Martin Vander Weyer Martin Vander Weyer

The Nicola Sturgeon effect on house prices

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Nicola Sturgeon depresses me and seems to be having the same effect on Scottish house prices. In a housing market described by departing Bank of England economist Andy Haldane as ‘on fire’, the flames have been rising higher the further away from London — but more or less extinguishing themselves at Hadrian’s Wall. Why buyers are scarcer in Nicola’s domain is a question I’ll leave to our political writers, but the broader picture of soaring home prices across the rest of the UK is an unforeseen pandemic effect that may have painful consequences.

Nationwide’s June data shows an annual price-rise bar chart increasing steadily from 7.3 per cent in London through the English provinces to 13 per cent in Yorkshire and Humberside and even higher in Wales and Northern Ireland. The stamp-duty holiday that’s now tapering off (and in fact stopped on 31 March in Scotland, where the rise is just 7.1 per cent) has clearly added fuel. But the urge to escape the capital for wider, greener, work-from-home space is a shift the Chancellor surely didn’t anticipate.

Low interest rates, for now, mean mortgage affordability remains close to its long-run average, but a first-time buyer frugal enough to put away 15 per cent of take-home pay will need five years to save the deposit for a basic home. Meanwhile, planning hold-ups combined with shortage of materials and tradesmen mean new-build supply won’t increase significantly in the short term.

All this can only add to inflationary pressures and intergenerational resentment. I know one couple with small children whose dream is to buy a croft in Orkney; perhaps, despite the Nicola effect, they’ll set a trend for the English young to seek cheap homes and new lives north of the border. They might even swing the vote to stay in the UK.

Crosser than ever

I’m overdue for one of my angry reports on the non-progress of Crossrail.

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