When will London burst ?

chucknorris

MARTYM8` wrote: »

Exactly – it rather irritates when certain posters fail to recognise that house prices rising 400% in the last 15 years has of course had no impact on their wealth or the ability of younger people to buy a house.


All this I worked hard and today’s kids are lazy attitude from certain smug posters on here rather irritates – you didn’t work hard for a 400% rise in house prices. Government and banking policies did that!

Of course it has an impact on my wealth (how has it not had an impact on my wealth?), and on the ability of others to buy. Excuse me for thinking otherwise, but I have always thought that I am only responsible for my immediate family's wealth, not yours, that I'm afraid is your responsibility. I have tremendous sympathy for those priced out, but not whingers on the internet, instead of getting on with life and making something of themselves.


If you are referring to me (because I did say that I worked hard on this very thread), I did work hard, as I said I didn't have a holiday for 10 years, worked almost every weekend and at least 2-3 late nights every week. Fair enough, I might not have made as much (without house prices rising so much), but my electrical contracting business and racecourse booking business (which I worked in and built up whilst doing a full time job) were still very successful, nothing to do with Gov. and banking policies, in fact I bought my first house for cash.

shortchanged_2

Generali wrote: »

Imagine the mess if London bursts. There'd be bits of London all over the home counties.

I must admit with how hollow the ground is under London now I await the day when it just becomes a giant sinkhole.

caronoel

MARTYM8` wrote: »

Exactly – it rather irritates when certain posters fail to recognise that house prices rising 400% in the last 15 years has of course had no impact on their wealth or the ability of younger people to buy a house.

My parents house in London is worth 80 times what they paid for it in the early 1970s – they regard the price of their house now as laughable and comical. And like most of their neighbours there is no way they could have afforded it at current prices on their typical salaries – they paid the mortgage on one salary and bought it with a 1.5 times salary multiple on an average London salary.

If you can find a house in London now for £60k – one and a half times median salary good luck!

All this I worked hard and today’s kids are lazy attitude from certain smug posters on here rather irritates – you didn’t work hard for a 400% rise in house prices. Government and banking policies did that!

Not a valid comparison at all

Mortgage rates were rarely below 10% for much of the 70's and 80's. There are plenty of decent fixed rates available now at a quarter of that cost. So while house prices have risen, the cost of servicing a mortgage has dropped off a cliff.

As for nothing being available on the "average" wage, I popped in £160k into Rightmove (4 times multiple against your average wage assumption of £40k), and it brought up more than 500 properties:
http://www.rightmove.co.uk/property-for-sale/find.html?searchType=SALE&locationIdentifier=REGION%5E87490&insId=2&radius=0.0&minPrice=&maxPrice=160000&minBedrooms=&maxBedrooms=&displayPropertyType=&maxDaysSinceAdded=&_includeSSTC=on&sortByPriceDescending=&primaryDisplayPropertyType=&secondaryDisplayPropertyType=&oldDisplayPropertyType=&oldPrimaryDisplayPropertyType=&newHome=&auction=false

The real issue is the "want it now" culture.

Few first time buyers could ever afford a 4 bed semi in a leafy suburb as their first home, but today's kids want the moon on a stick.

lisyloo

I have tremendous sympathy for those priced out, but not whingers on the internet, instead of getting on with life and making something of themselves.

I feel the same, but putting aside that whinging is easier with social media, I do feel that things have changed (and I have no personal vested interest in saying so).

I do feel that young people don't have the same opportunities - for example graduate jobs and have very high housing costs and global competition to contend with.

I don't have children and I'm a "have" so it's not a vested interest.
It's not my responsibility but I am an altruistic person who cares about future generations and the planet after I'm gone.
I think you're probably the same Chuck?

Social media and internet has downsides too and the whinging that would have been done over a few jars or the garden fence has now gone viral.
Is it a suprise that there is some disgruntlement and sense of entitlement for the 1st generation whose standard of living will go downhill.
It's perhaps not justified but I think it's understandable.
I certainly grew up with expectations, I was just lucky enough to be born at a time when they were likely to me met.

cells

what is happening to London is that it is, in the eyes of enough people, becoming the nice bit of "town" on a global scale

let me try to explain,

in almost every town and city there are nice bits and not so nice bits.
House prices can be 50-200% higher in the "nice bits"

you will all know this from your own areas.


This is also true town to town,
For example Luton and Harpeden are not far from each other. House prices in the Latter cost ~3x the former. Why is that so? Its simply a premium rich people pay to be near other rich people (or far from poor people depending on how you want to look at it).

so we know there is a very real premium for the "good areas". London is becoming one of the global "good areas" in the minds of enough people for it to actually become true.

cells

The only concealable thing that can slow HPI in London is if the London plan is achieved. It calls for 48,000 new builds a year. The last decade build rate has been closer to the 15-20k a year mark

So that means HPI is probably going to continue in London for many more years.

The big negative side is the result of more and more HPI is going to be a rapidly contracting owner sector. We might find that in the year 2030 the London rental sector is 70% of the market with owners at only 30%. Personally I think that would be terrible but....what can you do

Generali

N1AK wrote: »

The average London property is already in the £0.5 million range. A couple of years of 2.5% a month inflation would bring them up around the £850k mark... even with average wages increasing to the mid-£40ks a 20/1 house price to wage ratio across the whole city seems bonkers.

To be clear, any asset that was rising reliably at 2.5% a month would be gold.

Madoff claimed 1% pm and he had the world flocking to him.

chiefie

London needs teachers, police, nurses, firefighters, ambulances, hotel staff, public utilities staff - they won't be able to rent or buy. My question was really how can London remain supported by these people when they can no longer live there. People will be living in Stoke and travelling down (1hr 25 to Euston) before we know it

cells

chiefie wrote: »

London needs teachers, police, nurses, firefighters, ambulances, hotel staff, public utilities staff - they won't be able to rent or buy. My question was really how can London remain supported by these people when they can no longer live there. People will be living in Stoke and travelling down (1hr 25 to Euston) before we know it

near half the housing stock in some London boroughs are council homes/flats.

Hackney alone is 50% council homes (it was above 50% not long ago)

I don't know what the overall London figure is but I suspect it is north of the national average of 17% of homes. Maybe 25%?

So there are lots of homes for poor and low income people too


of course they could and probably should sell London social subsidised housing stock down towards 10% but thats another story

silvercar

setmefree2 wrote: »

This really has become a problem for the children - the children of Londoners. These "children" are young adults who have only ever lived in London and know nothing else...

Watch this space, I will let you know what's happening to them - my kids are 21 and 19 and both away at Uni. My friends kids range from 30 to 12. I don't know any who have bought a property yet - they are all (mostly) still living in their childhood bedrooms having returned from Uni or have gone abroad.

Kids are either living at home or renting (If they really can't bare the thought of living in leafy Hertfordshire). I do have some sympathy, if you do get a graduate job in Central London, you want to live in London, with or at least near your mates, rather than along some dodgy train line with your suburban parents.

I fully expect that the penalty for buying our own home early and when prices where low, will be that we will need to help our kids out.