November 9

A shop in Bethnal Green, where all your religious statue, ashtray and laundry basket needs are catered for.

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Today I was out working in Bethnal Green, East London. I don’t want to describe it as a dodgy, rundown area but hmmm, looks like I just have. Still, the average flat here would set you back about £270,000 (that’s $673,000 in the Australian money).

That’s not too bad for London – in the Borough of Camden where we live the average is £379,000 (just shy of a million Australian and that’s for a flat remember - the average semi-detached property is £1.5m and a detached house: £2m.)

Today came the news that prices in London have risen by 10% over the last year and have doubled over the past five years, making it increasingly difficult to buy, even for professionals on relatively good wages.

Hence you have mortgage providers finding new ways to get first-time buyers onto that elusive property ladder. Many now offer mortgages of five times your salary (the standard is three times). I wonder if the people who borrow to this extent, after deciding, ‘its so great we can upgrade to a spare bedroom and chrome taps’, have any money at all left over to do anything other than sitting quietly in their new place staring at their new walls.

So, how about trying the 52-year mortgage? – that’ll give you a little extra in your pocket each month - sure you’ll probably still be paying it off in retirement and will have paid about an extra 100 grand in interest payments, but still it’ll be yours in the long run.

Or you can buy in partnership with a housing association, meaning you only own 50% of the place. Those uncomfortable with the idea of sharing with a faceless entity can gather together three of their closest friends and go in for a four-way mortgage: yep, I can really see that working out in a hassle-free way. But would it be better or worse than buying with a complete stranger?

There was a reality TV series here called something like ‘Would You Buy a House With This Person’ where someone would be set up with three house-seeking strangers ah-la ‘Perfect Match’ style and instead of selecting which one to take away for a romantic weekend to Surfers, by the end of the show would have to choose who to ask to buy a house with them – so desperate were these people to purchase a place.

But the thing that really tops it off is that for the vast majority of people ‘buying’ a flat what they are actually buying is a leasehold. Okay, its usually for a very long time, say 99-years, but still once the lease period comes up to expiring if the ‘owner’ wants to keep the property they have to pay out even more money to renew the lease on their home, otherwise… I guess it reverts back to the building owner.

See, now when it’s put like that, don’t the inflated prices seem totally justified?