At least estate agents are happy. Image: Getty.
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Two charts that show why London home buyers are totally screwed

Everybody move to Paris.

More hilarious news from the London housing market. In the year to June, the average house price in the city climbed 25.8 per cent. The average price has now breached £400,000 for the first time.

To put that in a context, a healthy mortgage is generally agreed to cover no more than 90 per cent of a property's value, and to represent a maximum of 4.5 times the borrowers' income. So a couple of first-time-buyers hoping to buy an average London home would need a joint income of £78,000, putting them in the richest 4 per cent of households in the country. Oh, and they'll also need £40,000 in the bank.

Should you already own your own home in the city, and are consequently mystified that anyone could consider this a problem – congratulations on successfully having been born at the right time.

All this looks a lot like a bubble – prices are rising at their fastest rate since 1987, and look what happened then – but it's in the nature of bubbles that we can't be certain we're in one until they burst. So in the mean time, here are two charts.

The first one compares price increases in London with those in various other major world cities, over the course of 2013. (They’re a bit out of date because December was the most recent month for which we could find enough figures.) We've compiled it using data from the Bank of International Settlements, and the S&P/Case-Shiller Home Prices Index: the various indexes it's based on work in slightly different ways and cover slightly different things, so we're not claiming the figures are anything more than indicative. Nonetheless, they do give you a sense of the trends in various cities.

London is an outlier – but it's not the only place having a crazy house price boom. Prices have gone nuts in Sydney and Shanghai, too. The difference is, of course, that Australia and China both have much faster growing economies than the UK, much of which still remains in the doldrums.

All that said, it looks like a great time to buy a nice pied-a-terre in Paris, if you've got the cash to hand.

This second chart uses data from government research, asking the public whether they were in favour of building new houses in their area. The polling was conducted in 2011, so it's just possible attitudes have changed in the mean time. Either way, though, it explains rather a lot.

In inner London, where land is scarce and most people rent, everyone wants more housing. But in outer London, where there's more space, and where any major new housing programme is realistically going to have to begin, opposition to house building is stronger than the national average. In fact, people in outer London oppose house building more strongly than people in any other region of England.

So to sum up, we're screwed.

This is a preview of our new sister publication, CityMetric. We'll be launching its website soon - in the meantime, you can follow it on Twitter and Facebook.

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Daniel Hannan. You can find him on Twitter or Facebook.

Photo: André Spicer
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“It’s scary to do it again”: the five-year-old fined £150 for running a lemonade stand

Enforcement officers penalised a child selling home-made lemonade in the street. Her father tells the full story. 

It was a lively Saturday afternoon in east London’s Mile End. Groups of people streamed through residential streets on their way to a music festival in the local park; booming bass could be heard from the surrounding houses.

One five-year-old girl who lived in the area had an idea. She had been to her school’s summer fête recently and looked longingly at the stalls. She loved the idea of setting up her own stall, and today was a good day for it.

“She eventually came round to the idea of selling lemonade,” her father André Spicer tells me. So he and his daughter went to their local shop to buy some lemons. They mixed a few jugs of lemonade, the girl made a fetching A4 sign with some lemons drawn on it – 50p for a small cup, £1 for a large – and they carried a table from home to the end of their road. 

“People suddenly started coming up and buying stuff, pretty quickly, and they were very happy,” Spicer recalls. “People looked overjoyed at this cute little girl on the side of the road – community feel and all that sort of stuff.”

But the heart-warming scene was soon interrupted. After about half an hour of what Spicer describes as “brisk” trade – his daughter’s recipe secret was some mint and a little bit of cucumber, for a “bit of a British touch” – four enforcement officers came striding up to the stand.

Three were in uniform, and one was in plain clothes. One uniformed officer turned the camera on his vest on, and began reciting a legal script at the weeping five-year-old.

“You’re trading without a licence, pursuant to x, y, z act and blah dah dah dah, really going through a script,” Spicer tells me, saying they showed no compassion for his daughter. “This is my job, I’m doing it and that’s it, basically.”

The girl burst into tears the moment they arrived.

“Officials have some degree of intimidation. I’m a grown adult, so I wasn’t super intimidated, but I was a bit shocked,” says Spicer. “But my daughter was intimidated. She started crying straight away.”

As they continued to recite their legalese, her father picked her up to try to comfort her – but that didn’t stop the officers giving her stall a £150 fine and handing them a penalty notice. “TRADING WITHOUT LICENCE,” it screamed.


Picture: André Spicer

“She was crying and repeating, ‘I’ve done a bad thing’,” says Spicer. “As we walked home, I had to try and convince her that it wasn’t her, it wasn’t her fault. It wasn’t her who had done something bad.”

She cried all the way home, and it wasn’t until she watched her favourite film, Brave, that she calmed down. It was then that Spicer suggested next time they would “do it all correctly”, get a permit, and set up another stand.

“No, I don’t want to, it’s a bit scary to do it again,” she replied. Her father hopes that “she’ll be able to get over it”, and that her enterprising spirit will return.

The Council has since apologised and cancelled the fine, and called on its officials to “show common sense and to use their powers sensibly”.

But Spicer felt “there’s a bigger principle here”, and wrote a piece for the Telegraph arguing that children in modern Britain are too restricted.

He would “absolutely” encourage his daughter to set up another stall, and “I’d encourage other people to go and do it as well. It’s a great way to spend a bit of time with the kids in the holidays, and they might learn something.”

A fitting reminder of the great life lesson: when life gives you a fixed penalty notice, make lemonade.

Anoosh Chakelian is senior writer at the New Statesman.