“There is no magic money tree” say the people who think there's a magic housing tree, health, education and police trees

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£100bn a year is missing from our high streets thanks to 50 years of pay squeezes

Why does everyone say inequality is falling, when it's rising? Because they're only counting incomes, not all wealth (property, pensions, etc.)

The NHS is not a “cost”. It creates nationwide jobs, technology, growth and wealth. Oh, and health

FTSE bosses take 2.5 days to earn what you earn all year. Data shows they don't deserve it

All governments agree to fix the housing crisis. Latest figures show we're still not even trying

Recovery? What recovery?! Bank of England director explains why broke Britain is still broken

Brexit was about inequality in Britain, not immigration. Have our politicians realised this?

See the Stats: Osborne's 2016 budget protected the wealthiest while the most vulnerable suffer

Inequality: the UK has 9 of the 10 poorest regions in Northern Europe. But Inner London is the richest

Graphs at a glance: With highest pay and highest job growth is London sucking the life out of Britain?

Londoners earn 15% more 'cos London is damn expensive! But the poorest 5th in London are paid only 4% more

Graphs at a glance: Britain is already a low-pay economy with falling average wages

Is your Cost of Living crisis over?! Average wages are still back where they were 10 years ago

Election 2020: since 1997 the percentage of those under 55 who don't vote has doubled

Don't be fooled: the top 1% are paying more income tax? Because their income has doubled since 1995 while the bottom 90%'s has stagnated

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All major parties agree we must fix the housing crisis. Latest figures show we're still not even trying

There is one thing that all major parties are, and have always been, in unanimous agreement on. Fixing the never-ending housing crisis.

The benefits would cascade into other big vote winners. Take these three. Sensible house prices leave more money in everyone's pockets to boost the rest of the economy. Being low paid will hurt less. And a major house building programme away from London and the south east would underpin a big-picture coordinated regeneration of the regions.

So why hasn't the problem been swept away to the deafening cheers and applause of all sides of the house? Because of the political and "economic" reasons for never doing so. Let's walk this one through.

Why are those rents and house prices so high?

This is being fixed, right? Wrong!

Of all the problems we face, surely this is the one that will be fixed first and fastest. Why? Because the TV news is full of politicians promising to solve the housing crisis with the same solution: build more homes. Politicians, of every party, in every election, with no exceptions.

So, that’s a good start. After all, the UK has some of the highest rents and house prices in the world.

The average renter in England is spending 43% of their household income on rent. Most economists will tell you that a maximum of a third of income, a much lower figure, is what is reasonable.

As for buying a house, latest figures show the average household today takes 24 years to save for a deposit to buy a house. Back in the 1990s it was only 3 years.

We shouldn’t even be calling it a “housing crisis”, because the word “crisis” gives the impression that this is an unexpected and temporary problem. It’s the wrong word to use. It’s clear this has been going on for decades.

Yet despite all the promises to fix it, the problem just isn’t going away.

Why are high house prices and rents a problem?

It’s not, for some. That’s why it’s not being fixed

If a problem doesn’t go away, you can be pretty sure that someone doesn’t think it’s a problem at all!

It’s a well known joke among the property-owning classes that most dinner parties end up with everyone discussing their property prices. Correction: their rising property prices. And these aren’t super-rich property moghuls. These are mostly ordinary folk. In the UK around two-thirds of us are home owners. Most will be over 40, who bought when properties were more affordable. Some will have got financial help from well-off parents. Either way, it means they’ll have got on the property ladder without needing binoculars to see the bottom rung, and a rope and grappling hook to get on it [cartoon?]. Then there are the millions of landlords. Obviously, they like rents that comfortably cover the loan (mortgage) used to buy the property in the first place. The rents keep rising, but the cost of that loan doesn’t. So it’s a no-brainer to them.

That makes a lot of people who, when they vote, vote for parties that mouth off about fixing the problem but can be relied upon never to do so.

And let’s not forget that almost a third of MPs are landlords, letting out houses or flats.

But it is an awful state of affairs for tenants and people trying to buy. And there are a lot of them too. So it’s tenants versus house owners and landlords. What can break this deadlock? How about a closer look at how it’s a huge problem for the economy as a whole. Oh, and simple fairness.

Money should be spent on things that “add value.” In other words, the customer is getting something new, something more, or fixing something broken. If you spend more on furniture, you get more or better furniture. But rapidly rising rents and house prices are delivering the same old houses. That’s just bad economics.

An efficient economy rewards effort and risk. But landlords and house-owners are making money with little effort or risk. Very inefficient, as well as unfair!

And this all causes deeper problems for the UK economy, to do with spending and saving. Every nation needs its citizens to both spend (to live today) and save (to spend in old age). The spending keeps the economy ticking today. The savings don’t just sit there, but get invested in infrastructure and innovation for the future. Both are essential. Get the balance wrong, and one or other takes a dive and we’re all in deep trouble. Normally, younger people spend much more than they save. Older people, earning more, do most of the saving. That’s normally. But rising house prices have got older people into a bad habit. Why save for your old age when you can, when the time comes, sell your over-priced house? It’s one reason why since the early 1990s Brits have steadily been saving less. In effect, this generation of home owners are getting the young to do their saving for them, by getting them to save up to buy their overpriced house some time in the future. 

Which means the next generation are forced to pull the same trick on those following behind them. And on and on. So here’s a warning to young people: when your indulgent parent tells you “Darling, my money is your money,” they’re not kidding.

So that’s the nation’s savings screwed up. What about spending? Money spent on over-priced rents and houses is money not spent on the high street. So it’s bad for business and job creation. Yes, landlords spend too. But 60% of all properties in the private rented sector are owned by landlords that rent out more than one property. Half of them, around 30%, are owned by landlords that own 10 or more dwellings. This changes the pattern of the nation’s spending – how much, and crucially on which high street - when all those tenants cut their spending to hand over higher and higher rents to their landlord. Three tenants need three haircuts. One landlord just needs the one. And what if he’s bald?! We shouldn’t joke, or some housing minister will promise subsidised hair transplants to bald landlords, in another pathetic attempt to put another sticking plaster on the disastrous side-effects of the housing crisis. Yes, landlords will spend their profits on other things too, but not on your high street. Yes, older home owners will ultimately sell up and spend some of it. But the same applies. The tenant’s pound – which should have been spent on their high street – goes to the landlord. The landlord spends some of it – on his or her high street, wherever that is! – and likely uses the rest to bid on another house, pushing property prices up further.

Every government makes a promise to build enough new homes
Then promptly breaks it

In 2015 the housing minister said the government aimed to see one million new homes in England over this Parliament (2015-2020). That’s 200,000 a year. He was one of a long list of ministers over the decades who has made such promises. By November 2016 the (new) housing minister admitted the target would be missed.

200,000 a year? The last time England hit that figure was 1980. Since then it’s typically been 150,000 or below.

[Graph from the National Audit Office]

But that 200,000 won’t be enough. The National Housing Federation (NHF) said even more - about 245,000 new homes - are needed each year in England to stabilise prices.

Nothing near that number is being built. The NHF’s figures showed only 457,490 were built between 2011 and 2014. The NHF estimate 974,000 homes were needed during that period.

So, at the current rate, we’re not even half way there. That failure guarantees continued crazy rent and house price inflation, with no end in sight.

To make matters worse, London has got itself a reputation throughout the world for being a place where property prices only ever rise. So even rich overseas investors are buying properties, pushing prices up further.

There are other problems. They make things worse, and need to be fixed. But they should not be allowed to take attention away from the big problem: not enough houses. One example is empty houses and empty rooms. In many cases, some of the richest landlords don’t even bother to rent out their properties, and leave them empty, so sure they are that their “investment” will make plenty from prices that keep on rising. Angry politicians have upped the taxes on empty properties, and rightly so. But only around 200,000 properties across the whole of the England are ever empty for more than six months, so a tax on them is just another sticking plaster over a minor wound, while the major surgery needed is postponed again.

Next. Seven in 10, or 16 million, households in England and Wales have at least one spare bedroom, with eight million homes having two or more. It’s partly down to older parents, whose kids have left, staying in their family houses rather than downsizing and putting the profit in a pension. That’s what happens when rapidly rising property prices are a better investment than a pension. It’s also partly down to people just wanting a spare room. Talking some of these people (by the way, there’s little talking involved. It’s either through a benefit cut threat or a tax break bribe) into swapping a large home for a smaller one, or renting out the spare room, will help but it’s not likely to significantly change the total number of homes available.

What’s stopping house building?

The “green belts”? Or the divisive, corrupt, stupid, and cowardly

People want houses where their jobs are. That means cities and towns. But building more homes often means building on “green belts”. These are, as the name suggests, fields, parks and forests that the locals already enjoy for recreation. The locals don’t want buildings there. Better to build on “brownfield” sites. This is land that has previously been used for industrial and commercial purposes and is now derelict. And doesn’t have people in wellies and flowers in their hair chained to the trees and shouting “go build your faceless grey concrete monstrosity someplace else”. But even here planning regulations slow the process down. And even when there is some land available somewhere in the cities and towns, it is never enough.

What of the land that’s got the planning permission? The ‘big developers’ have ‘a stranglehold on supply’, said Sajid Javid, the Communities Secretary, and are ‘sitting on land banks’, while ‘delaying build-out’. Basically, big developers like a housing shortage, because they can sell their houses for more. Since 2008, the average time lag between a housing unit being granted permission and the home appearing on the market has risen from 21 to 32 months. They get away with it because there’s no real competition. The three biggest players build more than a quarter of all new homes. The top eight account for half. A House of Lords report said the industry “has all the characteristics ofan oligopoly”.

But there are other reasons that have nothing to do with space or profiteering big developers, and everything to do with politics.

Property owners don’t want their house prices to fall, which is what would happen if there were easily enough homes for everyone. Politicians fear property owners will not vote for them if they put an end to rapidly rising house prices. Remember, two in three households are property owners.

Governments have become addicted to the mirage effect our dysfunctional housing market has on the nation’s balance sheet. They can sit back, do nothing, and pass rising house prices off as wealth-creation. Look at it this way. Let’s say house prices stabilised, and people therefore get to spend more and more on furniture. The total value of the nation’s furniture doesn’t get measured! And furniture falls to pieces after a good few years. But house prices get measured. Now, you’d think that cheaper homes, but hundreds of thousands more of them (that’s what’s stabilised the house prices), would result in the same total amount of national housing asset wealth. You’d be right. But the foolish status quo allows our cowardly governments to steer clear of fights with those existing property owning voters. But it’s plain stupid to forego real wealth creation (stable house prices yet many more houses, leaving households with more money to spend on other things) for fake wealth creation (same old houses, just more expensive).

Stabilising house prices stops you using your house as your pension. You’d have to start using your pension as your pension! Now that’s crazy talk! Because it would need our pensions system to be fixed. Every decade has scandals over company pension pots disappearing, banks charging exorbitant fees for managing your pension, or governments changing the law so that your pension pays out less than what you expected. Hands up which government has seriously confronted the companies, banks and their own selves over our crummy pensions? None. Our governments clearly have little faith in pensions, so no wonder ordinary people don’t either. So no wonder so many are relying on cashing in their houses, instead of having a decent pension.

In the 1950s, 60s and 70s, we built new houses like crazy, averaging over 300,000 a year for twenty years. After that we built the bare minimum. So it’s divisive, corrupt, stupid, and cowardly. And unfair. It can’t be fair that young adults have to work so much harder than older generations to have the same housing. 

Prices in London and the south east are crazy. Why not live somewhere else, somewhere cheaper?

You can’t live where the jobs aren’t

You need to live near where your job is. There are always cheaper houses and rents somewhere, but not where jobs are being created. The midlands and the north are parts of the country that used to thrive – the engine room of the empire! But since the 1950s most job creation has happened overwhelmingly in London and the south east, whilst many big industries of the north (manufacturing, in particular) have shrunk.

We should be less focused on building new homes in London, and invest and create jobs outside the south-east of England.

For a start, the rest of the UK has the space for the new houses. The worst of the “green belt” problem goes away – the only good reason for not building a house.

There are other massive benefits. High housing costs in London and the south east make all the other costs of doing business high. Not just business rents. Staff need higher pay to cover their own housing costs, and those rising wages make everything else – cups of coffee, doctors and nurses, transport, everything – more expensive.

House building outside London is easier and cheaper than in London. Think of all the pipes and cables you need to lay, running to new utility plants. Then there are the new schools, hospitals, and other essential services.

The bigger problem is the creation of the jobs. In Manchester, Liverpool, Leeds, Newcastle etc. We’d need to get public and private services and businesses to move to where they had no plans to go. And their staff.

It can be done. Even that stick-in-the-mud the BBC relocated 1,800 jobs away from London to Salford, near Manchester, and backed the creation of MediaCityUK. Many BBC staff were dismayed. Some resigned rather than move. But by 2015 the BBC employed 2,500 there, with other media organisations employing thousands more.

Creating jobs outside the south east would be a big vote winner. The rest of the UK would be delighted by any government that created jobs in their region, rather than in the usual place: London. All it needs is for the number of these voters to exceed the number who want property prices to keep rising. And a strong, visionary and eloquent national leader who can explain that the current system is unjust, punishes hard working people who have to rent and can’t get on the property ladder, prone to cartel behaviour by the builders, and fools the whole economy into creating fake wealth instead of the real thing.

[SOURCE GUARDIAN: London gets 24 times as much spent on infrastructure per resident than north-east England]

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Don’t blame Donald Trump! He’s a symptom, not a cause

SOURCE: Institute for Policy Studies
Data showing how inequality has worsened in the USA over the last 30+ years.

OUR RELATED STORIES:

Recovery? What recovery?! Bank of England director explains why broke Britain is still broken

Brexit was about inequality in Britain, not immigration. Have our politicians realised this?

See the Stats: Osborne's 2016 budget protected the wealthiest while the most vulnerable suffer

Inequality: the UK has 9 of the 10 poorest regions in Northern Europe. But Inner London is the richest

Graphs at a glance: With highest pay and highest job growth is London sucking the life out of Britain?

Londoners earn 15% more 'cos London is damn expensive! But the poorest 5th in London are paid only 4% more

Graphs at a glance: Britain is already a low-pay economy with falling average wages

Is your Cost of Living crisis over?! Average wages are still back where they were 10 years ago

Election 2020: since 1997 the percentage of those under 55 who don't vote has doubled

Don't be fooled: the top 1% are paying more income tax? Because their income has doubled since 1995 while the bottom 90%'s has stagnated

Read More

EU and immigration: The fact is, the population rose just as much between the war and the 70s. Then, we built more houses, schools, hospitals. Now we don’t

KJ, Fee and Chris decide to stop blaming everyone else...

SOURCE: House of Commons Library - A Century of Change: Trends in UK Statistics Since 1900

Worldometers UK Population

OUR RELATED STORIES:

See the Stats: Osborne's 2016 budget protects the wealthiest while the most vulnerable suffer

Inequality: the UK has 9 of the 10 poorest regions in Northern Europe. But Inner London is the richest

Graphs at a glance: With highest pay and highest job growth is London sucking the life out of Britain?

Londoners earn 15% more 'cos London is damn expensive! But the poorest 5th in London are paid only 4% more

Graphs at a glance: Britain is already a low-pay economy with falling average wages

Is your Cost of Living crisis over?! Average wages are still back where they were 10 years ago

Election 2020: since 1997 the percentage of those under 55 who don't vote has doubled

Don't be fooled: the top 1% are paying more income tax? Because their income has doubled since 1995 while the bottom 90%'s has stagnated

Read More

MPs pocketed 10% payrise while Department of Works and Pensions report shows over half of Britons have been cutting back on food.

Wage restraint has been tough. In March 2015 the Chief Secretary to HM Treasury announced:

"Our teachers, doctors and armed forces do a wonderful job serving the people of this country. Pay restraint has been very difficult for many, but has helped us to protect vital public service jobs while we deal with Britain’s deep financial problems.

The independent pay review bodies have worked hard to bring forward a balanced and affordable set of recommendations that delivers on our commitments to increase pay by around 1% and deals with particular pressures. The government is grateful for their work and I am pleased that we are able to accept their main recommendations.

The government has accepted in full the recommendations for the following workforces who will receive an average of a 1% pay increase:

• Armed Forces
• independent contractor GPs and dentists
• Prison Service
• teachers
• senior military
• judiciary"

Happily for some the doom and gloom did not spread everywhere.

From 31st July 2015 MPs pocketed a 10% payrise, their pay going up from £67,060 to £74,000 per annum (backdated to the General Election in May 2015). 

Perhaps you remember all those MPs shaking their heads and shooting out their lips protesting that the payrise was a disgrace in these times of austerity? According to the website Donate My Payrise 74 out of the 650 MPs pledged to hand over the extra cash to charities. The website helpfully gives links to the individual MPs’ public statements, so you can check what your MP did or didn't say.

A report in October 2015 by the Sun newspaper stated in fact only 26 MPs had actually done so. [Subsequent to the Sun report the SNP chimed in saying their MPs too would donate their rises to charity, but hadn't at that time decided to which ones]. 

Asked what David Cameron would do with his payrise, the Sun reported Cameron’s spokesman would only say:
“The PM has been explicitly clear since the very start that he does not agree with this pay increase.”

Which may remind you of Cameron's response when asked whether he benefited from the "millionaire's tax cut" in 2013. Cameron was asked by Stephen Pound MP, during Prime Minister's Questions of February 13th 2013 : 

"Q12. [142834] Stephen Pound (Ealing North) (Lab):  will [the Prime Minister] tell the House whether he will personally benefit from the millionaires’ tax cut to be introduced this April?

The Prime Minister: I will pay all the taxes that are due in the proper way. "

There is a spooky similarity between Cameron's statement and that of the Starbucks and Google bosses when they were being grilled by a parliamentary select committee on multinationals tax dodging shenanigans:

"we strive to follow the letter of the law and have done so in the case of our tax obligations. All taxes owed to the UK have been timely and fully paid"

Mr.Troy Alstead, Starbucks

"We pay all the tax you require us to pay in the UK."

Mr.Matt Brittin, Google

Could it be Cameron, Starbucks and Google share tax advisors? Surely not!

The Government is not simply turning a blind eye to the predicament of the less well off. Iain Duncan Smith's Department for Works and Pensions (DWP) showed enough concern to commission a report on the impact of the Bedroom Tax: "Evaluation of Removal of the Spare Room Subsidy". This report found that three quarters of those affected tried to make ends meet by cutting back on food and clothing. The report also states that even among people not affected by the Bedroom Tax (referred to in the report as the "comparison group"): 56% cut back on food and 62% cut back on clothing. Which is not so surprising when, acccording to OECD figures, the UK has one of the highest proportions of workers on low pay in the developed World:

Duncan-Smith, thoughtful chap that he is, waited until the day MPs broke up for Christmas holiday, on 17th December 2015, before publishing the report. So as not to spoil their mood as they scampered off to spend their 10% payrise on presents and other festive stimulants. You can't say our Government isn't sensitive and caring.

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The government promises 200k new houses a year? We’ve only ever come close to hitting that figure once since the 1970s

KJ, Fee and Chris desperately seek diversion from the nation's never-ending property nightmare...

SOURCE BBC NEWS: 'Million' new homes by 2020 target declared by minister Brandon Lewis

Housing minister Brandon Lewis said the government aimed to see one million new homes in England over this Parliament. But the National Housing Federation (NHF) said about 245,000 new homes were needed each year in England. Figures from 326 councils showed only 457,490 were built between 2011 and 2014. The NHF estimated 974,000 homes were needed during that period. Gill Payne, NHF director of policy and external affairs, said: "Skyrocketing rents and ballooning house prices are eating up more and more of people's wages and forcing people out of their local communities or into smaller, lower quality housing... We haven't built enough homes in this country for decades.” In 2012, the government introduced changes to the National Planning Policy Framework, aimed at making the planning process simpler and quicker. But numerous other factors have also been blamed. A shortage of land has also been cited by homelessness charity Shelter, while criticism has been levelled at developers who build slowly rather than progressing quickly. By keeping the number of new homes available at any one time low, the price of those houses can be kept high, said Matthew Pointon, property economist at Capital Economics. A shortage of skilled labour, a big drop in the number of councils building new homes and regulations restricting housing associations have also been blamed. Shelter's chief executive Campbell Robb added: "We are past the time for another grand statement of ambition. To give ordinary families back the hope of a stable home, we need to see investment and a comprehensive plan that can actually get these homes built."

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Corbynomics. Old solutions to old problems? Not when old problems are today's problems

SOURCE TELEGRAPH: Autumn Statement: George Osborne to shrink the State to its smallest since the 1930s
The Chancellor's spending plans mean the public spending relative to the whole economy would be the smallest in 80 years, the Office for Budget Responsibility (OBR) said. The OBR, the independent government forecaster, said that Mr Osborne's tax and spending policies will require an austerity programme in the next Parliament much bigger that the one implemented by the current Government. That will mean far-reaching new reductions in "day-to-day" public services, including those provided by local councils, the forecasters said. It calculated that between 2009-10 and 2019-20, spending on public services and central government will fall from £5,650 to £3,880 per head in 2014-15 prices. Around 40 per cent of these cuts will be delivered during this Parliament, with around 60 per cent to come during the next, the OBR estimated. With major items of spending like the NHS and the state pension protected from cuts by political promises, independent economists say that the scale of the cuts that would be required in unprotected areas would be unprecedented and potentially leave the State unable to deliver some of its current services. The budget for Whitehall departments, not including health and education, would fall from £188 billion at the start of this decade to £86 billion in 2020, the OBR suggested. If Mr Osborne's plans are realised, public spending in 2019/20 will be 35.2 per cent of gross domestic product. It currently stands at 40.5 per cent. The lowest level achieved by Margaret Thatcher's governments was 37.3 per cent in 1988/89. The current post-war low was set in 1957/58 towards the end of an economic boom that led Harold Macmillan to declare that "most of our people have never had it so good." Mr Osborne has suggested that the Conservatives would try to find many of the post-election cuts from the welfare budget. He also promised to find £10 billion of savings in public sector “efficiency.” He gave few details of how the £10 billion will be found, but signalled it would mean at least another two years of pressure on public sector wages. Matthew Whittaker, an economist at the Resolution Foundation, said that none of the parties has been candid with the electorate about “just how much more fiscal pain there may be to come after the election.”

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if we don't almost double the number of new builds to the 240,000 per year we need to meet demand, rents will keep rising, house prices too

SOURCE GUARDIAN: Tory housing association right-to-buy policy attacked by big business

The Conservatives have come under fire after David Cameron pledged to give people the chance of a “good life” by extending Margaret Thatcher’s right-to-buy scheme to 1.3 million families in housing association properties. The Confederation of British Industry and the blue chip Jones Lang LaSalle (JLL) property firm joined many housing associations, warning that the Tory plan would not address the chronic shortage of housing. Boris Johnson said last month that the proposal would involve massive subsidies. Adam Challis, head of residential research at JLL, said: “The expansion of right to buy may be good politics, but represents terrible policy. This is exactly the kind of short-termist thinking that the country’s 4.7m households in social housing don’t need, not to mention the same number again of aspiring owners in private renting”. Gavin Smart, the deputy chief executive of the Chartered Institute of Housing, warned that the proposal could make life more difficult for people on lower incomes, adding: “We fear the figures simply won’t stack up.” Under the Tory plans, councils would be forced to sell off their most valuable homes, to be replaced by affordable housing in the same area. The funds from the proceeds of the council house sales would be used to pay for the extension of the right-to-buy scheme to housing associations. A further £1bn from the sales would be used by the Tories over four years to prepare brownfield sites for house building, with the aim of creating 400,000 extra homes. The Tories said around 15,000 council properties that are in the top third price bracket – around 0.4% of the stock – become available every year. Under the new rules, councils would be forced to sell those homes, raising £4.5bn net a year. This would be used to fund the building of cheaper, replacement properties. “That is more than enough to pay for one-to-one replacement of the council houses sold, discount for the right-to-buy housing association property, one-to-one replacement for the right-to-buy homes and this £1bn over four years fund to deal with brownfield sites,” one Tory source said.

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Graphs at a glance: Governor of the Bank of England said the housing boom is the greatest threat to the UK recovery. So what are we doing about it?

Does the UK Housing Boom really exist? It's common knowledge that London house prices have ballooned, but is the rest of the UK bubbling up too?

Figures from the Office for National Statistics show this is actually not the case. Since the banker induced economic crisis of 2008 London house prices have rocketed by 40%. UK house prices too have grown by a not insignificant 12%. However this average UK house price rise has been greatly inflated by including London's figures. 

Look at it this way: a company reviews the pay of two staff:

• Joe Minimus gets no payrise
• Felix Maximus gets a £10,000 payrise
• Their average payrise is £10,000 ÷ 2 = £5,000

The company can say it gave its staff an average £5,000 payrise. But strip out Felix's hike, and the reality is Joe got nothing.

If you strip out London house prices, as the ONS has kindly done in the graph below, you discover that in the five and a half years from January 2008 to July 2014 the average house price in the UK excluding London has risen by just 4%. That is about the same as if you put your money in a rip-off deposit account paying less than 1% for the same period of time.

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Graphs at a glance: How policy makers use averages to rip-off half the population

In an earlier post we pointed out that London is sucking the life out of the UK. Were we being fair?

 

It is certainly true that London has a greatly disproportionate share of the UK's economic activity.

One consequence is things in London cost more, from the price of a pint to the price of a house. 

So are people in London paid more than in the rest of the UK so they can afford higher "London Prices"?

Well, yes and no.

On average Londoners are paid more: 15% more than the UK average.  

But take a closer look, and the story is different.

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