Technology, right? It gets cheaper. You get more for your money every single year. Ferocious competition to meet voracious customer demand makes things cheap.
And that’s good.
But housing? With housing, the expectation is that they’re going to get more expensive over time. In fact, your house is supposed to get more valuable. That’s the deal, right? You take on ridiculous debt and devote a significant chunk of your income and in return you get something that generates money while you do absolutely nothing.
In any other walk of life, there’s no such thing as a dead cert profit, but politicians are supposed to deliver it. Their careers depend on it – and with the help of nimbies, environmentalists and zealous planners, they’d still be delivering now if the world money supply had been able to keep pace.
It’s simple: A) Ensure housing supply never meets demand and B) Have banks lend more (which they were prepared to do so long as A was true).
Except the legacy of this almost constant increase in house prices is that, for most people, rent and mortgage payments become the single biggest drain on their incomes after taxation, and in a very real way this imposes a great deal of financial hardship – an increase in the value of a house is not an increase in wealth. It’s a reduction in the value of money. It’s a trick – and a pretty nasty one at that.
It seems to be the British disease that we insist on protecting the value of our houses. To exceed demand for housing – and therefore bring genuine competitive forces to bear on the housing market is to advocate madness. To want better and cheaper housing, not just ‘affordable’ housing is somehow a radical and controversial idea!
And “Affordable Housing”? Ugh. There’s a euphemism. In the real world it’s propertly like the tiny little peasant huts that are technically houses because they have multiple floors, and the soul-crushing and overpriced ‘luxury apartments’ that dehumanise even Yuppies. The market is flooded at the bottom end of the market with substandard, crappy properties.
These sorry excuses for housing have one thing in common – no-one, in their right mind, would buy these things unless they were desperate to get on the housing ladder to cash in on the fat profits everyone else seemed to be enjoying. Get on the ladder, that’s what matters! Sell it in a year and buy something better with your profits! Houses really do print money!
What makes me incomprehensibly angry about all this is the complete lack of understanding that when a house goes up in value from £100k to £150k, it’s not that the house is worth 50% more – it’s that money buys you 33% less. We’re all being made poorer, and yet we cheer it and welcome it as if it’s a marvellous boon to our civilisation. It’s called the “Feel Good Factor” in fact – which is apt. You feel good, while we’re actually witnessing people being empoverished by rampant inflation in the cost of roofs over heads. But it feels good, and that’s what matters, isn’t it?
So what to do? I look around Halifax, where I live, and I see those old victorian terraces, built as housing for the very poorest mill workers, and I see that even these bottom of the rung houses are actually quite desirable now – and out of my price league, despite being a fairly well paid computer programmer. That houses and flats being built more than a hundred years after these terraces are even smaller and less generously fitted. Something’s not right. In this particular market, we’re going backwards, in the opposite direction to everything else.
I say again: What to do?
