Don’t lis­ten to the prop­erty mar­ket prophets of doom

Yorkshire Post - Property - - PROPERTY - Tony Wright

IN RE­CENT weeks, we’ve had think tank re­ports sug­gest­ing that our de­sire for home own­er­ship in this coun­try has been di­min­ished by our re­cent eco­nomic ex­pe­ri­ence.

Yet the Na­tional As­so­ci­a­tion of Es­tate Agents has claimed that first-time buy­ers who live in the north of Eng­land will find it eas­ier to get a foot on the prop­erty lad­der than peo­ple liv­ing in the south.

As ever, there are con­trary and con­flict­ing views on the for­tunes of the hous­ing mar­ket in the cur­rent cli­mate but I re­main con­vinced of the en­dur­ing ap­peal of home own­er­ship to UK buy­ers. De­spite the cur­rent doom and gloom in the prop­erty mar­ket, in­vest­ment in bricks and mor­tar con­tin­ues to be the as­pi­ra­tion for the ma­jor­ity of young peo­ple and fam­i­lies in Bri­tain.

Al­most 20 years ago, at a time of neg­a­tive equity in the early 1990s fol­low­ing Black Wed­nes­day – that Septem­ber day in 1992 when in­ter­est rates shot up sev­eral times in as many hours from 10 to 12 to 15 per cent – we ex­tri­cated our­selves from the Ex­change Rate Mech­a­nism (ERM) pro­ject and the death knell of home own­er­ship was sounded then too.

A tele­vi­sion pro­gramme fo­cused on res­i­dents of a large-scale new hous­ing set­tle­ment near Bris­tol who were in a state of neg­a­tive equity at the time. The new place was called Bradley Stoke which, with some in­evitabil­ity, head­line writers do­ing their job well turned in to Sadly Broke. Then we had head­lines about the next gen­er­a­tion – “Gen­er­a­tion Y” – who were go­ing to cock-as­nook at home own­er­ship for both eco­nomic and cul­tural rea­sons. A sim­i­lar con­clu­sion about “Gen­er­a­tion Rent” has been drawn by a think-tank re­cently. And so that was that. The English­man’s home was never go­ing to be his cas­tle again and we were go­ing to mimic our main­land Euro­pean cousins and look to rent­ing and never again would we in­vest so much time, en­ergy, emo­tion and money in home own­er­ship.

Yet, in chart­ing the Land Reg­istry’s house price in­dex, in York­shire and Hum­ber in April 1995 – just un­der three years af­ter Black Wed­nes­day’s doom and gloom head­lines about hous­ing – the av­er­age house price was £58,212 and the equiv­a­lent this April (2011) was £123,149. The years since the early 1980s – and twenty of those have been since Black Wed­nes­day – has seen the steep­est growth of owne­roc­cu­pa­tion in the UK. Whilst the num­ber of peo­ple who own their homes fell in 2007 for the first time since the 1950s, the fig­ure was still at 14. 6mil­lion with al­most 6.4 mil­lion own­ing their house out­right.

There is no doubt a grim re­al­ity to house buy­ing post cred­itcrunch Bri­tain yet six of the top 20 low­est value ar­eas in the UK are in York­shire & Hum­ber.

In a rep­re­sen­ta­tive snapshot, lev­els of home own­er­ship in the UK pivot around the 70 per cent mark. In Switzer­land, home own­er­ship lev­els are at just un­der 40 per cent, with Ger­many circa 41 per cent. France, our near­est con­ti­nen­tal main­land neigh­bour, has lev­els of home own­er­ship sim­i­lar to our own.

The vo­rac­ity of our ap­petite for rent­ing all of our lives is doubt­ful. Ad­mit­tedly, some peo­ple do ac­tively seek this while oth­ers have no choice but I am will­ing to bet that most peo­ple in this coun­try as­pire to own­ing their own home. There is a cul­tural is­sue about home own­er­ship which could stem from our sta­tus as an is­land nation and a de­sire to own a house-sized par­cel of it. This de­sire would ap­pear to be em­bed­ded so firmly in our na­tional psy­che that it, along with more ob­vi­ous long-term fi­nan­cial rea­sons and the fact that most of us have a de­sire to put our own stamp on a prop­erty, ensures the on­go­ing ap­peal of home own­er­ship. And isn’t it in­ter­est­ing that it’s France with a sim­i­lar per­cent­age of home­own­er­ship to ours? An English­man in his cas­tle, a French­man in his chateau? We prob­a­bly have more in com­mon than ei­ther would care to ad­mit.

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