On the day the Office for National Statistics announced a sharp rise in consumer price inflation, albeit to a still modest 1.5 per cent, we discovered that house prices have jumped by a staggering 10.2 per cent in the last year. The average house in England now costs £275,000, close to ten times the average annual income. In 1992, the average house cost three times the average income.
A housing boom during a pandemic in the wake of the deepest recession in 300 years doesn’t make a lot of sense, but a few recent events can partially explain it. After three lockdowns, there is pent-up demand, including for houses. The abrupt shift to working from home has led to a permanent change in how some people do their jobs. Office working and commuting have not returned to pre-Covid levels and may never do so.
Many people have realised that they don’t need to live in big cities and have been chasing down new homes (or second homes) in the countryside.
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