10 Reasons High House Prices BROKE The Economy

A look at 10 problems of high house prices, reducing living standards, distorting economic behaviour, and more importantly can it be changed to make an economy less reliant on a booming housing market.

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ABOUT
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[mariog]

As an Italian living in the UK, I see we're heading in a similar trajectory as Italy. 35 year old living with parents, counting on heredity to pay for a house, contracted job market, lack of independence for young people. Plus, compared to Italy, worse food and worse weather

[ghengisthegreat]

Ban banks from lending more than 4x annual salary for mortgages, and ban ownership of multiple houses. Then sit back and watch houses suddenly become affordable

[gerhard]

Mortgages account for, I believe, around 80% of the new money created in the UK economy each year.

They are now, more than ever, integral to the UK economy.

Money is debt and mortgages are the economy's turbocharged wellspring.

The last thing a UK government wants is enough housing with everyone securely, comfortably and affordably housed.

Mortgage lending is the 'engine' of our debt based economy.

The 2008 financial crisis proved that.

[Birko]

UK governments of both complexions have exacerbated the problem by spending taxes on subsidising first time buyers instead of just building affordable homes, which benefits a very few but only adds flames to the price fire.
Housing should be a basic social amenity not an opportunity for investment like fine art.
As my old dad used to say: "If you continue to pay rent all your life then you will never own a brick of the property."

[crochetomania]

And yet nobody wants to talk about all the empty properties around the uk. Our town centres are mostly empty above the ground floor. That’s a lot of apartments. Yes, it’s not houses with a garden and a garage, but it still would be a suitable living for young couples, students, people who don’t drive etc…

[equin]

Unchecked immigration since 1990's. Foreign investors buying properties in places like London like they're gold bullion and leaving them empty. People buying second/holiday homes when interest rates were near zero as a way to invest. Older people living longer, stagnant construction industry. Apparently 1 in 4 MPs is also a Landlord which may explain why things have not changed for a long time. 🤔

[sid-]

with limited supply side, a lower interest rate would increase the house price thus keeping things in a "back to square one" situation

[gerhard]

It's a deliberate, significant and sustained wealth transfer by the debtmongers and their political lackeys designed to leave ever more younger and poorer people perpetually struggling, their existences perpetually precarious and in perpetual 'highly profitable for some' debt.

Asset prices like property keep rising rendering them either unattainable - shades of you will own nothing, but be happy - or only purchasable over increasingly longer (thus again more profitable for the debtmongers) time frames.

Meanwhile, the widening wealth gap also quietly helps to push up the price of even the most basic of services like dental or eye care for those who can increasingly least afford them.

These are, in fact, chosen political policies masquerading as inevitable economic ones with a suitable BS, if still frustratingly widely accepted, narrative attached to them.

Frankly, it's a scandal happening in plain sight.

[stuartburns]

Right To Buy has led to 1.4 million social homes disappearing. The majority of which end up with landlords.
End RTB

[jon-xdtl]

While the supply of new housing is sluggish, but we continue to increase demand (population), the price of housing - rents and mortgage payments - will continue to rise in real terms.

[typingcat]

Seems like it's happening everywhere in developed countries. In Korea, a lot of people point to high house price as the main reason of the record-low birthrate. People just can't afford live normally. The government should not try to artificially increase the population (e.g., import foreigners, incentivise having children). Overpopulation makes everyone's life miserable.

[fern]

Canada: The average home price was about 6 times the average Canadian's earnings in 2003. By 2023, it was 11 times.

[stateofflux]

The type of housing being developed is so wrong: The estates of unimaginative freehold houses, which waste space with individual land plots and vehicular access all around the development. In *German* cities by contrast, even in smaller towns, it’s normal to live in a mid-rise apartment building often with convenient car parking adjacent and well-maintained gardens around. The internal floor area of these apartments is much bigger than inside a typical newbuild house in England. Brits are obsessed with an inefficient legoland style of housing.

[bortstanson]

unaffordable housing has also lead to, in part, the increased immigration because if young people can't afford property, that means they can't afford to get married and have children, which are needed for the labour market but that's been replaced by increased immigration

[DavoInMelbourne]

The Tories didn’t care about the homeless problem, it was a ‘lifestyle choice’ remember?

[trewjohn]

It’s a shame greed and lack of imagination have encouraged so many people to “invest” in housing. It does nothing for the UK economy.
The plan of downsizing and selling up rental properties may backfire if there’s an entire generation coming up that are excluded from joining the property ladder.

[margaretpepper]

Over the last few years I have traveling to many places in Europe & I can tell you that the same situation exists in all European countries, & even further afield such as in New York & the Far East. I hate to be a pessimist, but TBH I don't think that house prices & rents will ever drop significantly....

[jules-bzvc]

It also distorts working practices. The emphasis is on wait and see thinking- my house will go up in price so no need to work ( passive) instead of I'm off to work to earn a living for my me and my family ( productive)

[mrgaudy]

It can be fixed, it just requires the political will to do so.

[brettlight]

Would love to see a video on Land Value Tax and how that would turn around the housing situation here in the UK.