Housing prices are skyrocketing and gazumping is making a comeback in real estate hotspots. The average cost of a home jumped 13.4% in June from the same month last year, according to Nationwide Building Society.

This is more than four times the 3% annual wage growth rate in April and more than six times the 2.1% increase in consumer price inflation (CPI) recorded in May. According to high-end real estate agent Knight Frank, figures for next month should show sales across Britain to hit an all-time high.

Despite all the turmoil over the pandemic, some things have remained the same, and one of them is the British obsession with property. As the order for millions of workers to stay at home seems bound to change their view of how and when to work, and the desire to be green will temper their spending habits and vacation destinations, the love of bricks and mortar remains supreme.

Lots of people – and not just the wheel merchants who clutter up the Sunday opening hours rich list – have become very rich thanks to residential real estate. Shares in home builders have skyrocketed since 2012, when Chancellor George Osborne supported the market for newly built homes with his Home Buyer’s Assistance program. Persimmon, the UK’s second-largest homebuilder, has seen its shares triple in the past 10 years, from £ 5 to £ 30. Shares are currently worth double their pre-financial crisis peak of £ 15.

The pension funds have profited from owning these stocks and have done little to prevent major builders’ bosses from being awarded inflated bags of money. In 2017, former Persimmon chief executive Jeff Fairburn received £ 110million, which he said he would share with a new charitable trust. In February of this year, the Guardian revealed that he had kept everything to himself until then.

Studies confirm that all of the taxpayer subsidies have been used to line the pockets of the industry, but that doesn’t seem to matter. Already in 2017, investment bank Morgan Stanley calculated that £ 10 billion in purchase assistance subsidies had done nothing to make housing more affordable for first-time buyers, which was the intention, but had instead disappeared from the bank accounts of the industry’s dominant companies.

There is also only a tenuous link between building more homes and lowering prices. As long as the property is considered an investment, the demand is there.

Osborne is one of those who have benefited from our buoyant real estate market. He bought a house in 2006 in Notting Hill in London for £ 1.85million and sold it earlier this year for £ 3.95million.

At 50, Osborne sits at the lower end of the age range of people who have gambled and won on the real estate wheel of fortune, not least because the older generation has the resources to deposit deposits in the second, third. and fourth houses. The Intergenerational Foundation has shown that the proportion of homeowners over 65 has increased during this century, while it has declined in all other age groups.

Economists worry about the inequalities created by rising house prices, though their primary focus is on the instability this creates and the potential for disastrous – and costly – recessions.

The Geneva-based Bank for International Settlements (BIS), which advises the world’s central banks, said in a report last week that all major economies need to be on the lookout for rising house prices that are pulling away from wages. He warned that when regular homes were beyond the reach of middle-income people, it caused a bubble that could one day burst.

We know this from bitter experience. What we also know is that central banks in all major economies are committed to doing everything in their power to prevent a housing collapse. A drop is OK, but a major correction would be too damaging. The last one quickly disappears in the rearview mirror. It was in 1989-90.

Threadneedle Street is concerned about the weight of property expenses, from furniture to new patios. Aside from the buzz of the housing market, much of the economy is dying.

Ministers fear that older homeowner voters will turn on them if prices are allowed to plunge. From the ministers’ point of view, it helps that interest rates are near zero since the 2008 crash.

The BIS wants central banks to plan for interest rate hikes over the next five years to stifle the current boom.

Perhaps rates will rise slightly during this period, but not enough to trigger a real estate crash. It can’t happen: economics and conservative politics say so.