Don’t listen to the property market prophets of doom
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.