The most painful aspect of this has been young couples
ending hutched-up almost as soon as they hitched-up. The FT cited the example
of Tom Johnson. (People of a certain age may now want to put on the theme tune
to Radio 1’s vintage Our Tune): “When Tom moved into a one-bedroom flat in
London with his girlfriend, he admits it was partly because he wanted to escape
the housing situation he was in. He had been sharing a house with strangers, in
a box room that barely fitted a bed and a wardrobe.
“Living in London forces you sometimes to have uncomfortable
living arrangements with people you don’t know that you want to get out of,”
the 25-year-old says.
“But for that, he and his girlfriend ‘would have left it a
lot later’ to move in together – or perhaps not done so at all.
“They broke up about nine months into their cohabitation. In
a city where few young people can afford to live alone, his story is an example
of the strange things the rental market can do to people’s relationships.
Now, when I were a lad down in the Big Smoke for the first
time, it was buying not rental where this phenomenon was most prevalent. In the
mid-1980s, with the price of flats in many cases going up by a few percent a
month many a young couple would head to an estate agent seemingly a day or so
after their first liaison. The situation was exacerbated by Chancellor Nigel
Lawson disastrously allowing a six month window to exchange contracts before
withdrawing tax relief on couples’ mortgage interest.
Then, the day after it was withdrawn, came the crash.
Couples metaphorically woke up, looked at each other, shuddered and thought
“what have we done!” But the onset of negative equity meant they were stuck
where they were. Friends of a friend ended up so loathing the sight of each
other that they had to fix up woodchip panelling in a sort of Berlin Wall
across their tiny flat. A true story. Others had to buy out their partners,
often acrimoniously.
The current problems are mainly restricted to rental
properties, according to the FT. Recent graduates, who are earning less than
their counterparts before the crisis, are flocking to the capital - not only
because of its undeniable attractions, but because it’s where most of the jobs
are – but they are facing huge rent bills. The FT analysed median rents data
from Hometrack, the property consultancy, shows a new graduate on an average
starting salary of £22,400 can expect to spend more than a third of their gross
income on rent – a standard definition of unaffordability – for a room in a
two-bedroom property in 72% of inner London postcodes.
Now if some of this grouping are persuaded to apply (and are
accepted) for Help to Buy funding could history repeat itself? It would
probably be most likely in the first phase, allowing equity loans for new build
properties. Critics of housebuilders claim that their products are like rabbit
hutches in any case (I’ll not get into that debate). Could Chancellor George
Osborne “do a Lawson” and woo innocent couples into homes that are too small
for them … and then withdraw the stimulus, thus prompting a price crash? If so,
some irate former sweethearts might end up heading to B&Q to order
chipboard.
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