House prices

Britain’s land is very green, which Bill Bryson so rightly described as “an explosion in a chlorophyll factory”, is often remarkably pleasant for such a crowded place. It is also awesomely expensive.

Admittedly this is not true if the only use for a piece of land is agricultural. There the future remains highly partial, and often distinctly bleak. But watch the transformation if there is even a whiff of planning permission: British property prices reach new heights by the day.

A flat that you actually want to live in will cost £300,000 anywhere near the centre of London, £250,000 a short suburban train ride away and £200,000 a longer suburban train ride away. Any of these is most unlikely to have more than one bedroom. For Edinburgh, the starting price is £140,000; for Leeds, £120,000. There have been plenty of times in the last few years when prices have risen in a day by more than the vast majority of Britons earn in a day.

Those that don’t own property emit wry snorts when asked if they’re thinking of buying 'a place'. Those that do own property are working out many things: how to release equity; how to avoid the inheritance tax bill (Gordon Brown’s spending habits mean he is in permanent search of nice little earners, and this one is growing extremely rapidly).

But what of the other effects of these enormously high house and property prices?

Transport use has risen faster than anyone predicted. Is this because we are so enamoured of our buckled, crammed roads? Are we inspired to lumber along our farcically-privatised train network? No. There are many factors involved, but one must surely be house prices. Why do people commute ever-bigger distances? For the fun of it? Or is it partly because with each train station or motorway junction the house price falls and with it the burden of repayment once the banks (who can’t count the money fast enough; see recent profit stories) have taken their slice?

Our birth rate is declining. But when you are paying a vastly greater proportion of your post-tax income in mortgage payments, can anyone be surprised? Each child is estimated to cost £170,000 to bring up. Statistics prove anything, but what is certain is that children are damned expensive even if you borrow clothes for them from everyone you know, don’t buy them toys and put them in state-funded school.

And what about career choice? Graduates from British universities have the highest-ever level of personal debt in real terms. That is hardly surprising: the universities, starved of money for so long by successive governments, are desperate to gain some extra cash in any way the Government will allow. Suppose you graduated this summer. Your debts may be over £20,000, depending on how frugal you were, how much your parents paid for and what summer or part-time jobs you did.

Perhaps you want to do something a little away from the milkround mainstream: journalism, work for a charity or a museum, make films, be a social worker. If you want to have a family home (and Britons’ liking for owning their home goes hand in hand with the fact that there are fewer chances to rent in a stable, long-term way) you will need a Lottery win, richer partner, beneficent parents or all three to afford a place to call home. You cannot live in a cheap place on a modest salary and get a home of your own. At the other end of the scale, only City salaries have kept pace: even senior civil servants would find buying a suitable home difficult were they not already on the property ladder.

The reasons for the unprecedented amount of money located in the UK housing market are various – re-investment of gains by elders and investors; the cheapest money in fifty years; a buoyant employment market; increasing concentrations of wealth in urban centres; the lack of capital gains tax on first properties.

New Labour has enjoyed the benefits of this in the form of an ever richer-feeling electorate. Britain builds well under half the number of houses it did between the wars, when the fragmentation of families was as nothing compared to now. Nor was the population, which was then around 45 million. The Government's has a role in both. And what if you can't afford even the tiniest flat, despite your hard work and commitment? Tough.