced up is the price of Steel which is used to make lever arch's, which make it so the roofs are held up without burdening the windows, Modern Houses are honestly a way of people skipping costs and making weaker less sustainable houses, as insulation and cooling is skimped on. Honestly If I had to recommend a house that'd be good for current society, I recommend getting a Victorian times house and just installing an AC Unit. The only thing I can say is, I hate the overpricing of land, as it makes the budget which I can use to design be a lot lower than normal use.
There are too many people crammed into a too small area of land. More people = more housing demand, but supply cannot increase because there is not enough spare land to build on.
You also missed the fact that in last 20 years immigration has increased by over 7 million thanks to Tony Blair open door policy. This has also had an impact with more people buying with less housing available.
Of course, like all racists, you've not mentioned where all the tax paid by the increased population has gone. Immigration has added £10,000,000,000.00 as year to UK government tax receipts. Racists ignore that!
@@agataartwork9097 supply and demand, it's an uncomfortable truth but it's true. Your emigration is a tiny contributing factor of the housing crisis. The fact that You are willing to provide relatively (assumption) cheap labour also contributes to lower wages. I mean why did you emigrate in the first place? I bet it wasn't for the weather. (For the record I would do the same in your shoes) Don't be so naive to think all natives have stable families, my family aren't there for me and never were. I was on my own from day 1. In fact there's many, many dysfunctional families, just go to Blackpool or Neath. I'm self employed and work 2 jobs for a better future for my son. No one except top 10% of earners have it easy. I don't hate immigrants by the way, I blame ridiculous regulations, greed, and the government for the state of things not the immigrants. Enjoy your stay, and congratulations that you're looking to own.
Not convinced by your statement that green belts are not 'green' in the context of making room for housing developments. Building new buildings in place of arable land will create more carbon emissions than if that land was left alone, and I am not sure to what extent we can link commuter times with green belts, which will be affected by a myriad of other reasons. Great vid as always!
Houses are being built on the otherside of the green belts “leapfrogging” thus increasing the commuting times of those who live in those areas, not saying green belts are bad but imo a lot of them have to be re evaluated
Yea that link between commuting times and green belts is entirely spurious. There's many other factors, house prices (so people live further away), and the pollution comment they made is rubbish. A group commuting from Milton Keynes to London by train is far less polluting per person than if the same group drove in from Watford, despite Watford being closer. I would say many people rather live near farms so without the greenbelt people would live further out to be closer to the edge of the city thus increasing commuting distances.
@@joefothergill6303 Exactly. What if the price difference wasn’t severe for a 3 bed terrace in London and Milton Keynes? What if people could move a lot easier (less stamp duty and solicitors fees)? Many more ...
@@gsb5859 generally people would want to live close travel time wise to where they work (wfh may likely change this) so presumably more people would live in London if it was more affordable
Very glad you explained how this exacerbates wealth inequality! :) You forgot to mention in that section the quite important factor that is that the lower your income the higher percentage of that income is spent just living and so the lower the percentage that can be saved. That is to say not only is a house in your percentile more times your annual income but it is many, many more times your disposable income because food, shelter and utilities are a far higher proportion of your income (often reaching or even exceeding 100%).
From the Netherlands. My country hasn't fixed the issue. Buying a house is currently only for the richer people and it is getting more and more extreme.
They need to redevelop existing buildings especially in decimated communities. It's expensive in the sort term but better for growing communities! Also what about flat pack social housing? There's some great companies out there who make nice flat pack homes and it could be mega cheap on a grand scale. Plus depending on the foundations they could build on brown sites
ngl if I hear 'redevelopment' or 'regeneration' , it makes alarm bells ring. it usually ends up meaning kicking out the poor people, throwing in 1 community centre and 4/100 'affordable' houses/ social housing. reeks of gentrification :(
@@alexreeves3817 The government are competent, its just that their interests arent aligned with the interest of the lower classes. They are aligned with the interests, of the monarchy. Wealth management is what they deal in and the hive mind mentality kicks in. The lower classes are just drones, which are dispensable, however the closer you get to the queen and the more importance you have. And anyone who is wealthy is basically considered royalty.
Agriculture is green. Fields are green. This video is so biased and ignorant. Green doesn't mean "wild forest" - all forests in UK have been managed for agricultural communities for millenia! Green means NOT a horrible city
Mortgages have always taken half of someone's take home when they first buy. It's just these boomers and Xs haven't taught millenials this fact / history.
@@danielwebb8402 most people I know can't afford a mortgage. We're forced to rent, and in doing so are most likely paying someone else's mortgage. It's only getting worse and as long as most people below 30 can't afford to buy it'll be a generational problem.
@@dafuzzymonster If you can't afford a mortgage. So instead are paying rent. By definition that means rent < mortgage = you aren't paying someone else's mortgage with your rent
@@danielwebb8402 mortgages are handed out based on credit rating and valuable assets as well as income. Banks are more likely to give out mortgages if you have collateral. For example in my third year of university the house share I was living paid a 1/4 of houses value in rent over the year we stayed there.
@@danielwebb8402 as the company we rented off was a large student housing company I very much doubt the reinvested that money into the house. This is the case in most cities I'm the UK. That and companies buying up affordable housing removing any character from it by gutting it from the inside, and then painting it black/grey and that somehow triples the value.
Because so many people overpaid for homes even while loan rates were low, I believe there will be a housing catastrophe because these people are in debt. If housing costs continue to drop and, for whatever reason, they can no longer afford the property and it goes into foreclosure, they have no equity since, even if they try to sell, they will not make any money. I believe that many individuals will experience this, especially given the impending mass layoffs and rapidly rising living expenses.
I advise you to invest in stocks to balance out your real estate, Even the worst recessions offer wonderful buying opportunities in the markets if you're cautious. Volatility can also result in excellent short-term buy and sell opportunities. This is not financial advice, but buy now because cash is definitely not king right now!
Soon, cheap homes won't be cheap anymore because prices today will look like dips tomorrow. I think inflation will cause panic until the Fed tightens its grip even more. You can't just pull the band-aid Off half way. Booms and busts are the ups and downs of the economy, and they will affect any investments. If you are at a crossroads or need honest advice on the best steps to take right now, it is best to get counsel from a financial expert.
Mind if I ask you to recommend this particular coach you using their service?
Sonya Lee Mitchell maintains an online presence that can be easily found through a simple search of her name on the internet.
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£104 pound for a house is cheap! 1:26
Gimme two! ;)
I think he me- oh it's a joke
bugger I paid too way too much for mine.
@@trippymchippy8586 "Gimme 15 motherfucker!" Big Smoke
At 1:44 the house costs £10k more than advertised on the sign! They really did rush this one out...
Its no accident that the UK has too few houses, it makes everyone wealthy apart from those stuck renting.
I agree. 👍
true
The U.K. doesn’t have too few houses that’s a lie it’s because of cheap credit that’s why no one can afford a house.
@@thomasowen1720 yes.
It doesn't make homeowners wealthy, though, they just _feel_ wealthier when they see house prices going up. However, to get that money they'd have to sell their house, which they need to live in. It makes _landlords_ wealthier, and that's about it.
It's perhaps worth noting that a _lot_ of Tory MPs are landlords. Coincidentally, they also voted down a bill that would require landlords to ensure that the properties they rent out are fit for human habitation.
When you are German and knows how bad the housing crisis is over here and still get referenced as a better case. It must be really horrible on the island.
You should take a look at the quality of the new builds, it's a joke.
I mean, I wouldnt say that its a good comparison. Germany has a lower number of houses in total because of our prevsilant renting culture, so a 3% rise is less than a 2% rise in the UK
Families are moving to poorer parts of the UK to buy homes, because they can't afford to live in the places they grew up in.
Where I live in Swansea the average working family (both parents working) makes £33,000 a year. And a 3bed house will cost you about £85,000 in a bad neighborhood, £120,000 in an average neighborhood, and £180,000+ in a posh neighborhood. This is extremely good value. About as low as it gets in a city, outside Scotland.
If you go two hours up the motorway to Bristol 1 bedroom flats start at about £120,000, and three bedroom houses are £250,000+.
The closer you get to London, the more absurd it gets. Want to live in central London? I hope you have £500,000 for a studio apartment.
If you're renting for too long, you become stuck.
@@joshuaparrott2458 Except not, housing is not the only investment. It is even shown that you can earn more money through smart stock or ETF investments. We also have a lot more renter protection and regulation than countries in the anglo sphere and it only got bad in the biggest cities, when regulations were abolished and social housing sold in the early 2000s. Vienna is the perfect example how you can have a stable and affordable living expenses with your population being almost only renters
I live in cornwall and locals are being priced out of the area so many second homes here that locals can no longer afford abs have to move. Or house owners kick out there local renters because it’s more profitable to make it a holiday let
There should be some protection for local residents in areas where this is happening as it's disgusting that they're being priced out of their own areas by people rich enough to buy and second house
@@faves2064 absolutely there should be. But the Conservatives are actively promoting second home buying, so unfortunately you won't be getting such policy from this government. Sader still, it looks like we no longer have an opposition focused on this issue.
As a fellow Cornishman I can confirm this is the case. I had to move away to get a well paid job and a house I could actually afford.
@@michaelwhitaker4372 it's just maddening that this is promoted when there's a housing crisis going on. Usual rich getting richer nastiness while the torys divert their voter's attention to blame foreigners and the EU
The way to address this should be council tax. Charge triple council tax on second homes.
I live in a large city and the amount of empty and unused properties is unreal, this should be made illegal.
Which city?
@@jm-je4tl i live in birmingham and there are parts of 'brum' with properties that have been empty for ages yet there are homeless people living on the streets.
@@elliotspencer2648 You talking about Selly oak. There are about 10 properties on each street there for let, but lying empty
"How many crises do you have?"
Britain : Yes
"is it a bug or a feature of your system"
Britain: Yes
@@alexreeves3817 16x the median income
And this is the true reason you'll never own a house.
One of the _crises_ is clearly a crisis in spelling. ;)
Brexit was the best idea ever. At least all those people wont be able to move out of Britain! (Those landlords and huge hedge funds probably)
I’m living in London. Every time I go house browsing, I can only cry, because houses are generally in the 400K to 1M range. The cheapest houses are more than 10X my annual salary. Even renting is a extremely unreasonable, I have to give up about 60% of my salary on the rent alone, only for a basic tiny studio apartment.
yeah man. I moved up north 2 years ago. Instead of paying 650 (bills included) for a room in a share house, me and a mate pay 500 rent (around 700 with bills) for a 2 bed house. So I pay 350 and there's just us two in the house.
1M only in London ? In villages in Luxembourg houses are already 1.4M.
And in the city between 3M to 7M average for houses depending on area of the city
1) Who forces you to live in London ?
2) Who forces you to live in the UK ?
Besides yourself, nobody
It's hard I hear you. Just gotta try and make more money.
@@THEREALZENFORCE My job is in London, and I don’t have a Visa. I only just started working as well, so I don’t really have the ability to just pack my bags and leave just yet. There is a potential that my job might become remote at some point, which would open me up to more options.
quote - Why Are Houses Unaffordable in Britain?
To ensure more people rent to keep the haves having more than the have nots. The entire system needs changing!!!
But it won't change sadly 😭
They should lower the hurdles to do self-builds. Alot of younger people want to build their own because its cheaper. Tiny homes, biohomes etc. But when you get into the legalities its a nightmare
It’s the cost of the land that matters, the actual buildings are usually not worth much. My home - the building itself - was valued at cost at about £100k. The land is worth 15x that.
Nah the only reason I'm considering tiny homes ect is because I can't afford a proper house
@@tacosmexicanstyle7846 So your property is worth 1.6M? Jesus...
When one looks at the houses in Europe, there are so many individual styles, most often from self-build. In the UK (unless one has a lot of money) one has to purchas e a standard house from one of the big developers (and thank oneself for just being lucky and actually getting a property).
Exactly, you can't buy land to build on. Stuck to shop at what developers have on offer.
All because all houses have to look the same.
I'm of the older generation living in a flat long since paid off, but I'm feeling anything but smug, instead I'm very angry.
I bought my London flat on my own when I was a primary school teacher and I was able to afford it. Now, two teachers would not be able to afford it. Along with this is the degrading of language associated with housing : every new development is "luxury", "Manhattan Style", "boutique", "designer" (particulary ridiculous as every building is designed) etc. Then we are told that in every development there must be a number of "affordable" flats. Meaningless, because a person earning the average wage has no chance whatsoever of being able to "afford" one, and even at that price, it seems that the number of "affordable" flats in a development has been allowed to shrink.
The amount of social housing in London has dramatically fallen since my purchase, and many people who had lived in an area all their lives have been forced to relocate away from friends and support networks. It's all so unfair, but I see no chance of change because those in power are all too happy to let this continue, although they may shed crocodile tears from time to time.
Nah even some people with "good" salaries ("£45K+") would still not be able to afford a home in some parts of the country which is sad.
Same development in Germany.
The result of foreign investment in the UK and also banks generating digital cash for mortgages with no back-up. In reality banks should destroy every time there is a repayment to each digitally created loan and keep interest. But they obviosuly don’t do this. This system increased the affordability of home buying in the last 30 years coupled with foreign investment. If everyone actually sold their houses and decided to take cash and move abroad, the system would break down, but they know clearly people wouldnt do this so it is a perfect place to hide inflation due to digitally generated cash. Another example is the stock market. So in summary 2-3 % pay rise you get (if that...) every year based on Retail Price Index, they should factor in this HIDDEN inflation in housing market. People now have to take mortgages as couples rather singles as they did 10-20 years ago. Granted the interest rate in 1990 was 15% and probably you had to pay similar monthly payments. They managed to offset this price increase by reducing the interest rates, but how much further can they do this ? Surely you cannot have negative interest rates. The whole system is broken and in the future we will need to have 100 year mortgages to pass affordability...
I worked on some developments in London, I forget where but I walked past it when I was there once, an old cinema turned into ridiculously expensive apartments, right across the road were council like flats. I believe there was a big uproar about it all and rightly so, a surprising amount of developments in London are aimed at the foreign wealthy markets.
@@Chris-jo1zr sad,sad
"Britains housing crisis explained": GREED!!
Of course a video on the possible solutions is needed.... Was actually hoping that you would cover the topic in a bit more detail.
Btw I think another reason for the housing shortage and sudden increase in prices this year was the stamp duty holiday, low interest rates and most importantly the practice of banks giving interest only mortgage due to which people who already home owners are buying a second property to let out, As the rents cover the mortgage repayment with neat a couple hundred pounds in profit. Thus increasing the house prices unrealistically.
Also 2nd houses and foreign purchase
Under Thatcher we also had the deregulation of the banks and with that, under John Major the start of Buy to Let which really took off under Tony Blair, including himself. This created additional demand for house purchasing. Then of course in the last year with have had Sunak's special house price hike of over 10%. The interest only mortgage is the second speculative stage by the banks in Minsky's Financial Instability Hypothesis which then slips into the third Ponzi stage and an inevitable crash. Politicians seem to become increasingly incompetent with each passing decade, and we already know that this is only going to end in tears.
i concur
According to an article in the Guardian in 2017, 1 in 10 UK adults owned a second home whilst simultaneously 4 in 10 UK adults owned no property whatsoever. And of that half (52%) of all the assets held in additional properties is held by the baby boomers, born 1946-65, and a further quarter (25%) by generation X, born 1966-80.
There isn’t a lack of properties in this country. There are enough house for every homeless person and every single person or family to live. The problem is the distribution of housing, both in terms of singular individuals owning multiple properties as well as the fact that people want to live in specific areas and not all houses are where the majority of people desire to live.
Something needs doing about it but I can’t see this government or the opposition doing anything about it anytime soon.
@@arghjayem Sure, there are enough properties, except a large chunk of them are rented out. So are you saying we should somehow confiscate those properties and give them to the person currently renting?
I want a whole series on this. Including debating right to buy, and the impact of low interest rates.
Low interest rates are designed to generate tax without actively putting tax up. If interest rates were high everyone would save in their bank and not spend their money thus not stimulating the economy. If you want interest rates higher then expect tax rates higher which is unpopular in conservative government especially since the main target for tax is now the extremely wealthy. The simple issue is that no one wants to build houses. It wouldn't matter for low interests if a lower percentage of overall houses were renting. However local governments don't like that because it brings their land value down especially if the external estates are incredibly successful which they will be because of low mortgage rates.
Right to buy was the problem. Sell low with no penalties to then sell on cashing in on that profit BUT WORSE don’t replace stock. I can say that as a) grandparents and aunts had houses in East London, grandparents wouldn’t buy despite children trying to buy on their behalf but aunts did but however stayed until passing away. B) I looked to buy with my fiancée between 1986-1988 and all were ex council and priced the same as non ex council. West London then Essex. We would turn up for a viewing to be told ‘sold’. Mental. My daughter has a part buy part buy rent property, she’s disabled and works, bought 2010. System is broken. My sister joined the buy for profit game and bugged the life out of me. In 33 years we have moved once. A house should be for living in, not short term profit. My opinion, I won’t reply or engage.
I live in a garage which I've worked on myself and I pay £60 a month in rent, I've spent about £2000 to make it livable. I dont have running water or electricity, but I have alternatives, but the fact is it wouldnt be hard for the council to connect this if they wanted to, however they wont because the houing market is a racket. Consider how many years a mortgage takes to pay off and you'll understand why no politician wants to allow people to build their own homes. You have to work at least 40 hours a week to afford to make payments, and you have to work for around 40 years to clear the mortgage. People are a resource which is simply too valuable and the housing market and the motor industry is the key to keeping peole in the rat race.
Building more houses is not the solution. I live in britain and they are always building more houses. The fact is there is too much money to be made in construction.
Heres a breakdown of salaries per hour and jobs on a construction site.
Labourer £9
Forklift £14-18
Dumper £15
Excavator £20 +
Manager/forman £25+
Bricklayer £20+
Carpenter £20+
Electrician £20+
These are just some to name a few but should give you an idea of what to expect and you have to add to the health and safety inspector, slingers etc etc.
Construction always run over budget costs are cut as much as possible, contractors cut corners so they can bill for more hours etc etc, list of problems go on. What should essentially cost around £50k costs the end buyer £100 because of inflation, and I don't mean standard economic inflation, I mean the fact that these people are straight up willing to sell you plasterboard homes for the price of a stone house.
The houses are of poor quality and many new builds fail inspections upon completion.
The solution is to let people build their own homes but corruption is never going to let that happen.
This channel seems to have a left wing ideology (which historically harms the poorest the most) and are clearly economically illiterate, so not the best creators to ask to create such a series. Try reasonTV or reading Thomas Sowell’s book “housing book and bust” which is brilliant (and available as audio)
@@jameslincs if you believe pure capitalistic views then you want an economy to collapse under its own pressure.
Would love a solutions video!
Increase building social housing. Pay for it by investing (or increased targeted taxing haha) in large scale multiple housing developers. So while the crisis lasts the government gets more income through the latter to build more social housing. Eventually the ROI on these investments should go down, which means the increase in social housing has had the proper effect.
Easy to have a global project homes for all we have means and technology! but toxic oil banking people in power of us and would not make money then loss power! We have the technology and fiscal modelling for green homes for all. 1980 worked on a theoretical project greening London homes for all! but we have a toxic system mmmm time for global change
@@bosoerjadi2838 Er no. The problems created by government is not solved by more government.
End the state. Without state violence there's no more bribes, delays waiting for third party permission, no support for land ownership or unilateral contracts, finance not provided by QE.
@@ConsumerWatchdogUK Erm.. why not?
The key thing with problems created by the government is not that it has been created by the government but how it has been created by the government.
Yes please make one about the solutions! one of the more interesting videos I’ve seen from TLDR in the last months. I’m a long term subscriber!
the solution is alternative accommodation. I live in a garage and whilst it doesnt have electricity or water the council could connect that if they wanted to. But they wont because its not in their interest to allow me to afford to live without having to work.
One of the biggest issues for young people right now. Good Stuff.
Young people?!
I'm 43, earn about the national average, but because I'm single and rent, there's no way I'll ever be able to afford a deposit, let alone be able to move somewhere bigger than the studio I'm in unless I lipsticks and move somewhere cheaper where, as per, there's less jobs and worse salaries.
@@peterclarke7006 it generally affects young people more
@Henry Gill-Pratt uh no. People in the countryside oppose any and all development. This country is entrenched in the "I've got mine so you can f*ck off mentality"
The wider issue here is why the desire to own. Consistently my non real estate portfolio has out preformed the housing I own, by some considerable margin. Anyone with a compounding clue can tell you 5% a year since 1993 will kill any house gain in any area in the UK. The UK has this insane desire to want to own.
I own for diversification it's easier to dump property into my daughters trusts than other assets but if you don't need to own then borrow to invest elsewhere. You won't listen no-one will. Non residential outpacers about 60,000 per million per year.
@@JakeyG-eq1un It affects young people the least other than those who already have houses. This video totally missed a key point that the government has factored in, birth rate, if it's below 2 the population is shrinking, it's currently 1.6 per woman so for young people this opens up a massive opportunity in 10-20 years.
Personal property is stability and freedom. This monopolisation of property by a handful of rich investors, landlords and corporations will make the average person less stable, less free and more powerless than ever before. If this goes any further, we will need a revolution, there can be no other way.
You will own nothing and be happy
Voting for Leftists caused this problem, and even after a revolution there will be Leftists eager to implement the same "caring" (read: stupid) policies that caused the problem in the first place.
@@suserman7775 Explain this please
@@suserman7775 We haven’t had a leftist party since 2010 and even then, how “leftist” they really were is disputable
@@oneillnandie7999 Doesn't matter what party the current PM is in. News media have too many citizens "believe" that moving away from Leftist ideals is "mean". So basically the problem can't be solved with common sense.
Restructure the green belt? MEAN !
Reduce regulation to make new housing builds more doable? MEAN !
The Leftist philosophy, of "caring", is only about superficially showing there is care. If consequences lead to more hardship, well that's okay, we'll care about you at that time then.
The Left is quite content with giving a man a fish, if said man promises not to learn how to fish.
Solutions would be good. Especially covering alternative options rising.
Build more houses
@@alizaidi2893 politicians wouldnt allow that, they want an artificial housing bubble, they clearly didnt learn from 2008
Politicans know the solutions, they just lack courage and it wont benefit them politically. Reduce immigration numbers, raise capital gains tax on second houses, restrict foreign buyers by putting high taxes, and put in place rent control scheme like in Sweden
@@tinthings314 there are no solutions palatable to all parts of the electorate. FTB - wants prices to fall. Homeowners, landlords, pension funds, builders - want them to stay the same or go up.
@@alizaidi2893 This. It's hardly rocket science. The older generation wants to keep their houses expensive, they don't care about us. Even though they all bought their houses cheap.
Why even live in London if you're earning under 50k? Literally working to survive. What a waste of life.
and theres the solution. Move out of London, live in less competitive areas, find your own stomping ground. Prettysimple.
I wasn't looking at the screen when you said the price of a house was £104 and I was like ????? until I looked up and realised it was £104k and the audio is just wrong lmao
You missed out all the demand side factors pushing prices up such as how housing is taxed, the financial credit system, domestic (landlords), corporations, and wealthy foreign investors buying up housing (especially in London) etc. It's not all about supply and just building wherever we can, its as much a distribution crisis as it is a supply one.
I'm just marvelling at how quickly y'all can put together a video.
It was already done.
Most video are produced one or two weeks in advance.
@@paxundpeace9970 I don't think news videos work like that,
Although more general topics certainly are made in a reasonable span of time
I think they put them together so quickly that they don't check it over. Lots of little editing discrepancies in this video alone.
@@paxundpeace9970 yet if every single video were to be made days or weeks in advance they would have the exact same issue, you know that right?
@@影山平ら i worked myself in media production
For a house to increase more than the annual wages of its owner is insanity!
Buy one as soon as you can even if it means living with your mum and dad until you are 28. Just save up and don't be a rent serf
@@reheyesd8666 how about there be BOTH options. Social housing should of stayed at a certain percentage of that of private developments. But it didn't, people in the 80's brought up their council homes in their droves but the governments since then never reinvested that money into more social housing. Leading to a supply and demand issue. You have high demand but low supply, meaning the houses that being built become more expensive. And the houses being built are private leading to insane mortgage costs or high rent costs from a private landlord.
If we had had a steady supply of BOTH social and private developments there wouldn't be this crisis. The right to buy scheme was a good one in principle but in practise it was a long term disaster and totally mismanged by all preceeding governments.
All my neighbours live in council houses and refuse to buy them for extremely cheap price because anything happens they call the number an council solves it. While anything happens to my house that I'll be paying off for next 25 years, I pay for it. The country is full of leeches and crooks who exploit the system whether rich or poor
@@raukoring What you are explaining there is a wage issue. Those people have become comfortable paying rent and more than likely couldn't afford to buy those houses and pay for the up keep themselves. Those people are probably living pay check to pay check and you expect them to take out a mortgage? When more than likely their jobs are not secure enough and their pay isn't high enough. This is what people say about wage stagnation. Prices for everything have continued to rise but wages haven't kept up at the same pace. Capitalism and consumerism 1 O 1.
@@Fezzy976 my neighbour can buy his council house for 40K. the same house I bought for 145K. They're exactly the same houses mirror attached to each other. I'm a non skilled warehouse worker, pay my taxes NI, never asked for any benefits even when I was eligible because I don't consider that my money, I didn't earn them and as I'm not a cripple and can earn my money I save what I can and do overtimes. What I'm saying is I paid 145K+ interest while the neighbour refuse to pay 40K cuz if his boiler goes down, he calls the number and they bring a new one. If my boiler goes down, my bank account looses £2.000. if his roof breaks down, he calls the number. If my roof breaks down, I use all my savings/take a loan. I don't care he can't save his money. Other neighbour who works part time, spends evenings in jacuzzi in his council backyard with his unemployed wife while I'm in work thinking how can I support my future child while this guy has three kids I've no idea where he gets money for them from his part time unskilled job. Other neighbour living with his "ex" wife and new born, while officially renting other house. It's worth for him to send £250 every month to some people who put him on their rent so that his wife can be claiming single unemployed mother money living on her own.. while he lives with her. I could go on. Just saying. Tons of leeches here. Would be awesome to loose both the thieves from top AND from bottom
When I started my PhD in 2014 I had an argument with a guest lecturer saying that young people don't want to own houses and I was wrong. We liked the flexibility he said. Twak
Yeah, you're right. What a pathetic excuse from the same sort of people who potentially had contributed in deprivation of young people of their potential own homes.
I do think part of the issue is people owning multiple homes with the intention of renting and treating them as investments. The problem with that is no economic benefit is produced when you are renting out and you are essentially increasing the house prices by holding up houses that could potentially be bought.
That is indeed part of the problem.
Landlordism is basically using someone else's labour and hard work to pay your mortgage. It's quite disgusting. Not every landlord is bad or malicious, but the concept itself is quite fucked.
But they also play an essential role,
What are you going to do if you need to work somewhere else in the country for a year?
A) sell your house, and buy another
B) short term rent
C) buy a 2nd house
D) Live in a hotel
I can understand some level of Landlord hate, but I would argue Mum and Dad who buy a 2nd home to rent / holiday let out to supplement their retirement income or whatever, is not the issue.
The consistent manipulation of supply, and incentives like “help to buy” are more to blame IMO.
Aiming a product at students and young professionals not ready to settle down is also a efficient way to supply accommodation for these segments. Rent is less an issue in Germany where there is better public transport, better state provision, strategic planning and higher density of housing apartments.
So it’s not renting and landlordism.
@@jakecakestake8071 in an ideal world you'd just join a local housing co-op for a year
How about we only sell houses to people who want to live in them not rent them.
Who is "we" mate?
@@HhhGgg-iy1mk United Kingdom (and as a result it's citizens and therefore it's government)
@@TwistyThreeFifty well ok. But there are people who are British and who want to buy houses to rent them - or do what the hell they desire with their private property. What about them?
By the way - isn't it the British Developers who are responsible for this mess, at least to a degree?
@@HhhGgg-iy1mk What about them?
If everyone has a house, the 'buy to let' market will collapse.
Much like the creation of the motor car caused the horse drawn carriage market to crash.
I would be interested in seeing how much of the housing stock is being rented vs owned by the dweller and how much of the original council housing stock that was sold off is now in the hands of landlords rather than ex council tenants.
It's about 40%.
A disastorous policy.
If you have the right to buy you also get the right to sell later on. A policy that by itself would not have caused the housing crisis. Giving people access to buying their own homes helped many working class get on the housing market, offering social mobility and security over their own lives. Immigration, a lack of new house building and quantitative easing driving fixed assets higher unfortunately made demand and speculation of the existing housing stock cloud out the success of this policy. People often blame landlords for the cause of the housing crisis, but in reality the rise of buy to let’s is a symptom that exacerbates the crisis but not a cause.
@@jackhopewell1745 40% of former council houses sold under Right to Buy are now private rental.
It's helped to lock a generation out of housing and pushed back social mobility. Housing has become an investment which has pushed prices up.
@@jackhopewell1745 We are building a lot of new houses though, see the housebuilding figures since 2010.
Lets say we suddenly grant planning permission for 100,000 more houses per year than we currently have, where are we going to find the capability to build them? Are we going to magic builders out of thin air? They can't build much faster than they are doing.
I agree about low interest rates, but it's very hard to raise them without meaning that a lot of people can no longer afford their mortgage.
We need a significant council house building scheme, an end to right to buy and buy to let mortgages, rent controls and a limit on the number of homes you can own. House prices need to stagnate and allow wages to catch up.
@@Lennon6412 you need to understand the purpose of the policy before declaring it disastrous. The idea was to allow the government to replace its ageing, outdated and high maintenance housing stock, allow tenants to buy but only after a qualifying period, then let the local authorities use said proceeds to build new more modern affordable housing. The concept of the policy was good however the execution was bad once the local authorities decided to put the onus for affordable housing on the private sector via the local planners and pocketed the proceeds. In summary good idea poorly executed.
Only way I get a house is when my mother and father pass away, it’s messed up to say the least.
Assuming you got siblings, how does that work out with them?
Better get busy greasing the stairs...( and ungrease them when you move in ).
That's the other thing that wasn't mentioned in the video, that a lot more people who own their own house who are obviously middle-aged-retired are living much longer, which a) delays the availability of existing houses coming free for people in their 20s/30s and b) means that the house prices keeps rising for the extra 15-20 years they live in it. Plus C) just cause you are lucky to have a house become available that someone who was in their 80s/90s even lived in. Chances are they wouldn't have done much to it for decades since retiring, so their is the added cost of doing it up so upgrade and modernize it properly.
My Parents are pretty old now and well into retirement, but are both healthy and spritely still could easily last another 10-15 years, so it won't be of any real benefit to me by the age I'll be as and when that happens, more of a random 'bonus' in the 2nd half of my life. So I may end up selling it and putting the money into savings/investments/pension plan for when I get too old to work anymore.
and it's not like anyone is chucking £50-60k a year jobs at people in their 20-30s either to allow them to get on the ladder, so it's either lots of debt in one go, or somehow budget and worry about every penny for 20-25 years and have no life enjoyment. (and who wants to make that kind of commitment at 21)
No you won’t, the state will seize it for their care. Unlucky bro, it’s the renting life for us.
The people with parents that also had to rent won't be getting a house at all unless people like you rent it to them. And yet you complain about your life..
what makes the whole thing worse is that landlords are buying up what few "affordable" houses/flats that young couples would potentially be able to afford and then renting them out way over priced.
Doesn't alter the numbers of houses tho. Just who owns or occupies.
And not repairing overtime
That is true, it's happening throughout Greater Manchester. The rents are ridiculous but demand is high, so we end up paying two thirds of our salaries on rent, unless you are fortunate to get somewhere, at slightly more reasonable rent! Even though 1500 is common monthly rent, that does not guarantee we won't be begging and chasing for basic maintenance work to be done. Greedy, immoral landlord and agents are aplenty!
We already don't have enough green belt areas. We also do need to farm some of our food. You can't just build houses everywhere.
Hate to admit it, but fair point.
Socialists won't stop until every inch of Britain is made up of grey, concrete apartment blocks.
You are right. The problem in England is that people build horizontally instead of vertically.
I would like a video on possible solutions to the housing crisis
This!
Restriction on owning second homes. Rent caps. Lowering the tax threshold for stamp duty. Stopping foreign ownership.
@@jeremybiggs8413 rent caps can make the problem worse long term . rent control has already been studied to have a negative effect on long term housing supply
Get rid of the right to buy policy and prevent foreign investors from owning homes
Pray that pod sleeping as seen in San Francisco, where you rent a bed to sleep in, with dozens of other people and no space to yourself, is not presented as the solution and does not start creeping into our island.
I don't know if that would be in line with the laws here but you know our future is absolutely bleak, miserable, and in poverty if it gets established here.
You missed out the other main cause of house price inflation: The increased availbility of credit and stupidly low interest rates
A far more relevant factor than the others listed....
@@samuelboczek1834 But thats fine. inflation will shrink the size of the mortgage. My interest rate is 1.8% So on a £400k mortgage interest would only be £600/month. If that £500k house is worth a million in 10 years it will soon look like a great deal. Low interest rates are the key, it costs almost nothing to borrow money these days. The price of the house is irrelevant if it goes up the only thing that matters is qualifying for the mortgage terms.
People have been told to buy properties as an investment. In Germany they call it "Beton-Gold". Low interest rates incentivise people to become private investors. And those private investors compete with those people who are actually looking for a place to live, artificially increasing the demand. Investors tend to have way more money than your average young couple or family. They can easily outbid young and poorer folks, buy the property and then put it on the market with increased rent. They don't care much about the mortgages due to low interest rates and mainly because it will be payed off by their tenants either way.
Since banks don't give them much interest rates, more and more wealthy people have transferred their money into the property market, expecting high returns year after year. And to be able to keep that up, prices need to increase forever at this rate. Something, which is unsustainable and only benefits the investors.
@@maythesciencebewithyou It is also very socially acceptable to "invest" in property. People who do that seem to be respectful society members.
But these returns on investment have to come from somewhere. And they come from people unable to get on the property ladder.
Nobody seems to have a problem with this -- "that's capitalism for you, babe"
Same people who would snub buying a Primark t-shirt because "it's exploitation, the workers are not even paid minimal wages! shame!" seem to be OK with the fact that those people who will pay off their BTL mortgages by their rent -- i.e. money which they would otherwise spend building their own equity -- will not be saving for their own property. It's capitalism, baby! Not exploitation at the smallest!... Except it totally is.
"Why don't these people buy their properties if they don't want to rent forever!" Because they won't be able to.
Worse even, a toxic advice to invest in property to provide for your old age.
"How dare you attack house prices growth? We have invested into property to fund our retirements!" Keeping schtum that these money are drained off other people, who also deserve to have their houses.
If that's not exploitation, I don't know what is.
Those who will rent forever will somehow have to pay for their pensions by their own earnings.
The result of foreign investment in the UK and also banks generating digital cash for mortgages with no back-up. In reality banks should destroy every time there is a repayment to each digitally created loan and keep interest. But they obviosuly don’t do this. This system increased the affordability of home buying in the last 30 years coupled with foreign investment. If everyone actually sold their houses and decided to take cash and move abroad, the system would break down, but they know clearly people wouldnt do this so it is a perfect place to hide inflation due to digitally generated cash. Another example is the stock market. So in summary 2-3 % pay rise you get (if that...) every year based on Retail Price Index, they should factor in this HIDDEN inflation in housing market. People now have to take mortgages as couples rather singles as they did 10-20 years ago. Granted the interest rate in 1990 was 15% and probably you had to pay similar monthly payments. They managed to offset this price increase by reducing the interest rates, but how much further can they do this ? Surely you cannot have negative interest rates. The whole system is broken and in the future we will need to have 100 year mortgages to pass affordability...
I can't even imagine how lucky people who expect to inherit a home from their parents must feel, while trying to be a first-time owner in your family is like trying to climb mount fuji with a broken leg
I'm dreading it, what my mother inherited is worth a lot of money but the houses and few old farm buildings are in ruins. She had to pay £100,000 plus just in taxes to keep living in the same place she always has lived, by the time it gets to me and my brother the only way to pay the tax would be to sell the lot which is not something we want to do... My grandad bought it in the 50s for a few hundred quid to farm the land and in the coming decades it'll all be gone thanks to the appalling tax system we have, you're even taxed in death
I hear you. All my family are either living in a housing association area (my grandparents) or council house (my mother.)
I knew growing up hearing about how much they wished they could have afforded a home of their own. And how my mother feels guilty that she is unable to leave anything to me. This made owning my own home a dream of mine. A place I could look after my grandparents and my mum whenever the time comes.
Unfortunately it is starting to look like just that - an unattainable dream. I've saved and worked since I was 17 y/o (now 23), I just don't see the point of trying anymore.
What a time to be alive ay.
Inheritance is a gamble because of social care. The average person without a savvy accountant cannot, if they even wanted to, avoid care costs for elderly parents. Our bill, a charge on ma in laws house, was £130K. My disabled sister aged 56 has had a charge put on her house for the cost of a stair lift and wet room. This will only increase so inheritance is not to be relied upon,
@@freyachristina1340 you're only 23 don't give up, you can do it. Focus on increasing you salary and looking in cheaper areas
@@freyachristina1340 33 years old, me and my partner are in the process of buying our own home.
Don't give up. Your income will grow, you're still young.
OK so, I think there's been a little bit of oversimplification of the greenbelts here.
Most people know it's farms, we like farms, we'd prefer to still have them in the fertile areas around which our cities were historically built.
Completely agree - although farms aren't lush green forests bursting with ecodiversity, they are useful for growing food and as you say are much more attractive than having a load of des reses or apartment block 2 inches from your front door.
I didn't know it was mostly farms, I thought there were some farms and country parks myself.
It's also good for food security as well and cuts down on emissions related to importing food (which is the alternative).
@@randellster food security is important. You never know what could happen
@@andreaslind6338 More of the land in the north is less arable and more grazing or forest. Most of the green belt around Manchester are woods, meadows and moorland.
We need to put more emphasis on restoring empty and abandoned properties, rather than building new houses.
There isn't as many as you think. We need a lot more than that.
@@thomasczthomash1859 plenty up north, Wales and Scottish borders. Not included is also second homes and empty rentals. Buy-to-rent will earn more through rent than their mortgage and upkeep, maintaining higher rents than mortgages.
@@AWest-ns3dl While most of our new stock is lapped up by BTL landlords, I'm afraid no amount of refurbished abandoned properties will do it.
The BTL landlords are called "investors" but in reality they, like vampires, are sucking housing away from those who should be able to buy it -- but can't -- their money availability does not depend on house prices much, as they pay off their mortgages with someone else's broken hope money. First time buyers, however, don't have unlimited resources. And all these ideas, like help to buy, or allowing to use "the bank of mum and dad" (even this is attacked by some banks who demand to see the own income source from FTB's and call it "responsible lending"), or offering 30-40 years mortgages (sad and disgusting travesty sucking money from unhappy poor people their entire working life with ridiculous amount of interest to pay for it) -- they only try to cater to existing unfair "market" conditions.
Two very important things missing from this video:
1) The section in inequality forgot rent-seeking: The younger generation are being bled dry by high rents, so can't "just cut out the avocado toast" to get a deposit. But gives a nice income for a landlord to buy another property to rent...
2) The section on 'why' missed un-built homes (I don't know the technical term): in England, developers are just squatting on land where houses have permission to be built - over a million home apparently. It's deliberate supply restriction. This was discussed at a tangent, but didn't mention the landowners are actively not developing land with building permission.
Personally, 2) should come before any discussion on Green Belt and planning law. There are a million homes that could be built without any changes, they just aren't being.
I've talked to an architect who confirms 2). There's a point at which people need to accept that the free market is simply not gonna provide the best outcomes in all situations. Society needs housing, and the big developers holding land to increase demand is doing sweet FA to help anything except making them money. Housing and land is an asset for a country and companies need to be encouraged to be productive for society, with regulation, penalties, taxes etc. Same goes for multi-home ownership.
Exactly this. I work in the industry (though mainly for Local Authority clients) and the issue is that developers will always want to keep supply low as it means high profits. Then they attack the planning system for low housing delivery when they are more part of the reason. The tactics developers use to get out of paying affordable housing is frankly disgusting and they need to be held accountable. The real solution is for the Government to build houses again, which is what I advise to all my Local Authority clients.
2) is a myth, I'm afraid.
1) Is a real major problem - you can't save for a deposit to get on the housing ladder as you're spending all your money on, erm, paying someone else's mortgage.
@@chrisgardner4326 developers can only get away with this if it is too difficult for competition to enter the market. The solution is to make it easier for new competition to come in and disrupt these predatory practices.
@@willbxtn Move in with family or friends, or rent a cheaper house/apartment. If you don't like the terms and conditions of renting a house, don't sign the contract. Take some responsibility.
I know the used car market wasn't exactly a crisis but it was a major concern for many of us. Dealerships were buying cars back at higher than the customer paid so they could flip them for a lot more
That's price gouging, wtf
They're just inflationary pressures.
@@stevelamprou No, that's called price gouging
It's a shortage so some of it is expected and some of it is taking advantage of people
You've missed the absolute biggest driver of house price increase: interest rates.
With rates falling so low, it makes monthly payments lower, driving up prices. This comes at the expense of higher initial capital requirement, causing that divide.
This is mostly true, although interest rates only matter if supply is limited. If supply is limited house prices get bid up to a point where it is marginally affordable - which is determined by monthly repayments and thus interest rates. If the market were well supplied then the price would not get pushed up to the edge of affordability
This doesn't make much sense, actually. You are suggesting that borrowing costs are so low that the housing market is flooded with more buyers than sellers. That's not the case for even a 4% SVR keeps most people off the housing ladder...mortgages have to be maintained and the reality is most people are struggling. So, what might be closer to the truth is that whilst prices have been rising (for years), real wages have been trending downwards (for years). What everyone is seeing now is the gap between prices and the inability of working people to keep up. In actual fact, when no one can afford to buy, there is no housing market; maybe that is the real crisis.
@@GRYL180 rates are 1.45% for a mortgage (at least where i live in europe)... so yeah it is rates. If you have a somewhat decent jobs you can easily borrow 200-300k. Add savings and parents lending a helping hand and you have a recipe for everyone to fomo buy.
bingo. and the FED is to blame. every central bank follows their lead - watch "The power of the fed" by PBS - it's really great / scary.
@@__Wanderer Exactly. When I bought my first place in 1990 I was paying over 12% mortgage interest. If I was looking now, with 2/3% interest rates and similar income I could afford to bid far higher on the same property so pushing prices up significantly.
The biggest step we can take against the crisis? Voting out the party that is purposely not trying to fix it, but enacting just enough superficial policies to make it look like they're not completely ignoring it
In short don't vote for the conservative party.
In the last 10 years they effectively cut the NHS budget by 20%. This means less nurses and less doctors.
@@paxundpeace9970 Wrong, large scale immigration caused by Labour party policy caused the majority of the housing crisis. Why would voting for the same failed policies make it better? Not that the Tories have done anything to sort out immigration.
So, instead we should do nothing other than keep voting tory, a party that deliberately skews housing policy to pre-existing homeowners because they know that's their core voted demographic?
Good solution! Well done, you've solved it 😂👍
@@mikefish8226 You did even watched the video
Since Theatcher social housing units decreased from 7 million to less then 2 millions.
@Luís Andrade When labour was in power more housing was built.
I can't imagine owning a house anymore...
The thing is, the only difficult part is getting the deposit, once you’ve got that it’s not difficult, just feel sorry for anyone living down south
@@ReD_738 true man, but a good mortgage broker can do wonders, and looking into having a guarantor can also help a lot. It’s difficult dont get me wrong
@@ReD_738 You should look to buy a cheaper house, or move up North.
@@tomralph8540 can't, job and family, very unfortunate
@@ReD_738 You can relocate and there are plenty of jobs all over the country. It's your own preferences that are causing your problems.
Another reason for the spike in house prices in the last 2 years is because of Grenfell Tower, there are a million apartments that cannot be sold or bought in the UK right now because of the fire safety scandal, therefore people can’t buy cheaper apartments so they have to buy houses
@Magdelena Cloutier im sorry did you just say grenfall was a conspiracy?
It's also worth mentioning house price increases due to historically low interest rates since the financial crisis.
no, its simply this, the greatest gen found oil energy, they used the oil to take over the world and multiply like rabbits on heat, then the boomers they bred were the first here, they took everything, then their kids had nothing, the end.
I think it’s safe to say those rates are being rectified fairly quickly…
I was forced to buy a house in Winchester in 2017 because of my new born at the time , buying that house was the biggest mistake of my life ! The house was overpriced and small ! Luckily I just sold that house and we are moving to Auvergne in France we bought a farm house for 35k with 250 sqm2 and 1 acre of land . What we bought in France the equivalent in Winchester is probably worth 1 or 2m £. House prices in the UK makes no sense at all
@@robfodder5575 I'm French and My wife is English because we are married she has double nationality ! I mean if you want to buy a property in France and beat the 90 day rule it's probably best if you invest in a flat cheaper and you can rent it out in the summer and enjoy in the winter for ski season
Imagine joining a game of Monopoly, where all the properties are owned already. Your parents scrimp and save the odd pound they manage to avoid paying on their way round, but all they have to show for it is Old Kent Road.
'Hang on,' you say, 'How am I supposed to get on the property ladder if I pay all my wages on rent, transport and utilities?'
'It's a matter of Hard Work, young person,' the owner of the whole back row (plus hotels) tells you. 'I didn't get where I am today without Hard Work. Okay, so my parents gifted me a fair amount, but that's only right, after all the Hard Work they did.'
The system is set up to keep the rich getting ever richer, and the plebs hanging on by their finger nails. Every time anyone says 'Let's rethink the rules' they are shot to pieces.
So, do we continue playing the game with the rules the way they are, so things never change, or do we do what is in our power as a democracy, and rewrite them so that nobody gets super-rich, but everyone is able to do more than just survive?
@@stevenjoy3537 Oh, my saviour! Thank you, now I know to 'better myself'. It means Hard Work, right, the thing that always pays off?
So I'll go to university like all Hard Workers do, get a job, pay rent for a decade or so while I save what I can to buy a run-down house in the arse-end of nowhere with the leaky roof next to the crack den and the ex-convict who beats his wife and shouts abuse through the walls. Nice place to raise children!
Speaking of which, now I live a hundred miles from family and friends, what do I do for the impromptu help with childcare that every family needs?
Of course it's possible to take such a path, but why should we have to just to make people who are already excessively rich even more money? It's the system, stupid. 'Self betterment' is just another bullshit tory slogan, it's the system that needs to be improved, not the individual.
@@Fordnan I mean you can play it a lot smarter, save 20k buy a house outside of London for £50, rent it out and increase your income a lot.
@@ClickHere4Naruto How much is left of the median income each month post income tax, minus rent, minus food and utilities, transport, council tax etc? How long does it take to save £20k? As for buying to let, then you're part of the problem. Good work!
M XP. are you off your rocker? This is not a game of monopoly where you can't build anymore. It has to do with the government keeping the banking sector afloat through mortgages. The uk needs 1 000 000 more houses this year.
M XP. are you off your rocker? This is not a game of monopoly where you can't build anymore. It has to do with the government keeping the banking sector afloat through mortgages. The uk needs 1 000 000 more houses this year.
In Brussels, there is a similar problem, exacerbated by the fact that the city's periphery is in three different federal regions
Ah, Belgium
@@NAYRUthunder99 Love Belgium
Yeah and other people want to settle down in Monaco.
Why do people think they (over other people) have a special right to live in the most expensive cities in the world when they cannot afford it.
So you want all the luxury, comfort, infrastructures, metro, airports, restaurants, cinemas, sportscenters, swimming halls, etc of expensive cities while the middle class lives far from the city in villages.
@@THEREALZENFORCE people of all incomes need to live and work in these cities.
@@pjani14 "people of all incomes need to live and work in these cities."
NO, they don't, they can like me live outside the city and commute to work to the city. Especially in the last 20 years where public transportations is fast and environmental friendly. And nowadays there is also remote work (Télé travail), so many jobs can be done from home.
You are not entitled to city life if you cannot afford to live there.
The solution is to make rental properties a bad investment. There are enough homes, they are just not owned by the people living in them. You can see this easily enough because while house prices may double, the amount of homeless doesn't double.
Tax residential land which isn't your primary residence at an enormous rate. Make holding land as attractive as hot sick. Gear up the government to buy a new set of social housing stock for the people who do need to rent when properties get dumped to market.
Ah yes, because when you can't afford a place of your own you must automatically end up on the street rather than suffering other forms of reduced living standards such as being forced to live with parents until you're 30 or live in a house share for an amount of money that should normally be able to afford you an entire house to yourself.
Rented or owned, there are not enough properties to house the current UK population. Simple as that.
@@Hashterix "there are not enough properties to house the current UK population" then where the fock are they living in? Their shoes? Unless half the UK is homeless and i haven't noticed, there's enough roofs to cover us all. Problem is who owns the houses? My landlord owns 6 of them, 2 inherited and the rest mortgaged and he's a small fry i reckon.
Rory is right taxation on rental homes should be progressive until your third property is no longer profitable to rent. Your free capitalism will make the majority of the population unfree. No one needs more than 3 houses.
@@Hashterix totally incorrect. There are more than enough houses out there for everyone in the UK. It's jist that most houses are owned by a few. Be it landlords or large companies.
The government could easily regulate this by progressive taxation and by building affordable houses that only first-time buyers can purchase with no sale or rent clause for a number of years.
Of course this will never happen as the interest is not to help the young generation but to fleech the people.
@@mdo stupid argument. Yes there are enough, there are enough houses in the world to house everyone. In fact, there are hundreds of millions of empty properties!! Can you believe it?! Problem solved!
No. It's not that simple and we understand the world doesn't work like a child thinks it does, do we. Those houses are not where the population is. The demand is high in specific areas. What's your solution? We move thousands of people to live in derelict mining towns that have lots of empty houses but no jobs? Or perhaps we should move all the homeless into the millions of empty properties in China. Oh, how easy and simple of a solution 👏👏👏
It's supply and demand, it always has been and it always will be.
Also, just to highlight how disengaged you are from reality, those schemes you suggested do actually exist, and they do not help whatsoever, they only push prices even higher because the DEMAND is so high anyone who wants to buy has to stretch themselves financially to their limit because if they don't then the next person does.
@@alexc7367 oh yes, you're right, because nobody needs a house do they, everyone can just live in a bedroom and they can share a kitchen and bathroom; heck, they can even share a bedroom!
How do you determine there are not enough houses? How about the fact you cannot afford it because there's always someone ready to fill any space that comes up and keeps the market inflated. You go where there is more supply and less demand and houses get cheaper, that is a fact.
If a landlord owns a house does that mean nobody lives in it?? No, it means it's more likely to be lived in as efficiently as possible, as in nobody is going to pay extra for space they don't need.
All my peers, ALL of them, lived with their parents until age 27+. And you are telling me that there is enough housing. Go pull that rod out of your arse.
When I bought my first house in 1980 I was told keep your monthly mortgage payments equal to one weeks pay and you will be alright. Further more, the large house builders/developers buy land and sit on it waiting for house prices to rise before building.
its called capitalism .... cant stand the conditioned democracy loving sociopaths who are clueless....ie nearly everybody.
Housing supply cannot keep up with demand, therefore boost demand with Help to Buy. Another brilliant Osborne idea from the man who flatlined the economic recovery.
But it can keep up. There are more empty houses than homeless people in the UK. This is not a supply issue at all.
@@XMysticHerox The empty house/homeless ratio is related to housing supply/demand... how?
@@warmachineuk Shows that it´s not a simple "not enough supply" issue. There are houses and many houses even in downtown London that are long term vacant.
You ignored the Bank of England's money printing which causes inflation.
Shhhh! Don't talk about about systemic capitalist WELFARE for CAPITALISM.
Really the ECB and BOE have been printing stupid amounts of money none stop since the 2008 financial crash and inflation has struggled to get anywhere near the 2% target until recently
Imagine how quickly interest rates would go up if house prices were counted as inflation....
06:12 Your 'three reasons' is really three _mechanisms_ and ignores the actual _reason_ for the housing crisis. The _reason_ is that every UK government from Thatcher onwards (including 'new' Labour) has aggressively pursued policies aimed at increasing house prices.
This really only benefits the rich, and has a particularly detrimental effect on the poor, as you note in the video. However, governments have managed to convince home-owners that their house going up in price means that they are getting richer. They're not, because that increase is only realised when you _sell_ your house, but you'll still need somewhere to live - which will be more expensive because house prices keep going up.
Even if you are 'downsizing' after the kids grow up and move out, so your new smaller house is cheaper than your old larger house, chances are you're going to sink the difference into deposits for your kids' houses - which are more expensive than they should be. Really, it only works once you die: you can leave a more expensive asset to your beneficiaries. However, (1) that doesn't do _you_ any good, and (2) if it still just gets swallowed up by your beneficiaries having to spend more buying their own homes, it's still the same problem - just their problem rather than yours.
Until people realise that house prices going up is a bad thing, not a good thing, the housing problem is just going to keep getting worse.
And don't we forget that when people die, and their houses are (due to rising house prices) now worth above IHT threshold, the Government starts to lap their value from the inheritance receivers at 40% above threshold.
But of course those people who are comfortably planning their life, have already established trusts to forgo IHT and shirk their part onto someone else's shoulder.
Oh, and you have to pay the tax first, then only you can receive the inheritance.
My former boss, a simple man, who once inherited a modest 2-bed house after his mom's death in London, had to take a bridge loan against his own house (basically second mortgage) from his bank to pay the tax first, and then - only then - could he receive the house, then sell it and pay off the loan... receiving probably only about 3/4 of what the house was worth.
It's just not the UK. There is a massive housing crisis in the US as well. Homelessness, as well as the price of owning a home, is skyrocketing and wages are dipping, making it harder and harder to afford a house nowadays.
Watched a bit on just one of the many reasons for the US housing issues: large companies, like hedge funds, are buying entire neighbourhoods and are renting them. Typical issues like not fixing things tenants need fixed, suing when a tenant stops paying rent after something hasn't been fixed, etc. Doesn't seem like a great deal 😑
Some of these areas are bought before normal folks can even view a property, perhaps before they even hear of it.
If you ask me a lot of property-related issues are getting out of hand. At what point does it become as bad as lets say the issue with insulin, especially in the US? Seems pretty messed up all in all.
@@rafalpotasz True. Also China and Chinese oligarchs are buying up giant chunks of property in America. There needs to be some kind of legislation against that.
It’s a brilliant system /s.
Autoenroll pensions, invest in those stable REITs to provide you with income, just so you can’t rent it off yourself.
its everywhere guys.... here from Bratislava, Slovakia.... 800 square feet (70m square), new aparatment, between 250-350k €.... 50 year old ones for 200k €....
1:24 "houses only cost 104 pounds" damn man that's pretty cheap...
Worst thing is that you are trapped in a rat race: you spend most of your salary on the rent, cannot save any money, therefore will never have enough for a deposit. What will happen when you retire and your pension barely covers the rent? We will have most of nation living on benefits, if we can afford, which I doubt
Totally agree , I can afford my rent , I can afford mortgage but can’t save enough for a deposit and that is frustrating, I’m in a cycle I can’t get out of .....
maybe inheriting is the only way out
@@rafaelgonzalezrobles7380 that's what I'm waiting for ..got good genes in my family so everyone live a loooooong life
it's really frustrating how those owning fancy houses can prevent new developments because it would devalue their property
I hate NIMBYism. In America, regulations are the reason for housing crisis. We should allow development no matter what locals say: tower blocks next to your house are ugly, but homelessness is uglier.
It's not just that though, there's no point building houses and not building schools, supermarkets etc
Nowhere does he raise the question of the effect of mass migration. I can't help thinking if you import a population explosion it will exacerbate such problems.
Had to scroll way down the comments to see this elephant in the room. Mass immigration without infrastructure scaling is wreaking untold misery on many fronts.
UK is not the only country that has seen mass migration, yet it's the country that can't handle it in reasonable way. Migration is a contributing factor but there are other bigger reasons like land ownership and building approvals mentioned in video. Elsewhere an ordinary citizen can buy plot of land fairly easily and build house on it, hence why in certain countries self-build dominates the market. UK rather prefers stuffing pockets of big developers with money.
Another stupid idea that I can't understand is the land lease business in UK. You can own a house or flat but you don't own land that it stands on byt rather pay some lord or some big corporation to use that land. Insane!
Also he did not mention how much corruption money UK imported too. Ask your queen after WW2 when they asked for labour
@@FreeeeFall this isnt en elephant at all. all countries have immigration yet they are managing this better than the uk
Add the returning British people giving up living in Europe because Brexit has made their lives impossible.
6:39 The narrator says “the UK’s total land mass” but then we Are shown a graphic breakdown of England 🏴.
Glad you said it too! The common belief that England and Wales is the whole of the UK, it makes a mockery of statistics.
Most mortgage companies require a blood sacrifice, before they’ll even look at your application.
I saw a great tweet from someone who said 'The bank says I can't afford afford $900 a month for a mortgage, so I pay $1400 a month in rent instead'. I think that beautifully sums up the issue.
@@mitsterful What the bank is actually saying is because the buyer doesn't have the necessary cash to convert to equity that the risk level is too high to lend against. Banks are not charities and high risk lending on a wide scale in the housing market partly resulted in the 2008 economic crash. The rental risk isn't necessarily owned by a bank but the landlord who is responsible and therefore offsets his/her own risk on a case by case basis. Ultimately another bank may be in the equation but they don't have sole ownership of the risk and therefore it is safer.
@@mitsterful The person probably couldn't afford $900 per month, which is why the $1400 they are paying in rent unsustainable. Assuming they can't find a cheaper property (unlikely) wouldn't be suprised if they have to get a flat mate or move back in with parents.
My plan is to have kids so I can offer them up to our great housing gods! Haha
@@tomtimtomtim You make a good point. However, it still highlights an issue that people pay more for rent than they would a mortgage, making it harder to save for a deposit on a house and being stuck in a renting cycle. People are being told their finances are too risky because they don't have enough, or they're too unstable, so they have to rent instead which costs more and is worse for stability anyway.
As someone who moved to the UK recently, the housing situation is intolerable. The British live in crappy houses and most don't even realise it because they've never lived abroad. You tell them it's because of the Green Belt and they don't understand or care. Extremely frustrating.
You know what I do if I find a foreign country intolerable? I go home. Obvious, no?
And it's not because of the Green Belt, it's because of mass immigration pushing down working class wages and pushing up house prices. Simple supply and demand.
@@edwardkenworthy7013 it's both mass immigration and the green belt. Mass immigration increases demand for houses while the green belt reduces supply. You can have one policy or another, but not both. The state is artificially increasing house prices, in other words, which benefits the wealthy and home owners at the expense of everyone else.
@@chemicalwasted3450 First, the Green Belt doesn't reduce supply, but it does limit growth, and that's a good thing: this is a green and pleasant land, not a concreted over land.
Second, immigration also suppresses working class wages making it even harder for them to afford to buy a house.
In other word you are part of the problem and if you find it intolerable you could help solve two problems in one go.
@@edwardkenworthy7013 You can keep the land green but it will cost you millions in increased home prices; everything in life is a trade off. As for mass immigration, nothing is stopping the working classes from voting a right wing party into power except their own lack of political will.
Same here in Ontario. Where I live, in 2003 a home could be worth $220,000. Now in 2021, it's 1.2 million. .. that's MILLION. Fixer Upper homes are going for over $600,000. Sellers are selling townhouses for $499,000 and walking away with $750,000. That's $250,000 OVER asking price. The price of homes in my area has increased 50% (!!!) in the last year. So now we've got foreign investors living in other countries buying homes and renting them to canadians. Insane.
there isent a housing crisis the problem is most of the new houses that are being built are unobtainable for first time buyers or for working class people and there isent enough low cost housing yet government still build new houses that are expensive and hardy anyone can afford
If hardly anyone can afford them, how do they sell them? Or are they sat empty?
Isn't that what they said?
@@danielwebb8402 there are millions of empty houses that are either too expensive or in the wrong place
@@danielwebb8402 ill give you an example - were i live there is 141 new homes being built all of which are between 294k and 435k to buy - there are 19 affordable housing aswell how is that fair . for the houses ur gunna need at least 45k deposit minimum . the average salary for people in that are isent even 45k if we take the rule of thumb 20% of income thats 5 years just for the deposit ur looking about 30 - 40 years before you own the house its ridiculous
@@kirkwilson72
Agree deposits is the problem / pinch point today. Not the monthly mortgage payments.
You can, and should be, able to get 95% mortgages. So you'd need 15k for a 300k property. Or 5k a year / 400 a month saving for 3 years. That doesn't sound unreasonable to me. Having a 90% LTV for first time buyers is a large hurdle. Completely agree.
How many homes out of those 141 do you think is "fair" for them to sell at a loss / less than they could? Why is it their job to be a charity? I don't understand why they have to sell any at a government prescribed cost.
Two reasons:
- Government not building enough homes leading to high demand
- Private investors buying real estate thus driving prices up ever higher.
@@andreasgregorfrank9057 Your mistaken. State dept is accumulated due borrowing at low interest rates and printing money and lending out more money to wealth investors increases inflation, but government bonds are bought by the central banks at low yield keeping inflation down UK 2020 0.85%. If you are saying inflation / borrowing / lending keeps house prices high, you clearly have no idea what you are talking about pal.
Ill explain: Their is a high demand in the UK housing sector due to couples starting families in population increases ( High demand and low supply drives up prices ). On top of this, Rich private investors have bided out any first time buyers and have rented them. This in effect leaves houses remaining out of the buying market ever putting more strain on demand as little few their are snatched up, thus driving demand through the roof machining homes for average income people near impossible without going to bank dept.
The solutions is simple: Slow down printing money, laws on private investors homes like ( an investor can only buy x amount for any one year ) & government build more homes. This will increase supply and demand drops of thus price of homes become more affordable.
Any questions?
Ban all new buy to let, force councils to build a number of new homes, or hold design competitions for new high density patterned housing, like Paris or Edinburgh, there are solutions. It is infuriating that they don't grab the bull by the horns on this one.
@@andreasgregorfrank9057 high levels of capital investment is actually great, but people using it to pay for housing is a terrible waste because housing doesn't produce anything, so instead of building long term growth, it's hollow.
Not quite the Government are always building homes. But when you think of the housing market as a racket you understand why it will never change. People will always need accommodation this is an inflexible commodity and therefore people can be exploited. The truth is people pay sometimes a mortgage for 40 years, to do this they have to get a job. This is how the economy works. Therefore if you could build a house which required only 5years to pay off what would be the incentive to work
The inequality is staggering really, do they realise the damage this is doing? People are just carrying on as normal when all it boils down to is greed.
Forgot the effect of a net 250K immigrants arriving each year.
it was not ''forgotten'', it was intentional
@@mafismathis8012 probably
meanwhile germany with net immigration of 2 million coping better than the Uk... how bizzare
That sounds like a lot but that is only 0.38% of the UK population each year. Consider as well many immigrants tend to live in 'denser' housing structures (i.e. HMOs or smaller houses with many residents generally). I am not for nor against immigration but you need to put the numbers in perspective.
Doesn't matter if it's immigration, ex pats, birth rates. We are an island country. England is running out of fresh water. We don't make our own food and if finance sector move out of London are economy is exposed for the fraud it is. Were walking off a cliff.
It is a bit strange how it is considered that you are wealthy if you can afford a deposit (5%) on a 240k property (12k)
i've never met anyone with 12K pounds spear
@@bleddynwolf8463 well a spear of that price would indicate you have a lot of disposable income😂.
Sorry, I know you meant spare but I couldn’t resist.
Who’s able to get a 240k house on a 5% deposit? You’re looking 10-15% minimum
@@bleddynwolf8463 There is a huge difference between spare £12k and £12k savings!
If I have a £12k spear to throw around, I would suspect to have more than £12k saved.
Still, £12k would not be a hard number to reach in a family of two as long as they work ANY job that guarantees 40 hours a week (which is the actually problem in the UK).
Lenders rarely offer the 5% scheme, they think you're a credit risk. Or they offer you a crazy expensive interest rate for it. But yes, if you can save £12k while spending all your money on rent and council tax and living costs, you are very wealthy and the system is rigged in your favour to leech money off everyone else. It's a very subtle form of legal serfdom
A partial easy fix would be more heavily tax second, third and so on houses in a tier system.
Which'll just drive-up rent, surely? Why not just ban renting-out with no intention of sharing ownership-rights?
No mention of interest rates, which even the Band of England has identified as a major cause?
Interest rates are currently very low, compared to historical values.
I remember a time when they went as high as 17%.
The flip side is that interest on savings is extremely low. ☹️
Yes!
@@harrybarrow6222 thing is on the 70's housing was reasonable but food was costly . Just swapped what cost more tbh
Are you waiting for a 20% basic rate to buy?
@@stevelamprou No (though you never know, won't be buying a house for a good 8 years so rate could be anything by then), I just expected it to get a mention
People living with their parents into late 30s or 40s will become the norm, however as a home owner myself I personally think people who own their own property and decide to buy another house solely to just rent out, I've heared of cases where some people own 3-4 other houses solely to rent them out and I think that just takes away an opportunity for a first time buyer
Of course you are correct but this is a country of free enterprise & people lap it up. How can we change that mentality when the controllers of society are that way inclined ?
That's capitalism just don't be poor simple solution
@Jord Rich : like in the French movie Tanguy :-)
New money is created when loan is granted. Loans going into real estate means newly created currency goes to real estate. As more currency chases same number of houses, prices go up. Case closed.
thank you
Yes. Good summary. 👍
A very 'Politically Correct' version of the UK Housing Crisis
whats the politically incorrect detail they missed?
@@Snugggg there’s more vacant homes than homeless people. Property developers own the land and have planning permission to build around 1,000,000 new houses but don’t so the prices continue to rise. An increasing number of homes are being bought by landlords, including about 40% of all the social/ counsel houses that were sold off. I think there’s a few more details but I can’t remember them right now.
There's also the housing market in London, which has had a knock on effect nationally. Desirable properties in the centre of town have been bought up by Oligarchs, Sheikhs and International Property Investment Syndicates over a number of years. This has fuelled a boom, driving up prices for everyone across the whole city.
The Covid Lockdown has seen an exodus of Londoners to the regions, able to cash in on the value of their sold London homes, in turn driving up the cost of housing in the places they move to.
At a time when the economy is on its knees, Estate Agents are quietly having a party. Some people are saying that this will inevitably lead to a burst bubble, but I suspect that the price of property might just remain out of reach for most, as long as the population continues to increase, in proportion to the number of houses being built.
@@Snugggg Mass immigration and white flight.
I work in construction and i can tell you why the uk hasn’t built enough houses. Its because of greedy investors and contractors who offer such low rates coz they don’t want to see their profit margins drop. Thus leaving us with too much work with too little time and money to complete it efficiently, then we feel over worked and undervalued.
I really appreciate how clear and accessible all of TLDR's explainer videos are. Articles and videos you can actually understand on these seriously complicated topics (without doing loads of confused googling) are so hard to come by - a solutions video would be great!
This is a fantastic and well-sourced video. Great work guys, I learned a ton.
9:23 "DAMN YOU, THATCHER!!!"
Whenever I watch/read about politics/policies of the UK, current big socio-economic issues seem to always be due to the policies made under the Thatcher administration.
The main driver for the increase in house prices since 1990 is historically low interest rates. When I bought my first flat in 1990 mortgage interest rates were about 12% whereas now 2-3%. Therefore a buyer can afford to borrow far more so pushing prices up and so increase the multiple of house price to earnings. If interest rates rise significantly in coming years just watch as house price growth falls or prices drop.
Not entirely, because even though interest rates are low, the bank will still not loan you more than about 4x salary. The low interest rates do help to inflate the price, but it's not the driving force behind the insane increase in prices. Remember, the bottom of the market is always what holds up the rest, and the demand to live in the UK (particularly the south east) boomed from the late 90s onwards when Tony Blair opened the door to mass migration. 30k net turned into 300k net, every single person needing a room to live in. In London, a room alone can rent for £600 to £800 a month (slightly less now due to covid reducing demand), and suddenly a standard 4 bedroom house is grossing £3k a month.
Now let's do the maths. £3k a month or £36k a year makes for a value of £720k when you consider a 5% ROI is a good return (and in London you often expect lower returns than that, 2 or 3%, because people want the stability). That value is entirely propped up by the market rate those rooms achieve, and the fact that as long as you advertise at market rate you are practically guaranteed to fill them within a month.
@@Hashterix
Many lenders don’t work on income multiples anymore. They look at “affordability”
@@broadleyboy2 yes they do, I took out a mortgage last year. They also factor in your spending to make sure you'll be able to make the payments but it's still done on a multiple of your income to determine what you can afford.
@@broadleyboy2 And that is even worse, because their ways of calculating said affordability often deem perfectly capable people = unable to afford.
They think they're doing a good service to people, protecting them from unaffordable purchases. As a reality they often entomb these same people's legs into renting ground forever.
01:27 - I’ll take that for £104 no problem!
01:45 - it’s gone up £9,000 between making the graphic and recording the audio!!
Sloppy from TLDR
Because everything goes up with inflation, including the Governments wages, whilst most people are still stuck earning minimum wage that isn't high enough for the modern world's prices anymore
Maybe this is wishful thinking, but seeing this as a worldwide problem, perhaps it's time to enforce that housing should not be following the rules of supply and demand.
That's what lead to tower blocks under socialism
Too right. The free-market optimises for financial gain, and it's not like people have much choice to turn-down housing. When you can't 'vote with your wallet', all of the power to decide the price in with the seller. Plus, it just forces this cycle of 'higher house prices -> Less spending power -> harder to buy -> more renters -> Less spending power -> harder to buy...'.
We've got to cut the problem at its core.
The primary driver of high house prices is “access to capital”… end of story. It’s a common misconception.
It’s not so much supply and demand.
Yes, you can expect that when central banks are printing like there is no tomorrow.
Don't have the data, but I'm positive that Help-to-Buy s driving prices up.
every little government initiative to boost purchases drives prices up lol
I kinda see what you're saying. Because the goverment is helping, developers put the price up a bit. Yeah, needs data, but makes sense
@@nathanwaight Shared ownership schemes is just a scam for people who can't do maths.
@@nathanwaight Nah, central banks cause bubbles (the rest are simply scams).
This sounds good! In Sydney it's 20 times the average income.
I don't want to be hasty, but the thing about increased profits from a dominated developing market and a decrease in social housing sounds like intentional conservative policies to me... And the thing about it working to the benefit of the more wealthy and to the detriment of the poor.
And yet both Labour & the Liberal Democrats did nothing to even attempt to fix the issue.
@@loc4725 I wonder why. I guess with the liberal democrat coilition it was pretty clear who was in charge. But with Labour, I'm not sure, why didn't they do something about it. Also, what do you mean by Labour didn't notion? Social housing is a Labour policy, as far as I'm aware.
@@thesudaneseprince9675 No one can get social homes, and they are crazy expensive now anyway
yeh, it's about investment capital = people with moneys need to store and grow their moneys so they buy the reliable and steadily appreciate on value = feeding the cycle = more people and investment capital firms invest = more the prices grow. This is happening in every country on Earth. Don't forget that this is problem only for the world poor. The world rich (there's 50 humans who own as much as the poor 50% of all humans on Earth combined) - these guys benefit greatly from this trend...!
@@thesudaneseprince9675 The Lib Dems' showed their true colours when they were in coalition I'm afraid. Liberal & Democrat but only on the outside...
You're also right about Labour, but politics has changed. There was a time when all generations, both young _and_ old wanted a better country *for everyone* . That's why even though it was the young that mainly benefited social housing became a feature of the British political landscape. But fast forward to today and those younger generations are now the old and they don't have the same values of those that came before. And most importantly they vote.
So the problem is twofold: younger generations don't vote in sufficient numbers to matter and the current older generations seem to only think of themselves. And this therefore leads to political parties trying to woo the older, voting generation by giving them fantastic gifts like being able to buy their council home at a massive discount whilst at the same time eschewing the younger, mostly non-voting generation who are left to fend for themselves in an increasingly hostile environment.
So to answer your question Labour simply adapted to the times. And their MP's were very happy to go along with it.
Take down the landlord industry. Make heavy taxes on people who own more than 3 houses
stop printing money
@@iamnotgonnagiveyoumyname1373 why not land value tax, seems better
@@iamnotgonnagiveyoumyname1373 you've got to crack a few eggs to make an omelette.
I'm sorry your friends will have some negative affects but this is a massive societal problem, I have no sympathy for 3+ house owners. It'd be like Amazon complaining about tax.
@@iamnotgonnagiveyoumyname1373 Because he is probably an angry teenager who understandably doesnt have a full grasp of things yet, and is scared at stepping into the scary reality of being worse off than his parents.
He is obviously ignorant here, but we just need to try talk through and support, explain the economics and not get drawn into the anger.
Hope you don't have a pension then, as pension companies are very big landlords
Very simple "property speculators have deep pockets" ,ordinary people have limited resources.
succinct and apt.
This is really more of an issue for poorer people rather than the middle class, who have parents and/or grand-parents to chip in a few tens of thousands. In any case, this is only a problem because Britain does not have a culture of renting. In the 1970s working class people aimed to find public housing to rent, not homes to buy - that only changed when Thatcher introduced the right to buy rules. Britain's obsession with house buying is causing this problem. The solution is to build more social housing and have better and more regulated private renting.
This explains a thing or two. My town used it have a lot of green areas. Over the past decade, all of them have been filled up with tiny, badly put together houses. No improvements have been made to the road network and as a result the town get's grid locked with traffic. If only those houses were any good. I had a displasure of living in a modern build. The house was not even 5 years old at the time, but there were cracks in the walls and all window frames were loose, like you could grab a closed window and shake it. You could always feel draft going around the frames. Newer ones are even worse. A colleague bought one of them, they had 2 burst pipes and a lot of damage in the first 6 months.
Honestly that disgusts me, I am going to study architecture next year at university, and the construction agency cant even find a balance between sustainability and cost. A Modern house costs a lot less than other types of constructions as the only thing which causes it to be priced up is the price of Steel which is used to make lever arch's, which make it so the roofs are held up without burdening the windows, Modern Houses are honestly a way of people skipping costs and making weaker less sustainable houses, as insulation and cooling is skimped on. Honestly If I had to recommend a house that'd be good for current society, I recommend getting a Victorian times house and just installing an AC Unit. The only thing I can say is, I hate the overpricing of land, as it makes the budget which I can use to design be a lot lower than normal use.
There are too many people crammed into a too small area of land. More people = more housing demand, but supply cannot increase because there is not enough spare land to build on.
1. Real estate speculators.
2. House flippers.
3. Greedy landlords.
You also missed the fact that in last 20 years immigration has increased by over 7 million thanks to Tony Blair open door policy. This has also had an impact with more people buying with less housing available.
Of course, like all racists, you've not mentioned where all the tax paid by the increased population has gone. Immigration has added £10,000,000,000.00 as year to UK government tax receipts. Racists ignore that!
Those people pay taxes like british born citizens and the population has increased anyway, so it would've went up anyway
@@agataartwork9097 supply and demand, it's an uncomfortable truth but it's true. Your emigration is a tiny contributing factor of the housing crisis. The fact that You are willing to provide relatively (assumption) cheap labour also contributes to lower wages. I mean why did you emigrate in the first place? I bet it wasn't for the weather. (For the record I would do the same in your shoes)
Don't be so naive to think all natives have stable families, my family aren't there for me and never were. I was on my own from day 1. In fact there's many, many dysfunctional families, just go to Blackpool or Neath.
I'm self employed and work 2 jobs for a better future for my son. No one except top 10% of earners have it easy.
I don't hate immigrants by the way, I blame ridiculous regulations, greed, and the government for the state of things not the immigrants.
Enjoy your stay, and congratulations that you're looking to own.
Glad to see you back on track with good balanced content
Not convinced by your statement that green belts are not 'green' in the context of making room for housing developments. Building new buildings in place of arable land will create more carbon emissions than if that land was left alone, and I am not sure to what extent we can link commuter times with green belts, which will be affected by a myriad of other reasons. Great vid as always!
Houses are being built on the otherside of the green belts “leapfrogging” thus increasing the commuting times of those who live in those areas, not saying green belts are bad but imo a lot of them have to be re evaluated
Yea that link between commuting times and green belts is entirely spurious. There's many other factors, house prices (so people live further away), and the pollution comment they made is rubbish. A group commuting from Milton Keynes to London by train is far less polluting per person than if the same group drove in from Watford, despite Watford being closer.
I would say many people rather live near farms so without the greenbelt people would live further out to be closer to the edge of the city thus increasing commuting distances.
@@joefothergill6303 Exactly. What if the price difference wasn’t severe for a 3 bed terrace in London and Milton Keynes? What if people could move a lot easier (less stamp duty and solicitors fees)? Many more ...
@@gsb5859 The train to London is only going to get slower if they add more stops along the way. we'll be wasting more energy starting and stopping.
@@gsb5859 generally people would want to live close travel time wise to where they work (wfh may likely change this) so presumably more people would live in London if it was more affordable
Very glad you explained how this exacerbates wealth inequality! :)
You forgot to mention in that section the quite important factor that is that the lower your income the higher percentage of that income is spent just living and so the lower the percentage that can be saved. That is to say not only is a house in your percentile more times your annual income but it is many, many more times your disposable income because food, shelter and utilities are a far higher proportion of your income (often reaching or even exceeding 100%).
he did mention, the poor get poorer :)
I'm a 44yr old guy working full time in a supermarket in Brighton I can't afford to move out of my parents.
The solution would be is to standardise houses' building specifications against price and region with a fixed profit.
the solution is COMMUNISM ! - take away the extra homes from the rich and give it to the poor.
This could be a good idea Omar
I bought a 3 bed flat with a garden for £19k up norf. Leaving London. Best thing I ever did!
how far north did you go lad, fuckin Greenland?
I'm sorry, what? Near Cambridge that amount of money is not enough for a deposit.
@@alexc7367 Tyne and Wear!
@@mdo I know 🙂
From the Netherlands.
My country hasn't fixed the issue. Buying a house is currently only for the richer people and it is getting more and more extreme.
Show me any country in the world where lower than median income can buy a house of western democracies standards ?
Also a third of the country is owned by the Aristocracy, something a fair few countries got rid of ages ago.
They need to redevelop existing buildings especially in decimated communities. It's expensive in the sort term but better for growing communities! Also what about flat pack social housing? There's some great companies out there who make nice flat pack homes and it could be mega cheap on a grand scale. Plus depending on the foundations they could build on brown sites
ngl if I hear 'redevelopment' or 'regeneration' , it makes alarm bells ring. it usually ends up meaning kicking out the poor people, throwing in 1 community centre and 4/100 'affordable' houses/ social housing. reeks of gentrification :(
@@caaaaats9890 yeah that's a fair point! All we want is a government that is competent and will help the people! Is that too much to ask?! Haha
@@alexreeves3817 The government are competent, its just that their interests arent aligned with the interest of the lower classes. They are aligned with the interests, of the monarchy. Wealth management is what they deal in and the hive mind mentality kicks in. The lower classes are just drones, which are dispensable, however the closer you get to the queen and the more importance you have. And anyone who is wealthy is basically considered royalty.
@@PaulGoux that's a really interesting way of looking at it mate! Thank you
Agriculture is green. Fields are green. This video is so biased and ignorant. Green doesn't mean "wild forest" - all forests in UK have been managed for agricultural communities for millenia! Green means NOT a horrible city
:)
What really pisses me off is the fact that alot of boomers were basically given council houses in the 80s and now they take more than half my salary.
Mortgages have always taken half of someone's take home when they first buy. It's just these boomers and Xs haven't taught millenials this fact / history.
@@danielwebb8402 most people I know can't afford a mortgage. We're forced to rent, and in doing so are most likely paying someone else's mortgage. It's only getting worse and as long as most people below 30 can't afford to buy it'll be a generational problem.
@@dafuzzymonster
If you can't afford a mortgage.
So instead are paying rent. By definition that means rent < mortgage = you aren't paying someone else's mortgage with your rent
@@danielwebb8402 mortgages are handed out based on credit rating and valuable assets as well as income. Banks are more likely to give out mortgages if you have collateral. For example in my third year of university the house share I was living paid a 1/4 of houses value in rent over the year we stayed there.
@@danielwebb8402 as the company we rented off was a large student housing company I very much doubt the reinvested that money into the house. This is the case in most cities I'm the UK. That and companies buying up affordable housing removing any character from it by gutting it from the inside, and then painting it black/grey and that somehow triples the value.