Will UK House Prices Ever Become Affordable?

A look at recent factors affecting the UK housing market. Why prices have fallen by a small amount and what is likely to happen in the future. Why prices are unlikely to return to the old levels of affordability.

Text version with a few more links at

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[SchubertDipDab]

Really enjoying your videos - no sensationalism or clickbait, just a well-presented perspective. Thanks! :)

[giansideros]

8:17 this is wrong, it's only a loss if you sell it for less than what you paid for it.

You wouldn't say that you made a loss if you bought a collectors item for £100, then later get it appraised at £2000 only to sell it for £1500.

I'd like to think that people sell their homes for what they believe is the most they can get for it at the point of sale, not whether they can meet the valuation assessment or better.

[Smithb]

Brilliantly explained as usual 👍🏻 refreshing to watch the economics explained without being sensationalised!

[chrisw]

Much greater access to credit (starting in the 80s and extending to the present day) is the biggest cause of property prices rising above affordability. Before the 80s it was very hard to get a mortgage greater than three and a half times your salary. If that was still the norm, demand would drop substantially. This is a global issue.

[manuelfbaby]

You’ve got really good content. It’s crazy how YouTube is not pushing your videos

[BigHenFor]

Stagflation is the most likely way, as until it is accepted that the cost of maintaining the status quo is economically and politically destabilising, nothing will change. So, this is like a peat fire in the wild. The irrationality underlying the housing bubble will continue to burn the economy below the surface, until one day it will flare up and become unmanageable. We now have an economy that is increasingly driven by debt, and the creditors are being protected by the taxpayer, whilst the latter is being impoverished year after year by stagnant wage growth and increasing indebtedness. That is unsustainable in an era where money is no longer cheap. Reality will have it's revenge.

[oatzman]

I needed this excellent summary, thank you! I feel like I'm up to date after watching this! We are looking to upsizez and thought about waiting for house prices to fall. But I think we are just going to go for it.

[homegardens]

Just about to watch this video. Here in Essex near to where I live about 10-11 years ago you could get a one bedroom flat for about 70K. The same flat now about 130K-140K. Crazy stuff.

[aybgim]

How can Rightmove know the demand from FTBs? Some (but not all) potential buyers use their service to book viewing appointments but the number of viewers is not equal to the demand. Actual offers are not reported to them.

[clarissagafoor]

Your government in its wisdom had opened the door for over 3 million Hong Kong BNO passport holders to move to the UK. Just think what that is doing to your housing market. The cheapest flat I can buy here is around 300k£, that's for around 200 square feet! Even if someone doesn't an to actually move to the UK there's no reason why someone shouldn't sell a couple of their Hong Kong flats and buy a few houses in Britain

[allykhan]

Devalued paper money causes assets to rise. The market is international, local income is a factor but not the only factor.

[danielhooper]

Something that i have noticed in kent is that most houses on the lower price range are on auction with rediculase charges, making them unafordable for first-time buyers.
I am the only working parent as my partner has to look after a disabled relative limiting our income. We looked at a house with an asking price at 190k and as it was at auction in the past it has a 9k charge on it on top of mortgage and deposit. I donk have 9k to give to an auction house just for the privilege of them selling it to me. That's rediculase.
It is getting harder and harder by the day to obtain a house to the poing where i am looking at leaving this country as i dont see a good future in it.

[kevinu.k.]

Thank you for such a measured exploration of this subject when so many You Tubers are losing their heads with speculation and hyperbole.

[martinjames]

Thanks for making these videos. I'm a Brit living abroad for the past 4 years and I like to hear what's going on back home.
I also learnt a new word: Nimbyism 👍

[MatthewRivers-Davis]

There's an important distinction in the broken UK housing market: there may be a surplus of housing stock with even an increase in house building relative to household/family units (which reduces the argument that higher net migration is pushing up house prices with a demand pull effect) but the unaffordability of housing services (rental/mortgages/utilities) as well as the price of housing assets (house price inflation) still means households cannot buy into the market and are squeezed into a lower quality of housing stock that lowers living standards. Housing costs being higher than household incomes leads to households collectivising their living into multi-generational households or accepting lower standards for the same prices (studio instead of a 2-bed semi). The fact house prices may only be undergoing a modest fall or correction despite high interest payments and tougher mortgage application conditions with a a lack of demand from first time buyers, suggests a crash is not imminent. The risk of a crash is also unlikely due to a host of other determinants that still make housing a good UK investment: foreign buyer investment, inelastic supply of the transition of brown field sites to housing stock, firms buying housing stock but happy to leave them vacant with limited need to profit max returns from their investment, lower taxation on housing-related wealth compared to other direct/indirect taxes, government subsidy of housing welfare payments to landlords, return on substitute investment vehicles e.g. securities being lower, AirBnB returns generating alternate revenue streams.

Your average home is still owned by the buyer/occupier who has limited investment incentive, knowledge or liquidity to invest beyond their 25 year mortgage deal (look at how bank saving rates have stagnated against rising credit/loan rates) and disposable income gets consumed by higher living costs so housing as an asset remains the default investment vehicle for most households so maintaining value with the cult of home ownership - it is only unforeseen economic shocks like the inflationary pressure and tighter monetary policy interest rate rise of the late 1980s early 1990s (thanks Mr Lamont) and the Sub-prime banking crisis of 2007-9 that saw house price falls (that was a direct hit on the housing market and banks are not as exposed against mortgage-related products) - today economies are more diverse, deregulated/unregulated and monetarists liquidity washing markets with Covid cash creates more money to maintain prices. With a lack of growth edging other investment vehicles out of the economy, house prices remain relatively robust. The market confidence fears that normally crash markets aren't evident if employment remains high, credit is still widely available on visa cards and the super-rich that buy into new housing stock do not panic if house investment returns are not their primary asset or source of passive income. Doubt buy-to-let landlords will dump a load of property on to the market to create a surplus to lower prices - they'll just raise rents to cover the increase in mortgage costs.

[christopherwright]

Well, the banks did insist on raising interest rates a dozen times - thereby hiking the cost of

[aleccap]

For millionaires of course it will. Heading further to an American style of rich/poor with no middle ground

[quackcement]

i know somone my age in his early 30's given a 700k house by his dad who's a landlord. he lives in a bubble of fortune, and seemed to think it was good house prices going up, safe to say hard to be friends with somone living in such a bubble. he'll never have to work hard to get property in his life.

[mssdn]

New house builders are offering big incentives to buy at the moment, like £1, 000 a month for 2 years, no price reductions though so far

[varungupta]

No politics. No opinions. Plain facts. Love it.