These people can be, erm, odd.

According to the Office for National Statistics (ONS) one in eight homes in London, the South East, the South West and East Anglia is lived in by people whose total wealth is greater than £967,000.

This compares to just under one in 13 homes in the rest of Britain.

The figures mean that the south of England has 56 per cent more households inhabited by people worth over £967,000 than the Midlands, the North, Wales and Scotland. According to the ONS, wealth is made up of property assets, pension wealth, savings and other physical assets such as cars, furniture and jewelry.

OK, so houses are expensive in the SE of England. I think we knew this.

Ed Cox, a director at IPPR North, a think tank, said that the analysis is “the latest evidence of a growing North-South divide\”.

“With all political parties preaching ‘one nation’ politics it is about time they recognised that measures to rebalance the economy are simply not working and the country remains deeply divided,” said Mr Cox.

Brendan Barber, the general secretary of the TUC, said: “These figures show that too much wealth and power is concentrated in London and the South East. These regional inequalities are making whole areas of the country unaffordable, creating employment black-spots on other parts and are holding back our economy.”

Eh? What?

No you fools. What we\’re looking at is evidence of less inequality than we usually think there is.

So, if we look just at incomes then those in London and the SE earn much more than those in the North. Ooooh, inequality!

But what we actually care about, if we care about it at all, is not inequality of income, it\’s inequality of consumption. And if those with the higher wages are having to pay more for their houses then we\’ve less inequality of consumption than we do of income.

Britain is less unequal than everyone screams it is.

38 thoughts on “These people can be, erm, odd.”

  1. Actually I think people are looking for an excuse to increase spending by the government.
    I guess in an ideal world they would like it to be a a good reason i.e. people in the North can’t afford cars (let assume that is a good reason for the sake of argument) but any will do.

  2. Bear in mind as well that every man and his dog in the North works “down the council” where national pay scales are hard at work “reducing inequality”.

    And “decimating the private sector”

  3. Although there might be more equality, in terms of consumption, what is reduced is mobility. The whippet owning Northerner will be unable to move to the South and enjoy the same standard of living because he won’t be able to bring the same capital from his house sale as his Southern counterpart. Note that this works the other way as well, usually at retirement, the Southerner can move North and enjoy a vastly increased standard of living by releasing equity in his house, and the lower general cost of living.

  4. Although there might be more equality, in terms of consumption, what is reduced is mobility.

    well quite. But:

    the Southerner can move North and enjoy a vastly increased standard of living by releasing equity in his house, and the lower general cost of living.

    This is the southerner’s reward for having spent all his earned income on a tiny house and high-cost food &c. If you are prepared to put up with it for thirty years whilst you climb up the housing ladder you can cash in and have a jolly nice retirement. Your Northerner can achieve the same effect by saving up all the money they would have spend on a house, food, &c if they lived in Surrey. If they invest it, they might be even better off.

  5. @ 3
    OK let’s apply a little theory to the latter part of that.
    England (or even Britain) is a small country so there’s really not much climatic variation north to south. Not compared with say France.
    Common language (yeah, OK), legal system,currency, retail outlets etc etc etc
    People are ‘sticky’ as to relocating away from family & friends but the distances are not great. Often, it’s easier in practice to get from south to north than it is from one side of London to the other & a bloody sight more enjoyable.
    So we should be seeing a steady trickle of retired southerners moving north, taking their money with them & if Keynes’ multiplier bollocks works, a powerful force redressing the situation.
    Which we do not.

  6. I mean one look at these figures tells me they are a nonsense. As someone who had a senior relative working at the upper echelons of the IPPR he’d be puzzled at the reaction of the IPPR Northern Director.

    The £967,000 figure is mostly composed of ludicrously over-inflated housing values – a consequence of massive immigration which Ed Miliband is likely to move up to 400K per year, specifically into the South East to ‘rub the right’s nose in diversity’ (or eliminate the Conservative advantage in the South East) limit the numbers is people coming in and remove the ludicrously favourable tax treatment given to Property owners re: shareholders and this problem will correct itself eventually.

  7. a consequence of massive immigration which Ed Miliband is likely to move up to 400K per year, specifically into the South East to ‘rub the right’s nose in diversity’

    Yes, if you come round the outer zones of SW London it hasn’t really worked, though. We all live in very small, expensive houses, but the community is somewhat, err, homogenous.

    In the last general election there was a BNP candidate in my constituency. I got talking to one of the other people waiting to vote and we tried to work out exactly which people the BNP chappy was objecting to. In the end we decided he must have a real animus against Mr Chakraborty who runs the Taj Mahal up the road.

  8. Funny how in this discussion people only ever talk about economic imperatives. This country only has one city worth mentioning, let alone more than one genuinely world-leading city. Most people live in London because they want to live in one of the world’s top cities, no other reason.

  9. Van Patten>

    “ludicrously over-inflated housing values – a consequence of massive immigration”

    Nonsense. Immigration has had no noticeable effect on house prices in the south east. The net immigration to the south is a minuscule fraction of the migration from within the UK.

  10. I try to make this point as well when people complain about income inequality in the USA. In states like CA, NY, MA incomes are high but real estate is also expensive. But statistically these people are linked in with people living in say WY or TN where incomes are lower but real estate is cheap as well. The real inequality only exists at state level, and is greatest in Democratic states, in cities like Boston or NYC.

  11. @Dave
    “Nonsense. Immigration has had no noticeable effect on house prices in the south east. The net immigration to the south is a minuscule fraction of the migration from within the UK.”
    I am sorry do you really believe that immigration of over 2 million people in 15 years to a country which has very strong controls on
    house building does not cause prices to rise?

    I know loads of immigrants where I live. Far more than people from other parts of the UK if they were to all to leave and sell up/ stop paying rent/ or in too many cases stop paying my taxes as rent tomorrow would it have no effect on house prices?
    Do you not believe in supply and demand?

  12. David>

    It has had no _noticeable_ effect, although clearly there must be some.

    Aside from the fact that immigrants are proportionally much more likely to live in the north than natives, two million of them just isn’t worth mentioning in this context because the figure’s dwarfed by the twenty million plus who have moved south over the last eighty years or so. By some estimates there is still a net flow of as much as half a million people a year from north to south – which would match your two million in four years, if true.

    We’re short, by conservative estimates, something like ten million homes in the SE. Immigration has made very little contribution to that shortage.

  13. I find it hard to believe that there are so many people who moved south (and of course you have given no figures for this). Are you saying that there has been a 20 million netflow from the North to the South of the UK in the last 80 years? How do you calculate that?

    The Government has said that half of all new homes in the UK is due to immigration.

    http://www.telegraph.co.uk/news/politics/9715889/Minister-blames-Labours-immigration-policies-for-plans-to-concrete-over-countryside.html

    The idea that this has no noticeable effect on house prices in any part of the UK is crazy.

    BTW I am living in a house that I paid for in part by renting out rooms in my previous flat to immigrants. Of course the amount of my spending power was increased had an almost zero effect on UK house prices. However the idea that I was the only person who made money from renting to immigrants and spent on property in London seems strange.
    For more see here
    http://www.migrationwatchuk.org/pressReleases/19-Jun-2006

  14. At the very least immigration made people believe that house prices would rise during the boom and won’t crash now – which of course was a partly self fulfilling property –
    just google “buy to let immigration”

  15. “Over half of the wealth of people in the top 10 per cent is made up of pension pots, the ONS said”: how did they allow for pensions in payment? Do they multiply the annual pension by twenty? If so, many quite poor households with two state pensions must be worth north of a couple of hundred thousand? Or do they just lie by suppressing the issue?

  16. David>

    Check the population figures. There’s no question about the internal migration, although no-one ever mentions it. You can pull up historical censuses and check for yourself – pick any area you like north of Birmingham.

    Also, whatever the government, or one minister, may have said, it was a lie of omission at best – and more likely just a flat out lie. 100k households of immigrants per year pales into insignificance alongside the 10+ million homes we’re missing even if it is true.

    Did you know that there is basically the same number of homes in the SE as there was before the Second World War? Effectively, we have built no new homes in London in three quarters of a century, and we wonder why there’s pressure on the housing supply.

    Of course the government wants to distract you by scapegoating immigrants, because it’s actually their fault – and the fault of every other government for at least fifty years.

  17. “At the very least immigration made people believe that house prices would rise during the boom and won’t crash now”

    No, that’s just a reflection of the under-supply. Again, immigration has not contributed significantly to that.

  18. “Dave // Dec 4, 2012 at 5:22 pm

    David>

    Check the population figures. There’s no question about the internal migration, although no-one ever mentions it”
    Normally people provide their own figures
    rather than asking others to do so.
    Please back this up with a source. I could make up figures to support my views as well.

    “Did you know that there is basically the same number of homes in the SE as there was before the Second World War?”
    Really? So the new towns had no contribution?
    I and most of my friends in London grew up in houses built since 1950.
    “100k households of immigrants per year pales into insignificance alongside the 10+ million homes we’re missing even if it is true.”
    Really? In 2010 we only built that number of houses. So it seems a significant number to me.

  19. “Did you know that there is basically the same number of homes in the SE as there was before the Second World War?”
    I’m taking by homes you mean individual households there, Dave. Including apartments & such? Do you have figures to support that?
    Where I used to operate, pre-war, most houses were single occupant – meaning one house hold. I’m presuming you’re not including letting rooms, which was indeed common, because you’re not including it now. You’d have to include flat share, which is effectively the same thing. That’s the old LCC area so unless Herr Goering’s Demolition Contractors had been calling there really wasn’t much spare land. Whole swaths of that are now converted in to 2 or 3 separate flats. I’ve been involved in about 30 of them. Done work at hundreds more.
    Outside the LCC to the GLC boundary you have the estates of the 50s-60s. I reckon I could list a hundred. That’s estates, not houses. Nothing, out there, has been knocked down unless it was replaced.
    Explain.

  20. Note, in the above, I’ve not included New Towns.
    Basildon, Crawley, Waltham Cross, Harlow……
    Either not there or villages, pre-war.
    Ring developments. Chelmsford, Southend, Ongar, Croydon….
    I’m just picking places I know.

  21. BIS>

    The housing stock has improved in quality in that time, but there hasn’t been a significant increase in the quantity available.

    To be clear, when I say there have been few new homes built, I mean few additional homes rather than few recently-built ones. There has been a lot of reconstruction and replacement, largely as a result of the Blitz and post-war slum-clearances, but little has been added in terms of numbers.

    David>

    There’s no one source. I can point you to a link for the 1901 census, but you can equally well find that for yourself. Take Glasgow, for example – down from 1.1 million to 500k. Or Manchester – roughly the same drop in proportion.

    The New Towns were a drop in the ocean, mostly, particularly in terms of additional rather than replacement housing. Milton Keynes is a fair-sized exception – but Welwyn dates from the twenties. There was some increase in total as a result of the cumulative total, but not much at all.

  22. BIS>

    To take Basildon as an example – and it’s one of the largest new towns – we’re talking about approximately 50,000 homes. Even if those had all been additional to the existing stock (which they definitely weren’t) we’d still need another 200 towns like it.

  23. How do you know that all people leaving Glasgow went to the South east?
    Is there some law that stopped them from emigrating or moving to the countryside?
    According to
    http://en.wikipedia.org/wiki/Geography_of_Glasgow
    “However, in 1931 the population density was 16,011, highlighting the subsequent “clearances” to the suburbs and new towns that were built to empty one of Europe’s most densely populated cities”.
    Perhaps some of them went to East Kilbride – that has enough people for 10% of the decline in Glasgow’s population. Or maybe Cumbernauld that is another 50K accounted for

    Why don’t you look here for more information
    http://ukhousing.wikia.com/wiki/Glasgow

    I could do the same for Manchester but really you should do your own research.

    Also of course internal migration has been going on for ages. However housing in the South East has had massive inflation since 1996/7 – long after most of the decline in Glasgow’s population had taken place by a strange coincidence the same time as Labour supported massive immigration.

  24. “To be clear, when I say there have been few new homes built, I mean few additional homes rather than few recently-built ones.”
    That wasn’t what you actually said. You said:
    “Did you know that there is basically the same number of homes in the SE as there was before the Second World War?”
    If you take 1 three high house & convert into 3 flats, that’s a nett increase of 2 homes. A lot of it’s in response to the reduction of household sizes. More singles, less kids. But it’s still an increase in homes.
    “There has been a lot of reconstruction and replacement, largely as a result of the Blitz and post-war slum-clearances, but little has been added in terms of numbers.”
    London wasn’t Hamburg. Herr Goering’s lads were actually playing by the rules in the Blitz, unlike some relatives of mine. They bombed, with admiral accuracy mostly, strategic targets. The docks (Mum), rail targets & some industrial. Twin engine bombers with a 1 ton load ain’t exactly the right gear for leveling cities. Later they peppered the city with rockets I’ve seen the impact maps for my old borough in north London. It’s an even, random scatter with slight concentrations around the rail line out of Kings Cross.
    Being in the business, I’ve got a fairly good eye for citiscapes. Know the vintage of buildings. What the rational was when most of London’s stock was built around the turn of the century so I can spot the oddities. Apart from dockland, the bomb rebuilding tends to be isolated half streets, odd patches. They really were tiny bombs. Even the V1/V2’s & they had a high terminal velocity so they dug deep & most of the blast force went up. It was the Brits who used high capacity, thin case bombs with block leveling blast radii. And of course, the Germans were bombing into clay which is a very effective shock absorber.
    Slums? Most of the slums were cleared to allow the late Vic/Early Edwardian developments. Those that weren’t largely coincide with Herr Goering’s efforts because they were to the east & near the river.

  25. And should have mentioned:
    The rebuild was heavy on council blocks. Why London has all those midget council estates all through it. Often in areas where the surrounding housing is quite high value. Bayswater, Islington, Camden. Even the West End & Pimlico.

  26. “If you take 1 three high house & convert into 3 flats, that’s a nett increase of 2 homes.”

    Yes, those are all homes in the definition I was using. That’s not what has happened, though, for the most part. Basildon, for example, is an overflow town – when the living conditions in the East End were improved the population density went down. Obviously, then, the area on which housing was built had to increase.

    You’re quite right about the Blitz. Evidently I was writing badly earlier, because I didn’t mean anything different. The Blitz was one of the largest triggers of reconstruction since the Thirties, but not, in itself, all that large on a Londonwide scale. The stuff that wanted rebuilding most was, largely, in the East End anyway, though.

    What I was trying to get across is that a significant proportion of the homes built in London from 1945 to now were built as a fairly direct result of the Blitz. We have an incredible reluctance to demolish anything at all.

  27. “What I was trying to get across is that a significant proportion of the homes built in London from 1945 to now were built as a fairly direct result of the Blitz. We have an incredible reluctance to demolish anything at all.”
    I think that’s pretty well what I’ve said. And we are reluctant to demolish & rebuild.In my personal opinion, unfortunately. Most of London went up really quickly. 30 years with a big concentration just around the turn of the century. The question has to asked of course, where did the skilled labour come from? Trades would have taken maybe 3 years to acquire the full skillset. You have trouble seeing how they built the labour force so quickly. The answer is, most houses were built with semi-skilled labour, with the skilled being used where it showed. Most of those houses are thrown together. You find that when you take them apart to convert. They don’t even make good conversions.
    Answer would of course be to bulldoze & go for high density apartments like the city I live in. With all the advantages. Brits!

  28. Is there some law that stopped them from emigrating or moving to the countryside?

    We know that aggregate rural population has fallen, so while there’s no law to stop them moving to the countryside, they in fact didn’t.

    Emigrating, yes, obviously, Ten Pound Poms and so on, but there’s no difference from a housing stock point of view from a) a Glaswegian moving to London, and b) a Glaswegian moving to Sydney while a Jamaican moves to London, so it doesn’t support your point about immigration being responsible for house price rises.

  29. @john b
    “Emigrating, yes, obviously, Ten Pound Poms and so on, but there’s no difference from a housing stock point of view from a) a Glaswegian moving to London, and b) a Glaswegian moving to Sydney while a Jamaican moves to London, so it doesn’t support your point about immigration being responsible for house price rises.”
    Did you not read what I said?
    ” However housing in the South East has had massive inflation since 1996/7 – long after most of the decline in Glasgow’s population had taken place and by a strange coincidence the same time as Labour supported massive immigration.”

    I still don’t believe that we have had almost no new increase in housing in the south east since
    1945. I and most of my friends grew up in houses built since the war and it was where there was no housing before.

  30. “We know that aggregate rural population has fallen, so while there’s no law to stop them moving to the countryside, they in fact didn’t.”
    Actually a lot of people from glasgow did move to the countryside – but the countryside became new towns.

  31. My own anecdotal experience of the London housing stock from my sparking days is that a significant proportion of it is fundamentally shit. Piles of rickety bricks that ought to be bulldozed, but instead gets patched up over and over again, to do another ten years, by some enthusiastic young couple who’ve just paid a fortune for the privilege of living in said piles.

    Some of it isn’t so much piles of bricks as piles of sand you can’t even get a proper fixing in. Terrible.

  32. “Some of it isn’t so much piles of bricks as piles of sand you can’t even get a proper fixing in.”
    Curiously enough, probably why it withstood the bombings so well. With nothing much attached to anything else it rode shockwaves better than rigid structures.
    Judging by the scrapemarks left in the brickwork, the roof of my own old house must have lifted about a foot as the blast wave of the V2, a street away, passed by. Whole thing. Rafters, slates the lot. All in one piece. Dropped back so well, don’t suppose anyone noticed.

  33. The attitude to London housing seems to be a fine example of the power of narrative discussed elsewhere. Thanks to estates agents one & all. “They don’t build this anymore.” the proud householder boasts as he struggles with his faulty damp course, sagging ceilings & rear wall threatening to land in the back garden any minute. He’s comparing it with a 50s council house, built seemingly entirely out of engineering bricks with mortar you need explosives to rake out.

  34. David>

    “I still don’t believe that we have had almost no new increase in housing in the south east since
    1945. I and most of my friends grew up in houses built since the war and it was where there was no housing before.”

    You still seem to be missing the point. Of course there are new houses, but if you knock one house down to build one house, there is no additional home created. We, with some help from the Luftwaffe, largely demolished the old East End’s high density, well, slums. When we rebuilt those areas at much lower density (on average), there were many fewer homes there. That shortfall was made up by building places like Basildon. As a result, the new towns didn’t add more homes, they just replaced old ones with better ones.

    ” However housing in the South East has had massive inflation since 1996/7 – long after most of the decline in Glasgow’s population had taken place and by a strange coincidence the same time as Labour supported massive immigration.”

    Of course, there was nothing else going on at the time which might have influenced that…

    In fact, if you look at UK house prices adjusted for inflation, there’s a long-term trend which is pretty much a straight line, with a significant dip below the trend as a result of the early nineties recession. It seems reasonable to conclude that for the most part the increase in house prices from 1997 – which was UK-wide – was in fact largely just reversion to the normal trend.

  35. “Dave // Dec 5, 2012 at 2:15 pm

    David>

    “I still don’t believe that we have had almost no new increase in housing in the south east since
    1945. I and most of my friends grew up in houses built since the war and it was where there was no housing before.”

    You still seem to be missing the point”
    No I am not I don’t believe it mainly because you will not give any figures to prove your claim.
    “As a result, the new towns didn’t add more homes, they just replaced old ones with better ones.”
    There are not just new towns there are new housing estates in existing towns where previously there was farmland. I didn’t grow up in a new town. I grew up in London.

    “In fact, if you look at UK house prices adjusted for inflation”
    Where? Why don’t you back up your claims?

  36. “We, with some help from the Luftwaffe, largely demolished the old East End’s high density, well, slums. When we rebuilt those areas at much lower density (on average), there were many fewer homes there”
    Dave, I don’t want to intrude on your fantasy world too much, but have you ever thought of using Google Map, as you’ve obviously never been there. The big square rectangles are hi-rise. See if you can spot the 3 bed semis with gardens. Should keep you occupied for a year or two.

  37. BIS>

    As it happens, I’m very familiar with the area. I even put in the bracketed ‘on average’ you quoted to try and pre-empt anyone nitpicking.

    There is, of course, some high-rise – but mostly it’s not high-rise at all. (High rise is commonly defined as >12 stories.) All but the highest-rise blocks are less dense than what existed previously, and of course the really big blocks are rare and well-spaced so less dense on average.

    I think your memory is deceiving you. Instead of looking down from on top, where you can’t see the height of buildings, why not take a walk around:

    http://goo.gl/maps/JeLzM

    There are houses, mostly terraced. The odd high-rise off in the distance. Lots of green spaces. Above all, there’re lots and lots of low-rise blocks of three, four, five stories, maybe six at the most. That’s typical of the area, typical of what they tried to create.

    There was a deliberate policy to lower the housing density, so whatever you may think you remember, it’s not contentious to say there are far fewer homes in the East End than pre-war:

    http://en.wikipedia.org/wiki/London_overspill

    Of course it’s a good thing – the homes that did exist were in many cases terrible places to live.

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