Why UK House Prices Are About To Collapse

Property prices in the UK are unsustainable. Average #houseprices in the UK are now over £300,000 and £730,000 in London. The #costofliving in the UK is making it very difficult for many to manage. Very high rent or mortgage payments mean that there is very little money available for other spending in order to help the #economy Moreover many young people know that they will never be able to afford to buy a house.
Since the seventies house prices in London have increased by as much as 1000 times. This is because #london has become the location of choice of very wealthy people from all over the world to buy properties for investment rather than as accommodation.
The UK has always been seen as a stable well-governed country where the rule of law prevails. However, the whole world has seen the incompetence or the government recently and the chaos that #brexit has caused and wealthy investors may well decide to move their money elsewhere.
Therefore, the combination of the cost of living crisis meaning that many people wil be unable to afford their mortgages or rent resulting in repossessions together with a loss of confidence in the UK as a safe haven for wealthy investors is likely to lead to a property crash

[rachelmatthews]

My Italian boyfriend is 28 earns a relatively normal salary, has a netflix subscription, has an alfa romeo, goes to the gym, goes out with friends, goes rock climbing etc. and is in the process of buying a house. He will only require a small mortgage (normal there) and does not need to rely on his parents unlike nearly everyone here. He couldn't believe how ridiculously expensive it is to live here. It's not people failing, it's the govt failing people.

[martinburn]

Enjoyed your thoughts, unchecked corruption and greed has finally come home to roost, unfortunately it will be average Joe or Jane who will suffer, thanks Michael.

[johngreen]

You are right there. It seems like it is all about survival in the UK. Nothing has changed for me over the last 50 years.

[HelenaMikas]

Hello Michael and thanks for a fascinating video Spot on as always .I owned my own house in UK and was glad to be rid .when I relocated to Berlin . .Living in apartments, is the norm and renting is well managed.By the way had to smile when you mentioned common sense , that plus dry humour are two reasons I enjoy your channel .Common sense is in short supply and beats any fancy university degrees .Westminster has MP's who are devoid of common sense .They are empty vessels making a lot of noise :Have an enjoyable weekend :-)

[adamlasry]

I trust Gary Stevenson’s analysis: houses will keep going up as the super rich will buy them. Wealth inequality is to blame.

[ukmarsadelaide]

I remember talking to an arrogant young Tory Estate Agent once and he said prices will just keep going up its Land and population that is keeping the prices up. I gave him a little history lesson about a place with a very high population and very little available land. In fact just the land value of one property alone in this city was worth more than the total land in the suburbs of Los Angeles. The country where this city was had well paid people. Bit the bubble burst and property prices crashed some 80 percent yes not joking 80 percent and it took some 20 years before they started to recover. He assumed I was talking about the sub prime USA market, no I said this crash happened in a G7 western nation. The country was Japan and the City was Tokyo, that very quickly took the smile away from him...Unlike the UK Japan made products the world needed the UK just does money laundering....

[zetectic]

Under Thatcher a house was no longer a home it was an investment. With inflation the cost of the mortgage dropped & the property over time increase more than inflation. People started speculating: moving every 5 years into a bigger more expensive house.

[peterjhillier]

Thank you Michael, a very interesting Critique on the bloated cost of Housing which makes it almost impossible for many to own their own Homes.

[tonyprice]

Instinct tells me you're right. However, I've been thinking there would be a crash for years. Institutional investors and asset ownership companies are now buying into the market, so if that trend continues, it may cushion any downward trend. That said, with so many people feeling the pinch and the unaffordable rents being asked for something has to change. I would welcome a 30% drop, and though I own my own house, it's my home, not an investment as such, so it wouldn't worry me. If this lets more people in and gets some of the hostile landlords out, it can only be a good thing. However, the whole system needs changing. Why is a home of £16m exempt from any tax at sale? My son is building high-rise luxury apartments in Central Manchester, which he will never be able to afford. We really are in a mess.

[MikesterCurtis]

This peculiar housing ratio problem was bothering me around 2003.
And no government did anything to help people with the ratio.
Interesting how many MPs are landlords.

[thomaspowell]

I think the problem now is that large corporations are the only ones that can buy houses - and they are doing. That will keep prices high, and they keep rents high. I don't see a crash on the horizon.

[windyworm]

We’ve rented a one bedroom flat in a popular East German town, overlooking a small market place, near shops and rail/bus/tram connections including large living room, large bedroom, bathroom, utility room, large kitchen diner, cellar room, bicycle house at a cost of €390(£330)/month all-in. Such a hard life in the EU. Did I mention the clean rivers, cheap gas, good healthcare……..

[sheelaghquigley]

Thanks for another very informative post. Keep up the great investigative work, we need it.

[billywhizz]

One difference from Belgium and the UK is the way houses are built. In Belgium, you're likely to just buy a (cheap and plentiful) plot and a small local building company/architect will build something for you. In the UK, large house building companies (I'll say nothing about political affiliations) land bank and drip feed (bland, rabbit hutch) housing stock on estates that keep prices high.

[snowman]

Prices for housing in the UK have always been much higher than in most of the world, don't think that's going to change anytime soon.

[Ant.Gib.]

Great video again, Michael. Very informative, as usual. Keep up the good work.

[Jonnyicey]

I think a lot of us want a crash to happen but the people in power wont let it happen.

[dagatha]

I think the term „property ladder “and the concept behind the term is unknown to most people in Europe. We buy a house (or have one build to our specifications) and stay there most of our life.
I have seen British TV programs, where people buy houses, renovate them and sell them for a much higher price a few month later. They made a living out of doing that, but why would anybody buy a house, that’s been done up by someone else?

[spencer]

Council tax is fucking joke seriously needs to be looked at! My. 110k flat pays £1500 and 55 million house pays £3000, how the fuck is that fair? Seriously WTF

[rickparkinmoto]

My worry is that people will lose their homes. The houses will be be bought up by the billionaires who accrued unimaginable extra wealth under Covid and then rented back to the people who lose their homes. Rental costs will remain cripplingly expensive. Billions in a bank is incredibly vulnerable. Billionaires will be looking to invest, and hoovering up repossessed homes is a great investment for those with more money than morals.