13 ms·

When I look at London, I'm amazed this trend isn't happening faster. London is full of young people who are basically just breaking even, spending 50% or more

• tim333 10y ago
  More regulation doesn't really fix the basic problem of too many people wanting to live there and not enough accommodation. In China/Vietnam they deal with it by just putting up a bunch of 30/40 story apartment blocks which only seem to take about a year to build. I guess the slightly non democratic nature of the place lets them ignore the NIMBYs and just build stuff. Don't know if we could move that way in London - not commie dictatorship but weighing the benefits to those who want homes against the NIMBYs?
  • mac01021 10y ago
    My sister in law in Shanghai lives in such a highrise apartment block (of which there seem to be countless) and still commutes an hour each way to work because nothing closer was affordable. If London ever reaches that kind of housing demand, I suspect NIMBYs will have no say in the matter.
• mpswardle 10y ago
  You're completely right about the economy outside London. I'm from London and love it but i can frankly say the UK's biggest problem is having only one genuinely world-stage level successful city. Look at our productive friends in Germany, they have Berlin, Frankfurt, Munich, Hamburg. It's not surprising rent is so high when all the good jobs are in one place.
  • maze-le 10y ago
    On a smaller scale, you have these problems in germany too. Gentrification has been an (not so small) issue in Berlin since the early 90ies. And no one I know who lives in Berlin (or Hamburg for that matter) is satisfied with their rent-cost to living-quality ratio. A notable counter-example is Leipzig (cheap rent, lots of parks, good quality of living [my opinion]), but things are changing here as well...
    • lagadu 10y ago
      If you think renting in Berlin is expensive, check out Copenhagen. I know a few people living in Berlin, rent is 60-100% more expensive here.
      • ptr 10y ago
        I thought Berlin was known for being very affordable when it comes to housing -- low rents for nice apartments. "Berlin is poor but sexy", which I would think feeds the hipster and start-up cultures.
    • hyperbovine 10y ago
      > Gentrification has been an (not so small) issue in Berlin since the early 90ies. Yeah, I heard Berlin really changed a lot in the 90s...
  • arethuza 10y ago
    Well, as an Edinburgh resident I'm personally mystified as to why anyone would want to live in London! :-) [NB Of course there are perfectly good reasons for wanting to live in London - just never appealed to me!]
    • wrong_variable 10y ago
      As a Londener - London sucks ! Would love to Live in Edinburgh - but the world's laundered money doesn't flow through Edinburgh :(
• cm2187 10y ago
  That's because they share flats until their mid 30s. As for having a family, better be a banker...
  • buro9 10y ago
    Pretty much. My wife and I have chosen not to have children as neither of our careers allow us to afford it and still live in a place where the career could be continued. Academia doesn't pay, and being a developer doesn't pay enough to choose both home + children in London. I'm sure some people will come along and say how they've had children and have a mortgage, etc... but I guess the key difference is that I was homeless, and neither myself or my wife have any family who could support or help at all. We live without a safety net, and there are no luxuries. To continue with the work we both find very satisfying, we must live within commute of our work, in or near London... and there is no reasonably priced housing that allows us to do that whilst also stretching to children, pensions, etc. Hah, pensions. Might go cry already.
    • ljf 10y ago
      It is crazy isn't it, we've just left London, though I still work there (massive commute from Norfolk to London 3 to 4 days a week - staying with friends when I'm there). It's is obscene that 2 bed flats are over half a million in many parts of town. I loved living there but to have a family and fun it was important to get a house we could be happy living in. I'm someone that has "benefitted" from the increasing prices, but at the same time I haven't. While I've made some money on my house what does that mean if all the other houses have also vastly increased in price and if I need a crazy amount to buy a new house with an extra room or two? 20 years ago being able to scrimp and save for a couple of years to be able to afford the next house up was common, but now you are talking 100k minimum in London to add a room, and that doesn't really get you a bigger place or more room to actually live...
    • Chris2048 10y ago
      Can you only continue you career in London?
• mnml_ 10y ago
  Landlords are taxed to death
  • J-dawg 10y ago
    Are you joking? In the UK they can offset rental income against their mortgage payments (EDIT: mortgage interest payments), meaning they only pay income tax on their "profit" while also benefitting from the capital appreciation. (Admittedly this is changing from 2017 [0]) This, coupled with low interest rates means that landlords will take out additional mortgages to buy new properties even if they could afford to pay cash. Landlords have been able to act like mini hedge funds, making huge bets on the housing market using cheap borrowed money. Some will get badly burned when/if interest rates rise and property values fall, but that doesn't look like happening any time soon. [0] http://www.wrigleys.co.uk/news/property/budget-2015---tax-changes-for-private-landlords/ http://www.wrigleys.co.uk/news/property/budget-2015---tax-ch...
    • gaius 10y ago
      Only mortgage interest payments, IIRC.
      • J-dawg 10y ago
        Thanks for the correction. I think the point still stands.
    • the-dude 10y ago
      The mortage payments are a cost for the business, why would they not be deductible? All other costs are, even speeding tickets for example.
  • Unklejoe 10y ago
    Not really (in the USA). You pay income tax on the profit you made, but you can deduct property taxes, mortgage interest, maintenance expenses, and most importantly - you can deduct the entire value of your house (building, not land) over 27.5 years (at least in NJ). The idea behind that is that you will essentially need to rebuild your entire house after 27 years. However, since you can deduct maintenance costs along the way, you really don’t have to rebuild your entire house all at once, so it works out in the landlord’s favor. The only down side to the last part is that if you ever decide to sell the property, you need to pay full income tax on the portion of the value of which you have deducted in previous years. Either way, rental income is taxed fairly with respect to some other forms of business.
• lmm 10y ago
  People are moving into London at a huge rate. That to me suggests that the city is doing something right, and should keep doing what it's doing rather than try to radically shake things up. I don't think rent controls or second home rules can possibly work. That leads to people working jobs that aren't actually economically sustainable - and the benefit often ends up going to the rich (e.g. cleaners living in subsidized housing can be paid lower wages). A land value tax would be a good idea to encourage productive use of land, but the only way to avoid introducing loopholes is to apply it consistently to all land. My view is that agglomeration really is valuable, that the high cost of housing and office space in London reflects their high value. Industries that really benefit from being in London will locate themselves there and be more productive as a result. Industries that don't benefit will move out and make space for those who can make better use of it.
  • moonshinefe 10y ago
    You're totally right, regulation trying to not kick people out of their homes for massive rent hikes and things like that will only _hurt_ them in the end. It's the rich people and the free markets that will ensure they're taken care of, which has been the case for the last few decades. All hail Ayn Rand, and her glorious new regime.
    • lmm 10y ago
      Hah. I'm as tax-and-spend liberal as they come, and explicitly in favour of wealth redistribution. But regulating rents that way creates awful distortions: it means people in their 40s pay less than people in their 20s, it means if person A works where person B lives and vice versa they can't exchange houses without a huge financial penalty.
  • tmptmp 10y ago
    >>People are moving into London at a huge rate. That to me suggests that the city is doing something right, and should keep doing what it's doing rather than try to radically shake things up. It's actually a failure of UK and not necessarily just success of London. Here the failure of UK lies in the fact that it, as a modern society, has failed miserably to create other cities like London even after so many years of existence. The uneven progress of few (or worst, just single) such cities is a very bad sign for the society as a whole. Such nations will be heading for larger societal troubles ahead. Rent controls and limiting house ownership to strictly one house is one step forward. What is even more important is to set up infrastructure facilities in other cities too, so that industries don't find it necessary to flock only to single/few cities while living the rest of the nation poor/wanting.
• irremediable 10y ago
  London is quite crazy. I'm planning to live here for the next few years (working on a PhD), but I have no idea where to go afterwards. I don't think it's sustainable to live here in the long term unless I choose to pursue wealth over everything else -- and I don't think I'll be doing that.
• googletazer 10y ago
  "Right now, millions of people are working hard every day to make a relatively small number of landlords richer and richer. It's unsustainable, and I think some major societal change is coming." Perfectly sustainable, because they're literally serfs (so am I). A new feudal age is approaching.
  • zeroexzeroone 10y ago
    I'm down with being a samurai.
• nugget 10y ago
  > Right now, millions of people are working hard every day to make a relatively small number of landlords richer and richer. It's unsustainable, and I think some major societal change is coming. It may be even worse than this scenario, which sort of assumes no/minimum mortgage debt on the property. Imagine a world where the masses toil simply to meet minimum debt service on price-inflated, highly mortgaged housing. You're treading water just to stay alive.