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Uk Property Prices - Why So High.

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Recently I have been looking at property in France and Germany.The upcoming 20% VAT is likely to hit my business badly and my profits are down as it is.So I thought I might bail out.

Typical prices in bothy France and Germany are around 150-180 Euros for a farmhouse and one or two acres.For the price that I sold mine for in July - around 400,000 Euros you are looking at a serious piece of commercial property in either country.

I got to wondering why? it seems that if you were to take the construction cost of the property abroad and add say 10% that is about where things stand.So it seems to me that 50-60% of the extra cost must be the land itself.To strengthen my theory a property abroad with a few hectares doesn't command much more money.

Therefore I deduce that is the difficulty of gaining Planning Consent in Britain that is the driver behind all our woes.It needs to be loosened, and drastically so.My local authority is trying to prevent even infill building in villages,thereby driving up the cost of rural property.This is being done from a NIMBY/Hippy perspective but it is madness.

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Recently I have been looking at property in France and Germany.The upcoming 20% VAT is likely to hit my business badly and my profits are down as it is.So I thought I might bail out.

Typical prices in bothy France and Germany are around 150-180 Euros for a farmhouse and one or two acres.For the price that I sold mine for in July - around 400,000 Euros you are looking at a serious piece of commercial property in either country.

I got to wondering why? it seems that if you were to take the construction cost of the property abroad and add say 10% that is about where things stand.So it seems to me that 50-60% of the extra cost must be the land itself.To strengthen my theory a property abroad with a few hectares doesn't command much more money.

Therefore I deduce that is the difficulty of gaining Planning Consent in Britain that is the driver behind all our woes.It needs to be loosened, and drastically so.My local authority is trying to prevent even infill building in villages,thereby driving up the cost of rural property.This is being done from a NIMBY/Hippy perspective but it is madness.

Easy credit

Low interest rates

Low levels of social housing

A more anglo-Saxon capitalist culture

High population density

Edited by tallguy

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Recently I have been looking at property in France and Germany.The upcoming 20% VAT is likely to hit my business badly and my profits are down as it is.So I thought I might bail out.

Typical prices in bothy France and Germany are around 150-180 Euros for a farmhouse and one or two acres.For the price that I sold mine for in July - around 400,000 Euros you are looking at a serious piece of commercial property in either country.

I think that's because in the UK, working farmhouses are seen as cutie little places for OOs to buy and live in (with the farm left fallow). In Europe that isn't the case.

tim

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Recently I have been looking at property in France and Germany.The upcoming 20% VAT is likely to hit my business badly and my profits are down as it is.So I thought I might bail out.

Typical prices in bothy France and Germany are around 150-180 Euros for a farmhouse and one or two acres.For the price that I sold mine for in July - around 400,000 Euros you are looking at a serious piece of commercial property in either country.

I got to wondering why? it seems that if you were to take the construction cost of the property abroad and add say 10% that is about where things stand.So it seems to me that 50-60% of the extra cost must be the land itself.To strengthen my theory a property abroad with a few hectares doesn't command much more money.

Therefore I deduce that is the difficulty of gaining Planning Consent in Britain that is the driver behind all our woes.It needs to be loosened, and drastically so.My local authority is trying to prevent even infill building in villages,thereby driving up the cost of rural property.This is being done from a NIMBY/Hippy perspective but it is madness.

Germany had a house price boom in the 1980s - they've been in a slow 'bust' phase ever since. If you compared housing costs in Germany and the UK in, say, 1995 you'd find that UK housing was much cheaper at that time. It's just at a different phase of the cycle now and heading down perhaps permanently due to demographic change (Germany's population is static and about to start declining). France has an awful lot more land than the UK and a different culture when it comes to housing - people are happy to live in apartments and don't require a home with a garden like most people in the UK do. So building new houses in France requires less land on average. Also, as you point out, we have mighty restrictive planning laws that are there to 'protect' the 65% majority of home owners who already have a house to live in. During the boom the UK was building no more than 200,000 properties a year. The Irish repubilc, with 1/15th of the population of the UK, was building 60,000 a year. Now Ireland has had a proper house price crash because there is genuine oversupply - in the UK it hasn't happened because supply is still tight despite the mortgage famine. So basically you're right - the problem is the cost of land. When a house that costs 60K to build sells for 200K, you're paying 140K for the land. Utter madness.

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Germany had a house price boom in the 1980s - they've been in a slow 'bust' phase ever since. If you compared housing costs in Germany and the UK in, say, 1995 you'd find that UK housing was much cheaper at that time. It's just at a different phase of the cycle now and heading down perhaps permanently due to demographic change (Germany's population is static and about to start declining). France has an awful lot more land than the UK and a different culture when it comes to housing - people are happy to live in apartments and don't require a home with a garden like most people in the UK do. So building new houses in France requires less land on average. Also, as you point out, we have mighty restrictive planning laws that are there to 'protect' the 65% majority of home owners who already have a house to live in. During the boom the UK was building no more than 200,000 properties a year. The Irish repubilc, with 1/15th of the population of the UK, was building 60,000 a year. Now Ireland has had a proper house price crash because there is genuine oversupply - in the UK it hasn't happened because supply is still tight despite the mortgage famine. So basically you're right - the problem is the cost of land. When a house that costs 60K to build sells for 200K, you're paying 140K for the land. Utter madness.

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People in Britain, as a nation, generally speaking, are greedy, selfish, mentally inept, devoid of scruples and family values, and to top it off, we are manic gamblers.

This differentiates us from most of Europe.

As an 'investment', property has been the one manipulated by the system to allow for anyone with a heartbeat to take on ever increasing loans, in which all those within the financial and legal conveyancing loop made payday.

Some have done really well buying in during historical trend minimum inflexions, but it was not by luck or skill for the majority. Its been just simple maths following a growth curve relative to the seeming endless creation of credit which inundated the system. As stated prior, most people are simply not able to do the maths to see the reality, so it comes down to the media and the conveyancing lot to create an alternate reality in which to shield themselves and continue on with their asset rape policy.

Well, sadly, there simply are not enough people and not enough credit to keep up the growth. Natural equilibrium of the system being held up by politicians, for the meanwhile, because the voters who pay them refuse to take a hit on their property bet, but that push can only last for a while before it all comes tumbling down. Unfortunately, the phoney credit mechanisms in place now will never be able to create more people and prerequisite jobs and personal wealth to fire the furnace.

Sad reality for the folk here is that this excess 'credit' created over the last will have to be repayed.

In the end, a select few will end up with all the wealth, and the rest of us paupers. That is the essence of capitalism though.

This is Britain. Same as it ever was.

Edited by cashinmattress

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We have lived in France for the past 15 years, and can agree that you can buy much more for much less here. We think that the principal reason for property prices being so much lower is that the French banks would not lend as recklessly as did the British banks, particularly during the stupidity of 1995 to 2007.

Not fully up to date, but a few years back, one needed a reasonable sized deposit and could only borrow a sum roughly equivalent to three times family income, and that didn't change whilst the UK was enjoying the "boom" years. Thus, houses and flats (excluding the larger cities) remain affordable, even to (especially to?) first time buyers.

So, "Why are UK property prices so high?" is simply down to the greed of the lenders and the naivity of many of the borrowers, the latter now not being able to sell their properties at the currently over inflated prices, without incurring punitive losses. Once higher interest rates finally kick in, then UK property prices will inevitably fall, though probably still not to the level in France.

Incidentally, most of the new properties being built in our area of France are bungalows, are detached and have, in the main, reasonably sized gardens because, as someone has mentioned, land is more plentiful/affordable here..

Edited by ydbc

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Exactly

I am afraid I have to disagree. Lack of supply and overcrowding is not quite relevant. England may be more densely popolated than other EU countries, it also has the lowest house occupancy rate in Europe (check Eurostat website) so it is no quite as straight forward. Then saying that France is much bigger, it may be so if you want to live in the middle of nowhere but regions where there is work (Paris, Toulouse, Lyon, Rhones-Alpes...) are just as packed as the South East if not worse. A large part of France is covered by large mountain ranges (Massif Centrale for instance), so there may be lots of space but nothing to do there.

It is a bit like Wales/Scotland for example, they have a very low population density for a reason, large part of these countries are not exactly readily suited to host large cities! Small towns yes but large cities with easy access, large industry etc. no.

House prices are so high because everything is done to keep then that way. Nothing has dramatically change in the past 10 years and the population has certainly not exploded. Remember that house prices rose worldwide, at the same time and regardless of the demography of respective countries. Why? Cheap credit! Why is it not falling back to reality? People don't have to sell! (Low interest rates, no gross oversupply - but no lack of supply either IMO).

Remember that if everybody wanted to have 2-3 houses each and to live alone in a 3-4 bed house then there will be "under-supply" anywhere on earth. It is however not my definition of "under-supply". Under-supply is when people sleep in tents because there is nowhere else for them to stay (whether they can afford it or not).

Edited by frenchy

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Recently I have been looking at property in France and Germany.The upcoming 20% VAT is likely to hit my business badly and my profits are down as it is.So I thought I might bail out.

Typical prices in bothy France and Germany are around 150-180 Euros for a farmhouse and one or two acres.For the price that I sold mine for in July - around 400,000 Euros you are looking at a serious piece of commercial property in either country.

I got to wondering why? it seems that if you were to take the construction cost of the property abroad and add say 10% that is about where things stand.So it seems to me that 50-60% of the extra cost must be the land itself.To strengthen my theory a property abroad with a few hectares doesn't command much more money.

Therefore I deduce that is the difficulty of gaining Planning Consent in Britain that is the driver behind all our woes.It needs to be loosened, and drastically so.My local authority is trying to prevent even infill building in villages,thereby driving up the cost of rural property.This is being done from a NIMBY/Hippy perspective but it is madness.

You are absolutely right. Effective demand was boosted by too much and too cheap credit, and supply was restricted by planning blockage. The result was the biggest property prices bubble in the country's history.

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House prices are so high because everything is done to keep then that way. Nothing has dramatically change in the past 10 years and the population has certainly not exploded. Remember that house prices rose worldwide, at the same time and regardless of the demography of respective countries. Why? Cheap credit! Why is it not falling back to reality? People don't have to sell! (Low interest rates, no gross oversupply - but no lack of supply either IMO).

But the population has gone up, and the amount of new housing hasn't gone up at the same rate (scaled to whatever the average occupancy is), so that does have some part to pay. I think it's a minor factor though compared to credit-driven sentiment. As for falling back, it looks like it is starting to now, and this time there seems to be an increasingly noticeable feeling that more and more are accepting that as reality rather than a short blip in an ever-increasing lunacy, as was the case with the post 07 drop.

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Typical prices in bothy France and Germany are around 150-180 Euros for a farmhouse and one or two acres.For the price that I sold mine for in July - around 400,000 Euros you are looking at a serious piece of commercial property in either country.

No thats not true, depends on location.

France and germany are both much larger than the UK, and a cheep farm house is much more likely to be a long long way from anywhere..

Edited by cardiffone

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House prices are so high in the UK because the people that bought them as a home and to live in suddenly saw them making more money a year than what they could earn a year...the banks saw an opportunity to make money so obliged in lending whatever was required to meet the craving to 'get rich quick'......the banks were very happy to lend because they were earning 7% to 9% interest good returns, they held the title/deeds so their money was secure, everything was all hunky dory until the money ran out. ;)

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This German although a comedian points out a lot of truths...

Very good.

You should start a new thread with it.

A bit painful, but very educational.

Edited by Tired of Waiting

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People in the UK have an overactive gullibility gland.

When the financial sector told them that house prices only go up and having more debt to service is wealth, the vast majority of people in the UK believed it, due to this gland.

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People in the UK have an overactive gullibility gland.

When the financial sector told them that house prices only go up and having more debt to service is wealth, the vast majority of people in the UK believed it, due to this gland.

:lol:

But to be fair, people are gullible and over-eager all over the world, always. When interest rates are too low, borrowers always borrow too much, in any country. It was the job of our monetary authorities to curb it. They failed. Mainly because Gordon Brown tampered with the inflation index in 2003 (CPI v RPI).

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Also many countries in the Euro zone have higher taxes and more social housing provision.

If you where in China, Morocco, Algeria, Tunisia (just the ones I know) you would think prices of UK homes where reasonable levels of income of course they are in even larger bubbles.

There is definitely something about having your own currency/closed currency that helps retain a bubble ... maybe wrong but it seems to ensure your ability as a government to keep levels of monetary liquidity artificially high.

Edited by Fromage Frais

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It is simply the same mania which swept through Holland a few hundred years ago, where tulip bulbs became such a desired commodity that people would trade ten years' wages for a single tulip bulb.

Exactly the same as tulip bulbs, houses are only worth as much because everybody agrees they are.

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  • 261 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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