On our way to a new relationship with property?

For those who missed the Thatcherite council house revolution, or (what now look like unbelievably) low house prices of just a few years ago, Becky Pugh’s plaintive cry for a rich husband must sound familiar.

I am 27, have £114.34 in my savings account, no cash injection from my parents and no likely benefactors. Each salary increase means only that paying my bills becomes less of a burden.

First-time buyers are borrowing as much as six times their salaries to secure themselves a foothold on the ladder. Six times my salary would fetch me a small bike shed in central London.I’d store up some readies if I ate baked beans, drank Ribena and watched terrestrial television every night, but I’d rather continue to have a life worth living.

Then she notes:

If Gordon Brown does manage to build three million homes by 2020 – which is unthinkably far off – it won’t ease my pain. They will mostly be outside London and too ugly to be happy in. The same goes for the properties available through housing association schemes. Until bankers, foreigners, interest rates and buy-to-letters stop getting in my way, I’m going to have to hold out for that rich husband. If he doesn’t materialise, I will make like the super-chic Parisians and New Yorkers and rent for ever more. I needn’t bend over backwards just to call a hovel my own. Paying off somebody else’s mortgage can be my stab at philanthropy.

In Britain and Ireland there has long been a culture of owner/occupiers, which simply doesn’t exist to the same extent in other countries, where renting is the norm for most: including those in the professional classes. It leaves us with an awkward and problematical problem with regard to some housing problems.

John Bird (he of big issue fame) argued on the Daily Politics Show earlier this week that there was less need for new build houses, than finding ways to get tenants to assume greater care for the ones that are already built. He cited some impressive figures on the numbers of unoccupied social housing in Scotland.

Can’t see that appealing directly to politicians, but perhaps a rejigging of the bargain between the rights and responsibilities of tenants could make renting more socially acceptable, more sustainable and, indirectly, take some of the heat out of a highly inflationary housing market?

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  • DC

    An another interesting article about house prices and the trends to rent elsewhere, in particular Europe.

    Yvette Shapiro notes:

    http://news.bbc.co.uk/1/hi/northern_ireland/6756703.stm

    It’s a particular shame that wealthy business people have taken to plunging company profits/shares into the housing landscape as it runs in complete contrast to social values because those fortunate enough to make large profits are seeing to it that those on average salaries are squeezed out.

    Specifically, you need only look at footballers and the amount of houses they own, bought up as a result of their unique talent.

    It’s hard not to resent such traits whenever the results are so clear to see on the not so ordinary and ordinary person, etc.

  • This looks like an imminent rerun of the four-days-old thread at http://sluggerotoole.com/index.php/weblog/comments/property-market-chills/

    I mentioned then Simon Jenkins on last week’s Sunday Times main comment page. I don’t know if it was retained in the Irish edition, but it still is on line at http://www.timesonline.co.uk/tol/comment/columnists/simon_jenkins/article2076235.ece

    His arguments seem to be to come down to:

    1. There is no housing crisis, and it’s up to the “market” and not the Government to “solve” it. The alleged shortage of housing could vanish with a change in interest rates or a tax on under-occupancy or encouragement to students to live at home. In any case (and this is me, not Jenkins) Gordon Brown’s homes need to go on brownfield sites, not across the remaining few acres of north Down.

    2. The way we want to live is wasteful of limited living space more than any country in Europe. Densities are low and estates sprawl. City and town centres are under-populated (the “doughnut” effect taught in every school’s geography syllabus) while roads are clogged with traffic seeking out-of-town retailing which the government has all but decontrolled under pressure from the supermarkets.

    3. Governments have been wrong to encourage householders to view their real estate as a pension.

    4. We should be satisfied, like the continentals, with private tenancies, the most fluid and efficient form of housing.

    5. (And this is the rebuttal to Becky Pugh) House values and costs are not higher than they have been historically: they have only just caught up with the rise in equities. Median housing payments for first-time buyers were 16% of income in 1975, 18.4% in 1980, a savage 27% in 1990, 14% in 2000 and 16.8% last year.

    Sorry to repeat myself: just wanted to get in before the horde. Yeah, I guess that paints me as a reactionary free-marketeer: I’m not, and so what?

  • Animus

    Malcolm – how well is social welfare and pension in the countries which have high rental? We have the lowest pension in most of Europe – many people see property as a pension plan, rightly or wrongly.

  • Matthew Wray

    “too ugly to be happy in”- sounds to me like she is a bit too stuck up to live like the rest of us!!

  • eranu

    malcolm, i must be misunderstanding this.

    “5. (And this is the rebuttal to Becky Pugh) House values and costs are not higher than they have been historically: they have only just caught up with the rise in equities. Median housing payments for first-time buyers were 16% of income in 1975, 18.4% in 1980, a savage 27% in 1990, 14% in 2000 and 16.8% last year.”

    16% last year? if i managed to get a tiny 2 bed terrace for a bit under 200k, my mortgage would be about £1000 per month. do you mean that £1000 is 16% of the average income? if so then i will have to have some serious words with my boss !!

  • mnob

    Why does Becky feel she has a right to buy a house at a price she can afford ?

    I would like to buy an Aston Martin but realise I cant afford one. I’m not complaining that I cant.

  • As a footnote to a defunct topic, the news from across the pond is dire for property owners (and not good for buyers, with the screws in on new lending). Perhaps Chicken Licken got it right.

    The heads-up is here: http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=07&year=2007&base_name=post

    but the source article is here:
    http://www.nytimes.com/2007/07/24/business/24cnd-lend.html?ex=1342929600&en=d1cee01d4b823894&ei=5090&partner=rssuserland&emc=rss