A letter from Michael Pyke of Shenstone, Staffordshire, challenges the notion that postwar homeowners have not benefited from massive unearned wealth. Pyke responds to a previous correspondent who claimed that the increase in his house value 'just about covers all associated costs over that time.'
Inflation-adjusted vs. market value
Pyke points out that a house bought in 1965 for £3,500 would now be worth around £87,500 had its value simply kept pace with inflation. Instead, its current market value is approximately £350,000. Similarly, a house costing £20,000 in 1975 would be worth about £220,000 with inflation, but sells for £900,000 today.
'It is hard to imagine what “associated costs” would come anywhere near such huge increases in value,' Pyke writes. He also criticizes the suggestion that young people could buy homes if they avoided 'fancy holidays,' '£50,000 weddings,' and 'ridiculous £90,000 cars,' noting that such cars made up at most 0.75% of new registrations last year, and that this thinking was parodied by Charles Dickens.
Call for intergenerational support
Pyke agrees with Polly Toynbee's column, stating: 'Young people need money because our system is rigged. Here’s a way to give it to them.' He concludes: 'Those of us who grew up in the early postwar years and are now sitting on piles of unearned wealth should acknowledge their good fortune and be willing to help out a less fortunate generation.'
