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High House Prices Damage Businesses And The Economy

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Apologies if already posted.

High house prices damage businesses and the economy

(...)

Unaffordable housing in areas such as London, Cambridge and Bristol can put a brake on economic growth.

(...)

Longer term, as the Barker Review of Housing Supply in 2004 made clear, tackling the shortage of housing can prevent instability in the wider economy because of the impact a place to live has on businesses, labour markets and individuals. An insufficient supply of housing can restrict labour market mobility, raise business costs and exacerbate inequality – constraining economic growth.

The specific ways in which housing impacts on the economic performance of a city depends on the individual city context. In strong city economies, such as in London, Cambridge and Bristol, factors affecting economic growth, including skills levels, innovation and business startups already tend to be stronger.

In these economies, housing shortages and high house prices can put a brake on economic growth, placing increasing pressure on existing infrastructure, raising business costs, exacerbating skill shortages, and preventing people from moving to a successful city.

This is bad for the individual, bad for businesses and, as a result, bad for the local and national economy.

(...)

By Andrew Carter "an economist and deputy chief executive at Centre for Cities"

Full article: http://www.guardian.co.uk/housing-network/2013/jun/20/high-house-prices-damage-businesses-economy

See my forum signature, below...

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Î had a phone call last week asking me if I'd be interested in a position at McLaren cars, the chap seemed a little put out when I told him the pay wasn't enough to afford property in the Woking area.

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Î had a phone call last week asking me if I'd be interested in a position at McLaren cars, the chap seemed a little put out when I told him the pay wasn't enough to afford property in the Woking area.

Exactly.

Thanks.

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Î had a phone call last week asking me if I'd be interested in a position at McLaren cars, the chap seemed a little put out when I told him the pay wasn't enough to afford property in the Woking area.

Im sure many of these companies would prefer to relocate to India or China before even thinking of moving up North.

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My landlord was in touch over the weekend saying they would like to raise the rent 6%. I find it impossible to relate the anger I felt at this suggestion which they put to me as they arrived back from Mauritius after spending the last few months there relaxing. To be fair the rent for the house is a bit below "market" asking prices in what might be termed a "sought after" area by a tosser but its just where I need to be right now. I have a pretty good job which is bloody hard work. I am so incensed by these unproductive landlord layabouts that think I'm just here to keep them in a manner to which they've become accustomed. I am seriously, seriously tempted to chuck in my job tomorrow and tell the LL to go swivel. In so doing I will have to cut back but I will also be depriving the exchequer of 40k a year on income tax alone. Having a job and paying tax for me right now is like making my executioners axe!

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Î had a phone call last week asking me if I'd be interested in a position at McLaren cars, the chap seemed a little put out when I told him the pay wasn't enough to afford property in the Woking area.

The cost of rent/mortgages in London and the South East is becoming a problem for businesses and costly (see Tired of Waitings Sig). I work for one of the big oil companies and in order to get skilled Engineers, Geoligists and technical staff they either pay their rent or give them huge allowances for relocation costs. Otherwise the answer is "no thanks, the wages v's housing costs don't make it worth my time I'll stay where I am". This in part p*sses me off because for those of classed as not so skilled, you're competing in the rental/buyer market with big company money on top of everything else. I'm in a secure (as it can be) job with a boss that takes me with him around the company, and I've become pretty outspoken now at payrise/bonus time. I told him this year that it wasn't enough so he threw some more money at me. Ok, I'm lucky in that respect, a lot of people aren't getting anything at all, but I can't be the only one demanding more to keep up with housing costs and the outlay to businesses (that can afford it) must be huge.

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Î had a phone call last week asking me if I'd be interested in a position at McLaren cars, the chap seemed a little put out when I told him the pay wasn't enough to afford property in the Woking area.

Natasha of McClaren still seems to have that bungalow on the market, a bit further out in Fetcham. As I remember it she only wanted £470,000 for it when finished on Property Snakes & Ladders a few years ago. http://www.rightmove.co.uk/property-for-sale/property-30305336.html

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My landlord was in touch over the weekend saying they would like to raise the rent 6%. I find it impossible to relate the anger I felt at this suggestion which they put to me as they arrived back from Mauritius after spending the last few months there relaxing. Having a job and paying tax for me right now is like making my executioners axe!

:lol: I've got a good understanding of how you're feeling there. Working hard is getting so many people nowhere against house prices, and it's been that way for so many many years now. With many home-owners and landlords, in nearly all of the "sought after" areas totally insulated and not having felt any real financial pressures at all.

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Apologies if already posted.

See my forum signature, below...

..hah..hah..self centred sickos...."Unaffordable housing in areas such as London, Cambridge and Bristol can put a brake on economic growth."

..what about the rest of the country and areas of beauty and leisure where the second homes syndrome drove prices way beyond local wages....think you need to open up the Guardian to the rest of the country.....lefty pseudo intellectuals can't see the whole picture.... :rolleyes:

Edited by South Lorne

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I got approached by a company internal headhunter this week who wanted to put me up for a job in London. He seemed taken aback when I said that the cost of housing plus taxation levels meant that it was not worth moving to London or the south east of the UK even for a substantial pay rise.

He has now just come back with "how much would make it worthwhile". I really don't think most people understand how %Tages work!

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I got approached by a company internal headhunter this week who wanted to put me up for a job in London. He seemed taken aback when I said that the cost of housing plus taxation levels meant that it was not worth moving to London or the south east of the UK even for a substantial pay rise.

He has now just come back with "how much would make it worthwhile". I really don't think most people understand how %Tages work!

...points to the fact companies should be relocating out of London to provide workers with a quality and affordable life...no excuses in these days of continual advances in communications technology..... :rolleyes:

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I got approached by a company internal headhunter this week who wanted to put me up for a job in London. He seemed taken aback when I said that the cost of housing plus taxation levels meant that it was not worth moving to London or the south east of the UK even for a substantial pay rise.

He has now just come back with "how much would make it worthwhile". I really don't think most people understand how %Tages work!

At least you have an opportunity to give them a figure, might even get them thinking about it. Unless it's such a stupendous amount that the person's head would melt if you told them, or they would consider you crazy.

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At least you have an opportunity to give them a figure, might even get them thinking about it. Unless it's such a stupendous amount that the person's head would melt if you told them, or they would consider you crazy.

I'm going to go back with a comparison to Asia salary/living costs. Might make one person more understand how high house prices are no go for anybody except the landowners.

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I got approached by a company internal headhunter this week who wanted to put me up for a job in London. He seemed taken aback when I said that the cost of housing plus taxation levels meant that it was not worth moving to London or the south east of the UK even for a substantial pay rise.

He has now just come back with "how much would make it worthwhile". I really don't think most people understand how %Tages work!

"I'd need an accommodation allowance to cover the cost of a nice-enough place in London, maybe £5k/month additional. Unfortunately that would come from taxed income, so that would have to imply £12k/month extra on the salary."

.co.uk in a timewarp

[Ring Ring]

“Hello, [me] speaking”

“Hello, this is J. Random Recruiter. Is this a good time?”

“Yeah, fine. What can I do you for?”

“We’ve got a city financial company needs your skills, in particular [foo]“

“Indeed?”

“Would you be available to work in The City”?

“I work for clients around the world. The City is fine. Just so long as they don’t expect my bum physically in their seat on a regular basis. Happy to travel to London occasionally – say, up to once a month.”

“They’ll pay £150K for this. And that’s a permie salary”

“Great. And that’ll be based on working primarily from home?”

“No, clients won’t generally do that. But you don’t have to live in London, you can commute in from the country”.

“It’s a minimum of five hours from here to Paddington, one way. About monthly is OK; anything much more frequent isn’t. That’s why I work from home, for clients around the world”.

“You find clients who are happy with that?”

“Most of my income comes from America, which means it’s losing its value. I’d welcome work coming from London.”

“And you wouldn’t consider moving”?

“Yes, but not to anywhere in SouthEast England.”

“They might be flexible on the pay”.

“The money is fine, thank you. Southeast England isn’t. That’s what I’ve escaped from, and I’m not about to go back”.

“Oh. So you wouldn’t be interested?”

“As I said, I’m happy to go up there from time to time.”

… and it draws to a close. We haven’t even discussed the work itself, beyond the recruiter having taken an interest in my CV. He can use our telecoms infrastructure to do his job (contact prospective recruits) remotely, but won’t countenance the recruits themselves doing likewise.

Not all of them say £150k (the last one I recollect did). But the shape of the conversation is remarkably predictable. I expect hacks prepared to work in central London are in huge demand and commanding correspondingly inflated pay, while those of us who won’t do it will find my tale very familiar.

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...points to the fact companies should be relocating out of London to provide workers with a quality and affordable life...no excuses in these days of continual advances in communications technology..... :rolleyes:

This I agree with.....anyway you can't discriminate between staff members that do the same job, paying one far more money because they can't afford the cost of living in high priced areas.......most employees of a certain age and experience have already paid for their homes in so called 'sort after areas' in full when they were once affordable, quite a few have a string of BTLs on the go or spare surplus property over and above requirements they collect rent on, they would I am sure love wages to increase so they can buy more.

It is not the wages that is the problem it is the high value of land and buildings that attach low or no costs, pushing prices higher so in the end only the few will ever get access to them, not the young and productive our future. ;)

Edited by winkie

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I got approached by a company internal headhunter this week who wanted to put me up for a job in London. He seemed taken aback when I said that the cost of housing plus taxation levels meant that it was not worth moving to London or the south east of the UK even for a substantial pay rise.

He has now just come back with "how much would make it worthwhile". I really don't think most people understand how %Tages work!

As someone who has been out of work investing in myself for about 7 months and just found a new job I have had lots of these calls recently - I said I would need around 65k a year to move to London and 40k to move to Bristol but only 30k to stay in Somerset. When I looked into it I was amazed that businesses still want to stay in London, the place is an over expensive hole.

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We need an LVT to further incentivise a more even spread of economic activity across the UK. The London casino has now laid waste to great UK regional cities.

If companies could lessen their tax bill massively by moving to the regions they might.

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My landlord was in touch over the weekend saying they would like to raise the rent 6%. I find it impossible to relate the anger I felt at this suggestion which they put to me as they arrived back from Mauritius after spending the last few months there relaxing. To be fair the rent for the house is a bit below "market" asking prices in what might be termed a "sought after" area by a tosser but its just where I need to be right now. I have a pretty good job which is bloody hard work. I am so incensed by these unproductive landlord layabouts that think I'm just here to keep them in a manner to which they've become accustomed. I am seriously, seriously tempted to chuck in my job tomorrow and tell the LL to go swivel. In so doing I will have to cut back but I will also be depriving the exchequer of 40k a year on income tax alone. Having a job and paying tax for me right now is like making my executioners axe!

+1

The parasites are killing the hosts.

I've just found an old thread, 3 years old, linking an OECD report that says that high property prices hinder exports ( http://www.housepricecrash.co.uk/forum/index.php?showtopic=144283&st=0 ) it's incredible that the British media/public discussion hasn't learnt that yet.

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The cost of rent/mortgages in London and the South East is becoming a problem for businesses and costly (see Tired of Waitings Sig). I work for one of the big oil companies and in order to get skilled Engineers, Geoligists and technical staff they either pay their rent or give them huge allowances for relocation costs. Otherwise the answer is "no thanks, the wages v's housing costs don't make it worth my time I'll stay where I am". This in part p*sses me off because for those of classed as not so skilled, you're competing in the rental/buyer market with big company money on top of everything else. I'm in a secure (as it can be) job with a boss that takes me with him around the company, and I've become pretty outspoken now at payrise/bonus time. I told him this year that it wasn't enough so he threw some more money at me. Ok, I'm lucky in that respect, a lot of people aren't getting anything at all, but I can't be the only one demanding more to keep up with housing costs and the outlay to businesses (that can afford it) must be huge.

Yep. It's all bonkers. Productive sectors/activities/people are been leeched dry by the rentier classes, specially in London/South/SE.

I've just dug out this oldish chart for another thread, but I think it's relevant here too. The data is a couple of years old, up to 2011 (as they haven't updated the data for 2012), and I think it got even worse since in London:

hptoearningsbyregion.png

I've used data from this source: http://www.communities.gov.uk/housing/housingresearch/housingstatistics/housingstatisticsby/housingmarket/livetables/affordabilitytables/

From the "Table 577: Ratio of median house price to median earnings by district, from 1997, MS Excel, 185 kb"

Edited by Tired of Waiting

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Good on you.

I gave a balanced and fair reply showing the high costs of housing and tax compared to Asia and the US, and showed that I'd need 500kGBP to be able to afford the same standard of living and saving as currently in Asia on a lot less.

He said he's share my views with his colleagues but the role wasn't paying that. Hopefully it mad him think as I wrote it a way so I could be seen as greedy, just concerned for Londoners.....

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..hah..hah..self centred sickos...."Unaffordable housing in areas such as London, Cambridge and Bristol can put a brake on economic growth."

..what about the rest of the country and areas of beauty and leisure where the second homes syndrome drove prices way beyond local wages....think you need to open up the Guardian to the rest of the country.....lefty pseudo intellectuals can't see the whole picture.... :rolleyes:

London is bad but at least there are companies that are doing well enough to flash some extra cash....what about as you say the places of outstanding natural beauty, relaxing tranquil parts of the country offering good schools and a better standard of living that are in high demand, where the young locals are priced out completely due to the transfer of cash from the sale of high London price homes and other related areas........young people in theses areas have less of a hope of securing a job that will pay for any kind of accommodation, then there is the transport problem getting them to that job and home again....the cost of running a car is out of the question when you look at the cost of the annual insurance premiums... ;)

Edited by winkie

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Many of the posts here chime with my own experience.

I saw a job recently which was offering about twice my current salary. I did the numbers and I couldn't make the move back to London work (especially as I spent years trying to escape it). Even at twice my current salary I couldn't rent, never mind buy, anything comparable to what I have here in Wales.

Given how many relatively highly paid people are knowledge workers - it's madness to have them based in London.

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Many of the posts here chime with my own experience.

I saw a job recently which was offering about twice my current salary. I did the numbers and I couldn't make the move back to London work (especially as I spent years trying to escape it). Even at twice my current salary I couldn't rent, never mind buy, anything comparable to what I have here in Wales.

Given how many relatively highly paid people are knowledge workers - it's madness to have them based in London.

....things are changing, knowledge can now be based anywhere.......hands on work that has to stay in situ will be the only reason keeping anyone anywhere soon. ;)

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....things are changing, knowledge can now be based anywhere.......hands on work that has to stay in situ will be the only reason keeping anyone anywhere soon. ;)

if it can be done from wales, it can be done from bangalore... Even the odd commute is comparable ... Peak time travel to london .. 200gbp +

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  • 243 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%



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