September 24, 2023

In a village not far from where we live, near Saffron Walden in the north of Essex, there is a beautiful semi-detached cottage for sale.

This is a magnificent house, ideal for a family with young children, with three bedrooms, a well-kept garden and close to Audley End station, i.e. on the line between Cambridge and Liverpool Street.

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

Unless you’re an investment banker or a football player, or you don’t have an inheritance or a loan from Mom and Dad’s Bank, how many early career couples, young professionals, or layoffs can afford that price?

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Very few, and probably only those where both parents work, and even fewer as mortgage rates rise.

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Building a legacy: Instead of making housing a priority, successive governments have failed

If both parents work, add in the cost of childcare, which rises to £1,195 a month in London from April and £1,735 a month outside London. This is more than 80% of the average monthly salary in the UK.

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 apply, mean that prices are at least kept low. Surprise surprise, the locals are trying to block the offer. But these are the same house owners who complain about the high cost and inaccessibility of housing.

This is not a unique situation. Wherever you go across the country, especially in the southeast where most people want to live for all the obvious reasons, the story is the same. And the problem is getting worse.

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An analysis by the Leeds Building Society shows that buying a home is less affordable than at any time since the Victorian era. Research by Leeds shows that home prices are 9.2 times the median income. The last time the ratio was this high, at 9.3, was in 1875, when the building society was founded.

How unusual. What’s even more depressing is that this must be the case after nearly 13 years of conservative rule that, you might think, valued home ownership as part of its core philosophy. However, instead of making housing a priority, successive governments have suffered a crushing defeat. In truth, housing construction is reversing. The Prime Minister gave in to local lobbyists in the hope of protecting the votes.

Surprisingly, Rishi Sunak’s recent five promises did not include the construction of new homes. As did Sir Keir Starmer when he delivered his five equally empty mission statements earlier this week.

However, there is still so much to be done—build more on abandoned lots, get developers to include more local properties in their projects and build more beautiful homes, get parish councils involved, break the monopoly of the Big Three home builders. , facilitate small developers and look at the introduction of a land tax.

Politicians should take a lesson from the Victorians. They would not dream of covering the country with jelly, but would boldly build for future generations. There can be voices in such politics.

Flying high

Listen closely and you’ll hear British industry roaring back to work. The latest is IAG, the owner of British Airways, which was back in positive territory for the first time since the pandemic last year. More importantly, IAG predicts capacity this year to be around 98% of 2019 levels.

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The buyback of shares in Air Europa, which he does not own, is another sign of confidence. Although stocks fell on the news, they are worth betting on.

Rolls-Royce shares are still trending after rebounding to an 18-month high after a much better-than-expected performance this week.

Analysts love the look of new chief executive Tufan Erginbilgic, who could be the one to finally realize Rolls-Royce’s potential. Orders in all areas of business are working to their fullest, and huge debts are decreasing. Shares at 136.42 pence look like they’re in for another rally.

shame on the bank

As more becomes known about Jes Staley’s close relationship with the late Jeffrey Epstein, the more shocking it is that Barclays didn’t show much diligence before appointing him as chief executive in 2015.

Staley’s friendship with the sex offender became known long before the board approved his appointment. Epstein was already in jail in 2008 after paying for sex with minors.

Indeed, the latest U.S. Virgin Islands government lawsuit against JP Morgan, where Epstein was a client and Staley was head of finance, should reveal even more explosive material. Barclays has to be on guard to explain himself.