The housing market crash is just beginning | Economics | The New Statesman

House prices are falling, rents are rising, and pubs, clubs and our cultural spaces are disappearing due to landlordism.

Anoosh Chakelian, Britain editor, is joined by our business editor, Will Dunn, and assistant culture editor, Ellen Peirson-Hagger, to discuss the housing market crash, the impact of people moving out of London and landlordism on renters, both private and commercial.

Read all the pieces mentioned in this video here:

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[mqktkxc]

I bought a house in the early 90s crash when people were selling in negative equity. I didn’t buy it as an investment but a family home. And the interest rate was over 8% back then. I bought it when I earned only £13k, had to eat beans on toast and do without luxuries for a year but it gave my son a family home and stability. I only decided to buy because the council said as I was working I could rent after I was made homeless with a baby, I so saved and bought a home.

Now 30 years later I sold my 3 bed detached home after my youngest went to Uni, have downsized and have no mortgage . Gosh, wasn’t I lucky but now my oldest with his own family can’t afford to do the same, even with two people working - it’s heartbreaking. I now need to die so he can have money to buy his first family home. I’m not interested in making money of a house, a house is a home. The lack of affordable housing in the South East of England is disgusting!

[flowerpower]

There are currently over 30, 000 empty properties in London. Mostly in Kensington and Chelsea. We DO NOT have a housing crisis, we have a distribution of wealth crisis.

[oklwzfh]

Wow spot on! I struggled for years in London and eventually moved out and now own. I don't care that house prices are falling. Whichever house I buy next will be cheaper. This is good news for the young, and the only travesty is that rents are going up. The whole situation has been very unfair for decades. There is a cancer in London where society is failing apart over landlords taking artificial profits off young people. Teachers should never be forced to live in boats on the canals. Any smart teacher in the UK would not work in London, and consequently any teacher in London will be temporary or be bad. This is why Britain is no longer an empire. This is why we are regressing in the world. Lets have some real alternatives to London. Let's spread ourselves out and take power away from the vested interests that can control our society because its all focused in London.

[louiswilliamterminator]

The UK needs a political party that actually represents the interests of ordinary working people

[martindumont]

The first big mistake was to make housing a market. A house isn’t an asset in the usual sense because if you own one and decide to sell it, unless you plan on living in your car, the only thing you’re going to buy is another house. The whole economy is propped up on this massive bubble and everyone has too much invested (literally) in the status quo for it to change. We used to have a perfectly good, “organic” system that let move around between Private rented, social housing and owner occupation as their circumstances demanded. Now after putting everything into home ownership we’ve completely upset the balance and backed ourselves into a massive crisis that only suits a small number of people.

[rodbenson]

One of the depressing things about living in England in 2023 is it feels as if the wealthy are simply becoming more and more greedy. Whatever they have is never ever enough and while this statement has always been true, it seems that the sentiment is forever becoming more extreme.

[yetanotherbassdude]

Will's point at 16:29 about economic activity kind of got glossed over in this discussion, but while the loss of arts venues is still terrible, it really is almost a side-issue of this far bigger problem that Will talks about here. The drain that the under-regulated landlord sector imposes on every other business in our economy is a stranglehold that chokes out any prospect of real growth in this country. So many smaller businesses that create jobs, bring in investment, and actually generate economic activity in our local economies and communities are being bled dry by commercial landlords who have even fewer regulations on them than the scant provision private tenants have. Reforming both commercial and private landlords to make them contribute to the economy and to give long-term stability to their tenants could well be the single best thing we could do to improve this country and the lives of ordinary people here.

[andrew]

An interesting social impact is the displacement of renters in other cites who are displaced by renters moving out of London but earning London wages, thinking particularly of cites like Bristol and Southampton.

[Tom-wyup]

The real estate bubble also massively effects the price of anything you buy. Whether from a supermarket, small shop or restaurant, how much you pay for a gym, how much it costs to watch a local sports team etc etc.

The whole thing has become like a private tax, typically the largest tax a normal earner will pay and the vast majority of those vast proceeds (generally) go to the people who need it least.

[babybluesky]

In true housing market crash style, everybody with a vested interest is denying it is even possible that a housing crash could ever happen.

[jezlawrence]

...and long may the house price crash continue.

If ANY govt over the last 40 years had wanted to avoid a crash, they should've been building more houses so as to keep the prices level. They should've introduced some rent controls (after all, they restrict what someone on benefits is allowed to get based on the local average rents, so controlling rent means controlling benefit bill). They should've increased stamp duty. And of course they should've paid more attention to how banks were leveraging their debt long before 2008 forced a massive bailout.

But they wanted house prices to go up just for sitting there cos it's an easy win for them with voters. It lets them pretend GDP and wealth has increased but it's just a virtual increase - a bubble that must pop.

They didn't. And the Great British Public, as ever, just kept doubling down on the vote yourself rich scheme and to hell with the long term consequences.

So welcome to the consequences of that 40 years of nimbyism, obsessing over "line go up=good" when it comes to property, and cowardice when it comes to tackling the entitlement of homeowners, UK.

...and yes, I do in fact own my own home. I bought at just the right time in the 90s before labour ended up tripling house prices, and I didn't buy beyond my means (i.e. 3-5x salary, compromising on location and quality in order to not open myself to this exact current inflation issue because I was alive in the 80s and not wandering around pretending my parents weren't working themselves ragged to cope with the high interest rates and I wanted none of *that* thank you) and of course I've also just been very lucky in terms of timing too.

But the point is if greed=good then I *should* be upset about house prices falling but the thing is... greed isn't good, at a socio-macro level.

It's time for a major readjustment.

We could have done it voluntarily with management and accepting less free wealth for a lucky few along the way, but we chose to wait and pretend the situation was great because homeowner assets were rising in value for no good reason... and now we're forced and it'll hurt a lot more.

See also Climate Change. Slow clap humanity, shot yourself in the foot again thanks to short termist greed and a total inability to face into the wind.

[ChrisinHove]

Prices only crash when there is a significant number of distressed sellers that HAVE to sell. If lenders don’t repossess homes in significant numbers, that won’t happen.

[heem]

Until there is a widespread acceptance that high house prices are bad for the overall economy the housing disaster will continue.

[mattjones]

We have collectively commodified every aspect of our lives. We are seeing the great transfer to the big global investment entities. In 20 years time the majority will live in homes owned by an investment fund, they will just pay rent to live in a soulless bland flat or new housing estate.

[nickross]

Ban all foreign ownership of all or any property in the UK - and through offshore companies.

[dickie_white]

So glad you've said this. A few months every "expert" was saying that there would be a staggered impact of mortgage rate rises as people came out of their fixed rate deals at different times. Then, before any of that had played out, the same people began saying that prices were rising again, and the market was recovered. We are nowhere near the end of the shockwave produced by a TRIPLING of the cost of borrowing. Thank you.

[simonau]

This is great. Unaffordable house prices reduced to unaffordable house prices!

[susanlittlesthobo]

Air BnB is also a real issue where I live in Edinburgh…it has pushed house prices and rents up way faster than they should because people can buy using commercial mortgages and the income used is based on what they can charge for short-term lets and not wages

[nikamichi]

The market is stagnant, not crashing. You will see that people won't be able to get refinanced, and thus they stay put in the home they have finance for. Supply of homes for sale becomes very tight, stopping a crash. Additionally, when you have significant immigration, the additional population needs somewhere to live.

[suzilouden]

We moved to France 15yrs move ever. Our grandkids will one day, still be able to afford housing - rental or owning.