The London property market is doomed, doomed I tells ya

Generali

From Deutsche Bank via the FT.

http://ftalphaville.ft.com/2016/06/20/2166879/the-london-property-market-is-doomed-doomed-i-tells-ya/

The London property market is doomed, doomed I tells ya
Kadhim Shubber Author alerts
| Jun 20 16:22 | 15 comments | Share

Yes, yes, we know, people will keep buying property in London no matter the price, no matter the Brexit, no matter the sheer insanity of it all. But, there’s a credible bear case to be made that regulatory and tax changes in the buy-to-let market — known colloquially as the ‘evil landlord’ sector — are about to !!!!! what has become a very sizeable bubble. Last week, Deutsche Bank analysts Oliver Reiff and Markus Scheufler made that case over about 70 pages, arguing that for any rational investor, the economics of buying London property have been hammered. We’ll get to some of their arguments in a moment, but this chart summarises the issue:

The sums Deutsche Bank have done assume a 35 year mortgage and and 65% LTV loan for a higher rate taxpayer and use a 3.5% yield. Here are Deutsche's workings:



But that's all right, it's as safe as 'ouses innit!

Mistermeaner

Once we get rid of all those migrants everyone in sunderland will start their own car wash and port Talbot will be churning out steel to rebuild our navy then workers rights will improve and stoke on Trent will become London. Init

vivatifosi

Wow, Brit was right after all. Who would have thunked it?

Garethgrew

The German central bank saying all that is interesting considering they are going through a bout of truth telling in their death breath.

They are sinking fast in their toxic derivatives losses, they just fired another 3000 staff.

But they are correct London property is doomed.

lisyloo

Mistermeaner wrote: »

Once we get rid of all those migrants everyone in sunderland will start their own car wash and port Talbot will be churning out steel to rebuild our navy then workers rights will improve and stoke on Trent will become London. Init

Your sarcasm is not lost on me.
A few weeks ago I was at a hand car wash. There were 5 immigrants drying my car on a Sunday I paid a fiver.
They did not take those jobs from uk people and natives will not be queue to up for hard work at all hours.

kinger101

lisyloo wrote: »

Your sarcasm is not lost on me.
A few weeks ago I was at a hand car wash. There were 5 immigrants drying my car on a Sunday I paid a fiver.
They did not take those jobs from uk people and natives will not be queue to up for hard work at all hours.

There's a very strong possibility that your car was washed by victims of human trafficking/slavery.

Generali

kinger101 wrote: »

There's a very strong possibility that your car was washed by victims of human trafficking/slavery.

Really? Part of my job is understanding supply chains so I have a pretty keen grasp of these things.

I wouldn't imagine that car washes would be a good place for modern slavery although I'd welcome being corrected. They have one of the big flashing signs, being that the prices are too good to be true.

I doubt those guys pay minimum wage but I also have my doubts that they are involved in debt bonded labour or similar. It's just too easy to get across Europe for that to be likely.

Brexit hugely increases the risk of modern slavery in the UK IMHO.

If you have a better insight than me into this sector then please share it as I'm eager to learn more about this blight on society.

kinger101

Generali wrote: »

Really? Part of my job is understanding supply chains so I have a pretty keen grasp of these things.

I wouldn't imagine that car washes would be a good place for modern slavery although I'd welcome being corrected. They have one of the big flashing signs, being that the prices are too good to be true.

I doubt those guys pay minimum wage but I also have my doubts that they are involved in debt bonded labour or similar. It's just too easy to get across Europe for that to be likely.

Brexit hugely increases the risk of modern slavery in the UK IMHO.

If you have a better insight than me into this sector then please share it as I'm eager to learn more about this blight on society.

http://www.mirror.co.uk/news/uk-news/car-wash-slaves-kershnik-avdi-3595836

http://www.newstatesman.com/politics/economy/2015/11/dirty-dealings-how-car-wash-became-hub-human-trafficking

http://www.kentonline.co.uk/canterbury/news/car-wash-boss--denies-94980/

Generali

kinger101 wrote: »

http://www.mirror.co.uk/news/uk-news/car-wash-slaves-kershnik-avdi-3595836

http://www.newstatesman.com/politics/economy/2015/11/dirty-dealings-how-car-wash-became-hub-human-trafficking

http://www.kentonline.co.uk/canterbury/news/car-wash-boss--denies-94980/

Shocking and TBH I suspect that Brexit only encourages these sorts of abuses. That's my experience in Aus anyway.

kinger101

Generali wrote: »

Shocking and TBH I suspect that Brexit only encourages these sorts of abuses. That's my experience in Aus anyway.

I don't think Brexit makes any difference. There are plently of examples of slavery in the UK from people who are both legally entitled to work here, and those who are not. The mechanism for creating it is a debt, and the threat of violence against the individual or their family if it is not repaid on the creditors terms.

The one thing that might make a difference is if people think twice before getting their car washed with the equivalent of of couple of hours labour for a fiver.

If anything, I think the perception that someone eastern european is willing to do work for peanuts has stopped people doing a reality check when they drive into these car washes.

Thrugelmir

London isn't representative of the UK as a whole. If people want to spend silly money to live there, up to them. I for one don't care. A million buys a lot of property elsewhere. Not just a four bed terrace with no parking in Greenwich.