New home

We started looking for a new house to rent this last couple of weeks. We’re going to downsize and save quite a bit of money as we negotiated our current place when the supply of decent rentals was pretty thin.

It looks as if the UK house-price crash has stopped now. I still believe that houses are over-priced, whatever that means, but there are a number of reasons why property is still an attractive investment for people with excess funds to invest. Low interest rates offer next to zero returns on safe savings: property is higher risk but the returns are in proportion and over the long-term the ‘capital’ risk is fairly low. Demand for rented property is high as the large deposits now required by lenders have still to be, and may in many cases never be, saved by first-time-buyers.

I read somewhere that the percentage of UK dwellings being owner-occupied has increased every year since 1950. I’m not sure when that statistic was penned or if it is still true. If it is still true, I can’t imagine it will remain true for long.

I think that the gap between rich and poor is going to grow over the next 10-20 years and I wonder if it will ever close again. The major dividing line is going to be home-ownership: there will be ‘haves’ and ‘have-nots.’ From what I can gather this will be a return to the 1950s.

The UK is different to how it was in 1997 and we could well view this administration as being the one that allowed things to run out of control. Historically, Conservative governments have done less than Labour ones in redistributing income from rich to poor. Once the Conservatives are in power, it will probably be another 9 years before there is the remotest possibility that Labour will govern again. By this time, surely houses will have become even less affordable for first-time buyers.