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Ah-so

The property billboards that reveal the truth about Britain’s luxury housing market

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Excellent article in the Guardian on the insanity of the London's "luxury" apartment development.

https://www.theguardian.com/business/2017/apr/04/the-property-billboards-that-reveal-the-truth-about-britains-luxury-housing-market

We are all now familiar with the stories of apartment blocks being thrown up to sell to middle and far eastern investors and this analysis really digs through the issues.

I think it is important to recognise that these are not properties that were being built to meet residential demand and that foreign investors just happen to be buying them, but rather, these are developments that are taking place purely to meet the demand of foreign money. The end use is neither here nor there - some will stay mothballed as an investment and to hide assets; some may actually get let out. But the root problem is that there is not the demand for this type of housing by Londoners - the demand is something different - a wall of foreign money that is demanding a piece of the London property market and that is what it will get. Development in London has been configured to meet this demand, not the needs of its residents.

A good comparison would be the developments thrown up in regional cities to meet BTL demand pre-crisis. People wanted in, but there just weren't enough of the right type of property, so they got built. Who cared if there was not the demand from people to actually live in them.

Naturally this drives yields to ever lower levels, but who cares about yields these days?

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Surely a good thing?  Foreigners are paying to develop housing in the UK.  They'll keep them empty for a few years (hopefully with enough heating to stop damp).  Keep up the investment for a few years more to get some more housing, and then after the market crashes* in 2022 we can all buy affordable housing?  

[* a market crash in 2022 is not guaranteed.]

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23 minutes ago, dgul said:

Surely a good thing?  Foreigners are paying to develop housing in the UK.  They'll keep them empty for a few years (hopefully with enough heating to stop damp).  Keep up the investment for a few years more to get some more housing, and then after the market crashes* in 2022 we can all buy affordable housing?  

[* a market crash in 2022 is not guaranteed.]

Is this housing we actually need?

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9 minutes ago, chronyx said:

Thinly disguised race bait

It clearly is not. The city is already one of the most racially diverse in the world. It is highly relevant where the money is coming from [I am assuming here that you actually read the article rather than stopping after the introduction on the whiteness of the advertising, which is actually rather irrelevant].

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26 minutes ago, Ah-so said:

Is this housing we actually need?

It is okay.  Central (enough) London -- plenty of jobs there.  Presumably people could live there rather than commute in from the outer suburbs.

 

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13 minutes ago, dgul said:

It is okay.  Central (enough) London -- plenty of jobs there.  Presumably people could live there rather than commute in from the outer suburbs.

 

I disagree - I do not think that residents of London really seek these vastly over-priced developments - they are what foreign investors want and that is why they are built the way they are.

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I think this kind of article, and the mindset behind it, is a form of displacement for Guardian-reading types. The truth is that foreign investors are just the very visible froth on a market that has swollen out of control over decades. But the vast, vast majority of the mal-invested credit that has inflated the bubble is British in origin and benefits existing British homeowners* and British vested interests. 

Blaming it on the foreigns is a cop-out that, for the average ABC1, big-city, home-owning Guardian reader*, has the added advantage of not challenging their material interests. It's also a very convenient form of oh-dearie-me-ism that the Guardian has been peddling for years. In essence, it boils down to a belief that the bubble is real and that Brits should get to keep the nice capital gains that have rolled up in family houses, we just need to find a way to stop the nasty capital gains in luxury housing. It's magical thinking because there aren't two housing markets, there is one.      

(A good tell that this article is based on nonsense, by the way, is that it repeats verbatim the nonsense that Battersea Powerstation buyers are flipping for a profit before completion, rather than panic-selling before their final payment comes due - the denial runs deep, even among writers who claim to be concerned about the housing crisis.)

*Or, at least, those far enough up the chain to not worry about ever moving.   

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1 hour ago, hotairmail said:

To be more exact - a credit bubble.

This is probably rain in a K Autumn*. Look at Dublin pre crisis a decade ago for a full on craziness.

And these sorts of results are a symptom of the the 'cure' they decided to tackle the credit bubble that blew in the run up to 2007. Including young people still priced out, tiny homes, and buyers being predominantly investors on borrowed money.

 

 

* http://www.housepricecrash.co.uk/forum/index.php?/topic/53593-credit-bubble-bursts-first-snows-of-k-winter/

So we haven't had winter yet then?

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16 hours ago, Ah-so said:

It clearly is not. The city is already one of the most racially diverse in the world. It is highly relevant where the money is coming from [I am assuming here that you actually read the article rather than stopping after the introduction on the whiteness of the advertising, which is actually rather irrelevant].

I didn't say the article was untrue or irrelevant. I said they've managed to shoehorn race into it. 

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16 hours ago, Ah-so said:

I disagree - I do not think that residents of London really seek these vastly over-priced developments - they are what foreign investors want and that is why they are built the way they are.

And you are right, but with luck they wont be "overpriced" for long :) 

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Interesting article. Normally the adverts all show a precise multi-ethnic yuppie crowd all sipping prosecco in a brandnew slavebox. Perhaps this is aimed at foreigners (Chinese?) who imagine  - and want - a snow-white london, in  a "scene drenched with that scorching Miami sunshine so familiar to this part of Britain’s capital." :) But usually PoC are vastly overrepresented in ads - check out your local nationwide bs for example. 

EDIT: article did mention race and target market. Also a link to the crazier adverts! 

 

Edited by dryrot

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.

Quote

Join the Land Rush' 

A bit dodgy that one along with an image of a horse drawn wagon - considering the associations for the indigenous population in the US "land rush".

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3 hours ago, billybong said:

.

A bit dodgy that one along with an image of a horse drawn wagon - considering the associations for the indigenous population in the US "land rush".

yes...the 19th century land rushes in the USA was bad news for the indigenous locals..much like situation in London today...

A black-and-white photograph of cowboys on their horses

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I do wonder when our leaders became so disinterested and remote from the needs of the people.  I guess it has been a slow process...

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I live in one of these fancy new tower buildings and I can assure you it is not empty. I have neighbors. Maybe some of them are even english!

It is not packed, but definitely not empty.

Some of the penthouses however are still empty, as they've not being purchased yet. Be quick.

 

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On 04/04/2017 at 10:57 PM, thecrashingisles said:

High density housing in London?  Yes. 

Population reduction? Yes.. no more people,, studies show cramming people in is bad for them, higher suicide rates, poorer health and lower living standards.. living in London has taught me one thing, I don't like crowds.. when I was 18 it was just right, now I'm an old git it's just too much, I want to beat them with a broom! Not have my face wedged in their arm pits for 3 hours a day

One day I will flee this dump, but work keeps me here until I can buy my little house at the top of a hill, with a moat, and some crocodiles.. 

got to stop judging quality of life in monetary terms, I drive an old Nissan micra wort £4.50.. I'm happy enough with that, yet every time I hear people talking Brexit they always talk about money, not quality of life, air, food, water.. just money.. if we just scrapped the whole system and lived off the land with a few ear wax candles and a goat would we not be happier.. I don't want to be a number in a 7ft by 5ft stacker box house.. that's what they want, farm us like cattle till the robots take over then they can shoot us like foxes on their estates.. 

 

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