An oft heard cry of those in the property world who cannot emphasise enough that the location of your house far outweighs the importance and value of your chosen décor, the disco ball in the master bedroom, or the marble tiling in the bathroom. I can add further fuel to the fire of cartography with my experiences of the past week. If you should ‘choose’ to collapse in a heap on the floor of a country club with a subarachnoid haemorrhage, try to ensure that the said country club is a mere 7 minutes away from a hospital with one of the most highly rated neurological wards in the country. The workings of a hospital has always held a somewhat ghoulish fascination for me (admittedly I watch Holby City with a pillow in front of my face) but I can now freely admit that that interest has now been sated. Joking aside, the last few days have only re-emphasised to me that location really is everything.
Location featured subcutaneously in this week’s national property news. Hometrack’s monthly survey reported that house prices have risen 0.4% in August against 0.3% in July and many deem Britain’s’ housing market to be at its strongest for 6 years with an accelerating recovery knocking out the traditional August slowdown. A representative from Hometrack comments, “the balance of supply and demand recorded by the survey leads house prices by 3 months and is an indicator of future changes” (sic). As always though, the mismatch between supply and demand is more pronounced in the traditional hotspots of London and the South East. Yet again, location is the primary driving factor.
The downside of these rising house prices is that for many, home ownership may well prove to be an unattainable goal. The machinations of the world since 2007 have forced the country to become a nation of renters. In 2001 the average house price in England and Wales was six times the average person’s annual income; today it is nine times the average salary. At these rates, it is impossible to get a mortgage without a huge deposit. Inflation and therefore savings rates are at rock-bottom meaning that the ability to gather that initial deposit is still for many a never-ending if not impossible struggle. This week, Mark Carney, the new Governor of the Bank of England reiterated his message that interest rates are to remain low until at least 2015. There are several voices of dissent with City figures warning that this plan is flawed and risks accelerating inflation and increasing the probability of boom-bust cycles. For those of us who were around when Jesus was still in short trousers and have seen the cycle peak on more than one occasion, the resulting troughs are something to be avoided.