London house prices go through the roof

Press, 1 December 1987, Page 40

London house prices go through the roof

By JOHN COOMBER NZPA-AAP London Morrie, a cockney cab driver who earns £l5O ($426) a week, has decided to sell the threebedroomed terraced house he Inherited from his parents and move to Barbados and have a life of ease. Morrie did not win the pools or rob a bank. He discovered that his modest house in Pimlico was worth £350,000 ($994,000). “With that kind of money why should I put up with driving a cab in this weather?” he said. Although he never thought of his house as anything but ordinary, it happened to stand in what has become a fashionable part of London’s inner West End, where the wealthy are now prepared to part with astonishing sums for anything with a roof on it. Not everyone struck it quite as lucky as Morrie, but anyone who bought or inherited a house in London 20 or even 10 years ago now find themselves sitting on a fortune. House prices in the capital have been rising at tlie astonishing rate of 24 per cent in recent years — six times the rate of inflation, and this year the average London house has been increasing in

value by £54 ($153) a day. On paper, most homeowners make more money watching TV and lying in bed for eight hours than they do going out to work. The catch is, of course, that they still live in the same house no matter how much it’s worth, and if they want to realise their profit they have to move north or overseas, like Morrie. House prices are the best illustration of the theory that Britain is now two nations. A three-bedroomed family home in Leeds or Manchester costs about £50,000 ($142,000). The same house in London would be worth between three and six times as much, depending on location. In Liverpool, the little terraced cottage where Ringo Starr grew up is worth about £12,000 ($34,000). The same house transplanted to an inner London suburb like Camden or Paddington would be worth at least 10 times as much — more if it was in a “smart” area like Chelsea or Kensington. In Islington, a near slum 20 years ago, twobedroomed terraced cottages start at £130,000 ($369,200) a throw. In Scotland, you can buy a

castle for that. A Scottish castle isn’t worth a great deal more than a London broom cupboard, one of which recently changed hands for £36,000 ($102,240) once the mops were moved out and a bed put in. And in similar vein a one-car garage in north London changed hands this month tor £40,600 ($113,600). Rents in London are correspondingly terriftring, with the meanest flats costing £lOO ($280) a week. If your finances allow, you can open the property page of the “Times” and take your pick of desirable flats at £lOOO ($2800) a week. . Property analysts expect the top of the market to slow down in the wake of the stock market crash, as the six-figure salaries for financial market dealers dry up. But there is little sign of a slowdown in the lower and middle ranges -— up to around $1 million. Some are predicting further rises as people take money out of equities and seek more solid Investments in property. When Dick Whittington walked to London believing the streets were paved with gold he wasn’t wrong — just 600 years before his time.