Welcome back sanity

Guide prices for a forthcoming property auction now suggest that £20,000 will buy you a flat in Margate. Welcome back sanity, says Merryn Somerset Webb.

I was meant to go to a private view of some perfect-looking flower photographs by Vogue creative director Robin Derrick on Tuesday night. Bogged down in collapsing banks, banks shares, nationalisations and bankruptcies, I never made it. So I asked a friend who had managed to escape the trauma-ridden office of his private-equity fund to down a few glasses of someone else's champagne what it was like. His answer? "Full of gorgeous women."

The gallery putting on the show, Lamberty, sells exquisite things to rich people (if you have piles of extra cash, forget Damien Hirst and visit the Pimlico and Battersea showrooms now).But on Tuesday most of these one-time customers were either still at work in the City or St James, or, had they been employed by Lehman Brothers, nursing hangovers in the over-designed open-plan living spaces of their heavily mortgaged homes. So only their well-dressed wives, who presumably were getting desperate for free drink by this point, could make it.

On page 18 Simon Nixon says we shouldn't judge the banking community too harshly for what is happening to financial markets and, by extension, the global economy. When I suggested that he do his column this week on how people might feel about bankers, this wasn't quite the opinion I had in mind. Sure, ex-Lehman employees will suffer. And sure, I feel bad for the junior and administrative staff at the bottom of the heap. But as for the top lot, they've spent the last decade helping to build up one of the greatest credit bubbles of all time. In doing so, they created the conditions for it to collapse and take down with it many of the things that mean the most to ordinary people: the price of their houses, the perceived security of their savings and, perhaps, their jobs.

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The bankers have been very well paid for this. The rest of the nation has not. So it isn't really them that we should feel sorry for they've only themselves to blame if they failed to put their bonuses away for a rainy day. It's the nannies they'll be firing. It is everyone the credit collapse has left in negative equity. It is all the small businesses who can't raise finance to keep going. And this week, at least, it is the exhausted phone staff at Northern Rock who are all working hours of overtime taking deposits from those of us too nervous to keep their money in non-government-backed banks (me included).

Still, there's some good news about for first-time homebuyers. Eighteen months ago I interviewed someone for Tonight with Trevor McDonald. She had overextended herself and had her house repossessed. Her explanation? "If you want a house you have to borrow a lot of money. You can't buy a house for £20,000 anymore." That was then. Now you can. Guide prices for the next auction from Mustbesold.com suggest £20,000 will buy you a flat in Margate. Welcome back sanity.

Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.