London's world status and house price boom is now hurting the middle class


By jamFace at 2013-08-04 17:13:12
London, UK
68 replies
10434 views
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2013-08-08 09:15:00

I... imagine it's time for me to get used to the fact that I'll never have a property.

Oh well - I kind of like renting. chiefly the part where I call the landlord whenever something breaks and he fixes it from his own pocket. I really love that bit.

When the bubble bursts land will be cheap. Remains to be seen how far it inflates before it bursts though: if it's too far it will bring the banks down, again, and the govt almost certainly will not this time be able to bail them out, so we'll be a kind of worse Greece. So you might not like to live in London then.
I genuinely don't imagine it will burst. With inflation and interest rates apt to be low in the long term, purchases only if truth be told need to think of the expense of servicing the mortgage rather than the headline cost of the house. The expense of servicing mortgages is quite low and expected to remain so for a long time.
Because the property bubble that took the banks down 5 years ago could in no way happen again.
a though provoking comment if short and, taking it into consideration seriously, reminds me that 'world cities' such as london and NYC did not see a failure in prices as did the wider market in 2008's worldwide real estate crash.
My suspicion is that the reason they didn't is because the banks generally got bailed out, so people dependant on them for wealth stayed wealthy and carried on buying big houses. However we are now running away from fixing the underlying problems (breaking them up) and it's not clear to me whether, next time, there is enough money to bail them out again. In any case I think the 'property prices will inflate for ever' view is extremely naive: that's what the banks bet on before 2008 and it was silly then.


2013-08-08 10:22:00

Now? These trends have been going on for decades.
That was my initial thinking too, the mass exodus of the middle class will hurt the UK economy for years.

When I lived there until 2011 I earned good money, around £45k, but in the London environs that couldn't even buy us an regular sized family home. I came to the conclusion that the UK housing market was totally conked out and emigrated to the US, where the same comparable salary gets me a huge 4 bedroom house, 2 cars and a nice holiday every year.


2013-08-08 14:27:00

Now? These trends have been going on for decades.
Kinda. Prices trebled under Labour but the guardian didn't grumble so greatly back then as boom and bust was no more.
I was too young to actually notice at the time, but goddamn. They tripled? Ugh.
Yes. Labour's terms were a debt fest and the current troubles all land at brown's door. Not that any muppets sense that. They swallowed all the recession crap.

What labour did at that moment was unforgivable.


2013-08-08 18:51:00

There are a lot of reasonably priced properties in London, it's just that nearly all of them are poor condition and often located in shithole, undesirable areas with high crime rates and persistent unemployment. Gentrification might be an easy way for property developers to push up the desirability (with nice margins) of an area, but it just moves the real problem of crippling poverty somewhere else in and out of the city.

This is an topic for local and state government needs to solve.


2013-08-08 21:51:00

The article pisses me off a bit as well, the major centrepiece is concerning the gentrification of Brixton, but as an alternative of speaking to honest, working class people trying to get by on minimum wage, they give the main expression to some long term squatters complaining they're getting turfed out of a house they don't own or rent.


2013-08-09 02:44:00

I... imagine it's time for me to get used to the fact that I'll never have a property.

Oh well - I kind of like renting. chiefly the part where I call the landlord whenever something breaks and he fixes it from his own pocket. I really love that bit.

When the bubble bursts land will be cheap. Remains to be seen how far it inflates before it bursts though: if it's too far it will bring the banks down, again, and the govt almost certainly will not this time be able to bail them out, so we'll be a kind of worse Greece. So you might not like to live in London then.
I genuinely don't imagine it will burst. With inflation and interest rates apt to be low in the long term, purchases only if truth be told need to think of the expense of servicing the mortgage rather than the headline cost of the house. The expense of servicing mortgages is quite low and expected to remain so for a long time.
Because the property bubble that took the banks down 5 years ago could in no way happen again.
a though provoking comment if short and, taking it into consideration seriously, reminds me that 'world cities' such as london and NYC did not see a failure in prices as did the wider market in 2008's worldwide real estate crash.
My suspicion is that the reason they didn't is because the banks generally got bailed out, so people dependant on them for wealth stayed wealthy and carried on buying big houses. However we are now running away from fixing the underlying problems (breaking them up) and it's not clear to me whether, next time, there is enough money to bail them out again. In any case I think the 'property prices will inflate for ever' view is extremely naive: that's what the banks bet on before 2008 and it was silly then.
i actually concur with this and it was on my mind while writing that reply but i forgot to convey it. it may not all be due to that but i think it may have been a important factor.

on your point about banks NOT being bailed out due to insufficient funds i would like to point out that the US Fed has an in effect limitless ability to print money so the snag would not be affordability as much as the political will to do so. and to add to my last point the Fed is technically an apolitical association but in reality will likely consider politics (maybe not along political party lines but in some way) when acting.


2013-08-09 03:16:00

I... imagine it's time for me to get used to the fact that I'll never have a property.

Oh well - I kind of like renting. chiefly the part where I call the landlord whenever something breaks and he fixes it from his own pocket. I really love that bit.

When the bubble bursts land will be cheap. Remains to be seen how far it inflates before it bursts though: if it's too far it will bring the banks down, again, and the govt almost certainly will not this time be able to bail them out, so we'll be a kind of worse Greece. So you might not like to live in London then.
I genuinely don't imagine it will burst. With inflation and interest rates apt to be low in the long term, purchases only if truth be told need to think of the expense of servicing the mortgage rather than the headline cost of the house. The expense of servicing mortgages is quite low and expected to remain so for a long time.
Because the property bubble that took the banks down 5 years ago could in no way happen again.
There wasn't a great deal of a dip on London. Our (my parents) house is now worth more than it was pre crash regardless of the overall economy being worse


2013-08-09 07:44:00

That's why I moved out of London.

On a moderate salary of £50k, I'd be able to pay for a 3-bed in a non-slum area ..... never.

You could live somewhere like Leicester or the Stevenage area and commute to the city fairly well. I have a friend who bought a 2 bed with garden and garage for less than £180k and commutes to Moorgate to work. Depends what you want.
I worked in central london and life is too short to throw away 2.5 hours of it each day commuting to work from a place like Stevenage.
Plus you have to stay in Stevenage.


2013-08-09 12:00:00

There are a lot of reasonably priced properties in London, it's just that nearly all of them are poor condition and often located in shithole, undesirable areas with high crime rates and persistent unemployment. Gentrification might be an easy way for property developers to push up the desirability (with nice margins) of an area, but it just moves the real problem of crippling poverty somewhere else in and out of the city.

This is an topic for local and state government needs to solve.

That's a pretty colossal just that Pretty much undermines the first half of the sentence. no one cares how reasonably priced it is to live somewhere they completely wouldn't feel/be safe/comfortable living in.


2013-08-09 16:55:00

Now? These trends have been going on for decades.
Kinda. Prices trebled under Labour but the guardian didn't grumble so greatly back then as boom and bust was no more.
I was too young to actually notice at the time, but goddamn. They tripled? Ugh.
Yes. Labour's terms were a debt fest and the current troubles all land at brown's door. Not that any muppets sense that. They swallowed all the recession crap.

What labour did at that moment was unforgivable.

Any genuine point you were making there got swept away by the arrogance of the muppets comment. That merely says to me guy sounds comparable an expe- oh, no, wait, he's clearly an arsehole Treat your fellow (less experienced?) posters with respect and we might pay attention to your opinion.


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