The Daily Telegraph highlights a report by Shetler indicating that house prices have risen by 43 times since 1971. This is over six times the rate of inflation for basic weekly groceries in the same period.
The report comes with the usual train of interesting factoids:
The charity said that the typical value of a house had increased by just over 43 times since 1971, from £5,632 to £245,319.
If a family’s weekly shop had increased at the same rate, it would now stand at £453, which is six times the actual figure of around £75.
Applying the house price rate of inflation to everyday food and drink items means that a bunch of six bananas would cost £8.47, a four-pint carton of milk would cost £10.45 and a leg of lamb would be £53.18, Shelter said.
Another recent Telegraph story pointed out that home ownership in the UK has now fallen to levels last seen in 1987. The level of renting from council and other social landlords has fallen dramatically In other words, the long-term effect of the policy of right-to-buy for council tenants and deliberately stoked house price inflation has been a singificant move of people, especially younger and poorer people, out of the social rented sector and into the private rented sector. As anyone who lives on a council estate knows, that usually means younger families living in identical houses on the same estates as their parents, except at higher levels of rent, with less security of tenure and often with poorer maintenance.
Cui bono is always the first question worth asking in politics. Who has benefited from the shift in housing policy away from being principally about providing a decent home for all towards being principally about providing a high-value asset for home owners?
Principally, of course, those able to secure ownership of buy-to-let properties, especially large numbers of them. This group is also a primary beneficiary of the decision to bail out mismanaged banks rather than let them go to the wall while protecting the deposits of savers.
Another important group of beneficiaries are the upper-middle classes in and around London, whose life path often involves sellling an expensive London property on retirement, to move to the seaside, the West Country, or the Costas and release significant liquid capital. This group has really hit the jackpot over the past generation, with house price inflation in London and the Home Counties significantly exceeding even that in the rest of the UK.
Those who wish to buy a home for life, especially in less expensive parts of the UK, have merely seen the proportion of their income they must devote to housing costs go up significantly with no tangible benefit to themselves. They are, of course, now able to leverage much higher levels of debt using their more expensive properties as collateral. That benefits the financial services industry rather more than ordinary citizens. Younger poorer people have, as we have already noted, lost out significantly.
That much of this change happened during a lengthy period Labour government is a striking demonstration of the capture of public policy in the UK by the haves and self-exclusion of the have nots. High house prices have been uncritically sold to the public as a social good, with too few critical voices raised.