MAGGIE PAGANO: Victorian property values

There is the finest semi-detached cottage for sale in a village near where we live, near Saffron Walden in north Essex.

It’s a lovely house, perfect for a family with young children, with three bedrooms, a well kept garden and not far from Audley End station, so on the Cambridge to Liverpool Street commuter line.

But here’s the point: the asking price is £800,000, almost double what it was a decade ago.

Unless you are an investment banker or a football player, or have an inheritance or a loan from the Bank of Mom and Dad, how many couples starting their careers or even young professionals or downsizers could afford such a price? Very few, and probably only those with both parents working, and even fewer as mortgage rates rise.

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

What’s also interesting about this Essex village is that developers are hoping to build around 25 homes. This, if the laws of supply and demand are applied, should mean that prices are at least kept low. Surprise, surprise, the locals try to block the proposal. Yet these are the same homeowners who whine about cost and lack of housing availability.

This is not a unique situation. Wherever you go in the country, especially the Southeast, where most people want to live for all the obvious reasons, the story is similar. And the problem is getting worse. Analysis by the Leeds Building Society shows that buying a home is less affordable than at any time since the Victorian era. Research from Leeds shows that house prices are 9.2 times higher than the median income. The ratio was last this high at 9.3 in 1875 when the building company was founded.

How extraordinary. Even more disheartening, this should be the case after nearly 13 years of Conservative rule, where you’d think prized home ownership is part of the core philosophy. But instead of making housing a priority, successive governments have failed miserably. In reality, housing construction is declining. The prime minister has given in to local lobbyists in hopes of protecting votes.

Amazingly, Rishi Sunak’s recent five pledges do not include building more houses. Nor did Sir Keir Starmer when he issued his five equally meaningless mission statements earlier this week.

Yet there is so much to do – build more on old land, force developers to incorporate more local amenities into their projects and build nicer homes, get parish councils involved in the process, break the monopoly of the big three housebuilders, make it smaller developers easier and look at the introduction of a land tax.

Politicians should take a lesson from the Victorians. They would not have dreamed of covering the land in aspic, but would have built boldly for future generations. There may be voices in such a policy.

Flying high

Listen closely and you’ll hear British industry roaring back into action. The latest is IAG, the owner of British Airways, which was back in the black last year for the first time since the pandemic. More importantly, IAG forecasts that this year will be about 98% of 2019 levels.

Buying out the shares of Air Europa it does not own is another sign of confidence. While the shares were in the news, they are worth a bet.

At Rolls-Royce, shares are still doing well after jumping to an 18-month high after much better-than-expected results this week. Analysts like the look of new CEO Tufan Erginbilgic, who may be the one to finally realize Rolls-Royce’s potential. Orders in every part of the company are booming and massive debt is falling. Shares at 136.42p look like they’re in for another roll.

Bank’s disgrace

The more that comes to light about Jes Staley’s close relationship with the late Jeffrey Epstein, the more shocking it is that Barclays didn’t make more of an effort before appointing him CEO in 2015.

Staley’s friendship with the sex offender was known long before the board approved his nomination. Epstein was already in prison in 2008 after he paid for sex with minors. Indeed, the U.S. Virgin Islands government’s latest lawsuit against JP Morgan, where Epstein was a client and Staley head of wealth, will reveal even more explosive material. Barclays should be on red to explain itself.