Property

Do you sincerely want to lose a fortune?

Alaric Jacob

This is nofairy tale of inflation; it is a scrupulously factual account of how I narrowly escaped becoming what most people would call a very ricift

man.

w brought up in the belief that is is impolite to talk about money. But now that I am about to become a pensioner of the state with the attendant joys of free bus travel in London and the odd afternoon at the movies at cut rates to look forward to I have lost this inhibition, along with most others. The cautionary tale I have to unfold is that if over the past twenty years I had played my cards a little differently I would now be joining the 'senior citizens' fortified, in addition to a modest professional pension on which no manual worker could possibly live, with an investment income of not less than £13,h000 caoyuelar.

This d

have been achieved without the slightest effort on my part, quite undeservedly but entirely legally through playing the game of inflation the way sensible citizens such as Sir Charles Clore or Mr Harry Hyams would, I am sure, have played it had their circumstances been the same as mine. Clearly, I am not a sensible citizen but a plain fool. I think there may be many more like me.

In 1930, as a young man new to London, I lived with my parents in Cheyne Row, Chelsea. My father was lately retired from the Indian Political Service and the Arab Bureau in Cairo but Cheyne Row was not then a preserve of the rich. Our little Queen Anne house belonged, I believe, to the Cadogan Estate. I used to lament that we could not buy it but this did not worry my mother. Her reaction, which rings out today like an echo from some remote golden age, was: "One doesn't buy houses, in any case. One rents them." And our rental was an acceptable £175 a year.

For eleven years, from 1934 onward, I was abroad, first as a for eign correspondent, then a war correspondent in France, the Middle East, Burma and Russia. Returning home on leave in the at!tumn of 1945 I espied in Dalton 5 Weekly a house for sale at £3,850. My wife and I could have bought any good suburban house at this price but this one was different. It had been built in the early years of the eighteenth century to house an overflow of personnel from HamPton Court Palace, which had recently been reconstructed by Sir Christopher Wren. A magnificentlY functional building with splendid views over Bushey Park, it had been built with two front doors and two stairways so that it could be used as two houses, or as one, according to need. It had sixteen rooms, and this no doubt frightened some prospective buyers. It had also suffered bomb damage after being used as a warehouse during the war but repairs would in the main be covered by the government's war damage scheme. An architect friend undertook to put the house in order for a nominal fee of £100.

Thanks to his good planning, we spent in all £1,300 — a third of which came from the government — in installing a kitchen on the top floor and a bathroom in the basement which afforded a genuine 'garden flat' with access to Bushey Park at the rear. This gave us in all three kitchens and three bathrooms. The top floor had its own entrance and staircase and we let it unfurnished at £4 a week. The basement was also self-contained, We gave it free of rent to a couple with one child. The husband worked locally; the wife undertook to clean our part of the house in exchange. We retained for ourselves the ground and first floors — all splendid high-ceilinged rooms with the original fireplaces and some parquet flooring. This gave us a dining room, kitchen, study and drawing-room plus four bedrooms. After many years of living out of suitcases we found ourselves in a

situation of unprecedented luxury and with no money worries. Rates and repairs were covered by the lease of the top floor. . We moved in just in time for the birth of our first child. Our architect friend was frankly envious. "Never be tempted to sell this house," he said. "It's the find of a lifetime You may never be so lucky again." My work still involved a certain amount of travel. However, my Wife loved the house so much that she never wanted to leave it even for a holiday and she lived there in undiminished euphoria until her death in 1953.

When I married again, my second wife was a little frightened of the house at Hampton Court; it was, after all, a mansion and she already has a house of her own — a charming bandbox in Markham Street, Chelsea, with a vine and a fountain in its paved garden. She had rented it during the flying-bomb period for £125 a year and the lease had seyeral years to run. Moreover, her job made it essential that she Should live in central London and I. now had a job which entailed a Journey from Hampton Court so awkward and lengthy that I often had to stay overnight and sleep above the shop. The new situation indicated that we should add to our income by letting the big house and live in the smaller one.

But a snag arose. The big house had been bought in my late wife's name because I had happened to be abroad wnen the papers were signed and my late wife's trustees Proposed that the house should be sold in order to help me pay for my daughter's education. Accordingly, the house was offered at auction but the reserve of £6,000 was not reached. The tenant on the top floor refused to move and this made a sale difficult. For many months the house attracted no interest Whatever.

"These Georgian mansions are a drug on the market," I was advised. "Nobody wants them.. Accept even a derisory offer and be rid of it."

No more disastrous counsel could have been imagined. The great British property boom was about to begin.

In Markham Street my second family was on the way — first a girl, then a boy. The house would have been too cramped for three children but at this time pressure was eased because my older daughter was away at boarding school for eight months in the year. As time went on the trustees became increasingly anxious to rid themselves of responsibility for the house at Hampton Court and when at last an offer of £4,000 was made, it was accepted. A few years later it was sold for £16,000. Had it remained in my possession it would have yielded an income of at least £30 a week over the period and today it would fetch, at the most conservative estimate, no less than £60,000.

We spent some happy years in Chelsea but inflation was growing and we wondered if we could afford to renew our lease when it ran out. Our landlord was a pleasant and fair-minded young man and pre sently, since we were sitting tenants and he needed cash in a hurry, he offered us the freehold for £6,000. It would have been a disas trous bargain for him — and a goldmine for us. (Just recently that house changed hands for £45,000.) But we were hard up at the time. It might have been possible to raise a mortgage and a bit more to add an extra storey so that there would have been enough room for a family of five: my elder daughter was about to start school in London as we could no longer afford a boarding school for her. But then we heard of a large family flat in Prince of Wales Drive, Battersea, at £250 a year. Our landlord gave us £700 to move before our time and over the river we went.

There was more space and comfort in that flat than in any smart Chelsea house. It boasted a lift, constant hot water and partial central heating. The family who were moving out had been paying £125 a year on a pre-war lease but we were very satisfied with our bargain. And so we remained for a year or two. Then it became obvious that Battersea was going to be the Chelsea of the future, in which rich refugees from north of the river would be competing for the small stock of houses remaining after the council had completed its programme of high-rise flats. The old slums between Battersea Park road and the railway line were pulled down, a vast housing estate went up and the property speculators moved in.

All along Prince of Wales Drive the rents began to soar. An avid young man named Nigel Broackes, backed by Lord Crowther and the millions of the Commercial Union Assurance, appeared on the scene. Beginning with a series of coups in residential property, he moved on to higher things and before very long found himself a millionaire, with his Trafalgar House conglomerate figuring in the financial columns as often as a Bright Young Person in the pre-war gossip columns of William Hickey. The tenants of the Victorian mansion flats which had sheltered, in their impecunious days, Philip Gibbs, Katherine Mansfield and Noel Coward, arose to do battle with invaders but they were ill-equipped to fight.

A York Mansions housing assocciation of which I was chairman attempted to buy out the property men but in the long run we had to admit defeat. Soon it became impossible to rent a flat; everything was for sale. The going price for my flat would now be £28,000.

Then, quite by chance, I located a Victorian house within a stone's throw of Battersea Park which belonged to an absentee landlord. It was a villa dating from the period of Grossmith's immortal Mr Pooter — a very good period indeed — with fine stucco work on its high ceilings, four bedrooms and a walled garden smothered in soot and roses. The price was £5,000 and I leapt at it. Today, nearly ten years later, it is worth £30,000.

To sum up: if my wife and I had cut out our period in York Mansions and had held on to the two houses we had when we married we could have sold them for a total of £105,000. Over the past twenty years we would have had an income from the first house of £1,500 a year which, reasonably invested, would have been enough to buy the Battersea house at any time during the past five years, before it reached its present maximum. One must deduct from the £105,000 the £8,000 which would have been required to buy the Chelsea house and add a top storey at the price then prevailing, but against this one should set the £3,000 which I received in severance pay on my recent retirement from journalism. This gives a capital sum of £100,000 which, invested in City of Southampton bonds at 131/2 per cent, would produce over £13,000 a year. And today there would be a further option. We could retire to a small town in Cambridgeshire where I know there is a fourbedroom house with a pleasant garden available at £9,000. To exchange our Pooter villa for this would provide a further bonus of roughly £20,000. And now for the ironic envoi: one of the trustees who insisted on the sale of my first fantasy mansion has been living, these past thirty years, in a bungalow set in rather more than an acre of woodland which she bought with an unexpected legacy of £3,000. Ill-health has prevented her from doing a regular job and she has to live very carefully. A speculator has just offered her £100,000 for the property. She has refused to sell. A woman of principle, she does not want her little corner of Hampshire to be polluted by concrete driveways and 'executive' pillboxes.

To kick the-inflationary spiral in the teeth in this way seems to me admirable, if quixotic. With my record, I would have neither the courage nor the inclination to do it.