Is the UK really becoming a country of the landed and the landless?
I've been reading articles on housing in the UK lately with a growing sense of horror.
As the Government is about to put out the housing fire with gasoline with its bloody stupid new bill, the country seems to be dividing, more than ever, into a land of haves and have-nots. Those who have property and those who do not.
My nephew recently moved to London, having been offered a well-paid job there. Trouble is, he'd just bought a house in Colchester, where he'd previously been working. He doesn't know how long the job will last, so he isn't looking at buying a house in London, but he daren't sell the one in Colchester for fear of dropping off the 'property ladder'. So there he is, like so many young professionals, doing the houseowner two-step, renting out his own house to someone who can't afford to buy, renting himself in London from some other houseowner.
He was able to buy, not because of parental help, but because he works in the insurance industry and earns three times the national wage. But he was still 30 before he could afford it. I bought my first flat when I was 24 when I earned £8,000 a year.
Just out of curiosity, I looked at values for our old house in Tottenham. My DH and his ex-wife bought that house at the peak of the market in the late 80s for £90,000 - three times joint income - and by the time I met him, he'd already remortgaged it once and it was in negative equity. It remained in negative equity for the next 13 years, and all of our plans to move out of London and get a place together had to be put on hold until finally, painfully, it inched back into profit enough to cover the 110 per cent mortgage.
When we bought our house in France, therefore, we did it via savings, working five jobs between the two of us and saving every penny we could for three years. It cost £45,000, so we put down the £30,000 we'd saved and got a small mortgage for the rest. Then we carried on working, shuttling between France and the UK, renting the London ground floor out to lodgers for another three and half years before moving over in the winter of 99.
The London house crawled back into positive territory in about 2003 but when our tenant left, no agency would handle the property unless we made considerable structural investments, so we decided to sell it. We took the 25k it made (it sold for £125,000) and paid our French mortgage off with that, paying an early payment penalty on both mortgages. Suddenly we were mortgage-free. Broke, but mortgage-free. It's a decision we've never regretted.
That house is now valued at around £285,000 - an increase of 228 per cent in 10 years, or £333 a WEEK since 2003, if you want to think of it that way. Meanwhile, UK wages have hardly increased at all and living costs have soared. Anyone who wanted this house now would have to hock themselves up to the eyeballs.
You know the worst thing? The house is still a shit-hole. The builder who took it over may have fixed the damp front wall and leaking pipes under the hallway floor, but there will still be the same crummy backyard view of the neighbour's fence 4ft away. The miniscule back garden (our 'patio' was 8ft x 8ft and it took up most of the space), will still look onto the blank sidewall of a house in the next street, and will still only get two hours of sunlight a day, a legacy from when all houses were built with their kitchens facing north.
The front garden will still be 4ft deep, so every passer by can look into your windows unless you hang shades or blinds to cut out much of your own light. The sound will still bounce and echo off the buildings opposite so that even whispers sound like shouts at night, and it will still only be the upstairs rooms that receive any light.
And even if you could fix all that, it would still be in fucking Tottenham, for Christ's sake. With Broadwater Farm at one end of the road and a burnt-out car at the other.
It is madness that a crummy, small, cramped, jerry-built 1905 house should be 'worth' so much money. It wasn't 'worth' what we sold it for. It wasn't 'worth' what my husband paid for it. How any normal person could afford it now and still afford to maintain it is beyond me. In the same timeframe, our French house has taken 17 years to treble in value - a rise of about 8 per cent per year.
But what is to be done in the UK? When there is such a dire housing shortage, which was, let's face it, fuelled by Thatcher forbidding councils to build more housing, thus forcing people into the private rented sector, that which is scarce becomes valuable. The house owners have everyone else over a barrel.
Some of the property speculation seen in the UK would be pointless in France because the capital gains system discourages it. Our old London house, for instance, which was bought, done up and sold on by a builder, would attract stonking capital gains in France. To buy a house, do it up yourself and then live in it is just fine, but the French government does not approve of people renovating only to make a profit.
And why do new houses cost so much bloody money in the UK anyway? Here in France, it's quite normal to buy a plot and to have a house built to your own spec. There are masses of companies that make them, and every village has its lotissements, where a bunch of plots are sold together. You can get a perfectly nice small detached house built to a basic design from around 60,000 euros, including the land. 120,000 euros would buy you a very comfortable detached house with a big plot and an attached garage. This kind of pricing makes housing far more affordable and also acts as a damper on prices of other property. Ours will very likely never be worth more than it is now, because someone could always buy a new-build instead, at less money (and under a more advantageous tax regime).
It is terrifying to see what has happened to housing, which is SHELTER, one of humanity's most basic needs, in the UK. I can only hope that this property bubble will once again see a massive burst and that housing - not 'property' wil once again take up the place it deserves, as something that is affordable to most of the population.