So, let’s break the habit of a lifetime and talk about housing.
While it’s true Britain has a national housing crisis, it’s also true that we tend to talk about it from the viewpoint of London and the South East (where the problem is one of insanely high prices and the near impossibility of getting onto the ladder) than from that of other parts of the country facing other problems (quality, insecurity and so forth). Not all housing crises are created equal.
And yet: we can this revisionism too far. Over the last 15 years, every city in Great Britain has seen substantial increases in prices. Look:
The smallest increase between 2003 and 2017 came in Sunderland, and even that was over 40 per cent. In other words, for wages to have kept up with house prices, they would have to increase by an average of 2.4 per cent a year – and that’s in the city where prices have increased least.
That map shows a lot of cities, though, so – for the purposes of analysing broader trends – let’s restrict ourselves to the big guys. The next graph shows house prices change in 12 of Britain’s major cities (the 10 Core Cities, plus the capitals of London and Edinburgh) between 2003 and 2017. Let’s find out what the data tells us.
The trends are still a bit difficult to spot, to be honest – both prices in London, and the rate at which they’ve increased, are so much higher than in the other cities that it renders the rest of the graph pretty unreadable.
So let’s simplify things. Instead of looking at absolute prices, let’s look at how they’ve changed.
This next graph shows mean house prices as a function of their 2003 value: if the average home in a city was worth £150,000 in 2003, but £300,000 in 2017, then on the latter it’ll show up as “2.0”. That should make it easier to spot trends.
Two things instantly jump out at me about London. One is that – entirely unshockingly – the increase in house prices in the capital has been quite ludicrous. By 2017, they were nearly two and a half times higher than they were in 2003, when our data series starts – and that was already in the middle of a boom.
But another is that – while prices in London have increased steadily – it’s only since the crash that it’s really shot out ahead of the pack. Around 2009, as prices in most other cities start to drift, those in London continue to soar. That, I would guess, reflects both the city’s resilience after the crash, and the fact that over the last 10 years property in major world cities has become a sort of reserve currency for the global rich.
London’s trajectory means the rest of the graph is still a bit hard to read, so let’s do this again without it:
Bristol and Manchester are vying for the top spot in 2017: prices in both cities have nearly doubled.
But the two have followed very different paths. Prices in Manchester increased fairly steadily on either side of the Great Recession, suggesting the rises are a function of the city’s long-running regeneration. In Bristol, though, the increases started much slower, before shooting up from about 2013. My suspicion is this is escapees from London, looking for more space.
Lower down the table, things are much of a muchness, with increases moving in a what looks suspiciously like a pack: rapid increases from 2003-2007, a wobble until about 2012, followed by slower increases since. But three cities defy this pattern at least slightly.
One is Liverpool which, as I’ve noted several times in this slot of late, experienced a bit of a boom in the run up to its year as European Capital of Culture, but has struggled somewhat since the crash: that seems to be reflected in its house prices. Those in Newcastle has seen a similar trajectory, but without the dramatic boom.
And then there’s Nottingham, which has seen the smallest increase in prices since 2003, but where prices have increased rather faster since 2013. I don’t know much about Nottingham, in all honesty, so am struggling to explain this. Please do write in.
It’s difficult to come up with a coherent conclusion to all this, in all honesty, so I’m going to settle for:
- No, the house price crisis – let alone the broader housing crisis – Is not purely a London phenomenon; and
- London house prices, eh? Bloody hell.