Why I'm unhappy about my rising house price

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stacks of coins  green and red...

As a London homeowner I should be happy about house prices moving swiftly upwards, right? Wrong.

I'm fortunate enough to own a home in London, not anywhere fancy, in good old Haringey (in an area that estate agents have tried to label SoTo, short for South Tottenham).



In the past year home prices have shot up a staggering amount. A two-up, two-down terrace was changing hands at around £325,000 in June last year and now you're looking at price over £375,000.

That's a 15% increase in under a year, and it's ludicrous.

The price London property, as we all well know, is well above the UK average, although there are varying degrees to the averages reported; Halifax says just under £175,000 and the Land Registry says £167,000.

In London you now have to shell out a shade over £400,000 to own a property, an average rise of 11%.

This is turning London quickly into a City of haves and have-nots, it is dividing generations and it is pushing people out of communities and away from their friends and families because they can't afford to live their any more.

It can't be denied that the surge has been a double whammy of the government's Help to Buy initiative and a lack of property on the market. More people are able to secure mortgages with a lower deposit thanks to the government underpinning loans but there are less properties to purchase. It doesn't take a maths whizz (which I'm not) to realise that these factors are pushing prices sky high.

And it looks like they're going to stay there as the Bank of England has said it will not increase interest rates when the unemployment rate falls to 7% because that's now going to happen too soon.

That will mean cheap mortgages will abound possibly until the end of the decade. If that happens then London property will be the sole preserve of stockbrokers.

There has been talk of removing Help to Buy from London but if that happens and prices fall then all those who have bought with just 5% deposit at the top of the market will see themselves face a different type of property problem: negative equity.

This in turn becomes a problem for the government, which is backing 15% of the loans. We're damned if we do and we're damned if we don't.

The government just shouldn't have damned well done it in the first place.