7 ms·

It's funny how the article considers overpriced housing, zero social mobility and a conversion of once a great city into a luxury den for super rich a success.

by mavdi 11y ago

It's funny how the article considers overpriced housing, zero social mobility and a conversion of once a great city into a luxury den for super rich a success. The very people London needs, nurses, doctors, programmers, firefighters, artists, carers etc are leaving the capital. And not to suburbs, a lot of them to other European cities.

PythonicAlpha 11y ago
Maybe, after a while, they will find out, that they can not eat and will not be healed by their money?
pjc50 11y ago
The UK has effectively decided to run the country as a property export operation: selling real estate to the global rich. This is setting up a future where we pay a significant fraction of our trade balance in rent to overseas landlords. Is this really politically sustainable? It'll require a lot of funding of newspaper propaganda to keep it that way.
- treve 11y ago
  > The UK has effectively decided to run the country as a property export operation. That's an insane hyperbole.
  - pjc50 11y ago
    Perhaps, but it's a big part of the problem. http://www.thisismoney.co.uk/money/mortgageshome/article-2340858/85-homes-Central-London-sold-overseas-buyers.html http://www.thisismoney.co.uk/money/mortgageshome/article-234... A slightly counter view with different numbers: http://pdf.euro.savills.co.uk/residential---other/spotlight-world-in-london.pdf http://pdf.euro.savills.co.uk/residential---other/spotlight-... : still points out that large amounts of UK assets are held overseas and that in 2013 there was $10bn of office property inward investment.
    - branchless 11y ago
      Have you seen this yet? http://www.private-eye.co.uk/registry http://www.private-eye.co.uk/registry
      - pjc50 11y ago
        I hadn't, that's an excellent piece of journalism.
        branchless 11y ago
        Good isn't it. I agree it's great, in distinction to the utter tripe pouring out the BBC these days.
  - axanoeychron 11y ago
    There is an element of truth in what you call hyperbole. Gordon Brown (in the treasury) produced a report to see how UK could integrate with the EU. The output was basically that the UK economy is not flexible enough. A very large portion of the UK's GDP is based on housing and housing services. The amount of debt on UK housing is astronomical. http://news.bbc.co.uk/2/shared/spl/hi/europe/03/euro/pdf/final_assessment/03_1100.pdf http://news.bbc.co.uk/2/shared/spl/hi/europe/03/euro/pdf/fin... Page 55 onwards "mortgage debt 60% of gdp" http://www.ft.com/fastft/309012/how-would-uk-housing-correction-affect-gdp http://www.ft.com/fastft/309012/how-would-uk-housing-correct... http://www.imf.org/external/np/ms/2001/121101.htm http://www.imf.org/external/np/ms/2001/121101.htm https://en.wikipedia.org/wiki/Five_economic_tests https://en.wikipedia.org/wiki/Five_economic_tests
    - pjc50 11y ago
      Table 1.5 line "Mortgage equity withdrawal" is particularly revealing: in the other countries it's negative, indicating that people are building up home equity, whereas in the UK it's positive, indicating that people are turning house price rises into spending money through financialisation.
    - gaius 11y ago
      Because we have a single-generation home ownership culture. In Germany and France, most people rent their whole lives and never own. In Switzerland (not EU I know but just for example) you get a 100-year mortgage and pay it off over 3 generations. This is NOTHING to do with an oil sheik buying a £10M mansion - he is not even in the same property market as you are.
- notNow 11y ago
  What makes yield collected from real estate properties any different from yield collected from bank deposits or dividends from shares on the stock market? Also, I don't think that yield from real estate is classified under the "trade" item in the Balance of Payments
- api 11y ago
  Canada is doing the same with Vancouver.
buffoon 11y ago
I'm not super-rich and I'm doing fine in London. So is everyone I know and that includes nurses, programmers, artists and carers perhaps ironically. None of them are moving away. What is a big problem is hyperbole, media and vocal whiners. Social mobility is bollocks as well. It's perfectly possible to do it and it is easier than it has ever been due to the sheer piles of education available for little to nothing and the thousands of opportunities. Motivation and time are the only constraints. Edit: everyone I know has moved up the social ladder, if there is one. We all appear to be in the same shit at the end of the day.
- DanBC 11y ago
  Carer is a term defined in law as someone who provides care without being paid for it. Did you mean carer, or did you mean care worker?
  - buffoon 11y ago
    Carer. My neighbor is one for her two disabled children. She sells art and things on ebay to make ends meet.
    - pjc50 11y ago
      Can she really make enough on ebay to pay for London rents? Or is she heavily dependent on benefits that are vulnerable to being cut, such as housing benefit and disability benefit?
      - buffoon 11y ago
        She has a mortgage that the benefits are paying interest only on and disability benefit as well for her children. She bought the house in 2002 so the mortgage isn't terrible. I think she breaks even every month on a good month. I will add that her husband died from bowel cancer in 2006. If ever you think your life is a bitch, it's a good comparison point.
        11y ago
dageshi 11y ago
They'll just be replaced by immigrants from the new entrant EU countries won't they? Problem solved.
nkoren 11y ago
I'm an American entrepreneur who has started two companies in London. My most recent startup was recently accepted into an accelerator in Berlin. Like-for-like, the real estate in Berlin is cheaper by a factor of roughly 6. The overall quality-of-life multiplier is roughly similar. It is definitely making me reconsider my long-term commitment to the UK.
- mavdi 11y ago
  Same here. My clients are in the US and I work from home. So it's only logical I rent my flat for a ridiculous price and live elsewhere.
- ThomPete 11y ago
  Berlin has the culture and the cheaper prices and def some interesting companies but it still doesn't have the capital and proper access to the things that make London (and SV and New York) great cities for startups. So I think it really depends on what kind of startup your are trying to build. Europe doesn't have much going for it with London ,Berlin and Stockholm as the exceptions. But just like you can go to LA and pay a third in rent of what they pay in SF doesn't mean that it's advisable. Again depending on what kind of business you are running.
  - pjc50 11y ago
    doesn't have the capital It's weird how capital is localised to particular cities in an era of air travel and Skype.
    - ThomPete 11y ago
      Thats how humans operate what can I say.
      - marcosdumay 11y ago
        There's probably a huge opportunity in that. I just don't know how to exploit it...
vacri 11y ago
What do these 8.5 million super-rich londoners do, if doctors can't afford to rub shoulders with them!?
- pidg 11y ago
  Finance.
- cjrp 11y ago
  Also there are doctors, and then there are _doctors_ - e.g. junior doctor working in A&E vs. partner at a Harley Street clinic.
- irremediable 11y ago
  Doctors aren't tremendously well-paid in the UK. Look at the recent attempted reforms to junior doctor pay.
- ZenoArrow 11y ago
  Doctors would join the thousands of other people who commute to work in London.
- gutnor 11y ago
  There is a lot of social estates in London. There are area like East Dulwich where you are either living in the estate and pay fuck all (while you qualify), or you can afford 1 million+ to buy a place. So that's a weird mix where the rich lives with the poor, but the middle class is excluded. ( well, from time to time, one of the estate flat goes on sale for between 300 and 400K which is somewhat accessible to middle class, but then less than 20% of the housing on an estate are privately owned via right to buy scheme, and most of the time the original owner are still living in as they can't really buy better anywhere else ) edit: note that for nurse, there are help scheme available via key worker shared ownership ( you buy a share and rest the rest ). So you have more chance to find a nurse living in the center than a doctor. Also note that the problem comes from the price explosion of private housing over the last decade. 10 years ago, where I was looking, there were estate, shared ownership (50% of 200K) and private properties starting 200K and up. Now, you have estate, share ownership (25%!! of 600K) and private for 600K and up. The salaries are about the same and the level of help to access government assistance hasn't changed much either. So you can progress from poor to lower middle class, but then there is huge gap to be able to afford your place.

by mavdi 11y ago

PythonicAlpha 11y ago

Maybe, after a while, they will find out, that they can not eat and will not be healed by their money?

pjc50 11y ago

The UK has effectively decided to run the country as a property export operation: selling real estate to the global rich. This is setting up a future where we pay a significant fraction of our trade balance in rent to overseas landlords. Is this really politically sustainable? It'll require a lot of funding of newspaper propaganda to keep it that way.

treve 11y ago
> The UK has effectively decided to run the country as a property export operation. That's an insane hyperbole.
- pjc50 11y ago
  Perhaps, but it's a big part of the problem. http://www.thisismoney.co.uk/money/mortgageshome/article-2340858/85-homes-Central-London-sold-overseas-buyers.html http://www.thisismoney.co.uk/money/mortgageshome/article-234... A slightly counter view with different numbers: http://pdf.euro.savills.co.uk/residential---other/spotlight-world-in-london.pdf http://pdf.euro.savills.co.uk/residential---other/spotlight-... : still points out that large amounts of UK assets are held overseas and that in 2013 there was $10bn of office property inward investment.
  - branchless 11y ago
    Have you seen this yet? http://www.private-eye.co.uk/registry http://www.private-eye.co.uk/registry
    - pjc50 11y ago
      I hadn't, that's an excellent piece of journalism.
      - branchless 11y ago
        Good isn't it. I agree it's great, in distinction to the utter tripe pouring out the BBC these days.
- axanoeychron 11y ago
  There is an element of truth in what you call hyperbole. Gordon Brown (in the treasury) produced a report to see how UK could integrate with the EU. The output was basically that the UK economy is not flexible enough. A very large portion of the UK's GDP is based on housing and housing services. The amount of debt on UK housing is astronomical. http://news.bbc.co.uk/2/shared/spl/hi/europe/03/euro/pdf/final_assessment/03_1100.pdf http://news.bbc.co.uk/2/shared/spl/hi/europe/03/euro/pdf/fin... Page 55 onwards "mortgage debt 60% of gdp" http://www.ft.com/fastft/309012/how-would-uk-housing-correction-affect-gdp http://www.ft.com/fastft/309012/how-would-uk-housing-correct... http://www.imf.org/external/np/ms/2001/121101.htm http://www.imf.org/external/np/ms/2001/121101.htm https://en.wikipedia.org/wiki/Five_economic_tests https://en.wikipedia.org/wiki/Five_economic_tests
  - pjc50 11y ago
    Table 1.5 line "Mortgage equity withdrawal" is particularly revealing: in the other countries it's negative, indicating that people are building up home equity, whereas in the UK it's positive, indicating that people are turning house price rises into spending money through financialisation.
  - gaius 11y ago
    Because we have a single-generation home ownership culture. In Germany and France, most people rent their whole lives and never own. In Switzerland (not EU I know but just for example) you get a 100-year mortgage and pay it off over 3 generations. This is NOTHING to do with an oil sheik buying a £10M mansion - he is not even in the same property market as you are.
notNow 11y ago
What makes yield collected from real estate properties any different from yield collected from bank deposits or dividends from shares on the stock market? Also, I don't think that yield from real estate is classified under the "trade" item in the Balance of Payments
api 11y ago
Canada is doing the same with Vancouver.

buffoon 11y ago

I'm not super-rich and I'm doing fine in London. So is everyone I know and that includes nurses, programmers, artists and carers perhaps ironically. None of them are moving away. What is a big problem is hyperbole, media and vocal whiners. Social mobility is bollocks as well. It's perfectly possible to do it and it is easier than it has ever been due to the sheer piles of education available for little to nothing and the thousands of opportunities. Motivation and time are the only constraints. Edit: everyone I know has moved up the social ladder, if there is one. We all appear to be in the same shit at the end of the day.

DanBC 11y ago
Carer is a term defined in law as someone who provides care without being paid for it. Did you mean carer, or did you mean care worker?
- buffoon 11y ago
  Carer. My neighbor is one for her two disabled children. She sells art and things on ebay to make ends meet.
  - pjc50 11y ago
    Can she really make enough on ebay to pay for London rents? Or is she heavily dependent on benefits that are vulnerable to being cut, such as housing benefit and disability benefit?
    - buffoon 11y ago
      She has a mortgage that the benefits are paying interest only on and disability benefit as well for her children. She bought the house in 2002 so the mortgage isn't terrible. I think she breaks even every month on a good month. I will add that her husband died from bowel cancer in 2006. If ever you think your life is a bitch, it's a good comparison point.
      - 11y ago

dageshi 11y ago

They'll just be replaced by immigrants from the new entrant EU countries won't they? Problem solved.

nkoren 11y ago

I'm an American entrepreneur who has started two companies in London. My most recent startup was recently accepted into an accelerator in Berlin. Like-for-like, the real estate in Berlin is cheaper by a factor of roughly 6. The overall quality-of-life multiplier is roughly similar. It is definitely making me reconsider my long-term commitment to the UK.

mavdi 11y ago
Same here. My clients are in the US and I work from home. So it's only logical I rent my flat for a ridiculous price and live elsewhere.
ThomPete 11y ago
Berlin has the culture and the cheaper prices and def some interesting companies but it still doesn't have the capital and proper access to the things that make London (and SV and New York) great cities for startups. So I think it really depends on what kind of startup your are trying to build. Europe doesn't have much going for it with London ,Berlin and Stockholm as the exceptions. But just like you can go to LA and pay a third in rent of what they pay in SF doesn't mean that it's advisable. Again depending on what kind of business you are running.
- pjc50 11y ago
  doesn't have the capital It's weird how capital is localised to particular cities in an era of air travel and Skype.
  - ThomPete 11y ago
    Thats how humans operate what can I say.
    - marcosdumay 11y ago
      There's probably a huge opportunity in that. I just don't know how to exploit it...

vacri 11y ago

What do these 8.5 million super-rich londoners do, if doctors can't afford to rub shoulders with them!?

pidg 11y ago
Finance.
cjrp 11y ago
Also there are doctors, and then there are _doctors_ - e.g. junior doctor working in A&E vs. partner at a Harley Street clinic.
irremediable 11y ago
Doctors aren't tremendously well-paid in the UK. Look at the recent attempted reforms to junior doctor pay.
ZenoArrow 11y ago
Doctors would join the thousands of other people who commute to work in London.
gutnor 11y ago
There is a lot of social estates in London. There are area like East Dulwich where you are either living in the estate and pay fuck all (while you qualify), or you can afford 1 million+ to buy a place. So that's a weird mix where the rich lives with the poor, but the middle class is excluded. ( well, from time to time, one of the estate flat goes on sale for between 300 and 400K which is somewhat accessible to middle class, but then less than 20% of the housing on an estate are privately owned via right to buy scheme, and most of the time the original owner are still living in as they can't really buy better anywhere else ) edit: note that for nurse, there are help scheme available via key worker shared ownership ( you buy a share and rest the rest ). So you have more chance to find a nurse living in the center than a doctor. Also note that the problem comes from the price explosion of private housing over the last decade. 10 years ago, where I was looking, there were estate, shared ownership (50% of 200K) and private properties starting 200K and up. Now, you have estate, share ownership (25%!! of 600K) and private for 600K and up. The salaries are about the same and the level of help to access government assistance hasn't changed much either. So you can progress from poor to lower middle class, but then there is huge gap to be able to afford your place.