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Epiphany - Why London Bubble Mk2 Took Off And Regions Didn't


Si1

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HOLA441

Post 2010 there's been a sharp shift away from Blair and Brown's subsidies of the regions (public sector employment and contracts, benefits). So the balance of jobs availability has shifted to the private sector and London.

In the regions there has been a relative decline in ambitious jobs worth bothering over, and a net migration to London. This has been sharp, over only 5 years.

Therefore London has seen increased population pressure and the regions decreased pressure.

London IS a bubble, but it had a trigger for its creation from 2010 onwards.

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HOLA442

But London has experienced net migration to the rest of the country in total and in all age groups except the 20-30 age group. This is true for the last 25 years and remains so.

See ONS.

How about the last 5 years?

A bubble needs a transient to trigger it, as well as availability of debt.

The longer term trend doesn't interest me. Has there been a transient intake of population into London as a temporary or sudden change in the last 5 years?

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HOLA443

Same for Cambridge.

http://www.cambridge-news.co.uk/Net-migration-Cambridge-rest-UK-8211-fuelling/story-26824882-detail/story.html

This fuels suggestions that Cambridge's rampant population boom is coming from overseas, with property specialists Savills recently revealing 45 per cent of new renters in the city came from abroad.

The new national statistics also show a far greater flood of people out to rather than in from the surrounding districts – as well as a steady flow of movement between Oxford and London

Cant disagree with that. Cambridge is an even more alien place than it was during the labour years.

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HOLA444

Same for Cambridge.

http://www.cambridge-news.co.uk/Net-migration-Cambridge-rest-UK-8211-fuelling/story-26824882-detail/story.html

This fuels suggestions that Cambridge's rampant population boom is coming from overseas, with property specialists Savills recently revealing 45 per cent of new renters in the city came from abroad.

The new national statistics also show a far greater flood of people out to rather than in from the surrounding districts as well as a steady flow of movement between Oxford and London

Cant disagree with that. Cambridge is an even more alien place than it was during the labour years.

The key thing being that it's happened faster than the infrastructure can keep up. And there been a ready availability of cheap credit at the same time.

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HOLA445
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HOLA446

Sorry, I added more to my post.

We mustn't also forget the effect of QE and the bailout of the finance sector and the massive rise in all assets as interest rates were slashed to near 0%. The affected the finance sector and their bonuses almost immediately.

You may call it 'private sector' but the state's decisions affected them beneficially compared to other sectors of the population.

Agreed

But I'm focusing on the sharp differential in behaviour between London/SE and the rest

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HOLA447
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HOLA448

I didn't mean to offend. I live in Leeds so it wasn't meant as a barb!

Comment made not specific to you. It now appears to be commonly used and makes it sound like the rest of us are subservient to the mother ship.

The while country is made up of regions including London and should all be equal. We are not all less equal parts of London. Iuswim

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HOLA449
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HOLA4410

Post 2010 there's been a sharp shift away from Blair and Brown's subsidies of the regions (public sector employment and contracts, benefits). So the balance of jobs availability has shifted to the private sector and London.

In the regions there has been a relative decline in ambitious jobs worth bothering over, and a net migration to London. This has been sharp, over only 5 years.

Therefore London has seen increased population pressure and the regions decreased pressure.

London IS a bubble, but it had a trigger for its creation from 2010 onwards.

Maybe should look at where these extra people are comming from that have been moving into London.....and the places the people that onced lived in London are moving to...home and away....I agree there are lots of extra pressures for many more people today than has been for very many years, more pressure for those who choose to make their home living in London.

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HOLA4411

But London has experienced net migration to the rest of the country in total and in all age groups except the 20-30 age group. This is true for the last 25 years and remains so.

See ONS.

As for definitions of state spending....about 1 in 4 properties in London are now in receipt of HB in work or no. They have introduced sharply higher wages and help with homes for London workers in the state sector...

Hence why buy-to-let appears to be a significantly bigger factor in London:

1ovrl0.jpg

Source

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HOLA4412
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HOLA4413

Read again. FINANCE SECTOR.

Don't forget also that when they thought this was on the ropes, they also introduced loads of funding to silicon roundabout to attract international behemoths to centre their technology in London. This should have gone to Sheffield, Leeds, Manchester, Bristol, Glasgow etc.

Agreed. That's consistent with the thrust of my thesis.

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HOLA4414

It doesn't have to be actual physical migration in does it?

It could be, in part at least, driven by this overseas investment about which we have read so much - all these properties owned that remain dark at night

Yes, and all those empty office blocks highly illuminated at night....what a waste.....must have money/energy to throw away.

Edited by winkie
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HOLA4415

Same for Cambridge.

http://www.cambridge-news.co.uk/Net-migration-Cambridge-rest-UK-8211-fuelling/story-26824882-detail/story.html

This fuels suggestions that Cambridge's rampant population boom is coming from overseas, with property specialists Savills recently revealing 45 per cent of new renters in the city came from abroad.

The new national statistics also show a far greater flood of people out to rather than in from the surrounding districts – as well as a steady flow of movement between Oxford and London

Cant disagree with that. Cambridge is an even more alien place than it was during the labour years.

I live in Cambridge and I'd say at least 80% of my child's reception class has 1 parent (or both) from overseas.

I can't see how anyone can afford to buy/rent on a normal salary. I live on an ex-council estate in one of the cheaper suburbs and a 3 bed terrace now rents for £1200-£1350 a month and sells for £300k-£335k based on recent sales. There is next to no chance of a young locally born couple being able to afford a house in the area they grew up so they will move out to Newmarket/StIves/Huntingdon/Ely.

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HOLA4416

Did somebody mention New Labour subsidies for the regions? :rolleyes:

Spend, spend, spend.

http://www.telegraph.co.uk/news/politics/georgeosborne/11911150/George-Osborne-poaches-former-Blair-ally-Lord-Adonis-to-head-infrastructure-commission.html

George Osborne will pledge to “shake Britain out of its inertia” by handing decisions on building billions of pounds worth of new airports, roads, homes and power stations to an independent commission chaired by a former Labour cabinet minister.

In a significant blow for Jeremy Corbyn, the Chancellor will announce that Lord Adonis, the former Transport Secretary, is quitting his party to chair a new National Infrastructure Commission.

The new body is an attempt to “depoliticise” infrastructure projects and will herald a wave of building across the countryside.

The move is likely to be unpopular with traditional Conservative voters, and sources close to the Chancellor said the initiative shows “a willingness to confront the Tory shires” after years of opposition to building projects.

Edited by zugzwang
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HOLA4417

It doesn't have to be actual physical migration in does it?

It could be, in part at least, driven by this overseas investment about which we have read so much - all these properties owned that remain dark at night

No that's a different part of the bubble mechanism. That's the credit driven speculation responding to the initial trigger IMHO.

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HOLA4418

Comment made not specific to you. It now appears to be commonly used and makes it sound like the rest of us are subservient to the mother ship.

The while country is made up of regions including London and should all be equal. We are not all less equal parts of London. Iuswim

I was annoyed to hear Cambridge referred to as "greater London" the other day.

We are 60 miles away, have 1000+ years of history as a major city and an 800 year old world famous university yet someone on the TV news was attributing the success of the local economy on easy access to London!

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HOLA4419

I was annoyed to hear Cambridge referred to as "greater London" the other day.

We are 60 miles away, have 1000+ years of history as a major city and an 800 year old world famous university yet someone on the TV news was attributing the success of the local economy on easy access to London!

By the same token people say Leeds is part of greater Manchester, a similar distance away. You're right in the case of Cambridge IMHO

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HOLA4420

Big urban centres are just more bubble-prone. It was the same with Tokyo vs. the rest of Japan, Dublin vs. the rest of Ireland etc etc etc. I don't think that there is anything specific about London. Most of the things discussed on this thread fall into the category of ex-post justification. They might be true, but without a counterfactual, there is no way of knowing.

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HOLA4421

Big urban centres are just more bubble-prone. It was the same with Tokyo vs. the rest of Japan, Dublin vs. the rest of Ireland etc etc etc. I don't think that there is anything specific about London. Most of the things discussed on this thread fall into the category of ex-post justification. They might be true, but without a counterfactual, there is no way of knowing.

Fair enough. I'm just trying to clarify what the trigger for this boom was, given that there could have been many potential triggers especially given a capital city.

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HOLA4422

But London has experienced net migration to the rest of the country in total and in all age groups except the 20-30 age group. This is true for the last 25 years and remains so.

See ONS.

As for definitions of state spending....about 1 in 4 properties in London are now in receipt of HB in work or no. They have introduced sharply higher wages and help with homes for London workers in the state sector.

Finally, because of the way the Whitehall based civil service and politicians allocate capex on transport (a flawed 'business case' prioritisation process) London has been in receipt I think of about 90% of all capex. The only other way you get transport improvement is if your region qualifies for EU regional assistance like Cornwall or North East. If you are in the middle like Leeds and most of the rest of the country, you have to wait until you crumble and hope you're poor enough to qualify for EU funds.

As a Londoner I would like to say feel free to cut HB which is being paid to London.

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HOLA4423

However Cambridge is, financially speaking, in the same city as London. Real people cant afford housing and perhaps never will and the incumbents are mighty smug about it which I found out after a visit to an old friend who moved up there before prices jumped over the moon. The casual talk amongst the owning class residents is the same as London, house prices, house prices and house prices and smug comments like I don't care if my house is now worth 600k, its just my house and I live in it (implying 'stiff sh*T' if you cant afford it, I can because I'm clever) in fact I would rate Cambridge house owners as being genetically identical to London house owners.

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HOLA4424

We're subsidising the regions ? You are having a laugh. All the focus on the London region is way the biggest 'subsidy' of the lot.

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HOLA4425

Prices set at the margin and all the bail out/QE fed banker bonuses etc needing some place to go and mainly in London/bankerland where they mostly live. Latterly a few rich overseas people jumping on the band wagon along with possible hedge fund investment.

Plus a government wanting to buy votes and a lot of London and the South East used to be on average mainly Conservative or at least was years back - although in London the house price policy seems to be rebounding on the Conservatives now.

Edited by billybong
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