Cost of Living

Written by Paul Elgood and published in Latest 7 Magazine on Fri 1st Apr 2005

Analysis of the Halifax house price index shows that Brighton has seen a staggering 247% rise in house prices since Labour came to power and Hove has seen a 239% increase.

Meanwhile, the cost of living has hugely multiplied in what has been a relatively economically stable ten years. At the same time statistics show record borrowing and credit card debts. Personal bankrupcies have also hit an all-time high too. It all makes you wonder what will happen if the time of high levels of house repossessions returned. There is no doubt about it that we will one day be paying the price for the recent consumer boom, and maybe that day is not so long away. But how has this country moved from being a nation that held up thrift as a virtue and considered debt a vice, to owing a trillion pounds on mortgages, credit cards and other loans? A generation ago borrowing money carried a social stigma. To borrow was to admit to living beyond your means. Borrowing to fund a home extension or a holiday, would have been seen as frivolous and something to be looked down upon by lenders and neighbours. As for credit cards, as recently as the 1980s, these were regarded as being for the privileged few rather than the many. The answer I suppose is that many people have seen the market value of their homes double or more in the past few years. As a result we have become asset-rich faster than at anytime in history. At the same time, not coincidentally, consumers have benefited from low levels of interest rates, inflation and high levels of employment. All in all it's a wonder anyone can afford to live any more, and I can't help be fearful that the cost of living is about to catch up on us all.