Why have prices of houses gone up so much???

Question

Is it too many immigrants ??

Answer 1

There is historical evidence that the price of houses will always get out of control unless the market is regulated, which recent Governments have not done.

Demand for housing has increased not just because of immigration but because of demographic and social changes. The age balance of the United Kingdom population is skewed for various reasons including the post-war baby boom and increasing longevity. The result is that older people are still alive whilst younger adults want to take on new homes. In addition, family size has fallen for various reasons, Students who once lived at home also take up additional rooms, if not houses, at Uni.

In parts of the country, notably the South West, second homes are a serious problem (some communities are almost derelict in Winter). Instead of penalising second homes, these share tax advantages, such as no VAT on homes and favourable taxation on profits, that should really only apply to first houses. A cynic would point out the politicians were one of the first groups to benefit from second houses as they have properties in London and in their constitutencies.

Finally, the most serious reason for the rise in house prices is simply speculation. Speculative bubbles, for instance Tulip Mania in seventeenth century Holland and the eighteenth century South Sea Bubble, take the form of a long rise in prices, which people begin to believe will go on for ever, and then a sudden collapse. This happened in 1990 in UK housing, as I bitterly remember because I got caught. Be warned!

Answer 2

People who live in houses that they own are reluctant to sell just yet, because they are making huge amounts of money for basically doing nothing but wait and wait. When it looks like there may be a collapse in prices, people may well then rush to sell in the hope that they can realise the greater profit by selling early. Those who wait will lose as momentum in selling increases. then the opposite will hapen. Too many sellers chasing too few buyers. The price will collapse and the clever buyers will wait for the market to bottom out before buying again. A few will make a killing, those who bought when the market was in the depths of the last recession, and those that sell soon.

I remember well the last housing boom in the late '80's. the estate agents proclaiming that this boom would last, there would be no collapse etc etc. basically the same things that they are saying now. The key 2 differences this time are 1) at the height of the market, mortgages in London where averaging 40% or more of average incomes. it's not that high yet, but 2) the main boom and then the large bust happened almost excusively in the South East. Now, the whole country has seen massive price inflation.

Answer 3

Inflation, the decreasing value of a dollar, has driven prices up everywhere. This is why our parents gripe that a loaf of bread cost so much less back in the day - the dollar went further then. Nowadays, the dollar is weak, and so we need more of them to buy the things we want and need. Here's the real kicker: Though property values are going up, other costs are going up, too. Bankruptcy is at an all-time high, and people are losing their houses. The result: A housing market with too many homes available. In Ohio, for every house being sold by a person wanting to move, there are three HUD (reposessed) houses available at a fraction of the cost. If you want to find an affordable home, go to the HUD website and click on HUD Homes. If you don't mind doing a little fixer-upper work, you'll get a great deal. The downside is that if you're trying to sell your home, you're going to have to settle for a below-value sale price if you want to compete with the re-po market. It's such a mess right now...

Answer 4

the price of houses are going up because people are paying that price. It is a rip off buying a house nowadays. I'm glad im already on the property ladder as I really dont think I would be able to afford to buy a house now. Stamp duty. What the hell is that all about????????

Immigrants have nothing to do with it. They get free housing, free medical treatment free everything. I'm in the wrong job!!

Answer 5

Because the demand for housing has gone up - people can't get social or council housing anymore and private rents are a joke - too high and you have hardly any rights as a private tenant (can't keep pets etc) - its actually cheaper to pay a mortgage than to pay private rent, and housing benefit is useless in the private rented sector as most landlords won't take people on Housing Benefit.

So the only way to get a roof over your head is to get a mortgage and thanks to all these total SHARK "sub prime" lenders even people with really bad credit histories can get one.

Hence the increased number of repossession as well.

Answer 6

simply because demand has over ridden the supply and when there is a shortage of anything so the price will rise and i would guess this will go on into the 2010 and perhaps beyond and the people flooding in to this country has everything to do with it what else could it be

Answer 7

The prices of everything have gone up.
I'm kinda glad though. We bought our house for a paltry 200k and now it's almost worth a million.

Answer 8

It is because the interest rate was so low that almost anyone was able to secure a decent mortgage rate. Therefore, less people were willing to pay rent, when they could pay less for a home. Those who already owned a home could then sell it for more, since more people were willing and able to "fight" for it.

Answer 9

Because demand for housing has gone up.

Answer 10

No, it's too many families splitting up.