Do house prices rise that much? A dissenting view

Abstract

The debate over the social significance of home ownership partly rests on the 'house price assumption' -the notion that house prices rise consistently above general inflation rates and benefit all owners. However, these theoretical claims rest on sparse empirical evidence and are beset by measurement difficulties. This article attempts to measure real house prices (ie adjusted for inflation) and pure house prices (ie adjusted also for quality and quantity changes) for Britain since the mid 1960s. Comparisons are also made with high and low price regions in Britain and with four other north European countries. Results suggest that real and, even more, pure price gains are not assured, that price falls are as significant as price rises, and that over the long term gains may be low and even ephemeral. Short term booms and slumps may distribute gains and corresponding losses between owner occupiers, but this redistribution is likely to be socially random. These results therefore support criticism of the 'housing sector cleavage' model.

A Nation of Inheritors? Housing Inheritance, Wealth and Inequality in Britain

“…The result, as Saunders (1990) has shown, has been large capital gains for many owners, particularly those living in London and the South East where prices, and rates of house price inflation, have generally been higher (see, Hamnett, 1988 and1989a for discussion of these increases and their regional and temporal differentiation). Some critics (Spencer, 1987;Duncan, 1989) have argued that the focus on nominal rates of gain is misplaced, and that in real terms the gains have often been quite small, particularly in some of the lower priced northern regions. But the consensus of opinion is that despite periods of falling real house prices in Britain most long term owners have experienced real capital gains, although the scale of those gains differs considerably (Holmans, 1990).…”

Housing Inheritance and Social Inequality: A Rejoinder to Chris Hamnett

“…The argument offered here is that the crucial causal determinant of life chances, including entry to different housing tenures (Sullivan, 1989), continues to be social class and not consumption sector position. Duncan (1990) argues that the assumption of a consistent rise in house prices is central to Saunders' theoretical edifice, and it also informs Hamnett's analysis. Duncan points out that although real house prices in Britain have increased overall since the mid-1960s, this increase has been uneven with several periods of falling real prices.…”

“…Home ownership does not seem to be either as safe or profitable an investment as it was during the 1960s and 1970s (Doling and Ford, 1991), a point which is graphically illustrated by the ballooning of mortgage payment arrears and house repossessions in the late 1980s and early 1990s (Council of Mortgage Lenders, 1993). This recent decline in house prices is symptomatic of the underlying volatility of the British housing market, the causes of which are related to the dominance of speculative house builders (Ball, Harloe and Martens, 1988), and government macro-economic policy (Duncan, 1990). Given this volatility, the timing of people's housing inheritances could clearly significantly affect the size of bequests.…”

Chicago Crime, Blue Collar and White: Sara Paretsky’s V. I. Warshawski Novels

“…The Windy City, Hugh Dalziel Duncan argues, added "[a] new hero type in American literature, the 'business man.'" 37 The major texts of Chicago naturalism -Frank Norris's The Pit, Sinclair's The Jungleare novels of business and labor. Dreiser too portrays workshop exploitation in Carrie, as well as financial and real-estate speculation in The Titan (1914).…”