It has been talked of for 20+ years except we’ve had a decade of ZIRP to explode debt levels and house prices are set on the margin. Enough forced sales and prices will reduce.
True, as always. Happened in the early 90s, and again in 2008-10. Interestingly, the 88-90 onwards crash preceded 10 years of very cheap housing. In 1995 I bought my first house and went from paying £350 pm for a rente flat to £220 a mnth (ish) for a bigger house. That was a very common story amongst my friends and contemporaries. It didn't happen in 2008, the rise continued after a brief dip.
For many, monthly energy costs could overtake their mortgage or rent payment and tip them over the edge.
For sure, but that's all houses. The poor, as ever, will be hit worst because it doesn't cost twice as much to heat 100sqm as it does 50sqm, mostly because you don't heat the whole place all the time.
It’s interesting to see that nice flats now seem back in demand after nobody wanted them during covid.
That is interesting, however you're forgetting that that will only last until the first time you walk into the building and smell someone else's cooking and your oh-so-snooty "friend" says "Oh this is nice. Yes, I remember when we *had to* live in a flat. Still, it gets you on the ladder, doesn't it?"
We do have to remember that successive govts have done everything they can to inflate house prices. When it starts getting wobbly, they’ll do something.
They will. The UK has a funny relationship with housing. It has nothing to do with rational thinking and everything to do with using it as a barometer for the economy. The British public knows *nothing* about economics but it does think it knows about housing. "Well, it's bricks and mortar, innit? You know where you are with housing. Stanstereason dunnit?" The same public will put up with any degree of financial hardship provided their precious semi goes up more every year than inflation. Because that way they've "made money", haven't they? Well, if they hadn't paid interest on a loan and if everything else hadn't gone up, yes. But in fact not. But that's not the perception. The press reinforce this day in, day out.
So you are absolutely right. It's long overdue that we start living in smaller places. But we won't. Because if you live in a smaller place you are poor. If you live in a newer place, you are poor. If you want to be successful in the UK you need to have a new car and an old house. Erm, what? Well, old houses have character. So old cars don't? Yes but old cars are expensive on fuel. Right, and old houses...aren't? And old cars break down and need fixing. Riiiight, a bit like old houses then?
It makes no bloody sense. House builders advertise "starter homes" with 3 bedrooms "from £250,000". Starter, with 3 beds? Why? If you live on your own, or as a couple, why on earth would you need 3 beds? See above. If you don't have 3 beds, you're poor. Who wants to be poor? It will be a long, long time, and take a LOT of cultural change, before people in the UK will choose to live in a 40 sqm 1 bed flat through choice. I've said here before, there's no (effective) taxation on housing, there's no significant penalty to owning a bigger place, other than actually buying the joint. After that, it's gravy. I know, I moved from a 2 bed rented semi to a 4 bed family house. Did I need to buy anything so big? No. However given that I had the money, I'd be a mug not to.
