London Has Peaked

padington

Jason74 wrote: »

True. There are people who have done well out of the boom. But my point is that seeing the price of an essential commodity like housing getting more and more expensive is ultimately a problem for a city like London, rather than something to be celebrated.


If it becomes harder and harder for people to gain the security and "stake" of home ownership, that creates more problems than benefits. And even the gains of those taking money from London to downsize elsewhere create (albeit smaller) problems in those places by making it harder for local people to afford housing . . . . .and so the problem continues.

It's a pretty clever solution to get Kick start a recovery, if you double the equity everyone enjoys all these homeowners suddenly have the funds necessary at the click of their fingers to make that business idea a reality.

Also making tower blocks and commodifying our cultural allure overseas is another way to game a tricky period of debt.

Of course with every positive reaction there is often an equal or opposite negative reaction and there is no true free lunch for everyone and too much of anything isn't a good thing.

I would suggest we introduce a new tier of property to the market - affordable leasehold which can only be owned by someone who doesn't own any other property and which is funded by simply printing tons of money and where buyers are selected on their ability to support UK the grow, decided by an Australian based points system to encourage the skills we need.

chucknorris

Jason74 wrote: »

True. There are people who have done well out of the boom. But my point is that seeing the price of an essential commodity like housing getting more and more expensive is ultimately a problem for a city like London, rather than something to be celebrated.


If it becomes harder and harder for people to gain the security and "stake" of home ownership, that creates more problems than benefits. And even the gains of those taking money from London to downsize elsewhere create (albeit smaller) problems in those places by making it harder for local people to afford housing . . . . .and so the problem continues.

A problem for some yes, but not for everyone excluding landlords, I do have sympathy with those yet to buy.

Jason74

chucknorris wrote: »

A problem for some yes, but not for everyone excluding landlords, I do have sympathy with those yet to buy.

True, but there's no doubt in my mind that overall, the impact of current price levels in London is a corrosive one z so I think that Paddington is very wrong when he described it as a "clever" thing. Indeed,ci'd go as far as to say that Londonneeds a property crash. And I don't say that thinking that a crash is a pleasant thing,I'm well aware of the carnage that would bring. It's just that the long term damage being done by prices at these levels is such that a crash and reset at much lower price levels is the least worst of a set of bad outcomes. Policymakers have a lot to answer for imho for allowing this situation to come about.

And before anyone suggests that this view is from some kind of "HPC style" bitterness, it's worth noting that I own my home in London outright, so price changes have a minimal impact on me personally one way or another.

lisyloo

so I think that Paddington is very wrong when he described it as a "clever" thing

That was in the context of kick starting a recovery and I think Paddington was correct.
Back in 2008 we were in a really bad place, some of the measures like QE and bailing out the banks had to be taken.
Yes there are consequences, but it was the least worst solution.

The current situation is not good, but the props are being removed e.g. landlords tax breaks in the budget.
I am certain the housing market will re-adjust. I'm not a perma bear but it's absolutely obvious that todays graduates cannot afford todays prices. Eventually the boomers will die - of that we can be certain.
What we have now is unsustainable.

Policymakers have a lot to answer for imho for allowing this situation to come about.

I disagree considering where we were in 2008.
I think they've done a jolly good job overall to get us to where we are today.
Yes there are issues, but they've managed to get us out of the banking crisis.
It dead easy to say you could have done it better with hindsight.
To which I'd say - why didn't you? Where were you?
Being an archair warrior? or did you actually contribute anything?

chucknorris

Jason74 wrote: »

True, but there's no doubt in my mind that overall, the impact of current price levels in London is a corrosive one z so I think that Paddington is very wrong when he described it as a "clever" thing. Indeed,ci'd go as far as to say that Londonneeds a property crash. And I don't say that thinking that a crash is a pleasant thing,I'm well aware of the carnage that would bring. It's just that the long term damage being done by prices at these levels is such that a crash and reset at much lower price levels is the least worst of a set of bad outcomes. Policymakers have a lot to answer for imho for allowing this situation to come about.

And before anyone suggests that this view is from some kind of "HPC style" bitterness, it's worth noting that I own my home in London outright, so price changes have a minimal impact on me personally one way or another.

I'm not arguing or calling you bitter. But forgive me if I don't join you in wishing for a crash when we have a substantial amount invested in the London property market. The market will do what it will do, regardless of what you or I want it to do, there isn't any point in being emotionally involved, I'm not saying that you are, I'm merely pointing out that I am not (but I do think that some posters are).

remorseless

chucknorris wrote: »

I'm not arguing or calling you bitter. But forgive me if I don't join you in wishing for a crash when we have over £4m invested in the London property market. The market will do what it will do, regardless of what you or I want it to do, there isn't any point in being emotionally involved, I'm not saying that you are, I'm merely pointing out that I am not (but I do think that some posters are).

if you have over £4m invested in London property market, wouldn't make you a speculator? Let me guess, you don't even live in London and of course, you're one of the good guys?

(just pulling your leg!) :rotfl:

lisyloo

Do you think that people with £4m+ really care what you call them?

chucknorris

lisyloo wrote: »

Do you think that people with £4m+ really care what you call them?

Well it is more to do with 'would you care what someone called you, when they are doing so just because of what you have'? But I'll give you this, they call me call me twice as much if my equity can be doubled.

chucknorris

remorseless wrote: »

if you have over £4m invested in London property market, wouldn't make you a speculator? Let me guess, you don't even live in London and of course, you're one of the good guys?

(just pulling your leg!) :rotfl:

I know that you are only joking, so this isn't a serious rebuff, but what is the difference between a speculator and an investor, is there a difference? If there is, it might be being in the market for the long term (I've been in the market over 24 years now, and still counting).

I think you probably already know that I don't live in London, but I did live in 5 (including 2 already sold) of my London properties for a combined total of 14 years.

remorseless

chucknorris wrote: »

I know that you are only joking, so this isn't a serious rebuff, but what is the difference between a speculator and an investor, is there a difference? If there is, it might be being in the market for the long term (I've been in the market over 24 years now, and still counting).

I think you probably already know that I don't live in London, but I did live in 5 (including 2 already sold) of my London properties for a combined total of 14 years.

TBH - I think it's a very fine line between speculator and investor.

Then again, renters (me) in London could also be on a similar note. I am happy to fuel your mortgage to cash in the salaries of the city but I have little liability. I can pack and go quickly if it turns to be a house of cards!

Some may argue that it'd be better (long term) for actual city residents to own and occupy properties rather than investors pushing rent up and up till how much? Again, I don't know how much it would really make a difference.

I suppose investors can cash in until someone is willing to pay the price and then it either crashes or adjusts. How far are we from that point?

In Sydney, it's a very similar game, the city transformed in just over a decade to a trading room of property exchange.

BTW - I'd more likely do the same as you! :A