MAGGIE PAGANO: Victorian property values

Politicians should take a lesson from the Victorians, they would have built boldly for future generations, says MAGGIE PAGANO

  • Rather than make housebuilding a priority, successive governments have failed
  • In truth, housebuilding is going backwards
  • Prime Minister has been giving in to local lobbyists in hope of protecting votes

There is the prettiest semi-detached cottage for sale in a village close to where we live near Saffron Walden in north Essex.

It is a gorgeous home, perfect for a family with young children, with three bedrooms, a well-kept garden and not far from Audley End station, so on the commuting line between Cambridge and Liverpool Street.

But here’s the thing – the asking price is £800,000, nearly double what it was a decade ago.

Unless you are an investment banker or a footballer, or have an inheritance or a loan from the Bank of Mum and Dad, how many couples starting out in their careers or indeed young professionals or downsizers could afford such a price? Very few, and probably only those where both parents are working, and even fewer as mortgage rates rise.

If both parents work, add in the costs of childcare – set to rise to £1,195 a month from April in London and to £1,735 per month outside London. That’s over 80 per cent of the average UK monthly wage.

Building a legacy: Rather than make housebuilding a priority, successive governments have failed miserably

What’s also interesting about this Essex village is that developers are hoping to build around 25 homes. This should, if the laws of supply and demand are applied, mean that prices are at the least being held down. Surprise, surprise, the locals are trying to block the proposal. Yet these are the same householders who whinge about the cost and lack of housing availability.

This isn’t a unique situation. Wherever you go around the country, particularly in the South East, where most people want to live for all the obvious reasons, the story is similar. And the problem is getting worse. Analysis by the Leeds Building Society reveals that buying a home is less affordable than at any time since the Victorian era. Research by Leeds shows that house prices are 9.2 times higher than average earnings. The ratio was last that high at 9.3 in 1875 when the building society was founded.

How extraordinary. Even more dispiriting is that this should be the case after nearly 13 years of Conservative rule, one which you would think prized home ownership as part of its core philosophy. Yet rather than make housebuilding a priority, successive governments have failed miserably. In truth, housebuilding is going backwards. The Prime Minister has been giving in to local lobbyists in the hope of protecting votes.

Astonishingly, Rishi Sunak’s recent five pledges didn’t include building more homes. Nor did Sir Keir Starmer when he came up with his five equally vacuous mission statements earlier this week.

Yet there is so much to be done – build more on brownfield sites, force developers to include more local facilities in their projects and to build more beautiful homes, engage parish councils in the process, break-up the monopoly of the big three house builders, make it easier for smaller developers and look at introducing a land tax.

Politicians should take a lesson from the Victorians. They wouldn’t have dreamt of covering the country in aspic but would have built boldly for future generations. There might be votes in such a policy.

High flying

Listen carefully and you can hear British industry roaring back into action. The latest is IAG, British Airways’s owner, which was back in the black last year for the first time since the pandemic. More importantly, IAG forecasts that this year will see around 98pc capacity of 2019’s level.

Buying out the shares in Air Europa it doesn’t own is another sign of confidence. Although the shares were down on the news, they are worth a bet.

Over at Rolls-Royce, the shares are still on a roll after jumping to an 18-month high following far-better-than-expected results this week. Analysts like the look of new chief executive Tufan Erginbilgic who may be the one to finally realise Rolls-Royce’s potential. Orders in every part of the business are firing on all cylinders and its massive debt is coming down. Shares at 136.42p look as though they are in for another roll.

Bank’s shame

The more that comes to light about Jes Staley’s close relationship with the late Jeffrey Epstein, the more shocking it is that Barclays did not do more diligence before appointing him chief executive in 2015.

Staley’s friendship with the sex offender was known about well before the board approved his appointment. Epstein was already in prison in 2008 after paying for underage sex. Indeed, the latest lawsuit by the US Virgin Islands government against JP Morgan, where Epstein was a client and Staley was head of wealth, is due to reveal even more explosive material. Barclays should be on red alert to explain itself.