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
10534 views
Have you seen the houses in brixton?
Walk out the station, cross directly ahead, go left and right on the corner.
There are, what looks like, 4 story town houses, across the road from housing estates. The contrast made it seem like Brixton is a unmitigated shithole when it's not actually the truth.
(I know I may have misconceptions, but last i heard of that area, was when a cop I train with told me he was there to break up a fight, and one guy was deceased by the time they got there, hit with some post someone tore off an old fence, i was under the sense you wouldn't feel safe getting home after dark)
Edit: the three large agencies of the area, have become very close to what people voice of agencies like Foxton.
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.
It's a very British belief that land is the main means to wealth, and British property is the best at it. Aren't we merely projecting the same beliefs onto others. at these Russian millionaires, if I had that cash I'd start a Buy-to-Let empire in Bromley! The incentive that those that are buying in London, want to do so, is because of London's importance in global trade and finance. Any impending recession/problems with the financial sector may be a basis for foreign ownership to reduce, not be a substitution for home-grown buyers.
British, and markedly London, property really isn't performing that well as an investment when compared next to other things. The US stock-market reached an all-time high this week, but an ordinary London property yields less than 4%.
it's the capital gain stupid! - well yes, but unlimited capital gains in the face of less buyers is not sustainable. And the higher market prices levitate above sustainable prices (which can be very roughly approximated by comparing with the more liquid rental market), the elevated probability of a painful correction.
In summary: buyers is just grasping at straws to try and find a reassuring narrative that house prices are sustainable, it doesn't stand to reason.
The best hope for sustainable prices is good old inflation, that's the only thing that can the housing market - the numbers will be steady (or even rise), but the relative value of housing will steadily find a sustainable home.
Not that inflation doesn't initiate other problems, of course.
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.
Anyone who can't afford to raise the amount required to reach the bottom of the isn't active in the housing market. Their physical presence doesn't make things more expensive, it's people being functioning buyers - making serious offers - that push markets.
The only affect is indirect via the leasing market, but people are remarkably soft when it comes to renting - e.g. five persons might share a three bedroom house, however five people are remarkably improbable to purchase a three bedroom house.
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.
Not that the ECB or Federal Reserve aren't trying to prop-up their own bubbles of course. As long as we're all approximately just as fucked in terms of economic growth being reliant on increasing an already historically large debt burden, then we can put off doomsday for an additional three years!
What labour did at that moment was unforgivable.
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.
On a moderate salary of £50k, I'd be able to pay for a 3-bed in a non-slum area ..... never.
Commuting from that remoteness is the best sign you can get of a broken market plus an insane populace.
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.
Anyway: interest rates might be low in the long term, there's no security about inflation. Inflation is by now above target, and has been for most of the past five years.
Indeed, if the projected target for the Bank of England replaces the inflation aim then inflation will get notably higher.
This may be a way out if that inflation gets translated to upper earnings (fuck savers), but if it doesn't then we are heading down the road marked stagflation which will lower people's real-term income...
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.
Rates in the US will go up as they cleared their decks in 2008 with a good crash. The UK will then be painted into a corner.
