Azara Blog: Surprise: house prices in the UK are high

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Date published: 2007/04/13

The BBC says:

Public sector workers such as teachers, nurses, police and firefighters cannot afford to buy homes in seven out of 10 UK towns, the Halifax bank has said.

Halifax arrived at its conclusions by dividing average regional property prices by average annual wages.

It said property was most unaffordable in London and South-East England but property costs were also racing away from wages in other parts of the UK.
Of 517 towns and local authorities surveyed by the bank, 363 (70%) were deemed unaffordable.

Halifax defined a town as unaffordable if the average price of a house was more than 4.46 times the average wage of the workers - it is also the average multiple of income a first-time buyer pays for a property.
In 2002, just over a third of towns were beyond the means of public sector workers looking to buy property, last year that figure rose to 65%.

This is just the latest in a long line of garbage reports by Halifax on the property market. First of all, they fall for the dreadful government propaganda that says that the only people who matter in the world are public sector workers. But nearly everyone in the UK is in the same boat as public sector workers, i.e. unable to afford the housing they should be able to, given how rich the UK is.

Secondly, the Halifax is looking at the wages of single people, and most people who buy houses in the UK have two incomes, or are wealthy enough not to need two incomes. It's been like that for many years, and no single person, public sector worker or not, should really expect to be able to afford an average house. It goes without saying that it is households on average wages that should be able to afford an average house. So the entire report is based on a disingenous proposition.

And of course the figures they quote have gotten worse recently because house prices have gone ballistic recently. Unfortunately the result of all these kind of garbage reports, and the associated taunting of the government by the media, is that the government will throw more money at housing, not by building more houses, but by subsidising more public-sector workers even more than they do already. This helps nobody except financial institutions like the Halifax (who rake in ever more money from the housing market) and the (relatively) few public-sector workers who qualify for the handout. And indeed the rest of the country ends up worse off (because the main effect of any government subsidy of the housing market is to push prices up even more than they otherwise would).

What we really need in the UK is more housing, and much better quality housing. That is the one thing we never get. The UK ruling elite think the peasants should just put up with crap.

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