If UK house prices are falling, why is it still so hard to sell?

Britain’s faith in the housing market has always been strong. Before Christmas, we polled thousands of Britons about their money habits, and more people said they viewed property as a better place to invest their money over the next ten years than shares, savings accounts, or any other asset class. But in parts of the UK, that faith is being tested.

The average British home trebled in value between 1995 and 2005, but growth has been much more modest since. In fact, when adjusted for inflation — which, for some reason, people are loath to do when discussing house prices — prices are about a tenth lower now than at their pre-financial-crisis peak.

When we talk about the recent stagnation in Britain’s housing market, two segments usually attract the most attention.

The first is the decline at the very expensive end, mostly in London. Data from Zoopla on prices per square foot, based on valuations and sales, show just how steep those falls have been. In 2015, buyers in Chelsea were paying £1,704 per square foot, a price inflated by foreign investment and a thriving City. By 2025, prices had fallen to £1,227 — a drop of a quarter in nominal terms, or roughly half in real terms once inflation is factored in.

The second is the decline of the British flat. A quadruple whammy — the leasehold scandal, post-Grenfell safety concerns, declining investor appetite, and a general desire for more space — has pushed flat prices below their 2022 levels. By some estimates, nearly four in ten new-build leasehold flats in London are being sold at a loss. Other property types, meanwhile, have pulled away.

But how does this affect the housing ladder?

Buying a starter home in Britain is still expensive. A report by Deloitte puts the cost of a new-build flat in Britain at €5,203 per square metre (about £424 per sq ft), the third-highest among 25 European nations. In Italy, for example, the cost is roughly half that. Relatively high interest rates also mean first-time buyers are spending a substantial portion of their income on mortgage payments.

Yet after years of tight lending restrictions, banks are once again offering increasingly generous terms to new buyers.

Last week, Melton Building Society announced a 100 per cent loan-to-value mortgage. And, as a share of wages, first homes are not dramatically more expensive than the long-term average.

But what happens when those first-time buyers want to move on?

The traditional progression from starter home to stepping stone to dream home remains deeply embedded in the British property psyche.

For baby boomers, climbing the property ladder was made easier by rapidly rising house prices. Imagine buying a flat in 1995 for £40,000 with a £10,000 deposit and selling it for £60,000 in 2000. Even excluding mortgage repayments, your £10,000 equity would have grown to £30,000. Yes, your dream home might have risen from £60,000 to £90,000 during that period — but you would now need only a 67 per cent mortgage to afford it.

Today, however, the first rung of the housing ladder offers far less lift. While today’s first-time buyers have an average household income of £61,000, those able to move a second, third, or fourth time typically earn around £93,000.

The cost of moving has also soared. Gordon Brown turned stamp duty into a major revenue-raiser in the 2000s, and George Osborne later increased it for high-value properties and introduced a second-home surcharge in 2016. The result is that moving home has become far less common. In the late 1990s, 7 per cent of homeowners moved each year; by 2024, that figure had fallen to just 3.9 per cent. Data from Savills suggest that while 35- to 44-year-olds made up 32 per cent of movers in the mid-2000s, that share has dropped to 24 per cent.

At the same time, under occupation — having more rooms than necessary — is increasing among older age groups, as would-be downsizers find it too expensive to move.

There has been a recent glimmer of hope that homeownership among young adults has begun to recover from its early-2010s lows. But increasingly, British homeowners are becoming stuck in the first homes they buy. The penny may have dropped that property is no longer a get-rich-quick scheme; more young people are turning to alternative investments to bridge the wealth gap instead of relying on house price growth.

Some first-time buyers are now going straight to their long-term homes, says Richard Donnell of Zoopla, sacrificing location and size in the process.

And so, as baby boomers in the southeast attempt to cash in on their multi-decade, seven-figure gains, they may find few buyers willing — or able — to trade up behind them.

Source: The Times

Oil Prices Above $100: What It Means for Construction Costs and Housing Prices

Global energy markets are once again on edge. Analysts are warning that oil prices could rise above $100 per barrel if geopolitical tensions continue to disrupt supply chains and energy exports. While oil prices may seem like a distant concern for property buyers and real estate investors, the reality is that energy costs play a major role in the price of housing and construction worldwide.

For the Philippine property market, higher oil prices can have a ripple effect across the entire real estate sector—from construction materials and logistics to property prices and development timelines. Understanding how these dynamics work can help investors, homebuyers, and developers make smarter decisions in an uncertain economic environment.

Why Oil Prices Matter to the Property Market

Oil is one of the most important inputs in the global economy. It powers transportation, manufacturing, and construction logistics. When oil prices increase sharply, the cost of moving goods, producing materials, and operating machinery rises as well.

Real estate development is particularly sensitive to these changes because construction relies on energy-intensive processes. Cement production, steel manufacturing, heavy equipment operation, and transportation of building materials all depend heavily on fuel.

When oil prices rise, developers often face higher costs long before a building is completed. These increases are typically passed along to buyers through higher property prices or slower development schedules.

Construction Costs Rise Across the Board

One of the first areas affected by higher oil prices is the cost of construction materials. Many of the key materials used in building homes and condominiums are either directly derived from energy-intensive processes or require extensive transportation.

Steel production, for example, consumes large amounts of energy. Cement manufacturing is also highly energy dependent, with fuel costs forming a significant portion of overall production expenses. When oil prices increase, manufacturers often raise prices to maintain margins.

In a country like the Philippines, where many construction materials are imported or transported over long distances between islands, higher fuel prices can quickly translate into higher project costs.

Developers may face increased expenses for:

• transporting cement, steel, and aggregates

• operating heavy construction machinery

• importing finishing materials and fixtures

• moving construction crews and equipment between sites

Even a modest increase in fuel prices can significantly affect the total cost of large development projects.

Transportation and Logistics Become More Expensive

The Philippines is an archipelago, which makes transportation costs especially important for construction and real estate development.

Materials are often shipped between islands or transported long distances from ports to construction sites. Higher oil prices raise shipping and trucking costs, which then increase the overall cost of development.

For example, cement produced in one region may need to be transported hundreds of kilometers to reach a project site. Similarly, imported materials such as tiles, glass, or specialized fixtures must pass through several stages of logistics before arriving at the construction site.

As fuel costs increase, each step in that chain becomes more expensive.

These higher logistics costs can ultimately affect the price of new homes, condominiums, and commercial buildings.

Housing Prices May Continue to Rise

When development costs increase, property prices tend to follow. Developers typically operate on fixed margins, meaning that rising input costs eventually need to be absorbed through higher selling prices.

This is particularly true for large residential developments and condominium projects where construction takes several years. If oil prices remain elevated during that period, developers may adjust prices for later project phases.

For homebuyers, this can mean that waiting for prices to fall may not always be the best strategy, especially during periods of rising global costs.

Historically, housing prices often rise when construction costs increase because developers must maintain profitability to continue building.

Smaller Developers May Delay Projects

Higher oil prices do not affect all developers equally. Large property companies often have stronger financial reserves and better access to financing, allowing them to absorb temporary cost increases.

Smaller developers, however, may struggle to manage rising expenses. If construction costs climb too quickly, some projects may be delayed or scaled down.

This can reduce the supply of new housing in the market, which may further support property prices over time.

In cities where demand remains strong, such as Metro Manila, Cebu, and Davao, limited supply combined with steady demand can push property values higher.

Infrastructure Projects Could Also Be Affected

Oil prices also influence large infrastructure projects such as highways, rail systems, airports, and bridges. These projects require massive amounts of construction materials and heavy equipment.

If fuel costs rise sharply, governments may face higher project budgets or slower implementation timelines.

Infrastructure development plays an important role in shaping real estate markets. New roads, rail lines, and transport hubs often increase property values in surrounding areas.

If infrastructure projects slow down due to rising costs, some growth areas may take longer to fully develop.

However, governments often prioritize major infrastructure investments because of their long-term economic benefits.

Investors Often Turn to Real Estate During Inflation

Interestingly, higher oil prices can also support real estate investment in another way. Rising energy costs often contribute to inflation, which can reduce the value of cash over time.

During inflationary periods, investors frequently turn to real assets such as property as a way to preserve wealth.

Real estate has historically been viewed as a hedge against inflation because property values and rental income tend to rise along with the broader economy.

This means that even if construction costs increase, demand for property investment may remain strong.

What This Means for Philippine Property Buyers

For property buyers and investors in the Philippines, rising oil prices highlight the importance of long-term planning.

Real estate markets are influenced by many global factors, including energy prices, interest rates, supply chains, and economic growth. While oil price volatility may create short-term uncertainty, the long-term fundamentals of the Philippine property market remain strong.

The country continues to benefit from population growth, urbanization, and increasing demand for housing in major cities and emerging regional centers.

Buyers who understand how global economic trends affect real estate may be better positioned to identify opportunities even during periods of volatility.

The Bottom Line

If oil prices climb above $100 per barrel, the effects will likely be felt across many sectors of the global economy—including real estate.

Higher fuel costs can increase construction expenses, transportation costs, and development timelines. Over time, these pressures may contribute to higher property prices and slower housing supply growth.

However, real estate also tends to attract investors during inflationary periods, which can support property demand.

For the Philippine property market, the key takeaway is clear: global energy trends may influence local real estate prices more than many buyers realize.

Understanding these connections can help investors and homebuyers make more informed decisions in a rapidly changing economic landscape.

Source: Ziggurat Real Estate

Building materials retail price growth in Metro Manila steady in Feb.

The retail price growth of construction materials in the National Capital Region was steady in February with an acceleration in electrical materials prices offset by a slowdown in painting materials and related compounds, the Philippine Statistics Authority (PSA) reported.

Citing preliminary data, it said year-on-year growth in the construction materials retail price index (CMRPI) for Metro Manila remained at 1.2% in February, in line with the average in the year to date.

The February reading exceeded the 1.1% year-earlier level.

Compared to January readings, growth accelerated in the subindices of electrical materials (2.1% in February from 1.9% a month earlier), masonry materials (1.1% from 1%), plumbing materials (0.8% from 0.7%), and miscellaneous construction materials (1.1% from 0.9%).

Meanwhile, the PSA said slower price growth compared to a year earlier was noted in the indices for painting materials and related compounds (1.8% from 2.1%) and tinsmithry materials (1.9% from 2%).

The CMRPI is based on 2012 constant prices.

Source: Business World