Ryan Hubbard

Burnham says housing is wrecking the public finances. Correct. Watch him make it worse. Here is the arithmetic he managed to skip, line by line… Build cost. Sticking up a three bed runs north of £220k (to £280k) before you buy a single square foot of land or book a penny of profit. That figure is set by things like bricklayers and the spot price of copper. Sale price. Stack land, levies, finance and a margin that keeps the builder solvent on top, and your bog standard Bovis shitbox semi changes hands at £330k to £360k. Minimum. Wages. Median full time pay is £39,300. Median household income lands at £36,700. Hold those two in your head, because everything below is measured against them. Inflation. CPI is bullshit, inflation is not running at anything close to 2.8%. Treat that the way you would treat any figure a department gets to design its own basket to produce. Strip out the imported gadgets getting cheaper and the hedonic fiddle that pretends this year's phone counts as a pay rise, look only at what a family cannot dodge, rent, energy, food, childcare, council tax, insurance, and the real rate sits north of 6 or 7%. And I’m being nice. Pay rose against that by a rounding error. Sterling got debased. House prices in this range haven’t come down. Groceries. Feeding a family of four runs roughly £8,000 a year (conservatively), and anyone who tells you it is done on £60 a week is either lying or living on tins of beans. Energy. Price cap goes to £1,862 in July, and a family rattling around a three bed burns more than Ofgem's tidy typical household, so call it £2,000 gone before your new air con unit goes on / heating goes on in the winter. Rent, after housing costs. A three bed outside London goes for about £1,450 a month, £17,400 a year, and every pound of it buys precisely nothing. Renters hand over a third of gross pay for the privilege of standing still. Again this is lowball. It’s closer to £1,600+ in Reading (a good proxy for non salubrious London commute). Nursery. After the free hours a full time place in England is about £7,400 a year per child, so a family with two little ones still waves goodbye to the thick end of £15,000. Funded for 38 weeks only, with a taper that bites as you climb, and £13k to £16k a head in Scotland or Wales. Deposit. 10% on a £350k home is £35k. Out in the real world the average first time buyer now stumps up £59,000 and does it at the age of 34, which tells you how long it takes to save that while renting. Mortgage. Put ten per cent down and you carry a £315k loan. At a realistic high LTV rate of around 5.5% that is roughly £1,800 a month over thirty years, before service charge, insurance and council tax. Now the part Burnham will not say from a podium in Manchester. To service that loan on bog standard 4.5x lending you need a household pulling about £70k, or £57k if a lender stretches to 5.5x, with the deposit sitting in the bank on top. Barely a fifth of UK households clear even £65k gross. Fewer still clear the £70k this actually needs, and among the young it is thinner still. Of the 25-35 yr old crowd this home is supposedly built for, ownership has fallen from more than half in the 1990s to roughly a quarter or a third today, and most who got there leaned on family money. First time buyers bunch into the top two income brackets. From the bottom fifth, 4% manage it. Strip out the bank of mum and dad and the slice of that generation who could buy this house on their own earnings sits somewhere in the low teens. None of which is useless. Building council homes and moving a waiting list is a decent day's work, and somebody stuck on it will sleep easier for it. Trouble is, not one brick of that lowers the open market for two people on normal wages, which is the very fire he stood up to put out. He has in effect clocked the right problem and gone after it with a tool built for a different job. Because, like most of the Labour Party, he is totally illiterate. Classic.