When will London burst ?

buglawton

Yeh they got too obsessed with property and neglected the real economy

[Deleted User]

MARTYM8` wrote: »

Romania, Slovakia and Lithuania have the highest levels of home ownership and Switzerland and Germany the lowest.

Dunno about Switzerland but, having lived in Germany, rents are cheap over there. Many grown-ups on low income don't mind living in "Wohngemeinschaften" (a mix between shared housing and communes) and can't be bothered to jump on the property ladder.

wotsthat

MARTYM8` wrote: »

Its quite interesting that the level of home ownership in Europe is often inversely proportional to the wealth and prosperity of that country.

Romania, Slovakia and Lithuania have the highest levels of home ownership and Switzerland and Germany the lowest.

http://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate

Maybe there is a message there somewhere!

Buying a home is a lower cost route to providing accommodation so if there's a message it's subtle.

Landlords irrespective of whether they're in Romania, Germany or Switzerland are looking to make a margin and that margin is paid for by the tenant. If Germans are better off than the British it's in spite of renting rather than because of it.

Conrad

buglawton wrote: »

Yeh they got too obsessed with property and neglected the real economy

I think it's perfectly valid choosing to get your hands dirty and invest in one or more properties as opposed to the Teutonic propensity to let professional fund managers do the hard work by way of a pension / investment fund many of which invest in property anyway.


Even with one property it can be very rewarding to sell it tax free and down size one day. The pious puritan line "my property is a home not an investment" is very disingenuous. When the puritans come to sell I can assure you they squeeze every last penny they can from the market, so the monetary side of things does indeed become a corner stone of their property journey and not 'merely' incidental and of no import.

caronoel

chiefie wrote: »

For you economics experts out there . How can house prices continue to rise whilst the service economy depends upon continued low wage employment ? And whilst key public sector workers aren't paid enough to buy or rent somewhere ? how does this work and where is it all going ?

I predict prices will be 50% down by Christmas 2009

Killerseven

billywilly wrote: »

If they are on benefits, living and working in London, then they would be better off leaving and going somewhere else that is cheaper.

If the rent is £23,000 a year only those earning in excess of £80,000 should be living there - they can afford it without recourse to public funds.

With London, there will have to be a general exodus of those who have to rely on benefits to survive. They are going to have to come to the conclusion that enough is enough and move away and let those that can afford to live there move in.

If there is thi mass exodus from London, then who will do all the min wee jobs?

There will be. Lot of empty properties especially when you consider how many new properties re being added to londons supply every year.

Just shows how overvalued property and rents have got due to housing benefit pushing and holding up prices.

If housing benefit is cut, then rent no house price will fly to more fair level, but lots of repossessions on the horizon

buglawton

Having just been on a short break up North, I was reminded how great service is there.

Working on a theory that:
(Quality/Promptness/Friendliness of Service) is proportional to:
(Hospitality Industry Hourly Wage) / (Cost of Property)

or something

Killerseven

nannytone wrote: »

as a singleton, perhaps.
but even a couple, with children, both working full time on NMW won't earn enough to support their family without some type of benefit top up.

a joint income of £500 a week will not pay rent ( unless social housing is available) council tax and day to day expenses for a family of 4, even with no childcare costs, in any of the london boroughs

We are only talking about reducing the max £500 week down to £445 week. That is £26k down to new cap of £23k.

So rents will just have to fall around £55 week to absorb the cuts.

But this is just the start, the trend is clear to see, more cuts have to follow and rents and house prices will slowly correct to where they should be.

antrobus

Conrad wrote: »

...Total urban myth when it comes to Europeans being all willing and happy to rent. Even the most iron curtain of nations such as Albania and Montenegro have populations with a deeply ingrained ownership mentality.

All the former Eastern Bloc countries seem to have owner occupation rates of 80% +. (In Roumania it is 95%.)

MARTYM8` wrote: »

I
Maybe there is a message there somewhere!

I believe that the message is that you have forgotten about Norway, Sweden, etc...

Conrad wrote: »

I think it's perfectly valid choosing to get your hands dirty and invest in one or more properties as opposed to the Teutonic propensity to let professional fund managers do the hard work by way of a pension / investment fund many of which invest in property anyway.....

I don't believe it's the case in Germany that it's professional fund managers who are landlords; mostly it's actually private individuals doing the renting.

antrobus

ciaccino wrote: »

Dunno about Switzerland but, having lived in Germany, rents are cheap over there. Many grown-ups on low income don't mind living in "Wohngemeinschaften" (a mix between shared housing and communes) and can't be bothered to jump on the property ladder.

They can't be that cheap.

Germans spend 28% of their disposable income on housing. The EU average is 22%. In the UK it is 21%.

Share of housing costs in disposable household income, by type of household and income group (source: SILC) [ilc_mded01]
http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=ilc_mded01