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Comment by colesantiago | Hacker News Reader

It doesn't look like any young person can own their own home in the UK anytime soon, is this the picture of setting them up to fail?

So when are we expecting a housing crash in the UK? 3, 5 years?

This really cannot go on.

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Australia, Canada and New Zealand all have more expensive housing than the UK in price to income ratio [1]. NZ has been above the UK's current ratio since at least 2017 [2]. So unfortunately this might continue getting worse for a while.

[1] https://www.numbeo.com/property-investment/rankings_by_count... [2] https://www.numbeo.com/property-investment/rankings_by_count...

Australia is below the UK on both of those tables!

Which doesn’t surprise me, I recently moved from the UK to Aus and AFAICT you get more for your money here. There is still the same problem of young people being able to access the market, but it’s not quite as bad and what you get for your money here tends to have much more space.

My bad - I used the Irish figure for the UK! Australia should be omitted from the first claim and NZ claim should be amended to 2019.

> Which doesn’t surprise me, I recently moved from the UK to Aus and AFAICT you get more for your money here.

Houses in the UK are generally smaller than other countries but house prices are generally expressed as per unit rather than per sqft. This distorts statistics because by making countries with small houses seem cheaper than they are.

I recently moved from NZ to London and I have been very surprised how poor the quality of housing is relative to the cost compared to NZ.

You'd think so, but it has carried on for several decades so far. Things flattened for years in the 90s and there was a ~20% drop in 2008/2009, but in terms of an actual "a median family can afford a median house on a median income" no history points to a "crash" substantial enough to make that happen.

Last month two colleagues (less than 30yr old) bought their own houses. There are young people in the UK who can afford it. They saved for years...

Means nothing without quantifying income and location.

Since you're on HN I'm assuming you and your colleagues are SWEs, which is already painting a poor picture since SWEs often have a well above average income.

It's London. Colleagues do have slightly above average salary but nothing extraordinary.

There's a million immigrants per year and a tenth of that in new builds

Now do the math

Yes and the prescription is even more new builds. We need immigration, we are aging.

Ok, bring 50 million then, and build accordingly

We are aging and your argument is irrefutable

Right wing commentators, which is basically the whole media, like to blame immigration for all the problems in the country. It’s much simpler and less awkward for them than trying to explain what is really going on.

Immigration is demand, while supply has been sticky, prices have gone up massively. It's economics 101.

But you think there's a kind of boomer conspiracy instead (ageist and racist undertones).

To be fair, a lot of the griping about immigration also reads to me to have racist undertones. (That could be influenced by my American reading, but it doesn't seem 100% that.)

Japan is still a first world nation. The world hasn't ended for them. Can we stop pretending that having a population that isn't exponentially growing is a bad thing.

> having a population that isn't exponentially growing is a bad thing.

I want social programs, but you got to have a tax base to pay for it

But those immigrants are never going to earn the necessary 5%, never mind 10% for a deposit.

That’s with an established stream of income. Without, the deposit would be almost 50% leaving the homes to be scooped not by immigrants but those with high capital.

No immigrant is buying a home. It’s banks buying them up, landlords, foreign nationals as investments.

The UK housing is a commodity worth investing with no regard to the people who need them. Something has to give.

It’s simple economics. Immigrants want to rent houses, which increases rents, which increases rental yields, which in turn increases properties values.

They increase demand at the lower end which reduces the supply on the lower end. More-so for renting than owning, but that trends towards owning as they get established in the country.

Theres no way around it. More people means less supply of housing. Canada has this same problem.

Increases in housing demand (without increases in supply) will almost always cause house price increases by pushing more marginal buyers into the buying market.

Without any increase in supply, more people wanting emergency accommodation or council homes increase wait times. The person on the edge of deciding between council housing or private rental will go for the latter. The new renter will have to try and outbid other renters causing rental rates to go up. Ultimately that nudges the person on the edge of deciding between private rental and buying with a mortgage to enter the buying market and try to outbid other buyers - causing an increase in overall prices.

There's suffering at each stage of this process, where high demand forces people to engage in transactions that stretch them financially. Over time many people will just 'drop out' by staying with parents or going abroad.

The only real solution is to build more houses. In the 1960s the UK built >400k new homes per year [1] - enough to comfortably a million new migrants annually whilst also increasing house choice and affordability for people already resident.

[1] https://twitter.com/bbcquestiontime/status/12041546940519997... (chart is for England, I've extrapolated a peak of 350k for England to justify a claim of >400k for the wider UK)

> But those immigrants are never going to earn the necessary 5%, never mind 10% for a deposit.

Why not? Immigrants to the UK mostly live in wealthier places, and while it's hard to find figures, either earn very close to what locals do, or more. A software engineer in London usually earns enough to buy in the city, and definitely earns enough to buy in the London suburbs.

I am a software engineer and earn more than 95% of income earners according to HMRC statistics. So how is this relevant? If nobody worked those other 95% of jobs life would collapse.

Because HN is overwhelming software engineers, and more than half the developers I've worked with have been immigrants. So I figured telling people what the housing situation is like for software engineers is probably relevant.

> A software engineer in London usually earns enough to buy in the city

Maybe at FAANG salaries and maybe 10 years ago. Definitely not now at normal salaries.

(Source: me, a software engineer in London for the last 25 years)

Definitely now, because I'm in my late 20s and I'm seeing software engineering friends buying places in zone 2 and 3. Usually apartments and often with something like shared ownership or a lower-earning partner, but buying all the same. None work in FAANG or high-paying places, think in the £60-70k range.

(just realised I said "the city" in my original comment and realised that could mean the City of London - I meant London itself, sorry if any misunderstanding!)

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