House prices are soaring again and all is well with the world. Unless you live in Wales.
‘Those who do not remember the past are condemned to repeat it,’ is an homily attributed to the philosopher George Santayana. I find it very useful, given humanity’s limitless capacity for collective delusion and herd-like behaviour.
It came to mind again today as I digested the latest data on house prices. This is always accompanied by a flotilla (is that the collective term?) of emails excitedly speculating about what it all means. This national obsession - affliction even - feeds off itself; not least because house price rises send the tabloid press into raptures and are generally reported as A Good Thing.
For conveyancers, they most certainly are a good thing. Figures from the Land Registry show that during May 2013, the number of completed house sales in England and Wales increased by a whopping 19%, to 62,651, compared with 52,516 in May 2012. That means thousands more instructions.
This is not the place to debate the merits or otherwise of chancellor George Osborne’s measures to ‘pump up the volume’ with subsidised mortgages. If you’re a conveyancer, or one of those to have benefited by acquiring your own home, you are entitled to feel grateful. But one doesn’t have to be particularly jaundiced to look at the raw numbers and wonder where this is heading - and how soon.
House prices are rising 12% on an annualised basis; yet we know that British workers have suffered one of the biggest falls in real wages among European countries over the past three years. Sub-prime lending is once again helping (sic) to bridge the gap between what we want and what we can afford (though not in the mortgage market - or at least not yet). How are these facts to be reconciled?
Yesterday, we also learnt that the average deposit in London is now £65,000, well over double average annual earnings. A garage with a lavatory is on the market in Highgate Village for £250,000, though you can pick up this grimy horror in Brixton for a trifling £100,000. (When an estate agent admits a property is a dump, you know it really is a dump.)
Aye, and there’s the rub. Is it - to echo the estate agent Felicity Lord’s aspirational marketing slogan - ‘A London Thing’? Yet another manifestation of how the capital is no longer really ‘of’ the UK, but rather its own city state adhering to financial norms that do not apply in less exalted places?
The party has not got going again everywhere, not least in Wales, where prices are falling. There is an unwittingly plangent sentence in the Land Registry’s press release, and it is this: ‘The most expensive sale in July 2013 was of a property located in west London which sold for £23,305,000. The cheapest sale in July 2013 is located in Blaenau Gwent and sold for £15,000.’
Add: ‘What does this say about modern Britain?’, and you’ve got a pretty good question for an Oxbridge entrance exam.
Paul Rogerson is editor of the Gazette