Monday, November 30, 2009

Past imperfect 2 - Argyle Terrace

3 Argyle Terrace

In July 1982 I bought the ground floor of a Victorian terrace on the edge of North Shields in Tyneside. I paid £7,700 including legal fees. In return I got a huge flat with high ceilings and original features, a great view over the fields and a neighbour with a punk daughter who played the drums at all hours!

I was twenty years old and had just returned from my third year at university. There were three million people unemployed and somehow I landed a job as a sales rep for a newspaper. That single break allowed me to buy the flat and in so many ways affected the course of my life.

Putting the price of the flat into perspective, it was exactly the same as my first annual wage. I remember I borrowed £300 from my mother to cover the deposit. I was so determined to repay her that I barely did more than eat for two months. Looking back, quite why I was so fiercely independent I can't say, but I don't regret it, or what it taught me. I have remained so ever since.

I lived at Argyle Terrace for three years before moving north to Northumberland. They were three good years - formative, fun, and a long time ago in more ways than one. It would be almost inconceivable now for a young person to buy a decent first home for the equivalent of a year's wage.

And you know, it is not a good thing that they can't.

I feel immensely lucky to have reached adulthood at a time when buying a house wasn't the crippling expense it is today. A blog isn't the place to discuss detailed personal finances, but in the twenty seven years since I bought Argyle Terrace I have never had to take a mortgage more than twice my salary. That combination of good fortune and circumstance (and huge a slug of prudence) has afforded me a freedom from debt that many people only a decade younger, and for no fault of their own, have struggled to achieve.

The view from my window - and my first company car!

My Grandfather lived not far from Argyle Terrace. He bought his first house when he was in his twenties and never thought to move until he was seventy seven. His house wasn't an investment; it was somewhere to live and raise a family. That might sound old fashioned, Romantic even, but it has always struck me as the right way to look at it.

There is little that dismays me more than the property boom of recent years. At times I have wanted to scream. We are not richer when house prices rise - and certainly we are not richer as a society. Even at an individual level the 'I have equity' school of thought seldom stacks up. In my case I have supposedly made a handsome profit - but what about my children who will need a home sometime in the future? As a family we are immensely poorer.

A typical home in the UK is worth three to four times its price in 1995. But how does that supposed wealth manifest itself? It's not as if people can cash in and live for free elsewhere. In practice, the real wealth of home-owners of my generation (providing they have been prudent and not borrowed against their equity) is in having a smaller mortgage - something everyone could have enjoyed if prices hadn't risen so aggressively in the first place!

And none of this even touches on how the housing market has skewed our economy, left millions in a mortgage trap, warped our values about what is important. I could make some jokes here about Home Front and Location bloody Location having a lot to answer for - but it's way too serious to laugh at.

I feel most sad for those starting out. A few years ago young people were damned if they did and damned if they didn't. A friend of mine said recently, ' They should rent, like everyone does in Germany.' But that is unrealistic; we don't have their housing infrastructure and in any case cultural norms are an important part of our self worth - in the UK owning a house is, for the vast majority of aspiring people, an central aspect of making progress in life.

But if ownership is legitimate, a lust for rising prices and the putative wealth it brings is destructive. It has always struck me as perverse that housing is the only essential product we want to see increasing in price - imagine if we had the same attitude to energy or food. I could go on, but I would probably scream after all.

I know that every generation has its trials and fortunes, but as I look again at the photo of my first house, I think it was truly a lucky break to be starting out then. I hope one day the cost of housing will return to something near affordability - though I doubt my particular definition of that word would be possible.

More's the pity, because I suggest we'd be better off if it did.


P.S. And there you were thinking my last post of November would be a nice quiet round up. Nablopromo - no problem!


  1. I agree wholeheartedly. Younger daughter living and working in London with a reasonable although not massive wage can no more afford to buy than she could fly. That is not healthy and the gulf between those whose parents can help and those who are truly on their own is pernicious.

  2. I only got on the property ladder 3 years ago, believe it or not, and have no interest in whether the house is losing or increasing its value. I don't care. It's home. I'm with your gradfather on that. We were lucky in a way too - for all the mortgage is crippling, I'm aware that we got a decent house for a bargain price due to circumstances which I won't bore you with here... so fo rme it's all worth it. Marjet forces, equity and material value don't come into it for me... and I'm glad. But I do worry for my kids.

  3. I agree. I am stuck in a rut because of this issue. I have a lovely one bedroom flat, we moved in to this and sold Mr's house, thinking it owuld be short term as we would quickly get a family house. Then I got pregnant, then we sold the flat twice, both times it fell through as the young buyers ended up having financial problems. The house we were buying has now not happened, so we have lost money in the process and we're still stuck in our flat which is far too small for me, mr, baby and dog. It wasn;t supposed to be like this sob sob :(

  4. You made it, well done!

    I bought my first house around the same time as you - December 1981. Mine was a 2 up 2 down terrace in Pity Me, Durham using money I'd saved up from my student grant and holiday jobs! I slept on the floor for the first couple of months because I couldn't afford to buy the furniture to go with the house, but then was bowled over by the incredible generosity of my new colleagues who donated a bed, fridge, some chairs etc etc.

    It was cheaper to buy that house than to rent in spite of the crippling mortgage rates at the time. And I was so proud of what I'd managed to do through my own hard work.

    I think it's pitiful that today's hard working youngsters can't afford to do what I managed.
    And whilst we might look rich on paper, you've got to downsize drastically OR not have a home at all in order to be able to realise your property's equity. As that's the case, then we're not really rich at all are we?

  5. I bet you didn't have the incredulous looks from your colleagues though when you told them about buying your flat. Mine automatically assumed I must be married to have done so and were shocked by the absence of a ring on a certain finger!

  6. Our country is riddled with foreclosures and people out of work. So selling a house here is like pulling hen's teeth and owning one is not easy due to taxes. Everyone wants homeowners to foot the bill for something -- from the wars we are still in to the local school.

    I have always thought civilization is about slavery so subtle nobody notices what people are allowed to buy--where they are allowed to work--how much money they are allowed to make--how much they can borrow--while those in power sit back and reap huge profits from our labors. It is a system not much different from the way plantations were run before our Civil War.

    Fortunately, we bought our house in 1962 and it was new. It has increased in value tremendously and has been paid for many years. I could not afford to buy a new quarter million dollar home on government retirement wages.

  7. I grew up in an era where renting was the norm for a whole swathe of the population...then came the Thatcher era, where public housing stock was thrown away in order to create a market in property. Just look where that has got us.

  8. I am coming to this late... apologies.
    But I had to comment.
    I'm Scottish, still living in Scotland.
    Along with 80% of my peers I was born into the council housing sector. Plain good quality housing stock at a reasonable rent. With security of tenure.
    The along came Thatcher and the right to buy, cutting through vast swathes of the Estate I lived in and creating ghetto streets where there was no one who could afford to buy.
    The move away from renting was disastrous. And bear in mind many Councils are still paying back the loans they took out to build those Council Houses.
    I look to the continent - to Germany and the Nordic countries where renting is the norm.
    Mortgages created millstones round workers necks. Left people unable to afford to take action against poor employment practices because they had heavy burdens of debt to service. They made the roof over your head precarious.
    I bought - because with 5 children and an elderly parent to house and care for, there was no alternative.
    With our professional positions and two very high salaries coming in we can afford our modest mortgage for this 12 apt house. Financially we have benefited from low rates.
    But I despise this system - it has created social pariahs, made an underclass of those who rent in the Social Housing sector ; it has made private landlords rub their hands and it has unfairly benefited those like me who bought 'at the right time'.
    I am often in England and am appalled by the hateful way in which many refer to those who live in Council Housing. Thankfully it is not quite as vitriolic a division in Scotland. Homes are essential shelters and should be a human right - they are not castles, nor investments.

    1. la mujer libre

      You write an eloquent case, and I agree with almost all you say. I fear for my children and the options (or lack of) they face.