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Tuesday, February 04, 2014

London heading for a bubble & bust

The debate continues over whether London property prices are overheating and heading for a bust.

The Telegraph entered the debate today.  The average price of a London property is £403,792....crazy, bonkers, mad....this is 3.5 times the price of the average in Northern Ireland and 3.3 times the average in the North East.  Or is it?  London is undoubtedly one of the Worlds greatest cities.  Don't give me any rubbish about New York or Paris being number one.  Have you been to New York recently, it's tired, dull, slobby and expensive.  As for the stylish Paris, it is but it is also rapidly become a museum piece.  A grand dame withering on the vine.  London on the other hand has more history and style in one of it's crowded streets than the whole of Manhattan put together.  If there is a global league table of places to live London is up there.  It's safe, exciting, modern and covered with heritage and iconic brands.  Just as we have seen with the wages of premiere footballers, there is no limit to the best.  So true is for property in the right location.  So London is a global phenomenon and in a totally different market with different metrics.

UK property outside London

The UK on the other hand where most of us live is very different.  Are prices expensive here?  They are not cheap given the fact that wages aren't rising and the first time buyer house price to earnings multiple is 4.6 way above the long-term average of 3.5 so definitely not cheap.

All we can hope for in UK property generally is some of the glitter dust sprays out from the London postcodes as it did in the 90s.  This time I'm not so sure it will any time soon.  Hold onto your hats or go south landlords....the choice is yours.

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Bill said...

It's not the prices in London that are 'crazy, bonkers, mad' it's the place itself. The whole area is an overblown illusion that there may be gold at the end of the rainbow. As we are all aware, some lucky few find it, but the majority spend their mortgage or rent-soaked lives trying to capture the ghost of whatever it is that London promises them. I walked across Westminster bridge recently and there were crowds gathered around the 'shills' on there who were practicing the three card and the 'ball under the three cups' tricks. I saw at first hand the greed in their eyes and the belief that here, in this vast, ugly, sprawl of unwarranted Metropolisation, there might still be the shirt-tails of a dream left to cling to. This is a place where people skin the backs of their fellow 'citizens' by the use of over-inflated prices and rents, little realising that in order to do this, they too have to pay for that privilege. Exciting? Where? History? There is more and far-less-manufactured History beyond the M25 than there ever was inside that monumental car park.
We are governed from London. Doesn't that say it all?
Turn my stomach Dick Whittington.

The Editor said...

Hi Bill and thanks for your comment. It amused and brightened my Friday morning. I obviously, don't agree but you put forward a very strong case I'm guessing perhaps for the rural idyll? Unfortunately, that model too has flaws.

Bill said...

No, I don't espouse the 'Rural Idyll' model. It's far too austere, time consuming and inaccessible. I actually favour a proper city system, like ours, where just this afternoon I dropped my partner off in a Derbyshire village and on the way home flushed a huge male grouse from a hedgerow. As I passed, he looked at me with an eye that's seen it all before... the way I look at London. Ten minutes later I'm in the heart of a city from which I can escape in any direction within fifteen minutes, even less from where I live. What's even better, is that I can afford to buy or change houses here. I can actually choose where I want to live in the city, not necessarily forced into a place I don't like or has aircraft passing overhead that sound like they are coming in the window. Or where I can't get a plumber/electrician/painter/nurse/ambulance driver/fireman et al because they can't afford to live near me.
What price money when it buys that kind of isolation? One day you might see out from under the blanket thrown over you by the illusion of power that has persisted so many years after the smog has gone.

Hawkeye said...

I thought Derby had been replaced with a Westfield shopping centre. I'm glad to hear the old town is still thriving and full of wonder.