6 ms·

Is this the New Feudalism? The super wealthy buying property from all over the world literally for rent seeking? Will the world become a Company Town? Is thi

Is this the New Feudalism? The super wealthy buying property from all over the world literally for rent seeking? Will the world become a Company Town? Is this desirable? Inevitable?

nextos 11y ago
The situation is completely insane. For example, Cambridge used to be a relatively affordable place. Now, rents for 1 bed 50 m^2 flats are in the range of, at least £1200 per month (climbing at a rate of ~£100 / year). It's sad, because it's a good place to do science in, but everything is really expensive. I come from Scandinavia, and things work much better there and are miles ahead in terms of affordability.
- seivan 11y ago
  How is Scandinavia better? Queue for years or get scammed on Blocket? I prefer a free market. At least people can rent out in UK and not get in trouble with the Co-op that only allows one year at a time.
  - nextos 11y ago
    I was referring to the Copenhagen area in particular. It's a nice balance between salaries and house prices. Malmö is even better. Since housing is usually taking the majority of your income, this has a huge impact on the quality of life. As a postdoc, you can easily buy a house in Copenhagen. Or you can rent, at it's barely 1/3 of your salary. In Cambridge, an equivalent flat is more like 1/2-3/4 of your salary. Also the rental market in the UK is really wacky with regards to tenant protection.
    - cplanas 11y ago
      I don't think renting is better in CPH than in Stockholm. Right now I'm paying 10.000DKK (1500USD) for a one bedroom apartment, not in the center (NV). It was the only option that didn't involve any shady stuff like no-contract or not being able to register myself in the apartment. Most of my friends live doing one of those, or renting a room for around 5.000DKK (750USD).
      - nextos 11y ago
        That's a lot. I was renting in the northern suburbs (Holte-Virum-Birkerød) and I got very nice 2 beds for 5000-7000 DKK with excellent landlords. UK on the other hand...
        cplanas 11y ago
        Yeah, yeah. London is amazingly expensive. And in CPH buying is "cheap".
      - seivan 11y ago
        Yeah that's the same in Stockholm. Does Denmark have Bostadsrätt (Co-op) that have requirements on renting it out? E.g max a year, and etc?
    - seivan 11y ago
      Malmö is cheaper because you get to "live" in Malmö, which I could never recommend to anyone, especially jewish or gay. Yeah but at least the UK got a rental market, think about it. Stockholms market is scattered and hard to come by without connections or help. But not only that, most people who rent out their apartments in Sweden will either go through the Co-op board and only get a year, or do it under the table, both situations adds a lot of insecurity to the tenant. In Singapore, there is a broad market from super cheap and shitty, to super expensive and amazing. Having a broad, free market helps consumers a lot more than having it closed down for a queue-system. Sure, I can get a closet space with no air condition and no kitchen for a 1/5, or I can pay 3/5 and get a condo, at least there is a choice. I can't speak for rest of Scandinavia, but I know in Stockholm that choice doesn't exist. You're forced to buy.
- deleted 11y ago
  [deleted]
- Silhouette 11y ago
  Cambridge is an excellent example of what's wrong with the UK housing market at the moment. What we need is a range of homes with enough availability to support a range of buyers. What we're getting is super-expensive flats (often with 7-figure prices or close to them) in the city centre aimed squarely at London commuters, combined with new estates built around the edge of the city. New estates typically have conditions attached to their planning consent about providing a certain amount of so-called affordable housing. In reality the developers seem to be able to build the high-end and most profitable houses first, drip-feed them into the market to maintain high prices, and somehow never quite get around to building and selling all the mid- to low-end property that was supposed to be part of the deal. Until the government changes planning policy to be realistic, such that it's economically attractive for the big homebuilders to build at about twice the rate they are doing at the moment, or it's economically viable for individuals to buy a plot of land and get their own house built as more commonly happens in continental Europe, or both, no amount of tinkering around the edges is going to do anything particularly useful. Schemes like Help to Buy just pump money into the existing system, without actually generating much new housing stock. Token tax rises on second homes bought for letting out won't do anything either, as they'll just get passed on to the tenants through higher rents. And even if they didn't, many UK homes "earn" more than the people living in them, so taking a 3% hit on stamp duty is basically pocket change to professional landlords. The bottom line is that what we need is lots more homes, but since any change in policy that brings that about will hurt the values of existing homes and/or the profits of the big homebuilders, it seems unlikely we'll see any meaningful change in this direction as long as the Tories are in power. That said, for a variety of reasons I wouldn't bet on the Tories still wielding much practical power in government by the end of the current five-year administration, and housing is the kind of issue that could come back to bite them at election time if we do see another 3-4 years of huge price rises between now and then.
  - nextos 11y ago
    Yes, it's a sad situation. In Scandinavia I was always renting houses from people that had moved abroad, or switched countries for a while. Here it's always investors, who are feeding the bubble.
  - 11y ago
- PopsiclePete 11y ago
  If you think £1200 per month is "insane", never, ever come to SF or NYC....
  - aprdm 11y ago
    rent is a much bigger part of salary in UK than it's in US. the salaries, mainly in tech, are pretty bad around here.
    - nextos 11y ago
      I'd say the majority of the people renting in Cambridge are from academia, and they cannot afford decent flats. This is quite absurd, because there's plenty of space. Cambridgshire is all marshland and low-value farmland.
  - DanBC 11y ago
    Average wage for Cambridge is likely to be much much lower than NYC or SF. Compare to London, where the average deposit needed to buy a first home is £91,000 ($130,000) -- 25% of total price.
    - pc86 11y ago
      What's wrong with a 25% down payment? You really shouldn't buy a house with less than 20% down in the US, either. It's just that some banks have looser financing (and higher interest) to allow 15% or 10%, and there are government programs that subsidize first-time home purchases to allow a 3.5% down payment.
      - DanBC 11y ago
        Nothing's wrong with a 25% deposit. But the size of that deposit - $130,000 - is pretty high for most people buying their first home. They need to save that money while also paying rent and paying off student debt.
      - douche 11y ago
        FHA 3.5% for the win. I went from paying $1300 in rent for one unit in a duplex to paying $1800 in mortgage/insurance/taxes for the entire duplex, and I get to charge the $1300 for the other unit. It's a no-brainer.
- aninhumer 11y ago
  Huh? I'm currently renting in a 1 bed 50sqm flat in Cambridge for £750/mo (up £25 over the past year). The only thing I can think is that you're only talking about really central properties? But Cambridge isn't that big, it only takes me 15mins to cycle to the centre.
- ziszis 11y ago
  Not sure Scandinavia is a good example of effective housing policy. Sweden and Stockholm in particular has one of the most severe current housing bubbles in the world. Housing prices have far outpaced GDP growth for several years. http://www.businessinsider.com/hsbc-sweden-housing-bubble-not-sustainable-2016-1?r=UK&IR=T http://www.businessinsider.com/hsbc-sweden-housing-bubble-no...
gaius 11y ago
We could solve a lot of the UK's problems by taxing the crap out of any property whose beneficial owner isn't a UK citizen.
- steaminghacker 11y ago
  hear hear. the UK is one of the few places in the world that a non-tax resident can buy land freehold. That means the owner pays no tax on gains and no tax on rental income (There's been talk of taxing them but how exactly?). Here in London, all these new shiny builds with glass and metal balconies are selling (ok about 60%) to rich people overseas who are not UK taxpayers. They like new builds because they can buy off plan without ever seeing the actual property.
  - kale 11y ago
    Could you not levy a tax, and if after x number of years of no tax income, have the state repossess? You could have the tax information as a required document for purchasing land.
  - zepto 11y ago
    This is false. Rents have always been taxable in the UK, just like any other business income generated in the UK, whether or not owned by a non-resident. Capital gains on property for non-residents were indeed not taxed until 2014, but that loophole is now closed.
    - steaminghacker 11y ago
      Let's say I'm Chinese and do not set foot in the UK and you are my tenant. You pay money into my bank account. I do not file a UK tax return. how exactly am i taxed on this rent. Capital gains do not apply to companies. I own the property through a company, whence no tax.
      - zepto 11y ago
        Your first example has nothing to do with UK law. It is illegal tax evasion that is possible in any country.
maxerickson 11y ago
Probably only once the property starts voting. As it stands, residents can do lots of things to make outside ownership unpleasant, at least, once/if they decide that is the best course of action. (I recall someone mentioning that property owners are the voters somewhere in or around London, but there were close to 0 residents there)
- jgroszko 11y ago
  You're probably thinking of the City of London, which is an area inside London that has it's own government and special privileges apart from the rest of what we think of as London. https://www.youtube.com/watch?v=z1ROpIKZe-c https://www.youtube.com/watch?v=z1ROpIKZe-c
  - maxerickson 11y ago
    Thanks. So there are 7,000 residents. Oops, that's not zero. The majority of votes do go to businesses though, and it is an artifact of its long existence, not a new thing. https://en.wikipedia.org/wiki/City_of_London#Elections https://en.wikipedia.org/wiki/City_of_London#Elections
    - twic 11y ago
      The votes go to employees of businesses, rather than to businesses. I had one for a while. Left that job and moved across the border into Shoreditch before i could use it, though.
maxxxxx 11y ago
It's not inevitable but it would require some major changes in policy. Not sure if it's planned that way but concentrating property is one way for powerful to keep their power in the future. It's pretty safe to assume that in some decades you can have a robot that will be able to provide with your basic needs for free and live autonomously and not have to buy many things anymore. The way to get around this for the powerful is to own the land and intellectual property so people will have to pay rent (tribute?) forever. This sounds a little extreme but I honestly thinks it's where things are going without major changes.
gozur88 11y ago
It's a housing bubble that's going to end the same way all housing bubbles end. Much of this "wealth" is just paper wealth that's going to disappear over the course of a few months.
- romanovcode 11y ago
  Few months? Housing has been on steady increase for the last 10 years.
  - gozur88 11y ago
    The "wealth" will disappear over a few months. The bubble always pops more quickly than it grows.
kamaal 11y ago
>>The super wealthy buying property from all over the world literally for rent seeking? The super wealthy have been buying investment instruments for time immemorial. >>Is this desirable? Inevitable? The least of evils. Think of yourself as a "temporarily embarrassed millionaire" not as a exploited serf under a feudal, everything will suddenly makes a lot of sense.

Is this the New Feudalism? The super wealthy buying property from all over the world literally for rent seeking? Will the world become a Company Town? Is this desirable? Inevitable?

nextos 11y ago

The situation is completely insane. For example, Cambridge used to be a relatively affordable place. Now, rents for 1 bed 50 m^2 flats are in the range of, at least £1200 per month (climbing at a rate of ~£100 / year). It's sad, because it's a good place to do science in, but everything is really expensive. I come from Scandinavia, and things work much better there and are miles ahead in terms of affordability.

seivan 11y ago
How is Scandinavia better? Queue for years or get scammed on Blocket? I prefer a free market. At least people can rent out in UK and not get in trouble with the Co-op that only allows one year at a time.
- nextos 11y ago
  I was referring to the Copenhagen area in particular. It's a nice balance between salaries and house prices. Malmö is even better. Since housing is usually taking the majority of your income, this has a huge impact on the quality of life. As a postdoc, you can easily buy a house in Copenhagen. Or you can rent, at it's barely 1/3 of your salary. In Cambridge, an equivalent flat is more like 1/2-3/4 of your salary. Also the rental market in the UK is really wacky with regards to tenant protection.
  - cplanas 11y ago
    I don't think renting is better in CPH than in Stockholm. Right now I'm paying 10.000DKK (1500USD) for a one bedroom apartment, not in the center (NV). It was the only option that didn't involve any shady stuff like no-contract or not being able to register myself in the apartment. Most of my friends live doing one of those, or renting a room for around 5.000DKK (750USD).
    - nextos 11y ago
      That's a lot. I was renting in the northern suburbs (Holte-Virum-Birkerød) and I got very nice 2 beds for 5000-7000 DKK with excellent landlords. UK on the other hand...
      - cplanas 11y ago
        Yeah, yeah. London is amazingly expensive. And in CPH buying is "cheap".
    - seivan 11y ago
      Yeah that's the same in Stockholm. Does Denmark have Bostadsrätt (Co-op) that have requirements on renting it out? E.g max a year, and etc?
  - seivan 11y ago
    Malmö is cheaper because you get to "live" in Malmö, which I could never recommend to anyone, especially jewish or gay. Yeah but at least the UK got a rental market, think about it. Stockholms market is scattered and hard to come by without connections or help. But not only that, most people who rent out their apartments in Sweden will either go through the Co-op board and only get a year, or do it under the table, both situations adds a lot of insecurity to the tenant. In Singapore, there is a broad market from super cheap and shitty, to super expensive and amazing. Having a broad, free market helps consumers a lot more than having it closed down for a queue-system. Sure, I can get a closet space with no air condition and no kitchen for a 1/5, or I can pay 3/5 and get a condo, at least there is a choice. I can't speak for rest of Scandinavia, but I know in Stockholm that choice doesn't exist. You're forced to buy.
deleted 11y ago
[deleted]
Silhouette 11y ago
Cambridge is an excellent example of what's wrong with the UK housing market at the moment. What we need is a range of homes with enough availability to support a range of buyers. What we're getting is super-expensive flats (often with 7-figure prices or close to them) in the city centre aimed squarely at London commuters, combined with new estates built around the edge of the city. New estates typically have conditions attached to their planning consent about providing a certain amount of so-called affordable housing. In reality the developers seem to be able to build the high-end and most profitable houses first, drip-feed them into the market to maintain high prices, and somehow never quite get around to building and selling all the mid- to low-end property that was supposed to be part of the deal. Until the government changes planning policy to be realistic, such that it's economically attractive for the big homebuilders to build at about twice the rate they are doing at the moment, or it's economically viable for individuals to buy a plot of land and get their own house built as more commonly happens in continental Europe, or both, no amount of tinkering around the edges is going to do anything particularly useful. Schemes like Help to Buy just pump money into the existing system, without actually generating much new housing stock. Token tax rises on second homes bought for letting out won't do anything either, as they'll just get passed on to the tenants through higher rents. And even if they didn't, many UK homes "earn" more than the people living in them, so taking a 3% hit on stamp duty is basically pocket change to professional landlords. The bottom line is that what we need is lots more homes, but since any change in policy that brings that about will hurt the values of existing homes and/or the profits of the big homebuilders, it seems unlikely we'll see any meaningful change in this direction as long as the Tories are in power. That said, for a variety of reasons I wouldn't bet on the Tories still wielding much practical power in government by the end of the current five-year administration, and housing is the kind of issue that could come back to bite them at election time if we do see another 3-4 years of huge price rises between now and then.
- nextos 11y ago
  Yes, it's a sad situation. In Scandinavia I was always renting houses from people that had moved abroad, or switched countries for a while. Here it's always investors, who are feeding the bubble.
- 11y ago
PopsiclePete 11y ago
If you think £1200 per month is "insane", never, ever come to SF or NYC....
- aprdm 11y ago
  rent is a much bigger part of salary in UK than it's in US. the salaries, mainly in tech, are pretty bad around here.
  - nextos 11y ago
    I'd say the majority of the people renting in Cambridge are from academia, and they cannot afford decent flats. This is quite absurd, because there's plenty of space. Cambridgshire is all marshland and low-value farmland.
- DanBC 11y ago
  Average wage for Cambridge is likely to be much much lower than NYC or SF. Compare to London, where the average deposit needed to buy a first home is £91,000 ($130,000) -- 25% of total price.
  - pc86 11y ago
    What's wrong with a 25% down payment? You really shouldn't buy a house with less than 20% down in the US, either. It's just that some banks have looser financing (and higher interest) to allow 15% or 10%, and there are government programs that subsidize first-time home purchases to allow a 3.5% down payment.
    - DanBC 11y ago
      Nothing's wrong with a 25% deposit. But the size of that deposit - $130,000 - is pretty high for most people buying their first home. They need to save that money while also paying rent and paying off student debt.
    - douche 11y ago
      FHA 3.5% for the win. I went from paying $1300 in rent for one unit in a duplex to paying $1800 in mortgage/insurance/taxes for the entire duplex, and I get to charge the $1300 for the other unit. It's a no-brainer.
aninhumer 11y ago
Huh? I'm currently renting in a 1 bed 50sqm flat in Cambridge for £750/mo (up £25 over the past year). The only thing I can think is that you're only talking about really central properties? But Cambridge isn't that big, it only takes me 15mins to cycle to the centre.
ziszis 11y ago
Not sure Scandinavia is a good example of effective housing policy. Sweden and Stockholm in particular has one of the most severe current housing bubbles in the world. Housing prices have far outpaced GDP growth for several years. http://www.businessinsider.com/hsbc-sweden-housing-bubble-not-sustainable-2016-1?r=UK&IR=T http://www.businessinsider.com/hsbc-sweden-housing-bubble-no...

gaius 11y ago

We could solve a lot of the UK's problems by taxing the crap out of any property whose beneficial owner isn't a UK citizen.

steaminghacker 11y ago
hear hear. the UK is one of the few places in the world that a non-tax resident can buy land freehold. That means the owner pays no tax on gains and no tax on rental income (There's been talk of taxing them but how exactly?). Here in London, all these new shiny builds with glass and metal balconies are selling (ok about 60%) to rich people overseas who are not UK taxpayers. They like new builds because they can buy off plan without ever seeing the actual property.
- kale 11y ago
  Could you not levy a tax, and if after x number of years of no tax income, have the state repossess? You could have the tax information as a required document for purchasing land.
- zepto 11y ago
  This is false. Rents have always been taxable in the UK, just like any other business income generated in the UK, whether or not owned by a non-resident. Capital gains on property for non-residents were indeed not taxed until 2014, but that loophole is now closed.
  - steaminghacker 11y ago
    Let's say I'm Chinese and do not set foot in the UK and you are my tenant. You pay money into my bank account. I do not file a UK tax return. how exactly am i taxed on this rent. Capital gains do not apply to companies. I own the property through a company, whence no tax.
    - zepto 11y ago
      Your first example has nothing to do with UK law. It is illegal tax evasion that is possible in any country.

maxerickson 11y ago

Probably only once the property starts voting. As it stands, residents can do lots of things to make outside ownership unpleasant, at least, once/if they decide that is the best course of action. (I recall someone mentioning that property owners are the voters somewhere in or around London, but there were close to 0 residents there)

jgroszko 11y ago
You're probably thinking of the City of London, which is an area inside London that has it's own government and special privileges apart from the rest of what we think of as London. https://www.youtube.com/watch?v=z1ROpIKZe-c https://www.youtube.com/watch?v=z1ROpIKZe-c
- maxerickson 11y ago
  Thanks. So there are 7,000 residents. Oops, that's not zero. The majority of votes do go to businesses though, and it is an artifact of its long existence, not a new thing. https://en.wikipedia.org/wiki/City_of_London#Elections https://en.wikipedia.org/wiki/City_of_London#Elections
  - twic 11y ago
    The votes go to employees of businesses, rather than to businesses. I had one for a while. Left that job and moved across the border into Shoreditch before i could use it, though.

maxxxxx 11y ago

It's not inevitable but it would require some major changes in policy. Not sure if it's planned that way but concentrating property is one way for powerful to keep their power in the future. It's pretty safe to assume that in some decades you can have a robot that will be able to provide with your basic needs for free and live autonomously and not have to buy many things anymore. The way to get around this for the powerful is to own the land and intellectual property so people will have to pay rent (tribute?) forever. This sounds a little extreme but I honestly thinks it's where things are going without major changes.

gozur88 11y ago

It's a housing bubble that's going to end the same way all housing bubbles end. Much of this "wealth" is just paper wealth that's going to disappear over the course of a few months.

romanovcode 11y ago
Few months? Housing has been on steady increase for the last 10 years.
- gozur88 11y ago
  The "wealth" will disappear over a few months. The bubble always pops more quickly than it grows.

kamaal 11y ago

>>The super wealthy buying property from all over the world literally for rent seeking? The super wealthy have been buying investment instruments for time immemorial. >>Is this desirable? Inevitable? The least of evils. Think of yourself as a "temporarily embarrassed millionaire" not as a exploited serf under a feudal, everything will suddenly makes a lot of sense.