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Rant - London rent prices...

Discussion in 'General Discussion' started by GSWAudio, Aug 22, 2015.

  1. Scam

    Capodecina

    Joined: Oct 20, 2002

    Posts: 13,460

    Location: London

    Is it so wrong to get attached to your home? If it has happened to you why aren't you angry? We're going the way that nobody under 40 is ever going to be able to buy a home in the SE. So we're expecting everyone under 40 and everyone after them to be 'happy' with the status quo of renting? Of being kicked out on your arse with 2 months notice? Of paying more than 40% of your salary on rent with nothing to stop it going up and up? (Which, puts you technically into poverty I might add). Everyone renting should be furious about the way we're treated in this country.

    To those saying 'move to Manchester, it's great' or 'move to Swindon' or wherever. What happens when those house prices become unaffordable? Because the rate we're going in the UK, they will. Central Manchester house price rose faster than London in 2014 (link. Will we have a thread in 3 years time called 'Rant - Manchester rent prices' with people saying 'Oh get over yourself Manchester isn't the be-all and end-all of existence, get yourself out to Burnley'. You need to look at the bigger picture. Telling people to leave London is not a solution. There's plenty of 'normal' towns in the UK where houses are completely and utterly unaffordable in comparison to the local average salary. Oxford for another example.
     
  2. balky12

    Mobster

    Joined: Oct 6, 2011

    Posts: 4,228

    Don't want to stoke the fire but like I've said previously I'm in the process of looking for a place after having saved for a while for a 10% deposit. Numerous of my friends have either moved out or in similar circumstances. So it's definitely do-able. I'm 26.

    Is it as easy as it once was? Maybe not.

    I know everyone's circumstances are different. But if you made a decision which in turn made it harder to save for your own house in the future then it's hardly the markets fault yiur finding saving for a home difficult.
     
    Last edited: Aug 24, 2015
  3. dlite

    Gangster

    Joined: Jul 5, 2015

    Posts: 252

    Location: Reading, UK

    There is a lot research that is based on very British economics about this issue.

    Solution is dead simple in theory, but getting Land Value Tax implemented seems to be very difficult. I think the problem is that it might be counterintuitive for many to think that adding a tax on land actually makes it cheaper.

    Here are list of few reasonably notable economists who (have) supported LVT:
    Adam Smith
    David Ricardo
    Henry George
    Milton Friedman
    Paul Krugman
    Joseph Stieglitz

    Personally I think LVT would solve most of the issues in income distribution within western democracies. Especially in UK it would create huge profits for government that could use the money to lower income taxes for people who mostly earn their money by selling their labour.
    Yes, because they think it is the safest area to invest and that they'll make up the difference in appreciation. Or that is my guess. Other option is that people are willing to accept less profit just to get the feeling that they are special and can afford to own property in London.
     
    Last edited: Aug 24, 2015
  4. toshj

    Mobster

    Joined: Aug 11, 2009

    Posts: 3,316

    Location: KT8

    It's not wrong to get attached to your home, but I don't know many people in London who consider a rented flat as their home. I suppose it's a difference in attitudes, but I wouldn't consider it valuable to emotionally invest in something that could easily and quickly be taken away from me.

    As to your other question concerning why I w\sn't angry at being relieved of my temporary abode; I was certainly a bit miffed at the time, but I didn't really see the point in getting angry. I don't expect that, simply because I live in a capital city in a developed country, that everything has to be proffered up on a plate for me and for my liking. My stance was that another individual owned the property and therefore could do whatever he liked - within the legal framework - and that I had no entitlement to the property. As such, I certainly didn't want to place too much importance on living in rented accommodation.

    I always regarded renting as a very temporary thing, and whilst it certainly did limit how much I emotionally invested in a home, it also spurred me on to getting on the property ladder myself. I saw renting as ****ing into the wind, and that buying a property would no only create a genuien home for me, but I also saw it as an investment. I think a lot of my friends who have always rented have started to come round to this idea (we're all around 29-31 yrs old) and they've all been desperately trying to buy.

    At the same time I think that young individuals looking to buy in London - and whom aren't the recipient of inheritance or a gift from parents - need to show a willingness and drive in order to purchase, as well as understanding the necessary risks involved; saving deposits, viewing lots of properties, putting in extra hours at work/to earn. For example, two of my girlfriend's friends have had a great start to their property ownership - they saved fastidiously throughout their 20's, scraping together £20,000 (£10,000 each), and bought a run down place in Leyton last year for £200k (with only a 10% deposit they were comfortable in assuming a higher monthly mortgage payment % as the downside to them getting a foot in the door). They spent £5k on renovating it themselves and sold the place within 12 months for a £100k profit. From now on in, assuming they invest sensibly in property, they should on an upward trajectory for the rest of their lives. This last paragraph wasn't aimed at you Scam, just simply pointing out that getting a decent foothold on the property ladder is entirely achievable, but it takes hard work and sacrifices. Obviously, everyone is in different positions but that means that you can't always have things live up to your own expectations.
     
    Last edited: Aug 24, 2015
  5. Richdog

    Capodecina

    Joined: Sep 8, 2005

    Posts: 24,211

    Location: Utopia

    You are kidding, right? Paris is one of the most expensive in Europe for rentals.

    berlin though is pretty cheap, yeah, but salaries are also generally lower than London.
     
  6. Lima

    Wise Guy

    Joined: Sep 1, 2010

    Posts: 1,331

    Location: London

    Or maybe it because £400 a month to commute from the Home Counties is about right. I used to live in Hertfordshire and my travel was £345/month. I now live in Essex and my travel is £420/month.
     
  7. Jim99

    Wise Guy

    Joined: Feb 25, 2015

    Posts: 1,215

    That's not the question though - if central London is too expensive, and you need to move further away to save a bit of money, the Home Counties isn't where you need to go.

    Places like, say, Feltham/Hounslow are going to be much cheaper than London and cheap to commute from.

    And, as stated, you're likely to be able to take advantage of railcard discounts if you're a student.
     
  8. balky12

    Mobster

    Joined: Oct 6, 2011

    Posts: 4,228

    Depends where you need to come into I guess. But I would argue you get more house for your money in some parts of Essex than Feltham, and for my work commuting into the city it would be quicker from Essex as well!
     
  9. GSWAudio

    Gangster

    Joined: Jul 1, 2012

    Posts: 319

    So the house mates are included in the rent?
     
  10. Scam

    Capodecina

    Joined: Oct 20, 2002

    Posts: 13,460

    Location: London

    Ok fine, I should clarify that my emotional attachment was more to Ealing/West London than my particular flat. Or maybe to my street. But the problem was that we were paying £1300/month for our flat, had we wanted to stay in Ealing that would now have to be more like £1800/month. We weren't prepared to pay that much so we have gone elsewhere. A cold-blooded capitalist would say that's economics, but tell that to my girlfriend who was in tears multiple times on our last day there. We'd lived in that area for 7 years total, we felt part of the community. We knew our neighbours, we knew our local curry house, we knew the local cats (etc. etc.). Now that's just been taken away from us. I'm just trying to get you to understand the human side of it.

    The point I'm trying to make (and that you keep missing) is that it shouldn't be like this. It's all very-well saying that's how it is in a modern capital city, but it needn't be. Like I said in my previous post, what happens when this starts going on in other cities in the UK? What happens when the Chinese, Russian and Arab oligarchs decide that Manchester and Leeds give great returns on property. Will we just say 'ah well that's life, move to Burnley'. I've already provided evidence that could happen.
     
  11. Lima

    Wise Guy

    Joined: Sep 1, 2010

    Posts: 1,331

    Location: London

    Lol :p
     
  12. toshj

    Mobster

    Joined: Aug 11, 2009

    Posts: 3,316

    Location: KT8

    Im not missing the point, I just don't agree. Yes, it would be nice to live in a city or country where everyone gets the property they want and there's no housing shortage, but that's simply never going to happen, particularly in London. Regarding the human side of it, just because it affected you and your partner to that degree it doesn't mean that everyone else would be afflicted so, therefore the system shouldn't change to pander and cater for your emotions :confused: Your argument seems to be "The property market needs to change! Why? Well because we got emotionally attached to the local cats and I knew the name of the guy who sold me chicken tikka!" It's life mate, and because you didn't own the property you were always at risk of being turfed. Getting upset that you had to leave the area isn't an acceptable reason to change the entire property system.

    In my opinion there's too much industry and wealth in London to prevent other UK cities from catching up in terms of attracting UHWNI, however as you indicate, decent rental returns are becoming available in other UK cities so I'd imagine a steady price growth rather than the outrageous growth that London saw. Manchester simply doesn't have the draw that London has to foreign oligarchs, but it may become more of interest to foreign independent speculators.
     
  13. muon

    Capodecina

    Joined: Nov 8, 2006

    Posts: 18,607

    Location: London

    Whilst true a financial yield measure is misleading.

    It's better to have a single property yielding 4% than 3 cheaper properties yielding 4%.

    It's that saving in effort and management which results in lower accepted yields. Also over the last 3 years London prices have outstripped even the rest of the South East by a large margin.
     
  14. dowie

    Caporegime

    Joined: Jan 29, 2008

    Posts: 46,842

    tis more the price rises which have increased monthly vs rental increases which occur yearly and which some landlords are reluctant to increase too much if they've got good tenants

    a yield isn't misleading, tis just factual information - if you buy a property today in London you'll get a relatively low yield in comparison to other places - it might still be an idea if you're anticipating rises in prices or for any other reasons but that is irrelevant to the point which was that the poster claimed they were 'greedy' when in reality they're asking for relatively little in rent in comparison to Landlords in other locations in the UK
     
  15. Van Diemen

    Wise Guy

    Joined: Jan 8, 2007

    Posts: 2,388

    Location: London & Dubai

    Exactly, the majority of landlords accept this in the hope that their initial investments are safe. Most small landlords are not in it for the gain in property value but rather the continual income.
     
  16. sigma

    Capodecina

    Joined: Nov 13, 2006

    Posts: 17,445

  17. muon

    Capodecina

    Joined: Nov 8, 2006

    Posts: 18,607

    Location: London

    I was just explaining lower yields.

    It isn't because London landlords are generous.

    Nor would I say London landlords are greedier than anywhere else either.

    When it comes to a return on investment, everyone is greedy.
     
    Last edited: Aug 24, 2015
  18. EdwardTeach

    Mobster

    Joined: Mar 18, 2010

    Posts: 3,423

    Agreed the yields can be terrible.
     
  19. MatteH Oxford

    Wise Guy

    Joined: Jul 26, 2010

    Posts: 1,619

    Location: Wiltshire

    I disagree, I would say it was more likely they withdrew equity from the house to do so rather than use their "own" money.
     
  20. delta0

    Mobster

    Joined: Oct 21, 2012

    Posts: 4,809

    Location: London

    Full time students are eligible for 16-25 cards regardless of age.