Did The UK Property Bubble Just Burst?

The average UK house price has flown up to 266,000

Which means that despite everything that’s happened with interest rates, UK house prices are very close to their all time high!

Or are they?

Yes, this is what you see all over the news, but there is a little bit more to this than meets the eye.

And when the team and I dug into the data a bit we realised that the complete opposite has happened.

Is the UK property bubble finally bursting? Discover the real story behind soaring UK house prices, interest rates, and the hidden trends in the UK property market. We break down the data to reveal whether the UK's housing market is on the brink of a major shift.

So in this video, we are going to break down what's been happening in the UK property market.

[picknmix]

Value of a property is actually zero if you can't actually sell it. It's pretty hard to sell a property right now!

[bb]

This is cherry picking stats to fit the agenda. The numbers here don't stack up. House price to earnings are unsustainable. House prices to disposable income after tax and living costs will be even further off the scale. House price pumping videos don't make for a better life. Young people are now living with their parents into their 30's and 40's.

[HessionDrasha]

Innequality has gone up since 2004. How much of those wages that have beaten inflation, have gone to the average person? House prices are less affordable now than in 2004 for the average person.

[andrewgage]

Property prices need to come down, pay isn't going up as quick as property prices, I'm a homeowner, but the next generations can't get on the property ladder, mortgages should be based on 2.5 times the highest persons earnings, not 12 or so times, rent prices should be capped though no government would ever do that because they're renting out property, I'm grateful that I never had children, it's going to be extremely hard for the next generations

[peezpeez]

Why invest in physical real assets in a country with deep structure problems and a stagnating economy?

[markkimba]

I am to understand that the price of gold has outpaced house price inflation over the last 20 years, but there are no tenants, stamp duty, maintenance, or mortgages to deal with.
Infact I just looked it up
1kg of gold in August 2004 was approx £7000 per kg
1kg of gold in amAugust 2024 is worth £61, 223 per kg
So if I had bought 4kg with my deposit for a house cash £28000, I would now have £244, 892 hassle free.
A gross profit of £216, 892
It's a little different if you buy a house to live in as 4 gold bars don't offer much protection from the weather

[ryanwibisono]

Brother, I’ve tried selling my house for 3yrs -20% on ‘market value’ no-one’s interested, or rather no-one can afford to be interested

[dallassukerkin]

No. Because there is no bubble overall.

The true problem is that wages for 'ordinary' people have remained stagnant for thirty years and that has resulted in their being priced out of the market. For sellers, given the status of houses as an asset class, there is still a market as the wealthy look for somewhere for their ever increasing stack of Scrouge McDuck gold to go.

Houses prices have not particularly inflated - after all, to keep pace with inflation the price tag of a house has to, roughly speaking, double every ten years.

[youtubeman]

Houses are still selling I got in a bidding war with 3 other buyers and they all outbid me, the price went over the askin price, there are so many cash buyers out there and that must mean something, , where I live the houses go on the market and are sold by dinner time, so when I see doom warnings I see a different thing I’m glad because anybodys portfolios are booming and that’s a good thing surely

[menyou]

We live in houses, and that's what confuses people between price and value.
Fact is houses are a terrible investment with a load of bother attatched.
You'd have been better buying gold, and let's not mention Bitcoin, or landlords will be jumping out of windows.

[benwilkinson]

Property prices will BOOM as soon as interest rates go to 3 or 4%. The rich are buying up assets. This is what will increase prices and also built up demand from the last 2 years.

[sleekitwan]

The interesting part is @3:53 where you’ve adjusted earnings for inflation. Let’s assume your calculations are correct, I have no reason to doubt them. So, we have a situation, where if we merely close our bubble of concern, around the UK £ values of wages paid over, there’s a modest increase of about 12% let’s say. Well and good, the numbers, the money, sat in isolation, seem mildly beneficial. Now try actually buying something with that money. And the ‘average’ has become more and more detached from the pay level most people get - in other words, fewer people have a lot of pay, and many have been left behind. So the average pay level, hides the fact that even more people as a percentage of the population, will gasp at how high the average is. When I got paid £28k in the 1990’s, I recall distinctly, I had ‘just about’ reached the ‘average pay’ for the UK worker. Previously I had considered this unobtainable, things merely went right for a few years - it later went wrong, don’t worry.

And as the average pay has lurched upwards, you’re not talking take-home pay either. These figures, ignore the fact that a lot more people run into higher income tax, as they hit the average pay up at around £37, 400 as of 2024 I believe. And, pensions are much less generous in general, so what your pound buys for your longer-term prosperity, has been having the legs cut from under it. Defined contributions vs Defined Benefit, isn’t it?

And property is a special case unfortunately. I sold a modest property way back in 2009, and it cost me nearly five grand. Just legal fees, a changed practice of what Council Tax was charged on an empty property, and so on (renovation needs were extensive). That was almost 10% of the property value at that time. At the lower end of the property market, the ‘fixed costs’ are relatively huge. There is no ‘broader shoulders carry the biggest burden’ in this. Or at least, it’s not fully linked to the sale price.

Then there’s another unseen bit of whittling at the value of what you buy, this applies peculiarly again, to the UK property market. There are many, many more private landlords than back in the pre-2000 era. I’d call it flooded. Almost every single one, has done the cheapest, most cost-effective ‘fix’ or repair, or replacement, for whatever aspect needed altering, and this means the quality of what’s in there, and of repairs, is down on what people who ‘bought for life’ would have done.


The bandwagon, is always safer if you are able to not sell when hard years arrive, same as stocks and shares. In my case, we were hit by health issues of the main earner, a lack of employer support (ie a very short period of sick pay even for cancer), and the government slapped a new legislative barb on the low-end rental market. This was the so-called ‘spare room’ tax. In practice, strapped councils or benefits staff didn’t check a property of a claimant, until they announced they were moving. Quickly, everyone realised this - and promptly, tenants on benefits ceased to move. We were stuck wanting to let a property, and the only buyer was another landlord, who could afford to sit on it til matters changed. Same as shares. If you get forced to sell - and a total absence of any tenants to look at a beautiful 3-bed property meant we were - the market rips a premium off you for that. Valuation was £85k. We sold at £55k.

I concluded the same as with shares, by the time you are in the ‘right’ circumstances to safely renovate and let a property, you won;t be needing to do so! But, others will manage it. Just beware of applying methods of making money, that worked in the past, to the future. The lack of aspiration in young people to bid to rent a home, let alone buy one, is not to be underestimated. Take care all, this is merely my experience.

[andrewrichards]

Prices will slow, stop or drop in many areas of London. But up north prices will rise to equalise as up north its safer, cheaper and friendlier. Plus from the Midlands we can access the countryside and mountains very quickly.

[theroadsnearyou...]

7:00 I think you missed out the interest charged on the mortgage, how much would that have been?

[tREVVA]

Whoever drew the upward bending trendline on that graph needn't worry: they've obviously got their talent in abstract artistic fantasy as a career fallback option 😂

[kalex]

Nice video…I agree with the idea of silent crash…we had massive inflation the past few years but house prices stagnated whereas you would expect them to go as general prices rises….so if rates fall to 2-3% then for sure house prices will start increasing again since we now have higher wages..

[abdullahk]

No you can't use inflation like that! Does your inflation include rents doubling? What's your inflation based on? A hand full of consumer goods?

[flipurlid]

Property prices have crashed in Wales apparently with the surge of owners wanting to sell due second homes council tax rises and possible CGT changes- hope this does not get translated to England

[KharmaComa]

I have been saying this for years. Many of the high profile property experts out there fail to acknowledge/understand inflation adjusted prices. Perhaps because it doesnt fit their agenda/business plan.

[pmtilbury]

The big issue is that many people’s wages eg in Finance / Accounting / Banking are not much higher than 20 years ago.