It has become a national myth that rising house prices are goodby Julian Baggini / March 1, 2017 / Leave a comment
The housing situation in the UK is absurd. Hardly anyone who doesn’t already have a house can afford to buy one. The ONS reported last week that “a quarter of neighbourhoods in England and Wales were off-limits to many prospective homeowners last year because average income in these areas was below the level needed to buy an entry-level property.” Sadly, renting is hardly an ideal alternative, with properties expensive, insecure and often poor quality. Countryside reported last year that workers under 30 pay almost half their monthly wages in rent.
If anything justifies outrage at political “elites” it is this. Decades of policy, not misfortune, have put good housing out reach of millions. Given that access to decent housing is one of the most basic hallmarks of an advanced, civilised country, you might have thought this would be considered a scandal that would dominate political debate. In fact, there is only one aspect of the housing market that has any perceptible effect on elections: price crashes cause the government of the day to haemorrhage votes.
That fact points to the heart of the problem. It has become a national myth that rising house prices are good, even though hardly anyone benefits from them. The only winners are those who downsize and pocket a profit. First-time buyers are obviously hit but so too is anyone trying to take a step up or even move sidewise. The higher house prices are the more movers pay in stamp duty and estate agents’ fees. And if the price of houses goes up then the gap between homes also gets wider in absolute terms: instead of a step up being from £200k to £250k, for example, it becomes from £400k to £500k: twice as expensive.