[Closed] House prices - when did our obsession begin?

I give not two shits as to the price of houses. I am obsessed by the weather though.

About 1970. When my parents generation decided that they had to own rather than rent like my grandparents.

Compounded by the sale of council houses taking away the stock of affordable housing for tbe next generation of people who, with tbe best will in the world, probably need cheap social housing more than they need a mortgage.

The only people who care are the older generations that love a bit of self-congratulatory back slapping... "aren't we so fabulously wealthy", and the vested interests that benefit from the turnover at ever increasing prices (estate agents, most politicians, banks etc.). Then there's the majority of people who didn't buy a home pre-2005 who just wish the whole ridiculous nightmare would end so that there's actually a viable alternative to (private) rented accommodation for anyone earning less than £50-100k a year.

It all started with that Fat dark haired woman on C4.

I give not two shits as to the price of houses.

+1

When someone starts going on about it though, thinking it uninteresting subject for conversation, then its a good indicator that its really not worth spending another second of your life listening to anything they've ever got to say. Ever!

I blame….

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Pre 1950 odd (more like 60's/70's) few people really could afford home ownership. Its been spiraling since then and its "affordability"

Personaly I'm blaming binners and the happy meal economy (tm)

The only people who care are the older generations that love a bit of self-congratulatory back slapping... "aren't we so fabulously wealthy", and the vested interests that benefit from the turnover at ever increasing prices

I completely agree, but that wasn't quite my question. It was more about timing, which seems to be

About 1970. When my parents generation decided that they had to own rather than rent like my grandparents.

1970's would be about it. People had statrted to buy in numbers and there were more looking to move on from a first house .

When we all became investors.

But let's not go over this again, it was done to death. Conclusion - I'm an idiot for not wanting to give all my money away to someone richer than me.

Timing wise I'd definitely agree with 1970's - that's when the term 'housing ladder' was coined IIRC, and of course the 'ladder' was really just the result of massive inflation wiping out people's housing debt so everyone borrowed as much as humanly possible safe in the knowledge that after a couple of hard years, the debt would seem like nothing allowing further borrowing and moving somewhere bigger/nicer and hence the term. The whole concept of the housing ladder is pretty much extinct as it has to be driven by inflation, be it growth in wages/disposible income alone or the traditional measure to erode the debt (which is then trailed by wages, albeit slowly). It's a bit different now innit?!

Actually this is one you can largely pin on Fatcha, and the politics of monetarism and the creation of massive amounts of personalised debt.

Make it "affordable" and "desirable" to become householders, persuade people that they are fabulously clever and wealth generating when they are in fact up to their noses in crippling debt, then make another policy that requires large wholesale sell offs of publicly owned housing stock into the private sector and put limits on how the money raised is to be spent ( on short term council debt repayments rather than future housing stock provision)

Bingo, everyone worries about house prices....

It may have started in the 70s but I think our obsession really took off during the 80s when Margaret Thatcher extended the existing "right to buy" schemes and introduced us to the phrase "property owning democracy". She also made it easier to obatain mortgages (i think?)

In the late 80s it was definately a accepted topic of dinner party conversation you could buy t-shirts with "I don't give a shit what your house is worth" printed on them.

Yep, Thatcher, with the concept of a housing "ladder", as opposed to buying a place to live in.
Selling off council houses at below their worth to the residents was a big incentive for buying. Funnily, she didn't propose that tenants of private landlords could also do the same.

In the late 80s it was definately a accepted topic of dinner party conversation you could buy t-shirts with "I don't give a shit what your house is worth" printed on them.

I bet there was no need for them by about 1992!

Began mid seventies and fanned by fatcha during the first boom in the 80s when we were sold the neoliberal dream of a home owning democracy.

It wasa mix of factors, we inflated ourselves out of recession in the 70s (prices and wages) houses went up most whilst mortgages repayments shrank relatively. Your parents generation or a bit older thought this house owning marlarky was a win win.

Espically when in the late 80s early 90s negative equity fell proved only to be a passing issue and the effects of new houebuilding falling off a cliff as fatcha stopped council house building began to be felt in prices due to reduced supply meant that for those who could afford it house owning is fantastic investment as we as a country are in too deep to property inflation fuelled economic growth. Even in the last recession we didn't get a real correction because its too important not to have one. we bailed out the banks. All our pension companies own land, property and have shares in housebuilders. We now all depend on it.

In defence of Phil And Kirsty, they're more "buy a house you'll be happy in and that you can afford, because you have a life to live"

It's big-boobed Beany that's more about "buy a house, add value, there's a killing to be made in the housing market".

I remember when my then GF and I had signed out lives away on an Endowment mortgage of all of £42k ( 2 bed cottage) when the interest rate went from 4 to 17% over the course of just 48 hours

No sleep for a bit after that

Blimey, people agreeing with my opinions on a serious topic! 😯

*runs off excitedly to the UK economy thread*

Oh, as you were..... 😐

I remember when my then GF and I had signed out lives away on an Endowment mortgage of all of £42k

I remember being sold a 45k endowment by a 17 year old Gordon Gecko wannabe who went to great lengths explaining how we could pay off the original loan and still have 40k cash to spend. I wish I could meet him now . . .

It's big-boobed Beany that's more about "buy a house, add value, there's a killing to be made in the housing market".

I actually heard that in her voice.

Thanks for that.

No, really...

Personally don't give a stuff, if I'm lucky I'll break even after improvements but plan on being here for the next decade anyway. Screwed if I ever moved down south though, can't afford a garage there...

So, started in the 70s when hyperinflation made people feel rich because the numbers got bigger overnight. Then fanned by Thatcher selling us all some carefully-spun John Locke, before moving into the cheap money of the late 90s and early 2000s. And now into overseas money getting Londoners all giddy.

So, part two the the question: if 40+ years of this have gone by and we're now in the place where property ownership is a key part of a widely recognised challenge on cost of living for the many, have we gone too far to undo this obsession?

It was all started by Mrs T & Nigel Lawson with bank deregulation in the 80s. Prior to this the BoE constrained money supply and lending e.g. it could demand bands deposit capital with the BoE at no notice, to stop them over-strectching themselves. Post deregulation, banks could borrow on the open market and lend to their hearts content. The endless supply of money, combined with a constrained supply of housing, made for massive house price inflation.....

In short yes

There is now a "demand" (a want, not need) for privately owned housing that is being driven by debt HAVING to provide investment. To put into perspective New York has twice the housing stock that London has with roughly the same size economic activity....

I see the Thatcher haters are in again this morning. While she may have encouraged wider home ownership the concept of property ladders and home ownership was pretty well established by then. House owning was seen as partly an investment ie you pay money in and at the end of it all you own something so you have an asset vs spunk money away on renting and have nothing to show for it at the end plus a bit about taking some responsibility for your future. The implementation of that missed the mark and the mass sell off of council housing - or probably more accurately, the collective greed of people to buy a house for peanuts and make a near instant profit, has contributed to the housing issues we have today. However, at the time there were a number of families who were financially "comfortable" but chose to live in a council house because they were cheap to rent and that left loads of money for buying TVs and cars and other consumerist pleasures. The principle of council housing should be about providing support for those who genuinely cannot afford their own and not a way to subsidise those who do not need that support but just want to spend more of their disposable income on "stuff".

There is a lot that is wrong with the way the housing market is at the moment ranging from the inflated house prices, stupidly high rents through to the lack of suitable, sustainable social housing.

Personally, I prefer the option to buy my own house as I then have an asset to show for my "investment" and am less likely to be impacted by any issues a landlord may have. I don't really see renting as a "value for money" proposition. Especially at the typical rents I see in our area. But that's me and my personal preferences. I also appreciate that I am fortunate to be in a position where I am old enough to be in the position to be buying and can afford to buy. I do empathise with those who are stuck at the moment without sufficient funds to accumulate a deposit, the relatively high house prices and the disproportionately high rents.

I see the Thatcher haters are in again this morning

Afternoon. 🙂

Don't forget "Greed is good" ,say it again "Greed is good"

1) I'm not personally bothered about having to have anything to show at the 'end' of whatever. (I respect some people do.) I prefer the now.

2) Renting has allowed mass spunking on carbon bike snobbery, a ladder I'm more comfortable with.

🙂

House prices - when did our obsession begin?

Allow me to re-phase that for you

When did our obsession with possessions/wealth/money begin ?

Oh ... I don't know... around the year dot.

Get on with it .... it's called life

I reckon the obsession began when it became government policy to degrade real-terms wages for normal people (these days they're called 'hardworking people') and enable them to make up the shortfall by taking out large amounts of personal debt in the form of mortgages. Quite clever really, they make people poorer, whilst at the same time making them feel much richer. You can criticise capitalists for many things, but being stupid is not one of them.

[i]Bikingcatastrophe - Member
I see the Thatcher haters are in again this morning. While she may have encouraged wider home ownership the concept of property ladders and home ownership was pretty well established by then. House owning was seen as partly an investment ie you pay money in and at the end of it all you own something so you have an asset vs spunk money away on renting and have nothing to show for it at the end plus a bit about taking some responsibility for your future. The implementation of that missed the mark and the mass sell off of council housing - or probably more accurately, the collective greed of people to buy a house for peanuts and make a near instant profit, has contributed to the housing issues we have today. However, at the time there were a number of families who were financially "comfortable" but chose to live in a council house because they were cheap to rent and that left loads of money for buying TVs and cars and other consumerist pleasures. The principle of council housing should be about providing support for those who genuinely cannot afford their own and not a way to subsidise those who do not need that support but just want to spend more of their disposable income on "stuff".

There is a lot that is wrong with the way the housing market is at the moment ranging from the inflated house prices, stupidly high rents through to the lack of suitable, sustainable social housing.

Personally, I prefer the option to buy my own house as I then have an asset to show for my "investment" and am less likely to be impacted by any issues a landlord may have. I don't really see renting as a "value for money" proposition. Especially at the typical rents I see in our area. But that's me and my personal preferences. I also appreciate that I am fortunate to be in a position where I am old enough to be in the position to be buying and can afford to buy. I do empathise with those who are stuck at the moment without sufficient funds to accumulate a deposit, the relatively high house prices and the disproportionately high rents.

[/i]

I just read your post and can only believe that you've read this, rather than were there.

Especially this statement:

[i]However, at the time there were a number of families who were financially "comfortable" but chose to live in a council house because they were cheap to rent and that left loads of money for buying TVs and cars and other consumerist pleasures.[/i]

In the late 70's - early 80's these 'consumerist pleasures' were usually limited to getting a colour TV and yearly week in Benidorm.

And personally the 'obsession' impacted me about 1986/7 when prices (in the South) started to get out of kilter with earnings. Happened a few years later in the North. We then had a negative period from about 1990-96/7 when prices seem to stabilise.

They then went crackers 2000/1-2008.

I see the Thatcher haters are in again this morning

HI! 😀

Hmmmmm … everything you've then gone on to say after that just reinforces what an absolutely ****ing stupid, self-interested idea her housing policy was. And sums up her 'no such thing as a society' ethos

You're in a very fortunate position where you had the capacity to choose whether you rented or bought your property. That, due to the policies started by her, and continued under everyone since, is a choice an ever shrinking number of people will ever have the option to make

probably more accurately, the collective greed of people to buy a house for peanuts and make a near instant profit, has contributed to the housing issues we have today

In fairness to Mrs T, and "mad mike" Heseltine who actually implemented the 1980 Housing Act, at least they allowed councils to charge something for their housing stock. I believe some Conservatives at the time thought long standing council tenants should be given their houses for no charge.

I see the Thatcher haters are in again this morning

And rightly so, she and her cronies have a lot to answer for.

probably more accurately, the collective greed of people to buy a house for peanuts and make a near instant profit, has contributed to the housing issues we have today

Slightly OT, but the same for railway privatisation. The money that was made from selling off "redundant" railway property within months of privatisation was enormous.

The principle of council housing should be about providing support for those who genuinely cannot afford their own and not a way to subsidise those who do not need that support but just want to spend more of their disposable income on "stuff".

That sounds like an orthodoxy now, but had the trousers of time bifurcated down the other leg in the 70s/80s you might be thinking it completely natural that the state should provide good quality low cost housing to most of it citizens.

The tragic thing is that the current 'situation' is sold to people as being good for the economy, and hence their own prosperity, where in fact all it's doing allowing the rich to build their fences ever higher to keep out the riff-raff. I wonder how long before we have workhouses again?

This isn't about housing but is related... [url= http://www.theguardian.com/commentisfree/2014/apr/12/capitalism-isnt-working-thomas-piketty ]http://www.theguardian.com/commentisfree/2014/apr/12/capitalism-isnt-working-thomas-piketty[/url]

Interesting the "long term investment" story that's spun out by folk.

A friend mine owns a Queen Anne house in the Fens that was built around 1690-1700 ( certainly seems to have been started then) first mortgage raised on the property was in 1751 ( if my memory is right) and it was for £100. Next one he could find details for was in the fifties when it was sold for £680. He bought the house of that couple in 1975 for £80k now it's worth well over 3/4 million

For the vast majority of its life the "value"of the house increased by a whopping £400.... Only in the last half century or less has it gone into the hundreds of thousands.

Madness

Part of the initial boom in prices was a result of the first round of sex discrimination legislation. Before this the amount couples could borrow was based on a single income. After the legislation borrowing and consequently house prices are largely based on two incomes. Just one of those unforeseen consequences (unless your seriously into conspiracy theories) of otherwise worthy legislation

(This doesn't let Mrs T & her cronies off their share of responsibility for the later booms)

I remember when my then GF and I had signed out lives away on an Endowment mortgage of all of £42k ( 2 bed cottage) when the interest rate went from 4 to 17% over the course of just 48 hours

When was that???

[i]When was that???

[/i]

Black Monday, 1987.

I got a call of panic from my wife.

16th Sept 1992. Though it was 10% - 15%. in one day. Not 4-17%.

http://news.bbc.co.uk/onthisday/hi/dates/stories/september/16/newsid_2519000/2519013.stm

16th Sept 1992. Though it was 10% - 15%. in one day. Not 4-17%.

That was Black Wednesday.

I suppose we just need Tuesday, Thursday and Friday to complete the set.

Renting has allowed mass spunking on carbon bike snobbery, a ladder I'm more comfortable with.

After the first 5 years our mortgage was always cheaper than renting something even vaguely similar, so having a mortgage has allowed even more money to be spent on carbon bike snobbery. At the last check the cost of our mortgage on a 3 bed semi with garden and big bike shed would just about get us a studio flat in the same area and where would I keep my bikes then?

I'd prefer it if it wasn't the case. But i'm not sure how you could change it now though without massively screwing people over.

It began earlier than the seventies, I first started saving for a deposit which had to be ten percent as soon as I first got engaged, (it's driven by women) in 67.

The thing that screwed things was the deregulation that invented the term 'equity' which you could borrow against and drove the level of personal debt through the roof.

It was 92

I just realised I missed a 1 from my original it was 14-17% thanks Llloyds

I remember the 1992 rates rise well. Driving about in the works minibus I listened to it live and was calculating the 50% rise in my mortgage payments. Though I think after we left the ERM and the panic was over the rise was never actually implemented.

In contrast I was doing a bothy trip in the Cairngorms in Oct 87 and when we got back to the road after 3 days it had all happened.

I say it all started in 1962 when Barry Bucknell had a long TV series called Bucknell's House where he renovated a house.

http://www.telegraph.co.uk/news/obituaries/1422765/Barry-Bucknell.html

Part of the initial boom in prices was a result of the first round of sex discrimination legislation. Before this the amount couples could borrow was based on a single income. After the legislation borrowing and consequently house prices are largely based on two incomes. Just one of those unforeseen consequences (unless your seriously into conspiracy theories) of otherwise worthy legislation

(This doesn't let Mrs T & her cronies off their share of responsibility for the later booms)

In a similar vein, my Mum blames feminism - meant more women going to work which doubled the amount a family could afford to pay for a house, too much money chasing too few goods, and prices went up.

Then in the 90's BTL came in as a concept and people thought owning 2+ houses for themselves was ok, whilst blithly ignoring what it meant for other people who also would like to buy a house, but to live in.

The only reason I'm within a fighting chance of being able to buy a house (living in London, aged 41) is because a) help from my parents, in part from money from my gran, which itself came from selling her house when she died in 2001) and b) some level of inheritance that's left from them when they die(a chunk of which will also have come from the increase in value in their house)

So basically, no-one wins, not even the middle-classes, who are in a minority in the UK. Meanwhile anyone not in a high-earning job or help from family money is screwed... it's not a great outcome from anyone's perspective really.

There's a bigger picture here though of a country which seems to have seriously lost perspective on what's important - we're in masses of debt because people are convinced that status and happiness comes fro what they buy (house, clothes, car, holiday) etc, rather than who you are, how you treat people, and what contribution you make to the world...

But i'm not sure how you could change it now though without massively screwing people over.

Screwing 'other' people over. Just need to screw over the people who own houses rather than the ones who don't

Screwing 'other' people over. Just need to screw over the people who own houses rather than the ones who don't

Well that's alright then.

we're in masses of debt because people are convinced that status and happiness comes fro what they buy (house, clothes, car, holiday) etc, rather than who you are, how you treat people, and what contribution you make to the world...

Couldn't agree more

But if you you can get money for free, why would you not ?

we're in masses of debt because people are convinced that status and happiness comes fro what they buy (house, clothes, car, holiday) etc, rather than who you are, how you treat people, and what contribution you make to the world

Well that's overstating it rather a lot. I wonder why you are overstating it.. hmm.

You do realise that not everyone's in crippling debt to fund lavish lifestyles for the purposes of impressing others, don't you? Some people can afford their mortgages, and live normal lives just like renters.

About the time Henry VIII nobbled Cardinal Wolsey so he could pinch his house (Hampton Court)?

Leaving aside the hyperbole, I've got my STW Approved(tm) answers:

Q1: the 1970s

Q2: we're now forever obsessed (hence the hyperbole)

Molgrips - exaggerating to make a point, to a degree, yes.

However:

[url= http://www.bbc.co.uk/news/business-25152556 ]Individuals now owe a total of £1.43 trillion,[/url]

On average, that means each adult in the UK owes £28,489, including any home loans.

Which is higher than median annual income

Since the start of the economic downturn, median household income and GDP per person have both fallen. However, the fall in UK median household income has been smaller than the fall in GDP per person over the same period. Between 2007/08 and 2011/12, median income fell from £24,100 to £23,200, a percentage drop of 3.8%, while GDP per person fell by 6.5%.

[url= http://www.ons.gov.uk/ons/rel/household-income/middle-income-households/1977---2011-12/sty-middle-income-households.html ]Source[/url]

Part of the problem is that house building is massivelly lucrative for the government who get severval slices of the pie (Stamp duty, Infrastucture levy contibuitions, ongoing council tax etc.) so it's not in their interest to dispeel the myths of a housing crisis.

We're currently smack bang in the middle of the process of going from having 1 generation of retiress to having 2 (for the first time in history) but once this levels out who knows what will happen..

yourguitarhero - Member

Screwing 'other' people over. Just need to screw over the people who own houses rather than the ones who don't

The people who can't afford to buy are already being screwed, so it balances out.

How should we screw them?

Earlier post nails root cause I reckon - money/credit supply!

It was all started by Mrs T & Nigel Lawson with bank deregulation in the 80s. Prior to this the BoE constrained money supply and lending e.g. it could demand bands deposit capital with the BoE at no notice, to stop them over-strectching themselves. Post deregulation, banks could borrow on the open market and lend to their hearts content. The endless supply of money, combined with a constrained supply of housing, made for massive house price inflation.....

dual income mortgages, boom/bust cycle etc. are just responses to it (the running up of asset costs). It's a bubble of sorts..

OK Lets assume for a moment that it's fine to screw the people that already own or are in the process of owning their own house.

How do you redress the balance without causing major social unrest and making the political party that did it unelectable for the next 50 years?

Part of the problem is that house building is massivelly lucrative for the government

At a time when the national debt is massive and the government needs to get hold of every last penny of income it possibly can so our future economic output doesn't just get eaten up in interest payments, leaving the country in long term penury.

As upset as I am by the extra-ordinarily high house prices, we're in such a tight spot, you can see why Gideon is playing the games he is playing.

The worry of course, is that if he's this desperate for income, just how bad is our debt and our ability to pay it off?

mudshark - Member

How should we screw them?

[i]Gently.[/i] But ultimately, we need houses to be things to live in, not things to invest in. That means moving to prevent prices increasing above inflation, at the very least, and it probably means working to deflate them significantly. Which you can do in a ton of ways, all of which will screw the owner. The goal isn't to penalise, of course, that's just a side effect.

Can you mention a few of the ways you are thinking of? Will everyone be gently screwed as soon as they buy a place?

probably means working to deflate them significantly.

'We want to reduce the value of your house'

Zero house price growth over 10 years? Or v slow, slight price drop?
Wages will catch up + gives first time buyers time to save up a deposit

Or just let the usual boom/bust pattern which is a feature of capitalism run its course...

1970s mum and dad hey bought a 3 bed semi in london for £12,000 on the central line

when you were allowed joint mortgages - Mum had to go back out to work as now competing against people with no kids to buy family home. demand created drives prices higher, people willing to use more of salary to live where they want to etc...

Break down of family life as I knew it...

We moved long ago so didn't make huge sums, but its probably worth £650k now
Trying to buy something similar as the house i grew up in is ridiculous, will never probably earn enough to buy something similar.

It would be better if again you could only have 1 person on a mortgage

[url= http://www.ft.com/cms/s/2/e1f343ca-e281-11e3-89fd-00144feabdc0.html#axzz34XOXBP5t ]Thomas Piketty got his sums wrong[/url]

And the FT article about Piketty is itself wrong, & cherry-picks its figures.

probably more accurately, the collective greed of people to buy a house for peanuts and make a near instant profit, has contributed to the housing issues we have today. 

Reminds me of the thread a few weeks ago where molgrips was castigated for buying a house rather than giving a landlord all his money...

Some people can afford their mortgages, and live normal lives just like renters.

And some people* have paid their mortgages off early and don't owe anyone anything...

* about 30% of home owners in the UK: http://www.theguardian.com/news/datablog/2013/may/13/mortgages-property-debt-uk-trends

31 September 1953

On the how did this happen theme above: I understood that prior to the deregulation mentioned. It was broadly necessary to apply and wait in a queue for a mortgage to be available (quota's).

Hence being a 'member' of a regional mutual society i.e. you were a genuine equitable member - as opposed to a punter being sold a product.

That changed things as well I think - in the old model of credit supply - far fewer people were getting tickets clipped/snouts wet.

You could look at CDO's as the ultimate progression and sharp end of this practice.

Out of interest what would happen if all mortgages other than straight repayment were stopped & you could only get BTL properties if you could buy them outright rather than taking the imaginary money from your "portfolio" (equity) ?
Also what about people taking equity from their house to give them a "lifestyle", surely it can't be sustainable?