Trying to buy a house in this area is near impossible

[Mick Mac]

Well it is a world financial centre - and the rest of the UK does feck all. London is a massive shark in a pool of baby goldfish. No disrespect :)

[LondonMix]

Foreign buyers are having an impact Mick Mac. If you think of London as only having 9 houses its easier to picture. Let's say 3 houses are in central London (most expensive area), 3 houses are in Dulwich, a 3 houses are in Eltham. If only 9 people wanted to live in London, the richest 3 would live in the most desirable area (Central London), the next 3 richest would live in Dulwich and the remaining 3 would live in Eltham.

If you allow one foreigner from Hong Kong to buy a house and they are richer than the 9 people who already live in London, the foreigner will buy in Central London, one of the people who previously could live in central London would move to Dulwich. The extra demand in Dulwich would push prices up-- remember (the guys who was forced out can afford to pay more than the others). The poorest person that could previously could have afforded Dulwich move to Eltham and push prices up there, and one person in Eltham would be forced out of London all together.

The bottom line is whenever more people enter the buying market, unless supply increases, prices will increase.

However, I don't think the foreign buyers are having as much an impact as people suggest for a few reasons:

They tend to buy new build flats and rent them out. To the extent that there is a shortage of properties for rental this in and of itself doesn't cause prices to go up. Moreover, many schemes wouldn't be developed without knowing they could be sold to foreign investors, therefore, foreign buyers presence in the market is actually increasing the total housing stock by stimulating building.

Foreign buyers mostly cause a problem when they buy flats and leave them empty. However, the number of people that can afford to do that is so miniscule that even though its irritating, in and of itself, it cannot have a very significant impact on the housing market.

The fact is, more people want to live in London than before. The population of London is growing and it's growing faster than the increase in the supply of new housing.

[Louisa]

A recent BBC report suggested if you removed London from the UK the rest of the country would be on a GDP par with a sparsely populated east European country. From my recent visits to other regions within England, I was shocked at how depressed these places seemed- high unemployment, poor infrastructure, and rows of streets full of empty and decaying terraced housing. I'm not just talking about tup'north either. The South-West and East Anglia are a country mile apart from London in every respect. Without some sort of economic redistribution to the regions outside of the south east, the future is fairly bleak for these communities. It seems insane that in the London bubble we are talking about not being able to afford to buy because demand is outstripping supply, when whole cities in other regions contain ample and affordable housing stock which is being laid to waste.

Louisa.

[Mick Mac]

Thanks LM.

That explains it simply. Except that most people seek to move "up" in location with each move. There is a minority that move "down" in location and its these people that feature in your sample pool of 9.

To improve your story I'd say central London seller of an apartment, sells and buys for the same money, or a bit more, a house in Dulwich. Hence the incentive is that he upsizes in space but accepts that he "downsizes" in location.

Thx.

[El Pibe]

IOL was very much saying that the foreign investment is at all levels, though apart from an anecdote about some poor chinaman who was conned into buying in lincolnshire and someone else pushing speculative buying in Epsom, there was only evidence of them prebuying plush new developments so I wasn't entirely persuaded.

[KidKruger]

I had a HK lady working for me for 12 mths up to last year.

Her and her hubby had a company apartment in Westminster (her hubby was here on secondment).

Knowing they'd be here for 2-3 years longer, they intended to buy 2x places and rent them out before they left.

One location they'd chosen was Woking where they were viewing 3-bed semis, the other was to be somewhere near Shard I believe, preferably a 2-bed new build.

[LondonMix]

Agree MickMack. However, when demand is greater than supply, to upsize you often see that people have to move. That is what is happening in London at the moment at a phenomenal rate. I liked to an article earlier that showed that the rest of London was now growing at a faster pace than central London, underlying the trend a lot of us will have seen anecdotally.

In ED its no longer people priced out of Clapham moving here (ED and Clapham for the same sized house aren?t actually very different at this point) but rather buyers priced out of North London. Droves of people in ED are moving to Beckenham. Moving up the ladder in your own neighborhood is becoming increasingly difficult for many buyers.

[stephen509]

Worth a watch...

http://www.bbc.co.uk/iplayer/episode/b03tqzqt/Inside_Out_London_03_02_2014/

[????]

I've noticed a few more north Londoners rather than claphamites recently. I think it's seen as a bit hipper (marginally) - especially 'cos of the Peckham/Belleneden thing - than Management Consultant/KMPG accountant land Clapham. By it I mean SE22/SE15 (right bits)

[Jeremy]

It's one of those situations where you can't just leave the market to sort itself out. To address the supply/demand issue, we need the right sort of properties, at the right price, in the right areas. Not just high-spec apartments marketed to overseas investors and junior city traders.

[????]

The market would sort it out - planning laws are what are stopping family homes been built in areas where they are needed as much as anything else.

[Earl Aelfheah]

It's not all about planning laws - there must be an element of builders pursing a low volume, high margin strategy.

???? Wrote:

-------------------------------------------------------

> The market would sort it out - planning laws are

> what are stopping family homes been built in areas

> where they are needed as much as anything else.

[????]

which is why I said 'as much as anything else'

Green belt restrictions artificially inflate the land prices in all of London. If planning laws were relaxed a bit and Local Councils were less Nimby about it we could increase family housing in easy commute distance and reduce land price/house price inflation further in.....

[LondonMix]

Part of it is cultural as well. English people (more so that other nationalities who live in large cities like NY or Hong Kong) are genuinely averse to living long-term in apartments. However, families living in higher density purpose built apartments is the only way to satisfy the need within London for family accommodation. This is totally normal in most metropolises and London is particularly well suited to this given the large number of parks and commons.

The other cultural issue is that the English prefer living in period properties and there is no way to increase the supply of those! The premium that exists for period houses means that a whole house is worth more than the two flats that could be created out of it.

The bigger solution though is that the government needs to redirect some economic growth out of London and back to the regions. The housing shortage can?t be solved if all of the growth and jobs are in London and every clever kid feels they need to move to London to have a decent career.

[????]

I was going to start a thread on 'regional development', as people are so naive about it just like it can heppen and it's the role if govt? The state buggers this up already. Just one example.

National collective bargining for Public Sector workers means that private companies find it nearly impossible to compete in salary/benefits (and traditionally security) terms in further out regions for many skilled jobs (IT for eg) and skilled workers as their cost is higher - this relativelty matters a lot for Private Compnaies looking at costs. The same is true when the BBC moves a whole bunch of skilled,fairly high paid, too, ooh say Salford, it sucks skilled worklers out of the private workforce and makes it harder (read more expensive for private companies) to recruit and retain staff so they go where there's more availibility....guess where that is. This maens you get regions increasingly relian on PS jobs and Private investment increasingly going elsewhere.

We need salaries etc to reflect the location not the job in the PS - London teachers should get significantly more (if they do a good job) than a counterpart in Newcastle.

PS unions will NEVER let this happen

However, I'd happily like to see govt. give LAs more power (rather than handouts) and let them be 'entreprenuerial' at job creation/wealth creation/inward investment etc.....some of them are gonna hang themselves with that rope though..

[Earl Aelfheah]

Interesting post ????s - must admit, i had never really thought about national pay bargaining in that way.

[Mick Mac]

rahrahrah Wrote:

-------------------------------------------------------

> Interesting post ????s - must admit, i had never

> really thought about national pay bargaining in

> that way.

Really? London weighting has always applied - its just never been any where near enough.

[Jeremy]

I don't really buy it. Expanding on your IT example... the main problem for companies outside of London/SE is finding skilled employees. I highly doubt that competing with public sector salaries is an issue.

[DaveR]

There is lots of evidence of a public sector pay premium in certain regions, most notably the North East, Merseyside and Wales. However, these are also areas with high unemployment i.e. spare capacity in the labour market, so higher public sector pay shouldn't push up market pay rates.

London is in a vicious/virtuous circle - the more capital it attracts (cash + infrastructure + human capital) the more attractive it becomes and yet at the same time (and as a consequence) it gets more expensive, crowded etc. But people keep coming.

[miga]

.

[Jeremy]

miga, I think it's a chicken-and-egg situation. More skilled graduates would stay in those areas if there were good employment prospects, and more companies would set up shop if there were more skilled candidates around.

[david_carnell]

Also, in Quid's example, the BBC sucks up skilled workers, pays them a premium and the private sector can't compete. They then move to London because there is a bigger pool of talent....but they'd have to pay them more because it's in London and their costs would also be much higher too because of rent/business rates etc. I doubt it's that simple.

Plus, fair days pay for a fair days work and all that. Don't see why a teacher, teaching the same curriculum to the same number of kids, in the same standard of school should get paid less up North. You want to see how the regions recover? It's not by sucking all the best teachers to London to earn better salaries.

[Righty]

Hi all,

In a more practical question - is the Blythe Hill area of SE6 and SE23 very nice at all? We are looking to move out of our beloved Nunhead for more space (at cheaper price)!

Any views welcome (particularly on schools and whether the area has/will improve)!

Thanks!

[edcam]

david_carnell Wrote:

-------------------------------------------------------

> Also, in Quid's example, the BBC sucks up skilled

> workers, pays them a premium and the private

> sector can't compete. They then move to London

> because there is a bigger pool of talent....but

> they'd have to pay them more because it's in

> London and their costs would also be much higher

> too because of rent/business rates etc. I doubt

> it's that simple.

>

> Plus, fair days pay for a fair days work and all

> that. Don't see why a teacher, teaching the same

> curriculum to the same number of kids, in the same

> standard of school should get paid less up North.

> You want to see how the regions recover? It's not

> by sucking all the best teachers to London to earn

> better salaries.

I'd like to see the evidence that the BBC pays more than equivalent jobs in the private sector as I'm not sure that is true.

[DaveR]

"Plus, fair days pay for a fair days work and all that. Don't see why a teacher, teaching the same curriculum to the same number of kids, in the same standard of school should get paid less up North."

Because you're paying over the odds, with taxpayers money, to fund a far better standard of living in an area where living costs are significantly lower i.e. pay, in purchasing terms, is far from equivalent. Is that 'fair'?