Jump to content
House Price Crash Forum
The Masked Tulip

Interesting Anecdotal About Jobs In London

Recommended Posts

I was just speaking with someone who was telling me that his recruitment firm is increasingly finding it difficult to find people to work in London.

Basically, the cost of renting in London is putting many people off taking London jobs with people actually opting to leave London rather than stay. He cited me examples of rents going up monthly - even said that some people had been getting their rents put up weekly by landlords looking to cash in on the Olympics.

He said that firms, buoyed by high unemployment, had cut salaries to the bone thinking that they can get away with paying much less. But increasingly salaries are not covering the cost of living in London or commuting to London.

So he said something has to give - i.e. companies needing to pay much higher salaries to get people. He said that was generally not happening yet - said the penny is only beginning to drop with companies as they lose people - but reckoned it will be only a matter of time.

I found this quite interesting. Looks like the Olympics are going to make London uneconomical from a jobs point of view. On the other hand, if firms do start raising wages to hold on to people then that is bound to have a trickle down wage inflation affect across the country.

One last thing, he had been personally looking to buy a place in Stratford to rent out but had concluded that the yield claimed by developers was not attainable re the price. Seriously wondered what would happen to all the rentals in East London after the Olympics was over.

Edited by The Masked Tulip

Share this post


Link to post
Share on other sites

I was just speaking with someone who was telling me that his recruitment firm is increasingly finding it difficult to find people to work in London.

Basically, the cost of renting in London is putting many people with people actually opting to leave London rather than stay. He cited me examples of rents going up monthly - even said that some people had been getting their rents put up weekly by landlords looking to cash in on the Olympics.

He said that firms, buoyed by high unemployment, had cut salaries to the bone thinking that they can get away with paying much less. But increasingly salaries are covering the cost of living in London or commuting to London.

So he said something has to give - i.e. companies needing to pay much higher salaries to get people. He said that was generally not happening yet - said the penny is only beginning to drop with companies as they lose people - but reckoned it will be only a matter of time.

I found this quite interesting. Looks like the Olympics are going to make London uneconomical from a jobs point of view. On the other hand, if firms do start raising wages to hold on to people then that is bound to have a trickle down wage inflation affect across the country.

One last thing, he had been personally looking to buy a place in Stratford to rent out but had concluded that the yield claimed by developers was not attainable re the price. Seriously wondered what would happen to all the rentals in East London after the Olympics was over.

Interesting point about the Olympics. I wonder how much of the recent London price rally has been down to the 2012 effect. Could be interesting next July / August in London at least...

Share this post


Link to post
Share on other sites

Interesting point about the Olympics. I wonder how much of the recent London price rally has been down to the 2012 effect. Could be interesting next July / August in London at least...

Probably next to nothing in reality but it's something useful for commentators to grab as an explanation when there's no logical reason for the rises.

Share this post


Link to post
Share on other sites

Raised this on another thread, but no idea why rents are going up.

Can't see the olympics making much more than a small dent to rents and house prices and that's much more down to the improved infrastructure and clean up of the areas.

Who are these people that will be paying so much rent for 2 weeks in a year's time that's it's worth kicking out tenants now?

Share this post


Link to post
Share on other sites

I used to rent a room in a HMO in St Albans until 12 months ago. The LL had about 14 HMO's and each time a tenant gave notice, he would advertise the room at a higher price every time.

He said he just tries his luck, and people don't question the VFM and just accept it

Mad

Share this post


Link to post
Share on other sites

On the other hand, if firms do start raising wages to hold on to people then that is bound to have a trickle down wage inflation affect across the country.

What also happens often is that when one sector of the economy begins to hurt all other sectors too much then lobbying starts to reign in the problem sector.

Share this post


Link to post
Share on other sites

Interesting point about the Olympics. I wonder how much of the recent London price rally has been down to the 2012 effect. Could be interesting next July / August in London at least...

reminds me of the Liverpool European city of culture thing

boosted and then dropped house prices etc

Share this post


Link to post
Share on other sites

reminds me of the Liverpool European city of culture thing

boosted and then dropped house prices etc

Interesting.

I wonder if we'll see a post olympic slump next year?

Share this post


Link to post
Share on other sites

Can't see the olympics making much more than a small dent to rents and house prices and that's much more down to the improved infrastructure and clean up of the areas.

Indeed. Relative to the size of the city and regional economy the 2012 Olympics in London will be similar in scale to what the 2002 Commonwealth Games were to Manchester. The Manchester games did not have any noticeable effect on local or regional house prices -- in the years before and after 2002 they continued to rise at a similar rate as those in Leeds on the other side of the Pennines....

'Trend in Average Prices in MANCHESTER -- All Properties':

http://www.proviser.com/regional/towns/manchester/property_prices/price_trend/

'Trend in Average Prices in LEEDS -- All Properties':

http://www.proviser.com/regional/towns/leeds/property_prices/price_trend/

Share this post


Link to post
Share on other sites

Very worrying news, those crazy bleeders best stay out of my town. I'd be happy for them to visit as tourists and spend their money here, but I wouldn't want them settling long term and paying over the odds for things en mass and upping my cost of living.

Share this post


Link to post
Share on other sites

Stratford is a $hit hole in the $hittiest part of London....

It might have some shiny new stadia and athletes villages but around this time next year it will all be over. That will start the slide back to where it's rental market belongs!! Come Xmas 2012 it will be back where it belongs

What goes up will come down what goes round comes round.... With any luck some of these profiteering landlords will load themselves up with rakes of debt in the good times in the sure knowledge property values only ever go up.. Lets see lots of them wiped out!!

Share this post


Link to post
Share on other sites

I was just speaking with someone who was telling me that his recruitment firm is increasingly finding it difficult to find people to work in London.

Basically, the cost of renting in London is putting many people off taking London jobs with people actually opting to leave London rather than stay. He cited me examples of rents going up monthly - even said that some people had been getting their rents put up weekly by landlords looking to cash in on the Olympics.

This does not sound right. The only way landlords would have any sort of pricing power would be if people could afford the rents. That in turn is entirely inconsistent with rising unemployment, rising inflation, stagnant wages, and especially with lots of people deciding to move to some cheaper city. I have never heard of weekly rent increases, and it clearly is not something that affects a non-trivial number of people. Just try watching the rents rising weekly on rightmove ....

Share this post


Link to post
Share on other sites

Wot, no more poles willing to live 10 to a room?

Might the riots have something to do with it too?

Cant see american style white flight, but London isnt on my list of places to visit after last weeks feral behaviour...

Share this post


Link to post
Share on other sites

Wot, no more poles willing to live 10 to a room?

Might the riots have something to do with it too?

Cant see american style white flight, but London isnt on my list of places to visit after last weeks feral behaviour...

A Polish friend of mine wanted to visit before he moves further North to take a new job up in Scotland.

We will not be visiting now. (I'm quite glad, because I didn't really wan't to visit in the first place)

Share this post


Link to post
Share on other sites

Raised this on another thread, but no idea why rents are going up.

Are they though? There's no-one whose job it is to talk down the rental market in the press after all. A bit of unscientific research I just did would seem to refute the claim that rapidly rising rents are a feature across the whole of the market. Whilst in the middle of moving countries back in 2005, I rented a 1 bed flat in this place:

http://en.wikipedia.org/wiki/Bow_Quarter

It's a nice enough gated development in Bow (which is a crap hole of course) but is very convenient for the City and not trader territory so affordable. I (well, my employer in fact) paid 1000 pcm rent. A quick Rightmove search now shows the going rate for a more or less identical apartment to be around 1200 pcm. I make that an annual rate rise of 3%, and that's for somewhere close enough to the Olympics to be suffering from the alleged boost that's bringing.

Share this post


Link to post
Share on other sites

Raised this on another thread, but no idea why rents are going up.

My hunch, based upon what I see anecdotally in London... Almost everyone who owns is looking to down-size and/or exit any moderately nice area. The prices touted by estate agents as purchase prices are around three to three and a half times where I see fair value - but the rental prices are only about 50-75% above the odds.

Faced with this kind of disparity, it encourages gambling for the single big pay-off over the steady income stream (while the owner frets that they'll miss the sale they'd really like.) I'm in a conversion - 4 separate flats in what used to be a very big semi. One flat is actively for sale; another is empty being "renovated" (presumably with a view to selling) and the other is empty - the owner, as far as I can tell, is abroad somewhere... I'm renting mine... and I'm paying a little over the odds as I negotiated in an extreme hurry.

If London residences are worth the figures touted by estate agents, then it makes no sense to rent them out... the only game in town is to sell them owner-occupied... and that effort is undermined if it's occupied by someone paying what, by comparison with the purchase price, is a peppercorn rent. In the medium term, rents will definitely fall, IMHO, but in the short term... the allure of making a single one-off killer profit by selling puts owners off flooding the rental market.

Share this post


Link to post
Share on other sites

My hunch, based upon what I see anecdotally in London... Almost everyone who owns is looking to down-size and/or exit any moderately nice area. The prices touted by estate agents as purchase prices are around three to three and a half times where I see fair value - but the rental prices are only about 50-75% above the odds.

Faced with this kind of disparity, it encourages gambling for the single big pay-off over the steady income stream (while the owner frets that they'll miss the sale they'd really like.) I'm in a conversion - 4 separate flats in what used to be a very big semi. One flat is actively for sale; another is empty being "renovated" (presumably with a view to selling) and the other is empty - the owner, as far as I can tell, is abroad somewhere... I'm renting mine... and I'm paying a little over the odds as I negotiated in an extreme hurry.

If London residences are worth the figures touted by estate agents, then it makes no sense to rent them out... the only game in town is to sell them owner-occupied... and that effort is undermined if it's occupied by someone paying what, by comparison with the purchase price, is a peppercorn rent. In the medium term, rents will definitely fall, IMHO, but in the short term... the allure of making a single one-off killer profit by selling puts owners off flooding the rental market.

Very interesting analysis.

Share this post


Link to post
Share on other sites

I think the only competition you would get for rented, is housing benefit types, who could outbid you. Even that might get knocked on the head next year. A lot will depend on how London continues to suck in immigrants and illegals. If the temporary workers start to go home it could get interesting, and it could happen as the Olympic site nears completion (not withstanding the need, to take on temp staff during the actual games).

There was piece on BBC Look North about how the Leeds skyline was now completely devoid of tall construction cranes, with the usual cries of more state support for construction. I've not seen the London skyline for a while, apart from The Shard which approaches topping out, but at one time you couldn't look in any direction in London, without seeing a crane. Be interesting to see how that looks now.

Edited by John Steed

Share this post


Link to post
Share on other sites

I live a commutable distance from London.

Contract came up in my area of expertise the other day - usual pay is £250-500 a day for short term work.

This was paying £180 a day for central London.

Travel would cost me £25 a day for train + £5 a day for bus so £150 left before tax+NI

I'm not commuting for that type of money.

Share this post


Link to post
Share on other sites

Interesting point about the Olympics. I wonder how much of the recent London price rally has been down to the 2012 effect. Could be interesting next July / August in London at least...

..shouldn't measure it to the Olympics ...should be to the month after.... :rolleyes:

Share this post


Link to post
Share on other sites

4g broadband is capable of 1gb a second static and 100mb mobile

Why will people need to work in London? It will mean lots of people can just work anywhere.

It's being trialled in the UK later this year.

Careful, that's called outsourcing.

I live a commutable distance from London.

Contract came up in my area of expertise the other day - usual pay is £250-500 a day for short term work.

This was paying £180 a day for central London.

Travel would cost me £25 a day for train + £5 a day for bus so £150 left before tax+NI. I'm not commuting for that type of money.

But someone will. Someone from Bulgaria will, it will be a Kings ransom for him. He will have think he's hit the Mother Lode. So he shacks up with ten mates who do the same thing. You can't stop them, they are in the EU and they are comming here.

Job Agencies know this and I wouldn't be surprised if the rates they get from companies are near as damnit the same and the agencies are just pocketing the difference.

Anybody disagree with this or think MT's version is more closer to the truth? I would like to know.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 343 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.