neon tetra Posted March 4, 2014 Share Posted March 4, 2014 Can't actually believe this... http://www.theguardian.com/business/2014/mar/04/average-small-central-london-flat-36m-2050 'Cause we all know we can extrapolate a trend 36 years into the future... This would be hilarious if it weren't so sad. These people are entrusted with people's hopes, dreams, and hard-earnt. Quote Link to comment Share on other sites More sharing options...
The Knimbies who say No Posted March 4, 2014 Share Posted March 4, 2014 Gotta be near the top now. 9% "firmly sustainable", lolz. Quote Link to comment Share on other sites More sharing options...
enrieb Posted March 4, 2014 Share Posted March 4, 2014 Hugh Best, LCP's investment director, said: "The average price in prime central London is now £1.5m, and has been growing at 9% a year, which we think is firmly sustainable. They have been growing at that level for 40 years and we see no reason for that to change. Mumzy got me a set of crayons and a Hello Kitty Ruler for my birthday, so I just drew a line. I also drew a doggie, but I forgot to put a tail on him" At a 9% growth rate, the average £1.5m flat will fetch £6.3m by 2030 and £36m by 2050. In the shorter term, LCP, which has invested about £600m in London property, reckons speculators will earn even more – about 14% a year – over the next five years. Quote Link to comment Share on other sites More sharing options...
lulu Posted March 4, 2014 Share Posted March 4, 2014 Can't actually believe this... http://www.theguardian.com/business/2014/mar/04/average-small-central-london-flat-36m-2050 'Cause we all know we can extrapolate a trend 36 years into the future... This would be hilarious if it weren't so sad. These people are entrusted with people's hopes, dreams, and hard-earnt. Why not, just let the morons get on with it.... They will either be correct and the price of a loaf of bread be £10,000 (sorry just a quick token estimate of the amount) or they will be totally wrong..... Quote Link to comment Share on other sites More sharing options...
moneyfornothing Posted March 5, 2014 Share Posted March 5, 2014 Why not, just let the morons get on with it.... They will either be correct and the price of a loaf of bread be £10,000 (sorry just a quick token estimate of the amount) or they will be totally wrong..... left to its own devices, the market would remunerate morons appropriately - but its not a market we have anymore thanks to govt interference... Who can blame him for taking a govt backed bet Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted March 5, 2014 Share Posted March 5, 2014 Can't actually believe this... http://www.theguardi...n-flat-36m-2050 'Cause we all know we can extrapolate a trend 36 years into the future... This would be hilarious if it weren't so sad. These people are entrusted with people's hopes, dreams, and hard-earnt. Welcome back to 2007. Brilliant. London collapse imminent. You have been warned. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted March 5, 2014 Share Posted March 5, 2014 You can see why the patented Precision Bloo Loo price and trend calculating devices are selling so well...we also do a digital version payable in Bitcoin. Quote Link to comment Share on other sites More sharing options...
winkie Posted March 5, 2014 Share Posted March 5, 2014 We may all be dead then or under water. Quote Link to comment Share on other sites More sharing options...
winkie Posted March 5, 2014 Share Posted March 5, 2014 We may all be dead then or under water. Quote Link to comment Share on other sites More sharing options...
Giordano Bruno Posted March 5, 2014 Share Posted March 5, 2014 9% rise p.a. is just a bit less than 10.4% which is doubling in price in seven years. We have the Wilson's assurance that prices double every seven years. So who are we to argue with geniuses? Quote Link to comment Share on other sites More sharing options...
fluffy666 Posted March 5, 2014 Share Posted March 5, 2014 Can't actually believe this... http://www.theguardian.com/business/2014/mar/04/average-small-central-london-flat-36m-2050 'Cause we all know we can extrapolate a trend 36 years into the future... This would be hilarious if it weren't so sad. These people are entrusted with people's hopes, dreams, and hard-earnt. Ads in 2050: Small london flat for sale, cost £36 million, or 100 loaves of bread. Bread preferred. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted March 5, 2014 Share Posted March 5, 2014 Er where's my fee for this brilliant insight, I've already worked out a £100k house will be worth £1.38bn in 100 years. Quote Link to comment Share on other sites More sharing options...
iamnumerate Posted March 5, 2014 Share Posted March 5, 2014 Boris Johnson, the mayor of London, said in January it would be "utterly nuts" to deter foreign investment in the housing market. I agree. However buy flats is speculation, building them would be investment there is a big difference. Quote Link to comment Share on other sites More sharing options...
porca misèria Posted March 5, 2014 Share Posted March 5, 2014 It's precisely the logic of HPI. Perhaps more interesting is the calculation I did in 2007 based on the logic of HPI. Take a pensioner with an average house but nothing but the state pension in income. Compare a worker with no assets. How much does the worker have to earn to keep the wealth gap constant at the (2007) value of the house? Assume living costs (all-but-rent) to be the same for both at the value of the pension, and that neither borrows. The answer was, the worker needs to earn a little over £95k headline wage. Cost to employer (including jobs tax) £107k. The breakdown of the £95k has two big components: tax, and an amount of savings to match exactly the pensioner's HPI. Rent is a distant third and all-the-rest fourth. Of course that calculation was inaccurate too: it ignored the pensioner's benefits package, such as bus pass, "fuel allowance", free NHS, etc. Not to mention costs of working, such as going to the sandwich shop for lunch. Of course, in reality the HPI didn't happen, and since 2007 I've closed that wealth gap myself - and on a lower income[1] [1] Part of that time (a little under three years) was on an income in the same ballpark. It helped, and in particular it got me started on avoiding taxes. Quote Link to comment Share on other sites More sharing options...
the flying pig Posted March 5, 2014 Share Posted March 5, 2014 good stuff. helpfully this "small London flat", with a 'value' of £1.5m, is 'worth' pretty much spot on one millionth of the UK's c. £1.5trn p.a. economy. how long before the pwoperdee outstrips the economeh? only a matter of time, surely*? * - strictly speaking, GDP estimates include the 'value' of, amongst many other things, residential newbuild, so mathematically there'd only need to be one average London flat built per year to stop this ever happening, but, still, you get my drift. Quote Link to comment Share on other sites More sharing options...
zugzwang Posted March 5, 2014 Share Posted March 5, 2014 The Crimea crisis would not halt London property's inexorable rise, said Naomi Heaton, LCP's chief executive. "The Russians are only a part of the market and have been dwindling in number over the past few years … we could instead have the Ukrainians coming in with their money. London is the destination for the high net worth community of the world, and we are only just beginning to see the mainland Chinese. The loss of some Russian oligarchs is not a fundamental loss for the market." Would that be the same Ukraine that's having to use emergency loans from the US and EU to stave off imminent bankruptcy? Free the wealth! Quote Link to comment Share on other sites More sharing options...
katchytitle Posted March 5, 2014 Share Posted March 5, 2014 (edited) Can't actually believe this... http://www.theguardian.com/business/2014/mar/04/average-small-central-london-flat-36m-2050 'Cause we all know we can extrapolate a trend 36 years into the future... This would be hilarious if it weren't so sad. These people are entrusted with people's hopes, dreams, and hard-earnt. I remember these stories in 2006. Everyone loves to extrapolate a trend as if it lasts for ever. Since the early 80s we have devalued our currencies, that is the only reason that asset prices and the stock market have zoomed upwards. We are not materially richer; the only thing that makes our lives "better" has been technology which has consistently fallen in price. All consumer staples that have been built for convenience are probably purchased on the back of debt in one way or another. The pyramid system we created is breaking down as population growth didn't keep up so we needed immigration which has lowered services / wages / quality of life for the population but increased asset prices for the wealthy. The government now deems the wealthy to be anyone who earns over 40K - just as an aside - in 1910 the only people who paid income tax were those who earned more than £5m a year the equivalent of £80m/year today. Sure, services have improved and poverty is better than the 1900s but there must be a lot of inefficiencies there to provide the services the population needs. http://katchytitle.blogspot.co.uk/2011/10/future-of-britain-uk-it-looks-bleak.html Edited March 5, 2014 by katchytitle Quote Link to comment Share on other sites More sharing options...
bendy Posted March 5, 2014 Share Posted March 5, 2014 Er where's my fee for this brilliant insight, I've already worked out a £100k house will be worth £1.38bn in 100 years. I see no reason to disagree with such calculus. After all, given the average Land Reg sold price is now IIRC around 160k, that means by 2050 assuming 9% the average gaff will be £3.56m. I’m being generous here on the wage inflation, but I’ll assume average 26k and 2% rise p/a – an average salary of 53k come 2050. A mere 60 year mortgage term, nothing that an intergenerational arrangement with kids you don’t even have yet can’t sort. Of course the 100 year arrangement begs a whole different quandary. Extrapolate to that length of time at 9% and we find the average gaff to be a mere back of the sofa scrummage snip at just over £800m. Meanwhile the same wage rise at 2% gives us a cumulative average of 185k per annum, a mere 4000 odd year mortgage term for those pent-up first time buyers come 2114. So while it may be that come the middle of the century debt ties in the family with those yet even conceived may be commonplace, early at the onset of the next century, if evolution if the theory we go with here, we could find those pent-up savvy investors signing contracts with a whole new species that doesn’t yet exist! Quote Link to comment Share on other sites More sharing options...
Errol Posted March 5, 2014 Share Posted March 5, 2014 By 2050 a loaf of bread will be about £20, a bottle of milk £10 etc etc. Quote Link to comment Share on other sites More sharing options...
lastlaugh Posted March 5, 2014 Share Posted March 5, 2014 I see no reason to disagree with such calculus. After all, given the average Land Reg sold price is now IIRC around 160k, that means by 2050 assuming 9% the average gaff will be £3.56m. I’m being generous here on the wage inflation, but I’ll assume average 26k and 2% rise p/a – an average salary of 53k come 2050. A mere 60 year mortgage term, nothing that an intergenerational arrangement with kids you don’t even have yet can’t sort. Of course the 100 year arrangement begs a whole different quandary. Extrapolate to that length of time at 9% and we find the average gaff to be a mere back of the sofa scrummage snip at just over £800m. Meanwhile the same wage rise at 2% gives us a cumulative average of 185k per annum, a mere 4000 odd year mortgage term for those pent-up first time buyers come 2114. So while it may be that come the middle of the century debt ties in the family with those yet even conceived may be commonplace, early at the onset of the next century, if evolution if the theory we go with here, we could find those pent-up savvy investors signing contracts with a whole new species that doesn’t yet exist! Brilliant! Very funny. Quote Link to comment Share on other sites More sharing options...
winkie Posted March 5, 2014 Share Posted March 5, 2014 http://www.youtube.com/watch?v=j8EFGHhFtEs Quote Link to comment Share on other sites More sharing options...
rh2409 Posted March 5, 2014 Share Posted March 5, 2014 Can't actually believe this... http://www.theguardian.com/business/2014/mar/04/average-small-central-london-flat-36m-2050 'Cause we all know we can extrapolate a trend 36 years into the future... This would be hilarious if it weren't so sad. These people are entrusted with people's hopes, dreams, and hard-earnt. The problem with extrapolating existing trends into the future is that there was this geezer once who was called like Malthus..... People tell me that I am slightly odd... itsarandomworld Quote Link to comment Share on other sites More sharing options...
Venger Posted March 5, 2014 Share Posted March 5, 2014 Small London Flat To Cost £36M By 2050 My imagination has tomandlu still feeling sorry for free-will competitive market buyers when they reach £30M in 2040. And all the other apologists doing the same 'They just wanted a home.' (No matter what the debt and fact they outbid others with credit). And Si1 accusing those who are doing the free-choice buying and paying higher prices as being trolls, unable to accept other market participants make decisions of their own; even bad ones where they have a belief forever in HPI. Just like the types who write and lap up these articles. They exist. Stop polishing their shoes. Life isn't fair. People lose out, and for decade+ it's been those waiting for house prices to correct who are the losers. Quote Link to comment Share on other sites More sharing options...
erat_forte Posted March 5, 2014 Share Posted March 5, 2014 Quote Link to comment Share on other sites More sharing options...
okaycuckoo Posted March 5, 2014 Share Posted March 5, 2014 Spoke yesterday to a guy who took his wife up to London for a night. They stayed with a friend who lives in a grace & favour flat just off Covent Garden. Ex-council property. The friend asked them how much they thought it was valued at. Being rubes, they said £500k? Nuh-uh: £3.1m. The guy said they had a hard time getting to sleep: the bedroom was so narrow they kept elbowing each other. (Fire away with your dreadful puns ) Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.