From 1980 to 2011 the average UK house has risen in real value by 2.9% per year.
According to thisismoney.com, a financial website, "austerity cuts are due to arrive, tax rises are about to hit people's pockets, inflation is eating their wages and savings and petrol prices are sky high. All those factors weigh heavily and with the property market all about confidence, rock bottom readings on consumer confidence indices do not bode well."
Yet, despite peaks in booms and troughs during recessions, values have risen relentlessly over the past thirty years.
In London over the past three months there's been a mini-respite to the down-trend as certain buyers have rushed in to benefit before the rise to 5% stamp duty on £1m-plus houses. But generally the picture is gloomy for sellers.
I recall buying my first flat in 1975 for just under £10,000 when my salary was £5,000. It was a two-bed top floor conversion in a Victorian terrace in an up-and-coming bit of South Battersea in what is now the highly trendy Between-the-Commons area. Battersea Rise was then full of junk shops, it being just seven years after Suzie Kendal, Maureen Lipman and Dennis Waterman starred in the classic film Up the Junction which depicted industrial slum life in nearby Clapham Junction.
And I was working as a junior marketer when in my early twenties in ' 75. It would be impossible without a big bank pay bonus or lump sum gift from parents to place a deposit on a similar property in an equivalent gentrifying district today. And the price of such an apartment in (say) Brockley or Peckham would be some £250-300,000 in 2011. I guess a trainee marketing person's annual salary now would be something like £25,000.
So, it doesn't take much to calculate the difference between my situation in 1975 and an equivalent man's predicament today. Then, my annual pay was worth 50% of the price of a flat. Today, my successor is generating only 10%!
How times have changed.
No wonder people are deciding to rent rather than buy. In Germany or the Netherlands most people rent well into old age; buying in Northern Europe is unusual. But rents in Hamburg or Munich account for up to half of people's wages. I was always told that rent should never amount to more than one third of take-home pay. The Guardian, reporting on the German situation says that "interest in home ownership is certainly growing" according to Dr Jan Linsin, who heads research in Germany for CB Richard Ellis, a property services firm.
This is a major quandary. If buying is becoming an unattainable goal, and renting will ultimately become unaffordable, where will people live exactly?
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