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Digsby

The great London property squeeze

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Councils and Housing Associations really have a good opportunity to work together here to deliver the affordable housing required. Increase the supply of housing for low wage earners and remove any incentive for the criminal landlords to make money off the poor.

Last night I watched 'Nightmare Tenants, Slum Landlords'. It seemed like Harrow Council were one step behind the criminal landlord they were trying to pin down. The dodgy landlord of an outbuilding behind a dry cleaners came up with excuse after excuse and seemed to have escaped prosecution in the end.

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Good article, but I really disagree with this bit:

Quote

The 2008 financial crash created a new politics of space, in which people on low incomes are forced out of their homes by rising rent and the wealthy are encouraged to use property for profit...This isn’t gentrification, it’s another phenomenon entirely. Global capital is being allowed to reconfigure the country.

This has become the standard narrative in left/liberal outlets like the Guardian. But it's deeply ahistorical, ignoring the huge run-up in real house prices in the decade before the financial crisis. And it ignores the increasing evidence that foreign investment in residential housing post-2008 was the dumb money that artificially kept the bubble inflated, and kept construction activity going, but failed to make a return once currency moves and taxes are taken into account.

To me, this idea is just too convenient, because the housing crisis becomes someone else's fault. British capital gains in non-luxury housing: good. Foreign capital gains in luxury apartments: bad.  

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To me this article screams opportunities for the rise of a proper left wing party (ie, not New Labour). I don't think Corbyn is the man to enter this electoral promised land, but I believe he is helping Labour rediscover more of its roots. Unless the tragedy in Manchester turns the election into one dominated by security, I predict Labour will do significantly better than the original polls suggested. 

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Just now, Darby Ram said:

Good article, but I really disagree with this bit:

This has become the standard narrative in left/liberal outlets like the Guardian. But it's deeply ahistorical, ignoring the huge run-up in real house prices in the decade before the financial crisis. And it ignores the increasing evidence that foreign investment in residential housing post-2008 was the dumb money that artificially kept the bubble inflated, and kept construction activity going, but failed to make a return once currency moves and taxes are taken into account.

To me, this idea is just too convenient, because the housing crisis becomes someone else's fault. British capital gains in non-luxury housing: good. Foreign capital gains in luxury apartments: bad.  

Read as 'this mess had nothing to do with the last Labour government'

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I don't see this article as partisan. If you just read the last sentence it says that both major parties have failed to adequately address the situation, which is a totally fair assessment.

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I think this bit is quite telling:

"Vicky Spratt is a 28-year-old journalist who worked as a producer of political programmes at the BBC but left because she felt the issues affecting her generation, such as the housing crisis, were not being covered properly. “A lot of issues were dismissed by the older generation – it didn’t affect them. They all owned their own homes”

and...

"Spratt believes that a key reason for this political failure is that “people who don’t experience this issue are in charge”, pointing out that almost a third of MPs are buy-to-let landlords"

Edited by RentingForever

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10 hours ago, rantnrave said:

To me this article screams opportunities for the rise of a proper left wing party (ie, not New Labour). I don't think Corbyn is the man to enter this electoral promised land, but I believe he is helping Labour rediscover more of its roots. Unless the tragedy in Manchester turns the election into one dominated by security, I predict Labour will do significantly better than the original polls suggested. 

Exactly right: a workers' party, with an emphasis on giving people back their self-determination and the personal stability to put down roots and build communities again. This was exactly the millieu that bred the original labour movement, so they could re-claim this ground - but only by repudiating essentially all of the "new labour" ideology, which has trapped people into dependency on the state and sold out to the sellers of debt. I can't see that reclamation happening.

Having read through the manifestos, the party which starts to nibble at some of the right issues seems to be the Greens, with talk of trying a land value tax, UBI, and an acknowledgement of the housing affordability crisis; but they fail to make an appeal to workers, nor do they criticise the net of controls and surveilance we are increasingly subject to.

So, I wonder who will step into the gap? There is a desperate need for a workers' party.

Edited by Toast
typos

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12 hours ago, rantnrave said:

To me this article screams opportunities for the rise of a proper left wing party (ie, not New Labour). I don't think Corbyn is the man to enter this electoral promised land, but I believe he is helping Labour rediscover more of its roots. Unless the tragedy in Manchester turns the election into one dominated by security, I predict Labour will do significantly better than the original polls suggested. 

Did you see this one?

https://www.theguardian.com/politics/2016/may/21/labour--councils-help-first-time-buyers-mortgages-john-mcdonnell

 

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1 hour ago, Jazzman said:

The big question is what will trigger the first leg down? Well unsustainable prices, but we're probably already there. Interest rate rises? That will be met by credit loosening. Event risk, or the black swan? Is there something lurking in the depths that is not yet visible, or at least obvious? Very possibly. The media could do a much better job of nudging things in the right direction, so hats off to the Guardian.

The 'wealth trap' is a really good concept. The nice thing about it is that it hits the problems in the housing market from both directions. As a seller, it's impossible to sell just your bathroom to realise some of your gains. And relatively well-off would-be-buyers are left on the sidelines, thinking 'why would why I swap £40K of liquid stocks, bonds and cash for a quarter of a one-bedroom flat?' The longer that stand-off goes on for, the worse that property looks on a relative basis, since over any reasonable timeframe a normal investment portfolio is going to outperform a depreciating asset. So the unrealisable paper gains are (I think) going to start evaporating on paper too. That might only happen in real terms, and over a decent period of time but, for people who aren't stuck in the wealth trap, the difference will be noticeable. 

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9 hours ago, Democorruptcy said:

Hmmm. Can't say I'm impressed. Others outside this site may well be taken in - spotted this just now:

YouGov’s weekly poll for the Times meanwhile has topline figures of CON 43%(-1), LAB 38%(+3), LDEM 10%(+1), UKIP 4%(+1) – a Tory lead of just five points. Fieldwork for this poll was conducted on Wednesday night and Thursday daytime, so is the first conducted entirely after the Manchester bombing.

Edited by rantnrave

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10 hours ago, Jazzman said:

It may be that the globalisation of real estate investment is vulnerable to a shift in prices anywhere.

I guess that hypthesis will get tested shortly by the falls in Canada. There was a very wishy-washy article in Bloomberg (linked to in the "Canada poppong" thread), which claimed firstly that Canadian mortgages were subject to strict rules to prevent a repeat of the financial crisis south of the border ... and then saying (I paraphrase) no one follows the rules, as mortgage fraud is rife.

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23 hours ago, MattW said:

Councils and Housing Associations really have a good opportunity to work together here to deliver the affordable housing required. Increase the supply of housing for low wage earners and remove any incentive for the criminal landlords to make money off the poor.

Last night I watched 'Nightmare Tenants, Slum Landlords'. It seemed like Harrow Council were one step behind the criminal landlord they were trying to pin down. The dodgy landlord of an outbuilding behind a dry cleaners came up with excuse after excuse and seemed to have escaped prosecution in the end.

Councils would let people sleep in the bath if it meant they didn't have to rehouse them.;)

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44 minutes ago, Jazzman said:

There is acknowledgement that prices are out of hand, but the consensus is we can't be in a bubble because subprime is absent. Since current prices have overshot 2006/7 peaks in some cities around the world, subprime can't have been the only problem. The credit crisis that followed overshadowed the housing bubble and house prices may have continued to increase if the credit crisis hadn't happened. So that begs the question whether prices ever became unsustainable. Perhaps they are getting close to that point now or soon. I don't know. Whatever, the shift in who carries the risk is different, at least in the US and so the impact, and remedies, may take a different form. Maybe a true correction will happen and losses will fall to GSE's, originators and borrowers, with the tax payer picking up much of the tab. I'm certain developers are watching lead indicators carefully. I was in Vancouver and London recently. The most striking crane activity I saw was in Canary Wharf ...could be the canary in the coal mine?

I was in CW recently, they are building box flats galore prices started from £600k +

Presuming that they were being built to entice foreign investors ?

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On 28/05/2017 at 8:13 AM, maverick73 said:

I was in CW recently, they are building box flats galore prices started from £600k +

Presuming that they were being built to entice foreign investors ?

Are a lot of them not being reduced?  

I am regularly getting emails about 'discounts' on newbuild flats locally (SW15) and would have thought the same, or even more so, would apply in CW. 

A friend's son bought a flat there at more or less the 2007 peak, and recently had to reduce the price substantially in order to sell it and move to a house - 2nd baby on the way.  He could afford to take the hit, though. 

I didn't like to ask what the asking/sold prices were, and didn't know the address so couldn't have a good old nose, but my friend said it was reduced 'a lot'. 

 

 

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