Our fixation on house prices is not a good thing. But today, everyone’s up in arms about something slightly different: Europe poking its nose in. Following advice from the EC around Britain’s regressive tax system and house deposit subsidies.
Given that Westminster – home of the political elite – has by far the cheapest rates of council tax in London, should anyone be surprised at the collective yawn shrieked out this morning? Most hardworking people would struggle to understand how the cost of collecting bins and looking after pavements is crowded central London can somehow be cheaper that in places like Croydon or Romford.
The big theme emerging today from the Resolution Foundation’s paper and the latest Nationwide house prices figures – taken from their comparatively small sample of mortgages which obviously excludes cash purchases – is the potential for spiraling debt. But this is a structural British disease: you haven’t even left home for university before you’ve unwittingly signed your twenties away paying down education before the ice-finger of convention pokes you towards a 30-year interest bill for a house.
What’s the solution? Build more. We’ve established that already. We know that no politician will stand up and call for a house price fall. And no one seems able to do the obvious, which is kickstart a massive Governmant-backed housing construction exercise.
Of course there is another way to take the debt out of housing: rent. A great source of data for the breakdown of renters versus homeowners across Europe is here. Yet, in spite of Britain’s falling rate of homeownership (driven by the South East), we’re still fixated on it.
This, arguably, is a another political disease and like Margaret Thatcher’s famous comments about buses being for the unemployed, the social stigma of not being a home owner remains. I’ve made this same point for years of course, and it was one of the big campaigns I pushed at the British Property Federation before my spell at BAA.
Yet at least we’re seeing a model of professional rental developments emerge across the South East and in Manchester are companies recreating the American model of building blocks – a bit like hotels – in central locations, where people can rent hassle free within spitting distance of a train connection, ridding the road of cars. Weirdly, the main political parties are behind, with Boris even setting a 5,000 annual target for rental homes.
Just imagine if you didn’t have eight different bills for utilities, internet, phone and council tax, and could move in and out without the hassle of disconnecting everything. Better still, what if your life didn’t revolve around watching news stories on house prices and interest rates to find out whether you could afford to go on holiday or not? Maybe the separation of the “service” of housing from the debt-laden investment is something that needs to be pushed a bit further up the agenda.
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