Brown would have been better off directing his money towards a worthy cause: me
Ihave been reading with interest the articles in the press about the Afghan family that is supposedly living in a £1.2 million council house. You see, the house in question is just round the corner from mine and if it really is worth £1.2 million that means Acton has been unaffected by the credit crunch. On the contrary, if the papers are to be believed, property prices in Acton have actually increased in the past 12 months. As someone who bought an almost identical property in the area last year, that came as an enormous relief.
When the story broke, I called Christian Harper, the Oliver Finn estate agent who sold me my house, to see if it was true. Was it possible that the Victorian property in question is worth £1.2 million? That was the value placed on it by the Daily Mail at the beginning of the week — all the more surprising given that the Mail ran a story the previous week in which it quoted a senior estate agent saying that prices in London were down 20 per cent.
‘It sounds outrageously optimistic to me,’ said Christian.
‘If you look on the land registry, the most a property in that street has achieved is just under a million and that was last year. Most of my business is in Chiswick rather than Acton, but I’ve seen some properties come down by as much as 25 per cent in the past 12 months.’ So that’s that, then. It looks as though my neighbourhood hasn’t bucked the trend after all. This is particularly worrying because, like many people who’ve bought property in the past year, I’m currently on a fixed rate mortgage that I’m due to come out of in the not too distant future. Given that the value of my house will have declined, the percentage of the house that I actually own will have fallen too, and that means I won’t be eligible for the most attractive mortgage products. In all likelihood, I will have to stay with the same mortgage lender, but switch to their standard variable rate. That will mean a 33 per cent increase in my monthly interest payments.
It is perfectly possible that I won’t be able to afford this, but at least I have the option of renting my house out and using that money to pay the mortgage. True, this will mean moving in with my parents-in-law — a situation they will not relish — but that’ll enable me to hold on to my property until the market starts to recover. Others in my position won’t be so lucky. I am absolutely certain that within the next 12 months several families of my acquaintance will see their net worth wiped out as they’re forced to sell their houses at a loss. Some of them will probably move back in with their parents, too, but others will be forced to throw themselves on the mercy of the state.
This begs the question of why Gordon Brown and Alistair Darling did not devote some of the £37.5 billion they have set aside to save the British economy to mortgage relief. As I understand it, the reason the share price of Britain’s leading high street banks fell so dramatically last week is because investors were no longer confident that the homeowners they lent money to would be able to keep up their mortgage payments. Consequently, rather than just help the banks to make up this shortfall, The Treasury could have done something to help people in my position as well. Surely if the government gave a pledge that it would not allow a single homeowner to default on his or her mortgage, that would have had an equally positive effect on the banks’ share prices. Admittedly, people like me are not a particularly deserving cause, but then neither is the banking industry. Helping homeowners would have made more political sense, too. If Gordon did something to alleviate the burden on people with large home loans — for instance reintroducing mortgage interest tax relief — they would be much more inclined to vote for him in 2010.
It looks as though I may have to follow the lead of my Afghan neighbour, Toorpaki Saiedi, who is reportedly receiving £170,000 a year in benefits. Admittedly, she has seven children and I only have four, but that is one shortfall I think I can make up. It might also help my journalistic career. As an old Fleet Street hand put it to me recently, ‘Four’s nothing. Seven’s a story.’
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