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What has actually changed is that thirty years ago, the ratio between house prices and average earnings was about 4. By twenty years ago it had doubled and, most importantly, it has been at that level ever since with no real sign of dropping [1].

This is a structural change. We now have at least one, and perhaps two, generations of people who can't really alter their economic situation through hard work. That's the classic recipe for populism to thrive.

[1] https://www.schroders.com/en-gb/uk/individual/insights/what-...

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tonyedgecombe 2 hours ago | parent | next [-]

Interest rates were much higher back then which accounts for most of the change. The base rate was around 6% through most of the nineties (it hit 15% at its peak).

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ndsipa_pomu 7 hours ago | parent | prev [-]

And as with so many modern issues, the housing problem was largely created by Thatcher - her Right to Buy policy.

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gnfargbl 6 hours ago | parent | next [-]

I couldn't disagree more! I think the housing cost issue is pure supply and demand, we have a country which doesn't like to permit building and an increasing population due to (legal) immigration.

I will bash Maggie all day, for her refusal to effectively manage industrial decline in Britain, for her boneheaded belief that a top-ranking economy could exist solely on services, and, most of all, for her idiotic squandering of our North Sea oil wealth. But, Right to Buy was a rare hit for me. I see it as having been a forward-looking policy which aimed to reward people for work -- play the game, and you too can have a tangible slice of society in the form of your own home to possess and care for as you wish. The problem is that we didn't replace the social housing lost to RtB.

	▲	calcifer 4 hours ago \| parent [-]
		> The problem is that we didn't replace the social housing lost to RtB. We didn't fail that - Councils wanted to build more social housing with RtB and Thatcher viciously destroyed those programs. She created RtB not because it was a "forward-looking policy aimed to reward people for work" but because she hated the social security apparatus and wanted to destroy it. And she was never covert nor apologetic about it.

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barry-cotter 6 hours ago | parent | prev [-]

Right to Buy does not explain why the same trend is visible all over the Anglosphere, from Dublin, Ireland, to Wellington, New Zealand, to Sydney, Australia, to Vancouver, Canada.

The people don’t want housing built near them and the politicians listened. Lower supply than demand for decades leads to steadily rising prices. If you want to see the alternative look to Tokyo, Austin or Seattle. Build so much housing that the returns on investment are low and people can afford housing.

	▲	robinsonb5 3 hours ago \| parent \| next [-]
		To me the biggest problem is the buy-to-let market, which means anything affordable is snapped up in seconds by people with money to invest, rather than people who just want a home to live in. I think it's mainly a symptom of the unusualy low interest rates over the last 20 years: people have invested in residential property not because they particularly want to be landlords, but because it's perceived as the easiest way to get a better return on your money than a savings account that pays near zero interest. I know of more than one person who's now looking to sell their rental property because they found out the hard way that "landlord" is actually a job title, not just the name of their savings account, that properties need to be maintained and that letting agents will find a way to swallow the vast majority of any profits. I also know more than one person living in rented accommodation with appalling maintenance lapses. One had a shoddy roof repair last year which left the gutter missing. When the next rainstorm caused water to cascade down the outside wall and flow in above the back door, the letting agent had the nerve to shrug and say "old properties do that". Another had a rotten wooden lintel above a street door scraped out, filled with expanding foam and painted over.
	▲	fire_lake 5 hours ago \| parent \| prev \| next [-]
		The problem is potential residents don’t get a say - only the incumbents. The only solution is national level housing policy.
	▲	thechao 5 hours ago \| parent \| prev [-]
		Austin? I thought my house was outrageously overpriced in 2014 when I bought it — compared to every other major city in Texas it was 2x/ft. It's tripled in "value" since then; new builds are quadruple. The rest of Texas is only up ~50% in the same period.