To them the core of the blame lies with a former Prime Minister, seven times removed, someone who left office nearly 33 years ago and has been dead for almost a decade – Mrs Margaret Hilda Thatcher.
Nothing will convince them otherwise. When one points to the gains in personal wealth and wider personal choice brought about by the Thatcher revolution, the response is usually the same: “Aye, for the few, not the many”.
Yet these same critics have been quite happy to buy their council houses at a massive, taxpayer-funded discount and regularly take advantage of budget flights to the Med, thanks to deregulation of the UK air transport industry, largely made possible by Mrs Thatcher.
One of the biggest inaccurate criticisms aimed at her was that she slashed public spending when, in fact, she didn’t. Public spending continued to rise under her premiership year on year, albeit at a rate slower than previously, as she attempted to put a brake on waste.
This is exactly where the property market is at the moment: said to be cooling but prices are still increasing, only at a lower rate than before. According to the online property company, Zoopla, the annual increase in property prices at July was 5.4 per cent in Glasgow and 3.8pc in Edinburgh but with Aberdeen recording a decrease of 0.9pc. Given that the average increase for Scotland as a whole was 6pc, this suggests the biggest rises may have been in provincial and market towns and rural areas rather than in the cities.
Across the United Kingdom as a whole, the average time taken to sell a home is also lengthening – from 19 days in April to 22 days in July.
But unlike Mrs Thatcher’s policy on public spending, the current increase in house prices is likely to plateau at some point. With the international and domestic situation so uncertain the best we can hope for is a levelling off of prices and not some 2008-style deflation, which led to thousands of couples and families losing their homes.
However would a “correction” (i.e. a halt to price increases and even a minor reduction) be such a bad thing?
Thanks to the recent surge in values coupled with the increase in interest rates and, now, soaring energy costs, first-time buyers in Scotland will require an extra £6,000 in income to get onto the property ladder, according to Zoopla. (In London the figure is an astonishing £34,000).
Perhaps this is the reason first-timers have been partly responsible for driving recent market activity – i.e. a sense of urgency about getting onto the first rung of the ladder before the aforementioned cost of living gets any worse and makes buying unaffordable. Zoopla says first-time buyers accounted for 35pc of all purchases in the year to July, during which the value of the average first-time buyer property rose by £33,000 to £269,000.
Despite the above factors, buying is still likely to be cheaper than renting for some time to come in Scotland, even at a mortgage rate of 4pc, says the firm.
However this does not make clear if the statistics include the ancillary costs of buying that do not come with renting – i.e. surveyor, agency and legal fees compared to one month’s advance rental and the equivalent sum (returnable at the end of the lease) as a deposit.
For many tenants in the private sector, the decision to rent a home is about flexibility rather than financial cost. Therefore, while concern is rightly focused on young, first-time buyers trying to realise their dream of home-ownership, sight should not be lost on the vital role that renting – long-term and well as short-term – plays in housing the nation.
The theory that “most people only rent because they can’t afford to buy” flew oot the windae years ago – just as blaming the late Mrs Thatcher for our current economic woes should have done.
David Alexander is chief executive officer of DJ Alexander.