How Far Will House Prices Fall? [Volume 6]

[OutInTheShed]

SunsetZed said:

ooid said:

Unreal said:

Where's the evidence 'many' are gifting their main home to their kids?

I'm not sure if you really need to have hard stats for this!? It is a no brainer for anyone who does not have a mortgage anymore and wants to pass their primary residence to their kids.

Unless you are really really charitable (I mean really!).

It's not quite that simple unless you're moving out unless you plan to pay rent to your kids that they will then pay tax on.

It's pretty common for people to split their home among their grandchildren.
Millions of people bought homes after the war, now people are inheriting that money and the first place it goes is into the housing market.

[okgo]

Is it?

I don’t know anyone that’s had that treatment. Possibly parents downsized and gave them some cash but nobody is living in their parents main home.

[OutInTheShed]

okgo said:

Is it?

I don’t know anyone that’s had that treatment. Possibly parents downsized and gave them some cash but nobody is living in their parents main home.

As it happens, I know a few people who are living in what was their late parents' homes.
It's probably not common, because most parents will have more than one child, so generally the capital needs to be split, and most people have settled in their own home before their parents die.
I know a few more people who've kept their parents' home and now rent it out.
Grandparents distributing to people in their 20s is probably more common.
Detail is not so important, the big picture is, several millions of people bought houses post war, people have been inheriting that.
It's on a different scale to home ownership pre-war and inheritance in the 50s/60s/70s/80s.

[OutInTheShed]

SunsetZed said:

That and the low number of residential properties in this country.

Of course we've increased the number of people by migration.....

[skwdenyer]

OutInTheShed said:

SunsetZed said:

That and the low number of residential properties in this country.

Of course we've increased the number of people by migration.....

And we’ve increased the number of working taxpayers as a proportion much faster, so there shouldn’t be a shortage of tax money to help fund building…

[loafer123]

skwdenyer said:

And we’ve increased the number of working taxpayers as a proportion much faster, so there shouldn’t be a shortage of tax money to help fund building…

Has the proportion of net contributors improved?

This is a genuine question.

[skwdenyer]

loafer123 said:

skwdenyer said:

And we’ve increased the number of working taxpayers as a proportion much faster, so there shouldn’t be a shortage of tax money to help fund building…

Has the proportion of net contributors improved?

This is a genuine question.

Well, we've been importing working-age people, whilst those already here grow older and have less children.

This is for 2022:

ONS said:

In FYE 2022, 53.8% of all UK individuals were net recipients (living in households receiving more in benefits than they paid in taxes), a reduction of 1.2 percentage points since FYE 2021. A much greater proportion of retired individuals were net recipients (89.2 %) in comparison with non-retired people (46.0%), largely because of the classification of State Pension and Pension Credit as cash benefits.

Only the top 40% of households are net contributors (when benefits in kind are included), when all direct and indirect taxes are taken into account. That's clearly unsustainable. Overall, households take out more than they put in on that basis.

That said, those figures do *not* include Employers' NI, which is clearly a "personal" tax (in the sense that, if you stop earning, that tax is no longer paid). I'd be interested to see the effect of those taxes on the overall numbers.

Source: https://www.ons.gov.uk/peoplepopulationandcommunit...

[OutInTheShed]

skwdenyer said:

And we’ve increased the number of working taxpayers as a proportion much faster, so there shouldn’t be a shortage of tax money to help fund building…

Observing the facts, that hasn't worked.

[loafer123]

skwdenyer said:

loafer123 said:

skwdenyer said:

And we’ve increased the number of working taxpayers as a proportion much faster, so there shouldn’t be a shortage of tax money to help fund building…

Has the proportion of net contributors improved?

This is a genuine question.

Well, we've been importing working-age people, whilst those already here grow older and have less children.

This is for 2022:

ONS said:

In FYE 2022, 53.8% of all UK individuals were net recipients (living in households receiving more in benefits than they paid in taxes), a reduction of 1.2 percentage points since FYE 2021. A much greater proportion of retired individuals were net recipients (89.2 %) in comparison with non-retired people (46.0%), largely because of the classification of State Pension and Pension Credit as cash benefits.

Only the top 40% of households are net contributors (when benefits in kind are included), when all direct and indirect taxes are taken into account. That's clearly unsustainable. Overall, households take out more than they put in on that basis.

That said, those figures do *not* include Employers' NI, which is clearly a "personal" tax (in the sense that, if you stop earning, that tax is no longer paid). I'd be interested to see the effect of those taxes on the overall numbers.

Source: https://www.ons.gov.uk/peoplepopulationandcommunit...

Thanks…good detail.

I think this illustrates that more taxpayers doesn’t necessarily help if they are low paid and net takers from the state.

Of course, for balance, retirees are increasing, so it is probably at no change on the previous year once you take account of that.

[lizardbrain]

I'm not too up on the details but I half remember reading that gross tax take is important for a government too. It's not just about the net. It influences all sorts of stuff like cost of borrowing.

Also those immigrants are taxed on things like VAT, and indirectly feed things like corporation tax

Edited by lizardbrain on Sunday 30th June 10:18

[Sheepshanks]

loafer123 said:

skwdenyer said:

loafer123 said:

skwdenyer said:

And we’ve increased the number of working taxpayers as a proportion much faster, so there shouldn’t be a shortage of tax money to help fund building…

Has the proportion of net contributors improved?

This is a genuine question.

Well, we've been importing working-age people, whilst those already here grow older and have less children.

This is for 2022:

ONS said:

In FYE 2022, 53.8% of all UK individuals were net recipients (living in households receiving more in benefits than they paid in taxes), a reduction of 1.2 percentage points since FYE 2021. A much greater proportion of retired individuals were net recipients (89.2 %) in comparison with non-retired people (46.0%), largely because of the classification of State Pension and Pension Credit as cash benefits.

Only the top 40% of households are net contributors (when benefits in kind are included), when all direct and indirect taxes are taken into account. That's clearly unsustainable. Overall, households take out more than they put in on that basis.

That said, those figures do *not* include Employers' NI, which is clearly a "personal" tax (in the sense that, if you stop earning, that tax is no longer paid). I'd be interested to see the effect of those taxes on the overall numbers.

Source: https://www.ons.gov.uk/peoplepopulationandcommunit...

Thanks…good detail.

I think this illustrates that more taxpayers doesn’t necessarily help if they are low paid and net takers from the state.

Of course, for balance, retirees are increasing, so it is probably at no change on the previous year once you take account of that.

Is there a reason employers NI isn’t included - it’s forecast to be £168bn this year, so not exactly trivial?

[skwdenyer]

Sheepshanks said:

loafer123 said:

skwdenyer said:

loafer123 said:

skwdenyer said:

And we’ve increased the number of working taxpayers as a proportion much faster, so there shouldn’t be a shortage of tax money to help fund building…

Has the proportion of net contributors improved?

This is a genuine question.

Well, we've been importing working-age people, whilst those already here grow older and have less children.

This is for 2022:

ONS said:

In FYE 2022, 53.8% of all UK individuals were net recipients (living in households receiving more in benefits than they paid in taxes), a reduction of 1.2 percentage points since FYE 2021. A much greater proportion of retired individuals were net recipients (89.2 %) in comparison with non-retired people (46.0%), largely because of the classification of State Pension and Pension Credit as cash benefits.

Only the top 40% of households are net contributors (when benefits in kind are included), when all direct and indirect taxes are taken into account. That's clearly unsustainable. Overall, households take out more than they put in on that basis.

That said, those figures do *not* include Employers' NI, which is clearly a "personal" tax (in the sense that, if you stop earning, that tax is no longer paid). I'd be interested to see the effect of those taxes on the overall numbers.

Source: https://www.ons.gov.uk/peoplepopulationandcommunit...

Thanks…good detail.

I think this illustrates that more taxpayers doesn’t necessarily help if they are low paid and net takers from the state.

Of course, for balance, retirees are increasing, so it is probably at no change on the previous year once you take account of that.

Is there a reason employers NI isn’t included - it’s forecast to be £168bn this year, so not exactly trivial?

Because in the narrow measure of the ONS, it isn’t a tax paid by the taxpayer.

[Mr Whippy]

Some odd action near me right now.

Values all over.

Some probate stuff at questionable asking and hanging about, in need of broad renovation but at prices within 10-15% of modernised and extended stuff nearby, or more than nice stuff!

One did actually move on quickly recently which surprised me (SSTC)
£450 ish + £100 to renovate and extend a bit, you’re at £550 ish after other costs etc.

£625 ish nearby and you get a modernised bigger house which is on another level or two up the ladder (unique stone built vs 80s estate style) and is an Airbnb being let go… of which more are appearing locally and at much more competitive prices.


I can see probate stuff becoming very unpopular given renovation costs and silly price expectations in this environment.

[donkmeister]

Mr Whippy said:

I can see probate stuff becoming very unpopular given renovation costs and silly price expectations in this environment.

True, if you look at it with logical eyes and with the cynical eye of someone who has struggled to find tradesmen who don't have a very long order back AND are not utterly ste...

I expect that developers (both amateur and pro) and the optimistic will still take them on.

[NerveAgent]

We recently sold a probate that needs a fair amount of renovation. It got into a bidding war and went nearly 10% over asking.

[Sheepshanks]

Mr Whippy said:

Some odd action near me right now.

Values all over.

Some probate stuff at questionable asking and hanging about, in need of broad renovation but at prices within 10-15% of modernised and extended stuff nearby, or more than nice stuff!

One did actually move on quickly recently which surprised me (SSTC)
£450 ish + £100 to renovate and extend a bit, you’re at £550 ish after other costs etc.

£625 ish nearby and you get a modernised bigger house which is on another level or two up the ladder (unique stone built vs 80s estate style) and is an Airbnb being let go… of which more are appearing locally and at much more competitive prices.


I can see probate stuff becoming very unpopular given renovation costs and silly price expectations in this environment.

I suppose if you can only raise £450K then you can only buy the £450K one. A capable couple, or one with useful friends / relatives, could renovate it for realtively buttons, perhaps over an extended period.

Plenty of these places are changing hands around where I live, given a quick refurbed by 'developers' and put back on the market - most are less than the prices you're talking about. I've no idea how it makes sense - perhaps people are nicking materials off other jobs.

[skwdenyer]

Sheepshanks said:

I suppose if you can only raise £450K then you can only buy the £450K one. A capable couple, or one with useful friends / relatives, could renovate it for realtively buttons, perhaps over an extended period.

Plenty of these places are changing hands around where I live, given a quick refurbed by 'developers' and put back on the market - most are less than the prices you're talking about. I've no idea how it makes sense - perhaps people are nicking materials off other jobs.

Given the amount of stuff I see advertised on Marketplace, eBay etc that is clearly “over-ordered” for jobs (stuff like boxed brand new access control kit, not just building materials) I’d say that was pretty likely. Trade accounts and big jobs mean a lot of stuff can be booked to a client whilst appearing elsewhere…

[Shnozz]

Sheepshanks said:

Mr Whippy said:

Some odd action near me right now.

Values all over.

Some probate stuff at questionable asking and hanging about, in need of broad renovation but at prices within 10-15% of modernised and extended stuff nearby, or more than nice stuff!

One did actually move on quickly recently which surprised me (SSTC)
£450 ish + £100 to renovate and extend a bit, you’re at £550 ish after other costs etc.

£625 ish nearby and you get a modernised bigger house which is on another level or two up the ladder (unique stone built vs 80s estate style) and is an Airbnb being let go… of which more are appearing locally and at much more competitive prices.


I can see probate stuff becoming very unpopular given renovation costs and silly price expectations in this environment.

I suppose if you can only raise £450K then you can only buy the £450K one. A capable couple, or one with useful friends / relatives, could renovate it for realtively buttons, perhaps over an extended period.

Plenty of these places are changing hands around where I live, given a quick refurbed by 'developers' and put back on the market - most are less than the prices you're talking about. I've no idea how it makes sense - perhaps people are nicking materials off other jobs.

Depends on the property type also. My folks were looking at Barton on Sea a little while back and there was a massive market in developers buying tired bungalows, presumably many probate/care home entrants, giving them a swift refresh and punting them out at £200k more to cash rich/time poor downsizers of older persuasion. Seemed to be a nice rinse and repeat business model.

[Mr Whippy]

skwdenyer said:

Sheepshanks said:

I suppose if you can only raise £450K then you can only buy the £450K one. A capable couple, or one with useful friends / relatives, could renovate it for realtively buttons, perhaps over an extended period.

Plenty of these places are changing hands around where I live, given a quick refurbed by 'developers' and put back on the market - most are less than the prices you're talking about. I've no idea how it makes sense - perhaps people are nicking materials off other jobs.

Given the amount of stuff I see advertised on Marketplace, eBay etc that is clearly “over-ordered” for jobs (stuff like boxed brand new access control kit, not just building materials) I’d say that was pretty likely. Trade accounts and big jobs mean a lot of stuff can be booked to a client whilst appearing elsewhere…

It’s about 1,450 sqft, but extended like some of the others, more like 2,500-2,750 sqft.

But, it’s getting the permission, and subtle variations in build might impact viability/cost of structural for the loft.

So you could buy, do up cheap, and you’ve still spent more than the neighbours one for a smaller house.
Thus limited supply and excess demand have created this situation.

Or you buy, luck out, do all the jobs, and you’re at £600k… but a done up example up the street was about to go up at £565k, so the logic of the time/spend/risk is nowhere near.


Obviously some money is still sloshing about out here.

Almost all these houses were family homes with kids, now all nearly old people who’ve grown old here or moved in as family owners moved on or downsized.


It’s frustrating as I want a house with potential to DIY renovate and a decent garden. But I can’t justify blowing £££ overs just because… I’d rather find the extra £100k and buy a completely better home in every way… the idea of spending very similar amounts overall, but with all the hassle, and the end result value being so unknown… I just don’t get it but there we are… clearly still exuberance even in rural N Yorks areas with silly spenders.

[okgo]

Two folks I know of with flats in zone 2, London - both newish builds I believe. Both owned for 4-5 years. Both selling at a loss just now on sticker price alone (before you consider inflation and SDLT & fees). Suspect people haven’t realised that the crash is now, this is it, get buying