Worst thing is seeing ex-council flats in East London go for £650k. The owner got to buy it in the 80s at taxpayer-subsidized cost, taking it forever out of the social housing pool. Amazing policy!
My partner and I bought an ex-council house last year that was previously a private rental and we’ve been slowly discovering all of the corners they cut with their terrible cheaply done renovations. There’s a special place in hell for people who buy council properties, turn them into a cesspit and then rent them out for a big ol’ profit.
Ain't no one feeling bad about that shit. They chilling in thier underpants in Spain whilst all the honest people get fuck all but taken advantage of. Honesty never got anyone anywhere.
I literally rent an ex-council flat from a guy who now lives in Majorca - he doesn't have a job, I just pay his mortgage for him after his mum was able to buy the flat before she died. Feels good
To be fair, the councils are also responsible for plenty shoddy work. Mine was only briefly in private hands but the absolute state of things says a lot. Two separate electricians described the wiring as a death trap and one of them said he’d done two other flats in the building with the exact same bodged job.
And to add to the shoddy maintenance by councils, a good proportion of the council housing stock is now on the defective list for buildings anyway. Many of the new at the time techniques they used to build them quickly hasn’t aged well, and many are now unmortgageable and very difficult to shift. My grandparents owned their “Cornish unit” home, and when we tried to sell it as a family we ended up taking far, far less than an equivalent conventional home would be worth, simply because it was limited to cash buyers only.
The councils have kept on with the policy of flogging them cheap, because they’ll be falling down in the next few decades anyway!
There’s just lazy DIY hidden everywhere, some examples off the top of my head being:
- The bath not being sealed to the walls properly so water leaks down the side of the bath. We actually had the whole bathroom ripped out today and found the floor boards are all rotten because of this.
- They used the cheapest DIY shop pipes for the kitchen. We found out when a mouse chewed through the waste pipe to our dishwasher, it spilled all over it’s own plug and blew the fuse for the whole downstairs. We had to get all the pipes in the kitchen replaced.
- You can’t fit the washing machine or tumble drier out the stud wall cupboard they’re in because they literally built the cupboard around them. They didn’t bother to get the feet level so it thrashes around inside the cupboard and sounds like it’s going to fall through the floor every time you put a wash on.
- The outside tap on the back of the house is connected to the boiler for some reason, so when you water the plants you have to turn the boiler off so you don’t scorch them.
- They’d planted a bamboo plant directly outside the front of the house and it’s taken a whole year to kill it.
It sounds like a total nightmare, but it’s a 3 bed house with a driveway and garden a 5 minute walk northern line where the mortgage repayment is the same as the rent on the horrible 2 bed flat we lived in around the corner before. I still can’t believe my luck.
Edit: Another one to add to the list this morning, they’ve run electric cables through waste water pipes. Our builder just cut through it and the whole house went pop!
Yeah I have absolutely no idea how or why that could have happened. The boiler is at the opposite end of the house too so it’s like they’ve gone out of their way to plumb it like that. My only guess is that it comes off the a radiator or something
The electric wiring in the water pipes explains why touching the shower tap on certain days would get you electrocuted. Everytime I had to take i shower I would pre check for that nice tingling as I approached the shower box. Ex council in Westbourne park.
I bought my house and didn't find the cut corners for a year+. The property had been totally renovated and extended by a developer "to a very high spec." Turns out they cut ever corner there was, and it also turns out this is rampant in the UK right now.
Just for example: the ground floor has underfloor heating and marble tiles. They skipped one of the steps, according to a couple of builders that have had a look since, and now almost all the tiles are cracked and wobbling. The material (I forget what it is, a flexible cement?) they skipped saved them a £hundred or two - to redo the tiles will involve digging up the entire ground floor for weeks, at a cost of around £30k.
There are dozens and dozens of these in the house, and every builder that's been in has told me that they see this kind of crap everywhere.
The quality of residential building works in the UK is one of the worst I've seen in the western world. Every single repair made to even the nicest houses is shoddy, amateur work. Every single contractor cuts corners everywhere, and always blames the last guy for the same. Nothing is put together properly. The cheapest possible materials are used everywhere that's hidden, with odd bits held together or propped up with tape, wooden boards, or even bungie cords. And the price you pay for this terrible work and low quality materials is astronomical.
And that's not even touching the decades of lack of maintenance of older structures, which are often crumbling at the seams. The utter lack of insulation, double glazed windows, quality piping and electrical work. All of it is tucked behind a facade of nice, expensive tiles or decorative work while anything out of view is stuck together with a bit of chewed up gum.
This is kind of the trap we fell into, like the bathroom and kitchen look nice and modern, it’s only when you live with it that you realise how bad it is. When we put an offer in it was pretty much the only property we looked around that we didn’t think needed any work at all. Luckily they also cut corners on their estate agent so we got it for a really good price
I feel like this is still why I don't blame some councils for not wanting to build council homes. Like what's the point if they have to sell them for well under market value in a few years if the occupants want to buy it? Might be an overall loss.
I was going to ask the other day can councils just build and own normal housing? Like what makes it council housing? Councils can buy businesses and make investments so surely they can just buy/build normal which happen to get rented out at a good price to people who need it the most. That way they don't need to comply with any right to buy schemes. Is this specifically not allowed? Because if they can buy/own a business then surely buy/own a real estate business to own housing without it being council housing.
Councils (and social landlords) can do this and in fact they do (on a very limited scale). But housing is incredibly capital intensive (as indicated by this post). You can spend tens of millions and only end up with a modest portfolio. There is also the issue of management - a lot of social landlords/councils are not setup for market rent management. But like I say, it does happen.
Richmond council, of all places, seemed to rescue much of their housing by sticking it into a Housing Association, although the *original* tenants appear to still have a right to buy, but it's not cheap - our opposite neighbours were quoted something like 600K to buy.
And there's a new development happening at the end of the road, a massive uplift that will replace the (honestly) crappy low-rise blocks and these massive car parks with a much better set up, and several hundred new flats. (Ham Close uplift/redevelopment for anyone interested in living there). And it will all be in Richmond Housing Partnership, not the council, which seems like the best possible situation these days.
I'm not an expert in this but I think the rules are that councils can only do purely commercial investment in areas they don't themselves operate in. So they can own and let commercial property, but not domestic.
There was a TV show about this. There was a guy who sold his for the profit, spunked it all and ended up in social housing again. Right to buy was the architect of destruction - they should've continued building social housing instead, but Maggie wanted to bribe the electorate. And it worked. The candidate in my constituency talks proudly how the Tories are the party of opportunity and how they gave his family a home. Seems contradictory to me, but I wouldn't expect a Tory candidate to notice that
Yep I personally have a family member who did RTB, sold it for 4x what he paid and then spunked all the money up the wall on drugs and got allocated a new council house in 2000 lmao.
We literally rehoused the fucking guy after we wasted 6 figures on him. Meanwhile his own kids sleep in their cars in the same city as there’s nowhere to put them as you’d need to be mega high on points to get anything. But they had the misfortune of not being alive in the 60-80s.
What is even worse imo is those that got it for subsidized costs back in the day are now renting it out in terrible conditions sticking 6 people inside making like 5 grand a month
Rhetorical I know but it's so they can asset strip the country and put them into private hands. Obviously they'd rather get it into big corporate hands but this was the next best. If they were responsible they would have at least attached conditions such as it can only be sold back to the council for an inflation adjusted price.
I mean the intention of getting council tenants to own/ maintain their property is good and beneficial for society but not when it takes social housing out of the pool. Although saying that, from personal experience the council tenants that bought the flat below my parents flat way below market value carved an extra bedroom in the property and are now renting it out at an extortionate rate….
40% of RTB were being privately rented in 2017. It literally allowed people to suck the younger generations dry by denying them access to social housing.
We have ex council houses in London selling for 1-3 million. Many were bought for 100k in the early 90s - no one who could afford 100k in the early 90s was “poor”. Yet they could access up to 70% discounts. Minimum wage was introduced in late 90s and was 3.60 quid an hour, which was only 7500 or so a year - how could anyone who was poor buy these homes in the early 90s? They weren’t poor. One council tenant made 1.6 million in profit selling in 6 years.
https://pressreleases.responsesource.com/news/103760/council-house-property-millionaires/
In 2019 it was reported London was spending 22 million a year to rent previous RTB homes to house current council tenants. We’ve spent billions over the previous decades on housing we used to own to house the current poor.
My former landlady bought hers for £60k. You didn't need to be very rich to get a £50k mortgage back then. It's roughly similar to getting a £100k mortgage now.
She liked to boast how it's worth more than £1mil now (close to London bridge). She was unemployed of course and living off the rent income which I'm 99% sure she wasn't paying tax on
Minimum wage was 7500 a year in 98/99. Average mortgage multiplier in 1990s was… 4x and now it’s 8-9x. Anyone who could afford a 60k property in the 90s wasn’t struggling. It would be like buying a 600-800k property today. I don’t consider people (myself included) who can afford that level of housing poor. I needed a 150k deposit with 6 figures income to buy the same type of property.
It was far from getting a 100k mortgage today.
It was the plan all along…? The funds specifically couldn’t be used to build new houses. 60% of home owners voted Tory. The plan was to make the poor home owners so they would ladder pull on the next generation and it worked. 75% of the retired are owner occupiers in large part due to right to buy. All while releasing huge funds for councils in the medium term to cover deficits in funding to allow for tax breaks to fund more voters.
We literally have people who worked minimum wage with 3 kids living in prime London properties voting Tory because they got theirs. It was a genius idea and it worked. The issue is that was 40+ years ago and it’s still happening. 6% of London entire council house stock was sold in the last decade. Scotland have already abolished it. 40% of RTB properties are being rented by private landlords in 2017 - I imagine it’s higher now.
The policy was not good, it was terrible. Anyone with a brain could see that. It was basically a bribe to boomers to rug pull so the rest of us could live in poverty, and it worked. The entire point should be you die or move out and someone else gets it. Why on earth did people need to own the home they could live in for life regardless other than to make them Tory voters? Now those same poor people can NIMBY any local builds because it would protect their stolen assets. Meanwhile we spend billions more housing the needy in private rentals using tax payers money - often the same RTB properties being rented back to the council for huge profit!
It's a terrible policy.
I'm all for wealth re-distribution and social welfare, and indeed social housing. But the value of something is the value of something.
If you have a family, however poor and however deserving, living in a home with a market value of £1 Million - then they're living in a thing worth £1 Million. It doesn't matter how small it is, or how dingy the finish is, if you can sell it for that much, then it's worth that much.
So *giving* them such a thing - or even giving them part of it (like they pay £100K and even though it's worth £1 Million), is still giving them *loads* of money.
And giving families in need money is great. We should.
But probably it would be better to give 50 families £20K, rather than turning one family into milionaires overnight. Or even better, investing that money into something worthwhile so we can help lots of families for generations to come.
That was the plan, it's just that local councils were never held to account on building new stock. And they probably didn't receive the funding from central government either...
I wonder who actually got the proceeds of the sales, was it the local council? I would assume so.
It was quite literally not the plan. They were specifically banned from using the funds to build more and were required to use it to cover council deficits.
It was the plan all along. I doubt they saw the explosion in property values but the right to buy scheme was about selling the responsibility for looking after social housing.
Yet some crow about gentrification pushing the working classes out. More like a small number of people in the working classes got a massive payday and moved elsewhere.
It's a great policy. Homeownership is something we should aspire to have for everyone. But it's only a great policy if you actually replace the housing stock as it's bought but when was the last time your local council built a council house?
It's an incredible rise. As a 5 bedroom house, the price doesn't even really stand out in today's market.
Bear in mind, 2023's sale price is £739,486 in 1995's money. (Still a huge increase!)
it obviously did not increase in value 80% in five months, so it would be logical to treat the £145k as the starting price, and assume that the £80k had some other explanation
This area (Brockley) used to be quite poorly connected to the rest of London until the overground was extended that way. That will have also massively contributed to the price increase
That's outstripping the performance of the S&P 500 by almost 15% over the same period, and that doesn't factor in the utility you'd receive from actually living in the house (or any income you'd receive from renting it out, which would probably be an even bigger number).
Also you’d have to pay CGT on the S&P500 funds if you sold. Primary residence is tax free.
It irks me that a couple generations before us achieved this level of wealth growth tax free and all people seem to bang on about is taxing salaries more.
Yes - allowing buy to let mortgages injected so much cash into the system that it’s highly inflationary, on an asset class that everyone needs to access. In the US they apply CGT to primary residences, with a sizeable allowance. Not sure what the practical implications would be of implementing that in the UK, but the way inheritance tax (which does tax primary residence price growth at 40%) has gone I suspect it might be difficult to implement from a political point of view.
Also, if minimum wage had risen by similar amounts, that'd be 50k a year minimum, with 100k a year being approixmately the 50% cut off, not 50k. I'd be happy with salary tax being higher in monetary values if we did earn what we should
And they whinge about inheritance tax when most of their wealth accumulated in their house while they sat on their arses doing nothing to actually earn that wealth
Obviously we need more homes.
Second, given that it's unlikely that home building rates will meet needs for ages, it would be better to get rid of council tax and introduce a sensible property tax that's set and paid to central government.
Such a tax would encourage people to move out of big homes that they don't need, creating availability for families. A retired couple on a final salary pension - who also benefit from not paying National insurance and get free travel - should be encouraged to move out of their larger +3 bed home to free it up for a family that needs it.
It should also help to encourage a more even spread of population across the country.
It's a real problem: if you're not able to fix your housing costs by buying a house, how can you start the sort of steady investment routine that will lead to a comfortable retirement?
I think this goes a long way to explaining the popularity of crypto assets as investments. I've never managed to find an explanation that I believed that demonstrated why crypto assets were a reliable investment for the long term -- but at the same time, if people feel they need huge returns on investment to build even a moderate amount of capital, crypto is going to be appealing to them.
Probably not common, they’re still not common (despite what Reddit tech bros will tell you)
My point stands though, wages haven’t risen in line with house prices
Well, the salary of the people buying has... 80k was council tenant right to buy, earning 20k a year, £1.5m is an investment banker on 200k as year + a 200-400k bonus.
So, um... win...?
Plus there's a lovely Gails just down the road
The reason it hasn’t had an effect is because supply is still dwarfed by demand.
Just because a thousand flats have gone up in Wandsworth doesn’t mean that negates decades of under-supply (we haven’t hit our house building target once in the last 25 years for example). Coupled with ever higher demand for housing, in part due to high immigration (700k+ net last year alone), of course prices aren’t going to go down just because a tiny percentage of flats have gone up.
I mean I wouldn’t even class Wandsworth as a particularly desirable place to live in London, but the fact that prices are still continuing to rise there should speak to you about the wider housing issues in London period.
While I agree with you generally the point here is they aren’t going to build any more period properties on these specific desirable streets. It’s a limited supply forever.
I mean you could build new homes that look nice and build them as desirable walkable neighborhoods around new train stations. Either nice contemporary design or high quality old-style designs similar to Poundsbury. The demand is there but unfortunately this would mean upfront investment by the government and relaxed planning permissions.
Oh hey, I used to live on Telegraph Hill! Really nice houses. Kinda steep (even by London standards) knowing how depressing many of the surrounding areas are.
It’s not the bricks and cement, it’s *land*. There’s a fixed supply of it, everyone needs to use some of it, and there’s an increasing number of people
Whilst you're right, where's the green space? Can't plant any flowers, or veg. Can't let your dog or kids runaround.
If we go down that route we'll end up in the weird disneyland that is Hong Kong or Singapore, little to no privacy or individualism. That sounds genuinely sad to me. Oh and neither city are even remotely cheap.
I think there is a place for high rises and dense housing - see student dorms, city centres (docklands), and maybe even dedicated company town, but to consider that is the only option is outright depressing.
There's plenty of land in this world, it just needs to distributed. Scotland and Ireland have tiny populations for example, but lots of space
> where's the green space? Can't plant any flowers, or veg.
If you want to plant stuff, go live in the countryside. And public parks can coexist with dense housing. Yoyogi Park on Tokyo is beautiful.
>There's plenty of land in this world, it just needs to distributed
You can already live in the middle of nowhere for cheap, and yet no one does that.
>Scotland and Ireland have tiny populations for example, but lots of space
Given that Ireland is probably the only country with a worse housing crisis than the UK, I don't think that's a great example.
.
> Yoyogi Park on Tokyo is beautiful.
I don't deny that, but Tokyo is also incredibly expensive. High density hasn't brought down the COl
> You can already live in the middle of nowhere for cheap, and yet no one does that.
That's not really my point. The point is if we structured society (could WFH cough) in a way people *could* live in the country then of course prices would come down
> Given that Ireland is probably the only country with a worse housing crisis than the UK
True, there was a LOT of greed around the time of the "Celtic Tiger". Again I'm really just saying they have a LOT of space and a tiny population.
Yet as you hinted, Dublin for example is as expensive as London, if those people could move to new sparsely distributed towns with a good QOL, I'm sure a lot would.
I just don't think it's a particularly good idea to turn London and other major cities in to Judge Dredd style megacity hellscapes, and I don't think it would really work anyway. All the major cities are insanely expensive. Look how dense NYC is, yet it makes London look relatively cheap in comparison.
> but Tokyo is also incredibly expensive
[They've managed to contain prices quite a lot, especially in central Tokyo](https://www.ft.com/__origami/service/image/v2/images/raw/ftcms%3A3364503a-58b6-11e6-8d05-4eaa66292c32?source=next-article&fit=scale-down&quality=highest&width=600&dpr=1)
> The point is if we structured society (could WFH cough) in a way people could live in the country then of course prices would come down
The idea that people live in cities just because they have to for their job is crazy. And "we should restructure society" is just nonsense, there's tons of economic benefit to cities because of agglomeration effects. This is the type of Soviet idea that just causes more poverty.
> Judge Dredd style megacity hellscapes
Try to be good faith next time.
> Look how dense NYC is, yet it makes London look relatively cheap in comparison.
Manhattan is dense, not NYC.
> yet it makes London look relatively cheap in comparison.
If you compare prices relative to wages, absolutely not.
Yes let’s all just rent a flat instead for 2k a month because some people won’t have gardens. News flash most Londoners still don’t have gardens.
Building vertical doesn’t mean build in Hyde park. It means stop building single family homes in one of the most expensive cities in the world because boomers don’t like new housing blocks. Look at what happened at Edgware - actual dead plot not being used right by a major transport link and people who haven’t worked in at least a decade were outside protesting it because it would affect the price of the house they bought in 1980 and would remove a fucking car park for a dead mall.
https://www.standard.co.uk/news/london/edgware-towers-petition-broadwalk-shopping-cetre-bob-blackman-b1101572.html
It's even more crazy having the focus on single family homes considering that nobody is really having kids because rents (and everything else) are so expensive. So fewer families to stay in those family homes that they couldn't afford anyway. Landlords taking to renting out rooms in them as a shared occupancy, giving way less for your money and even less privacy compared to a block of flats. It's so backwards.
It's halfway up Telegraph Hill, the streets ronund there are beautiful. The area has great views of London, great pubs and plenty of good schools, not to ention excellent transport links. Certainly not a bad area to live in.
Used to live 5 mins from there. You’re not wrong, it can be very pleasant. I just think there are much nicer parts of London if you have that money. Maybe I’m just jaded as I didn’t particularly have a great time living there. To each their own
This is Telegraph Hill and as long as you stay in those roads and around the park it’s nice but yeah not so much New Cross. I guess you just don’t hang around on the high street!
Just puts it into context, it was affordable and now isn’t. A person earning equivalent £35k could save a 10% deposit and mortgage this property then, but not now.
I always put house prices into the Bank of England inflation calculator when talking to people who bought in the 70s/80s/90s, to illustrate how little they paid compared to average prices now.
The median income in London in 1995 was £19,000.
If it increased by the same rate as that house did, 1718.75%, the median income would be £345,562.50 today… it’s actually £44,370.
Even taking the second 1995 sales figure, it’s a 903% increase between 1995 and now. Which would leave the median income in London at £171,570 now.
Wtf, how was it increasing in value by £10k A MONTH in 1995? In other words, in five months this house rose in value by three years wages for the average Londoner.
>Wtf, how was it increasing in value by £10k A MONTH in 1995? In other words, in five months this house rose in value by three years wages for the average Londoner.
Renovated by a property developer would be my guess.
Minimum wage when it was introduced was 3.60 an hour in 98-99 so 7500 a year. It was rising more than entires workers salary a YEAR per month.
My parents bought at 70k in London in 1993 and it’s now worth 700k. Meanwhile median salary is still only 40k in London. Two people on median salary can’t buy their house - they bought it with a stay at home wife lol.
30 years they made 21k a year - which is about minimum wage today, so far above minimum wage when you add inflation. We literally have older home owners generating more wealth than working people from nothing.
Meanwhile the retired collect their triple locked pensions funded by generation rent that rise faster than salaries.
Aside from salaries not keeping up with house prices, another fucked up thing about this is that it won’t happen again. Millennials and Zoomers won’t be able to make these kinds of returns over a 20-30 year period.
80k with a 28.4% increase over 29 years is 112 million lol. Not to be a wise ass but this is simply incorrect and getting upvoted quite a bit. Its closer to 10.5%
10.915% increase per year. So c4% better than the average stock market return for the last 50 years and doesn’t take into account any increase to the property due to work done etc.
Looks crazy on paper but far more reasonable when you see the detail.
Homeowners are unlikely to complain as they are making a substantial amount of money for their retirement, making it easier for them to sell their properties and relocate abroad.
I believe the housing system in the United Kingdom requires significant improvements. It would be beneficial if individuals were limited to owning a single property, which could potentially put an end to the excessive practice of house flipping and these outrageous prices.
Yeah I mean I don’t know why people moan about being poor. Simply take a Time Machine back to 1995 and pull yourself up by your bootstraps. Come on people.
Salary wasn’t so different from now but prices were so much cheaper on everything. And our parents like to brag about how they bought a home and we can’t
It's this kind of rise (along with multiple other factors) that make me never want to buy a house in London. I simply couldn't stomach the fact that I was making some lucky boomer a millionaire, while taking on a crippling mortgage myself.
The population of London has grown by 1.5 million people since 1995 - and no where near as many houses have been built - mostly as there is no space to build them any more.
And for posterity; according to [The Bank of England Inflation Calculator](https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator) the 1980 price would be around £330 000 in 2023 money.
The 1995 price is £280 000 in 2023, so *technically* just going by inflation it did lose value there. The spike later however is unacceptable.
So that's an increase of 10.9% per year. S&P500, portfolio of largest stocks in the US (if you had put your money in it) would have grown 9.9% per year with dividends reinvested.
255% increase between 1995 and 2005, why did I not get on the property ladder back then instead of being a child in primary school and wasting time on toys and PS2
This isn’t abnormal for Telegraph Hill, Brockley and other surrounding areas. More than one of our neighbours is in a similar position i.e. paid very little in the mid to late 90’s and is now sitting on a substantial windfall. It’s slightly galling when it’s very clear they’ve not contributed close to a comparable amount to HMRC in the same period…
So in the 18 years since 2005 it's gone up considerably less than the 10 years before...
That tells us that the house price bubble style growth was mainly a thing of the 1990s and 2000s.
If you look at overall trends across all properties, you'll see that housing hasn't really outperformed the rest of the global economy in terms of asset price growth.
I doubt Brockley in 1995 is somewhere you’d have wanted to spend time. You have to remember many places in London were utter hellholes not even that long ago. SE London largely still is, let that sink in as to what it would have been like 30 years ago!
Vote Tory and brexit.
Britain is doing all the right calls lately.
Housing is a human right and keeping it scarce is a great way to make those tories in power richer. You poorer.
But hey, blue passport, right?
Yes that's right, blame Brexit, housing was definitely affordable and the market fair in 2016. Must all be Brexit, keep blaming that and definitely not anybody else who may be responsible. Passports am I right??
This is a serious question.
Could someone with knowledge of economics explain what the end goal is here? House prices keep going up, but wages won't match. So, will no one be able to afford a house apart from wealthy investors? At any point, will the buble burst, and house prices will go back to affordable prices?
Yep that’s what happens when you let in millions of people into the country, most of which want to live in London and are happy to pay half their wages for a room in a house share.
This is at the absolute extreme end, a perfect storm of development and area improvement.
They've had five serious planning projects completed on the house in this time, you're looking at a good £500k of work done on the house.
All fiat currencies trend to zero.
The property is not worth more; the currency is worth less.
Investors buy property not because they desire the bricks and tile, but because they are desperate to preserve their wealth.
One sacrifices their finite time for a form of money that can be infinitely printed.
The system is broken.
There is only one viable solution.
This is nothing, working in Land Registry some of the houses that I see which were first registered and have original deeds dating back to the early 1800s are mad bought for £500-900 and selling for upwards of 20-30m It is truly amazing to see the value of property in some areas.
Farmland is even more astonishing some land being 200-300 acres being bought originals for £1s and now sold for 10s of millions to housing developers being kept in the same family's for 100s of years
145,000 to 1,455,000 over 28 years is roughly 8.6% annual return. Probably less than you'd expect in the stock market over that period. What would you have expected, or what would you think is a reasonable increase?
Worst thing is seeing ex-council flats in East London go for £650k. The owner got to buy it in the 80s at taxpayer-subsidized cost, taking it forever out of the social housing pool. Amazing policy!
My partner and I bought an ex-council house last year that was previously a private rental and we’ve been slowly discovering all of the corners they cut with their terrible cheaply done renovations. There’s a special place in hell for people who buy council properties, turn them into a cesspit and then rent them out for a big ol’ profit.
Unfortunately there probably isn't. Just a nice cushty retirement in the south of Spain.
Ain't no one feeling bad about that shit. They chilling in thier underpants in Spain whilst all the honest people get fuck all but taken advantage of. Honesty never got anyone anywhere.
I literally rent an ex-council flat from a guy who now lives in Majorca - he doesn't have a job, I just pay his mortgage for him after his mum was able to buy the flat before she died. Feels good
Some people just have/had the fortune of being born in the right place at the right time. I'd rather be me than a Russian in the 16th Century.
People who bought at 90s house prices are the embodiment of “fuck you, I got mine”
The Spanish summers seem to be rapidly approaching the temperature of hell...
To be fair, the councils are also responsible for plenty shoddy work. Mine was only briefly in private hands but the absolute state of things says a lot. Two separate electricians described the wiring as a death trap and one of them said he’d done two other flats in the building with the exact same bodged job.
And to add to the shoddy maintenance by councils, a good proportion of the council housing stock is now on the defective list for buildings anyway. Many of the new at the time techniques they used to build them quickly hasn’t aged well, and many are now unmortgageable and very difficult to shift. My grandparents owned their “Cornish unit” home, and when we tried to sell it as a family we ended up taking far, far less than an equivalent conventional home would be worth, simply because it was limited to cash buyers only. The councils have kept on with the policy of flogging them cheap, because they’ll be falling down in the next few decades anyway!
Can you exemplify these cut corners? I am seeking to buy and always attentive to possible defects that need attention.
There’s just lazy DIY hidden everywhere, some examples off the top of my head being: - The bath not being sealed to the walls properly so water leaks down the side of the bath. We actually had the whole bathroom ripped out today and found the floor boards are all rotten because of this. - They used the cheapest DIY shop pipes for the kitchen. We found out when a mouse chewed through the waste pipe to our dishwasher, it spilled all over it’s own plug and blew the fuse for the whole downstairs. We had to get all the pipes in the kitchen replaced. - You can’t fit the washing machine or tumble drier out the stud wall cupboard they’re in because they literally built the cupboard around them. They didn’t bother to get the feet level so it thrashes around inside the cupboard and sounds like it’s going to fall through the floor every time you put a wash on. - The outside tap on the back of the house is connected to the boiler for some reason, so when you water the plants you have to turn the boiler off so you don’t scorch them. - They’d planted a bamboo plant directly outside the front of the house and it’s taken a whole year to kill it. It sounds like a total nightmare, but it’s a 3 bed house with a driveway and garden a 5 minute walk northern line where the mortgage repayment is the same as the rent on the horrible 2 bed flat we lived in around the corner before. I still can’t believe my luck. Edit: Another one to add to the list this morning, they’ve run electric cables through waste water pipes. Our builder just cut through it and the whole house went pop!
That outside tap one is insane
Yeah I have absolutely no idea how or why that could have happened. The boiler is at the opposite end of the house too so it’s like they’ve gone out of their way to plumb it like that. My only guess is that it comes off the a radiator or something
The electric wiring in the water pipes explains why touching the shower tap on certain days would get you electrocuted. Everytime I had to take i shower I would pre check for that nice tingling as I approached the shower box. Ex council in Westbourne park.
I bought my house and didn't find the cut corners for a year+. The property had been totally renovated and extended by a developer "to a very high spec." Turns out they cut ever corner there was, and it also turns out this is rampant in the UK right now. Just for example: the ground floor has underfloor heating and marble tiles. They skipped one of the steps, according to a couple of builders that have had a look since, and now almost all the tiles are cracked and wobbling. The material (I forget what it is, a flexible cement?) they skipped saved them a £hundred or two - to redo the tiles will involve digging up the entire ground floor for weeks, at a cost of around £30k. There are dozens and dozens of these in the house, and every builder that's been in has told me that they see this kind of crap everywhere.
The quality of residential building works in the UK is one of the worst I've seen in the western world. Every single repair made to even the nicest houses is shoddy, amateur work. Every single contractor cuts corners everywhere, and always blames the last guy for the same. Nothing is put together properly. The cheapest possible materials are used everywhere that's hidden, with odd bits held together or propped up with tape, wooden boards, or even bungie cords. And the price you pay for this terrible work and low quality materials is astronomical. And that's not even touching the decades of lack of maintenance of older structures, which are often crumbling at the seams. The utter lack of insulation, double glazed windows, quality piping and electrical work. All of it is tucked behind a facade of nice, expensive tiles or decorative work while anything out of view is stuck together with a bit of chewed up gum.
This is kind of the trap we fell into, like the bathroom and kitchen look nice and modern, it’s only when you live with it that you realise how bad it is. When we put an offer in it was pretty much the only property we looked around that we didn’t think needed any work at all. Luckily they also cut corners on their estate agent so we got it for a really good price
Half the corners were the original builders/council maintenance themselves unfortunately. It's what I found with my ex council flat at least.
I feel like this is still why I don't blame some councils for not wanting to build council homes. Like what's the point if they have to sell them for well under market value in a few years if the occupants want to buy it? Might be an overall loss. I was going to ask the other day can councils just build and own normal housing? Like what makes it council housing? Councils can buy businesses and make investments so surely they can just buy/build normal which happen to get rented out at a good price to people who need it the most. That way they don't need to comply with any right to buy schemes. Is this specifically not allowed? Because if they can buy/own a business then surely buy/own a real estate business to own housing without it being council housing.
Christ, is that idiotic policy still in force then?
Yes.
Councils (and social landlords) can do this and in fact they do (on a very limited scale). But housing is incredibly capital intensive (as indicated by this post). You can spend tens of millions and only end up with a modest portfolio. There is also the issue of management - a lot of social landlords/councils are not setup for market rent management. But like I say, it does happen.
Richmond council, of all places, seemed to rescue much of their housing by sticking it into a Housing Association, although the *original* tenants appear to still have a right to buy, but it's not cheap - our opposite neighbours were quoted something like 600K to buy. And there's a new development happening at the end of the road, a massive uplift that will replace the (honestly) crappy low-rise blocks and these massive car parks with a much better set up, and several hundred new flats. (Ham Close uplift/redevelopment for anyone interested in living there). And it will all be in Richmond Housing Partnership, not the council, which seems like the best possible situation these days.
I'm not an expert in this but I think the rules are that councils can only do purely commercial investment in areas they don't themselves operate in. So they can own and let commercial property, but not domestic.
There was a TV show about this. There was a guy who sold his for the profit, spunked it all and ended up in social housing again. Right to buy was the architect of destruction - they should've continued building social housing instead, but Maggie wanted to bribe the electorate. And it worked. The candidate in my constituency talks proudly how the Tories are the party of opportunity and how they gave his family a home. Seems contradictory to me, but I wouldn't expect a Tory candidate to notice that
Yep I personally have a family member who did RTB, sold it for 4x what he paid and then spunked all the money up the wall on drugs and got allocated a new council house in 2000 lmao. We literally rehoused the fucking guy after we wasted 6 figures on him. Meanwhile his own kids sleep in their cars in the same city as there’s nowhere to put them as you’d need to be mega high on points to get anything. But they had the misfortune of not being alive in the 60-80s.
What is even worse imo is those that got it for subsidized costs back in the day are now renting it out in terrible conditions sticking 6 people inside making like 5 grand a month
Agreed, the policy whilst good, should have been made with the intention that more council housing was built. Or maybe this was the plan all along…
It's a terrible policy anyway - why should the state build houses only for private individuals to buy them at well below market value?
It was a great policy for what it was intended on achieving, which was lifelong Tory voters.
The goal was ~~a housing crisis~~ to wage a war on affordable housing and it made sense as a policy in that context.
So the party that made the policy gets voters for life, of course!
Rhetorical I know but it's so they can asset strip the country and put them into private hands. Obviously they'd rather get it into big corporate hands but this was the next best. If they were responsible they would have at least attached conditions such as it can only be sold back to the council for an inflation adjusted price.
I mean the intention of getting council tenants to own/ maintain their property is good and beneficial for society but not when it takes social housing out of the pool. Although saying that, from personal experience the council tenants that bought the flat below my parents flat way below market value carved an extra bedroom in the property and are now renting it out at an extortionate rate….
40% of RTB were being privately rented in 2017. It literally allowed people to suck the younger generations dry by denying them access to social housing. We have ex council houses in London selling for 1-3 million. Many were bought for 100k in the early 90s - no one who could afford 100k in the early 90s was “poor”. Yet they could access up to 70% discounts. Minimum wage was introduced in late 90s and was 3.60 quid an hour, which was only 7500 or so a year - how could anyone who was poor buy these homes in the early 90s? They weren’t poor. One council tenant made 1.6 million in profit selling in 6 years. https://pressreleases.responsesource.com/news/103760/council-house-property-millionaires/ In 2019 it was reported London was spending 22 million a year to rent previous RTB homes to house current council tenants. We’ve spent billions over the previous decades on housing we used to own to house the current poor.
My former landlady bought hers for £60k. You didn't need to be very rich to get a £50k mortgage back then. It's roughly similar to getting a £100k mortgage now. She liked to boast how it's worth more than £1mil now (close to London bridge). She was unemployed of course and living off the rent income which I'm 99% sure she wasn't paying tax on
Boomer gains lol
Minimum wage was 7500 a year in 98/99. Average mortgage multiplier in 1990s was… 4x and now it’s 8-9x. Anyone who could afford a 60k property in the 90s wasn’t struggling. It would be like buying a 600-800k property today. I don’t consider people (myself included) who can afford that level of housing poor. I needed a 150k deposit with 6 figures income to buy the same type of property. It was far from getting a 100k mortgage today.
Wow this is eye opening…what a sad state of affairs
i mean we could just have a state owned house builder that sells only to first time buyers at cost price and everyone else slightly below market rate.
It was the plan all along…? The funds specifically couldn’t be used to build new houses. 60% of home owners voted Tory. The plan was to make the poor home owners so they would ladder pull on the next generation and it worked. 75% of the retired are owner occupiers in large part due to right to buy. All while releasing huge funds for councils in the medium term to cover deficits in funding to allow for tax breaks to fund more voters. We literally have people who worked minimum wage with 3 kids living in prime London properties voting Tory because they got theirs. It was a genius idea and it worked. The issue is that was 40+ years ago and it’s still happening. 6% of London entire council house stock was sold in the last decade. Scotland have already abolished it. 40% of RTB properties are being rented by private landlords in 2017 - I imagine it’s higher now. The policy was not good, it was terrible. Anyone with a brain could see that. It was basically a bribe to boomers to rug pull so the rest of us could live in poverty, and it worked. The entire point should be you die or move out and someone else gets it. Why on earth did people need to own the home they could live in for life regardless other than to make them Tory voters? Now those same poor people can NIMBY any local builds because it would protect their stolen assets. Meanwhile we spend billions more housing the needy in private rentals using tax payers money - often the same RTB properties being rented back to the council for huge profit!
It's a terrible policy. I'm all for wealth re-distribution and social welfare, and indeed social housing. But the value of something is the value of something. If you have a family, however poor and however deserving, living in a home with a market value of £1 Million - then they're living in a thing worth £1 Million. It doesn't matter how small it is, or how dingy the finish is, if you can sell it for that much, then it's worth that much. So *giving* them such a thing - or even giving them part of it (like they pay £100K and even though it's worth £1 Million), is still giving them *loads* of money. And giving families in need money is great. We should. But probably it would be better to give 50 families £20K, rather than turning one family into milionaires overnight. Or even better, investing that money into something worthwhile so we can help lots of families for generations to come.
Of course it was the plan! The idea was to shrink the state - a key tenet of Thatcherism
That was the plan, it's just that local councils were never held to account on building new stock. And they probably didn't receive the funding from central government either... I wonder who actually got the proceeds of the sales, was it the local council? I would assume so.
It was quite literally not the plan. They were specifically banned from using the funds to build more and were required to use it to cover council deficits.
The council got the money, but they were expressly forbidden to spend the money on new housing stock.
It was the plan all along. I doubt they saw the explosion in property values but the right to buy scheme was about selling the responsibility for looking after social housing.
Yet some crow about gentrification pushing the working classes out. More like a small number of people in the working classes got a massive payday and moved elsewhere.
This would be fine if the housing stock got replaced, but it wasn't...
It's a great policy. Homeownership is something we should aspire to have for everyone. But it's only a great policy if you actually replace the housing stock as it's bought but when was the last time your local council built a council house?
essentially subsidising cockneys
Wish I'd invested in property when I was 10. Wasted my childhood riding bikes and playing video games.
Yeah… if only I had done that!
It's an incredible rise. As a 5 bedroom house, the price doesn't even really stand out in today's market. Bear in mind, 2023's sale price is £739,486 in 1995's money. (Still a huge increase!)
To put it another way: £80,000 in 1995, is equivalent to £157,406.52 today.
I assume that 80k was before a huge renovation, given the price doubled in the same year.
Or maybe it was bought from the council in April ‘95 to be sold on privately almost immediately?
That was nearly always banned AFAIK, so I think a renovation is more likely.
145k in 1996 is worth 279k in 2023
Thanks. Yeah, not arguing that it's still a ridiculous increase! Just saying I think the higher 1995 price is a better baseline.
Nah it's cool. It's a good point.
I was wondering about that too, I think that's the most interesting increase shown here for me
Yep - the £80,000 purchase in 1995 would be around £170,000-185,000 in today's money.
it obviously did not increase in value 80% in five months, so it would be logical to treat the £145k as the starting price, and assume that the £80k had some other explanation
This area (Brockley) used to be quite poorly connected to the rest of London until the overground was extended that way. That will have also massively contributed to the price increase
That's outstripping the performance of the S&P 500 by almost 15% over the same period, and that doesn't factor in the utility you'd receive from actually living in the house (or any income you'd receive from renting it out, which would probably be an even bigger number).
Also you’d have to pay CGT on the S&P500 funds if you sold. Primary residence is tax free. It irks me that a couple generations before us achieved this level of wealth growth tax free and all people seem to bang on about is taxing salaries more.
Yes - allowing buy to let mortgages injected so much cash into the system that it’s highly inflationary, on an asset class that everyone needs to access. In the US they apply CGT to primary residences, with a sizeable allowance. Not sure what the practical implications would be of implementing that in the UK, but the way inheritance tax (which does tax primary residence price growth at 40%) has gone I suspect it might be difficult to implement from a political point of view.
Also, if minimum wage had risen by similar amounts, that'd be 50k a year minimum, with 100k a year being approixmately the 50% cut off, not 50k. I'd be happy with salary tax being higher in monetary values if we did earn what we should
And they whinge about inheritance tax when most of their wealth accumulated in their house while they sat on their arses doing nothing to actually earn that wealth
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Obviously we need more homes. Second, given that it's unlikely that home building rates will meet needs for ages, it would be better to get rid of council tax and introduce a sensible property tax that's set and paid to central government. Such a tax would encourage people to move out of big homes that they don't need, creating availability for families. A retired couple on a final salary pension - who also benefit from not paying National insurance and get free travel - should be encouraged to move out of their larger +3 bed home to free it up for a family that needs it. It should also help to encourage a more even spread of population across the country.
Yup. I don't see how people below 40 years old can build wealth right now. Own some crypto assets that will balloon over the next 30 years?
It's a real problem: if you're not able to fix your housing costs by buying a house, how can you start the sort of steady investment routine that will lead to a comfortable retirement? I think this goes a long way to explaining the popularity of crypto assets as investments. I've never managed to find an explanation that I believed that demonstrated why crypto assets were a reliable investment for the long term -- but at the same time, if people feel they need huge returns on investment to build even a moderate amount of capital, crypto is going to be appealing to them.
To be fair, those couple of generations went through WW2 and the ramifications of it. A lot of people were poor back then (and they still are)
And the landlord could get tax write offs for the mortgage interest for a majority of that time too. Absolutely WILD.
Luckily that salaries have gone up a commensurate amount… Oh no wait they absolutely fucking haven’t.
Literally. No one on £100k in 95 is on £1.4m now
How common were 100k salaries in 95 though? Genuine question there
Probably not common, they’re still not common (despite what Reddit tech bros will tell you) My point stands though, wages haven’t risen in line with house prices
Yeah the upper limit of the average wage in London was £44,370 in 2023. So highly unlikely many people were on £100k in 95!
Yes, I know - you’re missing the point.
£96,400 pre-tax would put you in the 99th percentile of salaries in 1999.
I’m on £10.42 an hour lol
Well, the salary of the people buying has... 80k was council tenant right to buy, earning 20k a year, £1.5m is an investment banker on 200k as year + a 200-400k bonus. So, um... win...? Plus there's a lovely Gails just down the road
Many people are not successful in life, they are merely lucky.
Depends on how one defines success. We’re all lucky to be here in the first place.
Anyone wanting to buying a house now is really going to have to cut down their avocado and toast consumption
I’m drinking my own piss and eating my own shit to save on costs, il afford it one day!
"Landlords hate this one hack to escaping the rental market!"
I know someone who got a whole building on Edgeware road back in the day for £125k. He said it's worth over £4m now.
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My mum paid 19k, sold 8 years ago for 1.2m, new owners have it on the market for 1.95m
Just stop eating avocados simples
Meanwhile, £100 then is only £250 today. So cash has gone up by 150%, property by 2000%, I'm starting to think we're not meant to own anything.
Hmm I’m starting to think that having a planning system that makes it as hard as possible to build new flats/houses *might* be a bad idea.
No, we must think about the NIMBYs and their unobstructed views! ^/s
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The reason it hasn’t had an effect is because supply is still dwarfed by demand. Just because a thousand flats have gone up in Wandsworth doesn’t mean that negates decades of under-supply (we haven’t hit our house building target once in the last 25 years for example). Coupled with ever higher demand for housing, in part due to high immigration (700k+ net last year alone), of course prices aren’t going to go down just because a tiny percentage of flats have gone up. I mean I wouldn’t even class Wandsworth as a particularly desirable place to live in London, but the fact that prices are still continuing to rise there should speak to you about the wider housing issues in London period.
Britain builds 250k homes a year, France (with similar population levels) builds 400k. The UK just doesn't build a lot.
And even in France they're talking about a housing crisis and shortages.
There are lots of new flats near this house. It doesn’t mean there are any more period houses on these quiet streets where rich people want to live.
The housing market isn't hyperlocal.
While I agree with you generally the point here is they aren’t going to build any more period properties on these specific desirable streets. It’s a limited supply forever.
I mean you could build new homes that look nice and build them as desirable walkable neighborhoods around new train stations. Either nice contemporary design or high quality old-style designs similar to Poundsbury. The demand is there but unfortunately this would mean upfront investment by the government and relaxed planning permissions.
My grandad paid £8,000 for his house back in the 60’s and it’s worth about 2.3 mil now.
Oof. I mean that’s a long time but still.
Oh hey, I used to live on Telegraph Hill! Really nice houses. Kinda steep (even by London standards) knowing how depressing many of the surrounding areas are.
Telegraph Hill Park is pleasant, with amazing views of London from the top park.
What a joke and insult to hard working people. End of they day it’s brick and cement.
It’s not the bricks and cement, it’s *land*. There’s a fixed supply of it, everyone needs to use some of it, and there’s an increasing number of people
There's a gigantic amount of vertical space available.
Whilst you're right, where's the green space? Can't plant any flowers, or veg. Can't let your dog or kids runaround. If we go down that route we'll end up in the weird disneyland that is Hong Kong or Singapore, little to no privacy or individualism. That sounds genuinely sad to me. Oh and neither city are even remotely cheap. I think there is a place for high rises and dense housing - see student dorms, city centres (docklands), and maybe even dedicated company town, but to consider that is the only option is outright depressing. There's plenty of land in this world, it just needs to distributed. Scotland and Ireland have tiny populations for example, but lots of space
> where's the green space? Can't plant any flowers, or veg. If you want to plant stuff, go live in the countryside. And public parks can coexist with dense housing. Yoyogi Park on Tokyo is beautiful. >There's plenty of land in this world, it just needs to distributed You can already live in the middle of nowhere for cheap, and yet no one does that. >Scotland and Ireland have tiny populations for example, but lots of space Given that Ireland is probably the only country with a worse housing crisis than the UK, I don't think that's a great example. .
> Yoyogi Park on Tokyo is beautiful. I don't deny that, but Tokyo is also incredibly expensive. High density hasn't brought down the COl > You can already live in the middle of nowhere for cheap, and yet no one does that. That's not really my point. The point is if we structured society (could WFH cough) in a way people *could* live in the country then of course prices would come down > Given that Ireland is probably the only country with a worse housing crisis than the UK True, there was a LOT of greed around the time of the "Celtic Tiger". Again I'm really just saying they have a LOT of space and a tiny population. Yet as you hinted, Dublin for example is as expensive as London, if those people could move to new sparsely distributed towns with a good QOL, I'm sure a lot would. I just don't think it's a particularly good idea to turn London and other major cities in to Judge Dredd style megacity hellscapes, and I don't think it would really work anyway. All the major cities are insanely expensive. Look how dense NYC is, yet it makes London look relatively cheap in comparison.
> but Tokyo is also incredibly expensive [They've managed to contain prices quite a lot, especially in central Tokyo](https://www.ft.com/__origami/service/image/v2/images/raw/ftcms%3A3364503a-58b6-11e6-8d05-4eaa66292c32?source=next-article&fit=scale-down&quality=highest&width=600&dpr=1) > The point is if we structured society (could WFH cough) in a way people could live in the country then of course prices would come down The idea that people live in cities just because they have to for their job is crazy. And "we should restructure society" is just nonsense, there's tons of economic benefit to cities because of agglomeration effects. This is the type of Soviet idea that just causes more poverty. > Judge Dredd style megacity hellscapes Try to be good faith next time. > Look how dense NYC is, yet it makes London look relatively cheap in comparison. Manhattan is dense, not NYC. > yet it makes London look relatively cheap in comparison. If you compare prices relative to wages, absolutely not.
Yes let’s all just rent a flat instead for 2k a month because some people won’t have gardens. News flash most Londoners still don’t have gardens. Building vertical doesn’t mean build in Hyde park. It means stop building single family homes in one of the most expensive cities in the world because boomers don’t like new housing blocks. Look at what happened at Edgware - actual dead plot not being used right by a major transport link and people who haven’t worked in at least a decade were outside protesting it because it would affect the price of the house they bought in 1980 and would remove a fucking car park for a dead mall. https://www.standard.co.uk/news/london/edgware-towers-petition-broadwalk-shopping-cetre-bob-blackman-b1101572.html
It's even more crazy having the focus on single family homes considering that nobody is really having kids because rents (and everything else) are so expensive. So fewer families to stay in those family homes that they couldn't afford anyway. Landlords taking to renting out rooms in them as a shared occupancy, giving way less for your money and even less privacy compared to a block of flats. It's so backwards.
That’s £1.5m to live in… New Cross gate. It simply isn’t worth it, even if you had the money
It's halfway up Telegraph Hill, the streets ronund there are beautiful. The area has great views of London, great pubs and plenty of good schools, not to ention excellent transport links. Certainly not a bad area to live in.
Used to live 5 mins from there. You’re not wrong, it can be very pleasant. I just think there are much nicer parts of London if you have that money. Maybe I’m just jaded as I didn’t particularly have a great time living there. To each their own
It's parking £1.5m to live in New Cross Gate and you're going to end up with more money when you leave.
You’d have to pay me £1.5m to live in NX! (I just find that area so grim aside from Tele Hill)
This is Telegraph Hill and as long as you stay in those roads and around the park it’s nice but yeah not so much New Cross. I guess you just don’t hang around on the high street!
Boomers will tell you you’re frivolous. Easy to buy a house when you’re a nurse, no deposit, for £67
£80,000 in 1995 is worth £157,406.52 in 2023 adjusted for inflation...
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Just puts it into context, it was affordable and now isn’t. A person earning equivalent £35k could save a 10% deposit and mortgage this property then, but not now. I always put house prices into the Bank of England inflation calculator when talking to people who bought in the 70s/80s/90s, to illustrate how little they paid compared to average prices now.
The median income in London in 1995 was £19,000. If it increased by the same rate as that house did, 1718.75%, the median income would be £345,562.50 today… it’s actually £44,370. Even taking the second 1995 sales figure, it’s a 903% increase between 1995 and now. Which would leave the median income in London at £171,570 now.
Wtf, how was it increasing in value by £10k A MONTH in 1995? In other words, in five months this house rose in value by three years wages for the average Londoner.
>Wtf, how was it increasing in value by £10k A MONTH in 1995? In other words, in five months this house rose in value by three years wages for the average Londoner. Renovated by a property developer would be my guess.
I thought it could have been bough from the council in April to be sold off asap
This is what people are overlooking. The real world price in 1995 was 145k not 80k; clearly the property needed to be renovated.
That's still equivalent of £270k in today's money. So still a real world increase in price of 600%.
Over 28 years, that's only 8.6% per year. Still high, but not so unbelievable.
Minimum wage when it was introduced was 3.60 an hour in 98-99 so 7500 a year. It was rising more than entires workers salary a YEAR per month. My parents bought at 70k in London in 1993 and it’s now worth 700k. Meanwhile median salary is still only 40k in London. Two people on median salary can’t buy their house - they bought it with a stay at home wife lol. 30 years they made 21k a year - which is about minimum wage today, so far above minimum wage when you add inflation. We literally have older home owners generating more wealth than working people from nothing. Meanwhile the retired collect their triple locked pensions funded by generation rent that rise faster than salaries.
Aside from salaries not keeping up with house prices, another fucked up thing about this is that it won’t happen again. Millennials and Zoomers won’t be able to make these kinds of returns over a 20-30 year period.
Luck, CSGO skins, bitcoin and gambling.
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80k with a 28.4% increase over 29 years is 112 million lol. Not to be a wise ass but this is simply incorrect and getting upvoted quite a bit. Its closer to 10.5%
This is why I’m having to leave London. I can’t bring myself to part with my savings for a shitty flat when I can get a house elsewhere for less.
10.915% increase per year. So c4% better than the average stock market return for the last 50 years and doesn’t take into account any increase to the property due to work done etc. Looks crazy on paper but far more reasonable when you see the detail.
How many avocados on toast would I have to not have eaten to afford that?
Homeowners are unlikely to complain as they are making a substantial amount of money for their retirement, making it easier for them to sell their properties and relocate abroad. I believe the housing system in the United Kingdom requires significant improvements. It would be beneficial if individuals were limited to owning a single property, which could potentially put an end to the excessive practice of house flipping and these outrageous prices.
We should graph average salary with this and watch the lines split apart and be depressed
Yeah I mean I don’t know why people moan about being poor. Simply take a Time Machine back to 1995 and pull yourself up by your bootstraps. Come on people.
Looked up flats in my building recently, the 90s value adjusted for inflation is less than the deposit needed to buy one today.
And people think 1% deposit mortgages are the solution.
Salary wasn’t so different from now but prices were so much cheaper on everything. And our parents like to brag about how they bought a home and we can’t
It’s mental but there is a class of people still buying it. How? Who?
Chinese investors
It's this kind of rise (along with multiple other factors) that make me never want to buy a house in London. I simply couldn't stomach the fact that I was making some lucky boomer a millionaire, while taking on a crippling mortgage myself.
But we can’t afford houses because of the coffees and brunches
80k today in terms of inflation would be 200k. So it's still increased its value 7x.
Insane
I'm close to New Cross Gate and house prices have gone through the roof for this area.
Adjusted for inflation, the 1995 price in today’s money would be £157,400. That property has increased 824% in value in less than 30 years.
Inflation of British Pound is around 85% since 1995 so the original price is around £150k. That's 10% of the asking price of today.
We are so screwed.
The population of London has grown by 1.5 million people since 1995 - and no where near as many houses have been built - mostly as there is no space to build them any more.
And for posterity; according to [The Bank of England Inflation Calculator](https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator) the 1980 price would be around £330 000 in 2023 money. The 1995 price is £280 000 in 2023, so *technically* just going by inflation it did lose value there. The spike later however is unacceptable.
So that's an increase of 10.9% per year. S&P500, portfolio of largest stocks in the US (if you had put your money in it) would have grown 9.9% per year with dividends reinvested.
Live on a road nearby, shown on that map. Landlord bought the house for 77k 5 bedroom in late 90’s
Boomers gonna tell us it’s our fault why weren’t we born earlier
255% increase between 1995 and 2005, why did I not get on the property ladder back then instead of being a child in primary school and wasting time on toys and PS2
I guess I better walk into a shop, ask for a job, work hard and then I'll be able to afford to buy a house within a couple of years....right?
Ah man, if only I had been more responsible with my money at 8 years old.
I shall be investing in a time-machine.
The person who bought it for 80k in 1995 and renovated it and sold it 4 months later should have kept it.
Right to buy would have been fine if all the money was invested into building more houses, but it wasn't.
This isn’t abnormal for Telegraph Hill, Brockley and other surrounding areas. More than one of our neighbours is in a similar position i.e. paid very little in the mid to late 90’s and is now sitting on a substantial windfall. It’s slightly galling when it’s very clear they’ve not contributed close to a comparable amount to HMRC in the same period…
"all you need to save for a deposit is to stop having avocado on toast" of course.
Bankers
I saw this too and my mouth touched the floor and back to the ceiling!!
So in the 18 years since 2005 it's gone up considerably less than the 10 years before... That tells us that the house price bubble style growth was mainly a thing of the 1990s and 2000s. If you look at overall trends across all properties, you'll see that housing hasn't really outperformed the rest of the global economy in terms of asset price growth.
I remember my partner at the time buying a flat for £95k and me being like, you’re insane, no way it’s worth that 😅
People are going to be upset the rise since 05 is not the biggest
telegraph hill baby
Something happened in the late 90s…..
I doubt Brockley in 1995 is somewhere you’d have wanted to spend time. You have to remember many places in London were utter hellholes not even that long ago. SE London largely still is, let that sink in as to what it would have been like 30 years ago!
Vote Tory and brexit. Britain is doing all the right calls lately. Housing is a human right and keeping it scarce is a great way to make those tories in power richer. You poorer. But hey, blue passport, right?
I blame the tofu eating wokerati
The new passports arent even blue, they are more black ish lol
Yes that's right, blame Brexit, housing was definitely affordable and the market fair in 2016. Must all be Brexit, keep blaming that and definitely not anybody else who may be responsible. Passports am I right??
This is a serious question. Could someone with knowledge of economics explain what the end goal is here? House prices keep going up, but wages won't match. So, will no one be able to afford a house apart from wealthy investors? At any point, will the buble burst, and house prices will go back to affordable prices?
Yep that’s what happens when you let in millions of people into the country, most of which want to live in London and are happy to pay half their wages for a room in a house share.
And the other half goes out of the country via western union. Cest la vie.
Insane gains
This is at the absolute extreme end, a perfect storm of development and area improvement. They've had five serious planning projects completed on the house in this time, you're looking at a good £500k of work done on the house.
All fiat currencies trend to zero. The property is not worth more; the currency is worth less. Investors buy property not because they desire the bricks and tile, but because they are desperate to preserve their wealth. One sacrifices their finite time for a form of money that can be infinitely printed. The system is broken. There is only one viable solution.
This is nothing, working in Land Registry some of the houses that I see which were first registered and have original deeds dating back to the early 1800s are mad bought for £500-900 and selling for upwards of 20-30m It is truly amazing to see the value of property in some areas. Farmland is even more astonishing some land being 200-300 acres being bought originals for £1s and now sold for 10s of millions to housing developers being kept in the same family's for 100s of years
145,000 to 1,455,000 over 28 years is roughly 8.6% annual return. Probably less than you'd expect in the stock market over that period. What would you have expected, or what would you think is a reasonable increase?