MattIf one were to analyse the increase in property values over the decades I'm sure there must be a number of factors; however, I would guess there are two, possibly three, primary factors: firstly, a rise following inflation over the period; secondly, rises differing geographically based on the supply and demand driven by scarcity of property and available income; that is further exacerbated in areas such as London with migration to it from other parts of the UK and Europe, plus many new builds of luxury flats perhaps only affordable by foreign investors or those with inflated city salaries and bonuses. If one wanted, I suspect one could buy a street of houses in Hull for the price of a large desirable house, or even luxury penthouse flat, in South West London. (I choose that example as I know a couple who moved to Hull because they were trapped into a miss-sold interest only mortgage and that was the only escape route.) I'd still say it comes down to a shortage of suitable accommodation, particularly of affordable social housing. In some areas I suspect the rental market may also be skewed by a large number of students;) landlords know they'll be there for a limited period. Most of us that purchased did so for security reasons when we were able to do so - the rental market in the UK seemed dire back in the 1970s, I spent several years sharing a grotty flat in Earl's Court with a number of ex college friends, before I purchased a flat in Putney. It also made sense financially to invest in paying a mortgage rather than rent a property.However, I do sympathise with younger people; when I was still at work I had to admit to younger colleagues I wouldn't be able to afford the house my wife and I purchased several years after I'd acquired my flat. I had ex colleagues who although on quite good IT salaries working in the City (although not in the trader, investment management, etc scale!) who when they started families move out to places such as Bicester, a two, three hour commute. (Although hybrid working help a lot, which many tech companies realised was necessary to attract good staff long before the pandemic.) I also know another young couple with a family who relocated to Bathgate (an Edinburgh suburb) because they could afford a four bedroom house there rather than a pokey flat in Surbiton.As Ivonne says it wasn't anything we intended and if one can't realise the value it's a paper gain which, as I noted in a previous post, can't easily be realised, plus, remember, any paper gain can potentially disappear overnight - although I agree scarce physical property it a lot safer than digital investments on the FTX exchange even with Truss-o-nomics trying to make mortgages unaffordable!I really don't know what the answer is other than a better supply of affordable and social housing, and possibly more remote working for those that can or more companies relocating from London and other expensive conurbations? Perhaps phasing in CGT on all properties would help, but in places like London where there's a shortage of property it might just get added to the prices …
Michael Ixer ● 1173d