Comment: Obsession of the propertied classes

Why do we set so much store on buying a home when spiralling prices make us losers, asks Hilary Clarke

The world's stock markets nearly crashed last week. If they had, a recession - possibly of 1930s proportions - might have been triggered. But what was the first thing that sprung to the minds of most people I talked to on Tuesday morning as billions of pounds were wiped from corporate investment plans? Fears of mass redundancies? The prospects of pension funds collapsing? Tessas and Peps down the spout? No, the question on everyone's lips was, what does this mean for the housing market? The housing market?

Britain has long been a nation obsessed with property prices. No where else in the world are people so concerned with the value of their houses. In America folks get excited about share prices and mutual funds. On mainland Europe, interest rates and what they mean for deposit accounts are the main market concern of middle-class people with cash to invest. Here it is property, and in London most people are experts in what, and where, is up and down.

Sadly, I have become obsessed, too. I moved back to London last January after seven years abroad, with the intention of buying a flat in a nice part of town. I had been living in Brussels. The Belgians like to joke that they are "born with a brick in their stomach", meaning that they have a natural urge to buy a home, or as is common there, have one built. They don't know this country.

In fact, most Belgians I know of my age and earnings capacity don't buy. The government slaps a whopping 17.5 per cent stamp duty on house purchases which acts as a deterrent to home ownership, making it, in most cases, cheaper to rent. That is true of most countries in Europe. Across the Channel most people don't think about buying property until they are in their mid-thirties. And when people buy, they do so "not to get on the housing ladder" but to nest for life. It doesn't mean people are less wealthy because of it. Switzerland, after all, has one of the lowest rates of home ownership in Europe. Switzerland is not exactly a nation of paupers.

For the average punter like myself, January was the worst possible time to start looking for property in London. Prices were soaring out of control and there were very few properties on the market.

It didn't help that I had picked Islington, the epicentre of inflated house-price mania, as my preferred place of residence. I thought I was earning a high enough salary to be able to pretty much choose where I lived. Around pounds 120,000 would, I thought, secure me the home of my dreams. How wrong I was.

My experience is similar to the thousands of people who have been looking to buy property in London this year. I signed up with most of the local estate agents and naively expected to be inundated with phone calls. Not a peep. So I accepted the estate agent's advice to "pop in regularly", thereby joining the throngs of desperate house-seekers. I did see some properties. About 30 of them in all until I finally gave up on this particular part of north London.

The worst part of the whole experience was not the exorbitant prices, which were going up by the minute, but what was being offered for the money. In Belgium they build homes to last. In London cheap ceramic floor tiles, badly laid fake parquet and mock Georgian fireplaces are deemed "features" adding value to the house. In Belgium real parquet and marble flooring is the norm. I wasted hours of time searching, but it was an education. Anything worth buying was snapped up before it came on the market by a mysterious and shady new breed, the cash-buyers.

On several occasions I arranged to see a place only to be called by the estate agent to say it had already been sold. What was left was the dregs.

A few places I saw will stick in my mind for ever. Like the apartment on offer at pounds 125,000 that was so small the vendors had put the washing machine in the cupboard on the landing. Or the pounds 95,000 purpose-built maisonette (estate-agent speak for council flat) on a housing estate so rough that the current owners had encased the outside with metal grills. I saw a host of "conversions". In every one the communal entrances were shabby. You would be ashamed to take anyone home.

When I was given the details of another flat in Clerkenwell where the only nice thing the estate agents could think of saying about it was that it had "an original 1930s towel rail" I knew it was time to give up.

I was unlucky. I was a house-hunter at the wrong time. Had I come back to London three years ago I would have been one of those smug people who have seen a return on their investments of up to 75 per cent in some areas. But why does the Government tolerate a housing market that is so volatile? The stress of buying a home is well known. Now it's turning us all into sharks and liars.

When, back in the 1980s, Margaret Thatcher passed legislation to allow people to buy their council homes, she declared her intention to make every man and woman in the country a capitalist. Some people did indeed see the value of their homes soar during the heady property boom that preceded the 1987 stock market crash.

Those council tenants lucky enough to live in the better-built local authority homes were the beneficiaries of one of the biggest government hand-outs ever seen in this country. That, however, does not make them capitalists. And there were as many, if not more, "negative equity" and repossession victims of the subsequent slump. The ignorance of what a stockmarket crash would entail proves to me that Mrs Thatcher failed in her mission.

Today, even with house prices rising, people are reluctant to move. What is the point of going through all the hassle of moving when a better property has also risen in price equally? It's a vicious circle, because there's a shortage of sellers, sending prices spiralling upwards. Even though it was short-lived, last week's fall in the stock market will, I suspect, push prices up further as people seek a safe investment. Estate agents are reporting a new surge in the number of house-hunters.

As for me, I have found a house and placed an offer but it is in "up- and-coming" E1, not N1.

The writer is deputy business editor of the 'Independent on Sunday'.