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This Street In East London Tells A Story Of The Great British Divide: Those Who Own Property And Those Who Don't

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http://www.theguardian.com/money/2013/oct/27/albion-drive-revisited-property-divide

Six years ago, only a few months before Northern Rock collapsed and the world plunged into a financial storm from which it still has not properly recovered, I met Alex Rossiter, a 29-year-old freelance radio producer, in the basement kitchen of his parents' house in Hackney, east London.

His father, Alan, a community arts worker, told me how he had bought the house for £9,300 in 1977 and that now "it's probably worth £500,000, if you can believe that". Actually, I told him, it's probably more like £800,000. At which point, he nearly fell off his chair.

But then this was May 2007, and I'd spent a fortnight tramping up and down his road, knocking on doors, asking strangers intrusive questions about their personal lives. I was trying to build up a snapshot of how Britain's super-inflated housing market had affected the people in a single, randomly chosen London street.

..

In 2007, it didn't seem possible that prices could keep on rising. And yet, despite the crash, she estimates that prices in the street are 65% higher than they were at the so-called "height" of the boom.

She bought her house for £170,000 in 1986 and in 2007 told me that it was probably worth £1.2m. "Did I say that? Well we're just having some work done on it, and when it's finished I think it'll be worth around £2.4m-£2.5m, so that's actually a 100% rise. But it's a very specific product."

..

Six years ago, I'd found every sort of person and every sort of housing story in Albion Drive. People like George Vassiliou, who bought his council house with Right to Buy a decade earlier for £39,000 and had just sold up for £565,000; first-time buyers like Dan Massie, 25, a town planner who'd managed to buy a one-bed flat for £265,000 with his girlfriend because of "massive help" from their parents; young renters such as Jodie Banaszkiewicz who, with two friends, was paying nearly £1,500 a month to rent an ex-council flat on an estate at the end of the road; and academics like Rosemary Stott, who had seen her house treble in value in a decade. She was a film lecturer who told me she taught a course on film in the hyper-inflationary Weimar Republic "and frankly, this feels quite similar".

Six years on, the winners have just won more; the losers are just ever further away from being able to afford their own homes. Alan Rossiter says "it's absolutely nuts" when I talk to him about the price of his home now, but he doesn't have quite the same sense of shock and awe that he had back then. Even when I point out that a similar-sized home to his recently sold for £1.25m. "I know it's just crazy. But we love living here. It's a house to us. It's our home not an asset."

A nice game of numberwang in this article. Still who needs to earn money when your house can offer these types of returns....

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http://www.theguardian.com/money/2013/oct/27/albion-drive-revisited-property-divide

A nice game of numberwang in this article. Still who needs to earn money when your house can offer these types of returns....

The problem comes when you need money to pay for stuff like food and services. I suppose you could sell your house and be the richest vagrant............. in the world.

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http://www.theguardian.com/money/2013/oct/27/albion-drive-revisited-property-divide

A nice game of numberwang in this article. Still who needs to earn money when your house can offer these types of returns....

It is London, though. London - the place so out of touch with the rest of the country that I wish it just declared its independence from.

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http://www.theguardi...property-divide

A nice game of numberwang in this article. Still who needs to earn money when your house can offer these types of returns....

New entrants can go hang..no wonder Death taxes are such an issue in the news...

I like the bit where a house goes up 1million just by having some work done....it seems the rich dont give a damn for value....or maybe the seller really IS spending a million on the place.

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From article:

She bought her house for £170,000 in 1986

Surely a fortune then?

In 1988, with a 95% mortgage, I scraped together enough to buy a modest bungalow for £26k.

Edited by Bootsox

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From article:

Surely a fortune then?

In 1988, with a 95% mortgage, I scraped together enough to buy a modest bungalow for £26k.

Just goes to show money is no longer of intrinsic value......pushing up prices does not make anyone any richer only most people poorer......having poor people is no good to anyone if they can't pay the manufactured inflated prices asked.....keep chucking high amounts of debt at them to buy only makes it worse over time. ;)

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She bought her house for £170,000 in 1986 and in 2007 told me that it was probably worth £1.2m. "Did I say that? Well we're just having some work done on it, and when it's finished I think it'll be worth around £2.4m-£2.5m, so that's actually a 100% rise. But it's a very specific product."

BS.

I used to live not too far from here, and have some friends nearby (though in a nicer location) with two big houses that they've knocked together and done up as nice as possible. Their place is worth half what she's quoting.

Let me guess, this is her house:

http://www.rightmove.co.uk/property-for-sale/property-19269075.html

For sale for the past 2.5 years.

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From article:

Surely a fortune then?

In 1988, with a 95% mortgage, I scraped together enough to buy a modest bungalow for £26k.

£170,000 (nominal) was probably well over twice the average for London in 1986. So at £1.2m (about 4 times average) it's leaps and bounds above that ratio now?

At £2.4 m (after "some work done") it'll be about 8 times average. Better than working - by a long chalk.

Edited by billybong

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His father, Alan, a community arts worker, told me how he had bought the house for £9,300 in 1977 and that now "it's probably worth £500,000, if you can believe that". Actually, I told him, it's probably more like £800,000. At which point, he nearly fell off his chair.

£9,300 wasn't that expensive (for London ) in 1997. Probably below the average London price.

So at £800,000 Hackney must have gone well up in the world.

Edited by billybong

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http://

moneyweek.com/uk-house-prices-will-plummet-look-at-this-scary-chart-14664/

UK house prices will plummet: look at this scary chart

Who knows but money week's prediction could turn out to be correct after all - especially for dizzy heights London.

Edited by billybong

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How did we get it so wrong? I joined this forum in 2007 after lurking for a few years before that. Apart from the odd troll no-one, and I mean no-one, has predicted anything approaching the reality for London property.

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How did we get it so wrong? I joined this forum in 2007 after lurking for a few years before that. Apart from the odd troll no-one, and I mean no-one, has predicted anything approaching the reality for London property.

Only look in retrospect, i think we never estimated the flood of money from QE looking for a home. (no pun intended)

And also the money from abroad looking for an investment.

In a world of dodgy investments what would you invest in ?

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£9,300 wasn't that expensive (for London ) in 1997. Probably below the average London price.

So at £800,000 Hackney must have gone well up in the world.

Original article says 1977.

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Original article says 1977.

Well spotted - thank you. Typo.

So my earlier post amended is

£9,300 wasn't that expensive (for London ) in 1977. Probably below the average London price.

So at £800,000 Hackney must have gone well up in the world.

Edited by billybong

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