fire in London tower block

[Mark Saunders]

I took the time (about a minute and a half) to see what the average price for property in Kensington and Chelsea actually is. According to Rightmove it's 1.4 million pounds for a flat, 4.4 million for a terraced house and 6.1 for a semi detached property (I've rounded down the tens of thousands and lower amounts). You've either got a wildly different view of moderately well off or haven't bothered to do some basic fact finding.

 

That sums up the reason why millions of people commute into London rather than live there!

[pete_mcfarlane]

I took the time (about a minute and a half) to see what the average price for property in Kensington and Chelsea actually is. According to Rightmove it's 1.4 million pounds for a flat, 4.4 million for a terraced house and 6.1 for a semi detached property (I've rounded down the tens of thousands and lower amounts). You've either got a wildly different view of moderately well off or haven't bothered to do some basic fact finding.

That's an average, in a borough that has a mix of property types, from council flats to some of the most expensive houses in the land. Ex-Council flats go for way less than the average. Here's the result of my few minutes on Rightmove

 

http://www.rightmove.co.uk/property-for-sale/property-60478816.html

http://www.rightmove.co.uk/property-for-sale/property-67457732.html

http://www.rightmove.co.uk/property-for-sale/property-68319578.html

 

These are still expensive by UK standards, but still within the range of middle class professionals on London wages mortgaging themselves half to death, or working people who were already on the London property ladder before it all went mental and so have a bit of capital behind them. They key bit, though is the 'Properties sold nearby' section - the prices have gone up massively in the last few years, so people who could afford these a few years ago now can't.

[Neil]

Less than average at £390,000 - £450,000 seems pretty stratospheric, especially seeing that these are at the budget end of the spectrum. By comparison £25,220 is the average salary for a registered nurse in London, ordinary firefighter £33,000, and a teacher in the main pay range from £28,000 - £39,000. With the cheapest of the properties being ten times the salary of the most well rewarded of these ordinary middle class professionals it's clear that there's something wrong with the property market in Kensington and Chelsea.

[Horsetan]

....With the cheapest of the properties being ten times the salary of the most well rewarded of these ordinary middle class professionals it's clear that there's something wrong with the property market in Kensington and Chelsea.

Well, I suppose you could try to ban foreign nationals and companies from buying properties in such areas....

[PhilJ W]

Well, I suppose you could try to ban foreign nationals and companies from buying properties in such areas....

Or impose an empty property tax.

[hayfield]

I took the time (about a minute and a half) to see what the average price for property in Kensington and Chelsea actually is. According to Rightmove it's 1.4 million pounds for a flat, 4.4 million for a terraced house and 6.1 for a semi detached property (I've rounded down the tens of thousands and lower amounts). You've either got a wildly different view of moderately well off or haven't bothered to do some basic fact finding.

 

 

Grenfell was in the borough of Kensington, but not in Kensington. I think white city is a better description and whilst the cost of properties is much higher than many in the greater London area, its no where near the prices of Kensington. One bedroom flats £300k  three bed flats £350k.  However whilst these areas are very close to each other, different additional factors may alter prices slightly

[hayfield]

Well, I suppose you could try to ban foreign nationals and companies from buying properties in such areas....

 

 

Ivan a bit radical and knowing you its mostly tongue in cheek/irony.

 

On the other hand all over the country in desirable areas wealthy individuals and companies are buying second homes/holiday let properties, which make it impossible for locals to complete. Walking back to the hotel in St Ives I went past many ex-fisherman's cottages, all of which had been either turned into holiday lets or commercial premises.  This was common in most of the coastal towns and villages, the exception was Clovelly (which you paid to enter) which has strict occupation rules.

 

Then you have the likes of myself moving out from the London area a bit thus increasing the prices further out

 

You are right in many ways, certainly those who live elsewhere and buying for investment purposes only put nothing into the local communities should be discouraged. Also our major cities are getting far too overcrowded,

 

Years ago there was a move to relocate jobs to other areas, seems only national and local authority jobs moved. Perhaps a tax on nonessential jobs in the centre of London might focus minds, but the financial carnage which decreasing property values would cause might collapse the banking system?

[Mark Saunders]

 

Years ago there was a move to relocate jobs to other areas, seems only national and local authority jobs moved. Perhaps a tax on nonessential jobs in the centre of London might focus minds, but the financial carnage which decreasing property values would cause might collapse the banking system?

 

Try getting MP's to move out of London!

 

The value of investments can go down as well as up; when this happens to ordinary people it's tough and you have to live with negative equity!

 

Mark Saunders

[The Stationmaster]

From what's been said in the media, the fire has exacerbated (or is being by political activists to exacerbate) some pre-existing tensions within that particular London borough, caused by 'rich' outsiders moving in, buying properties and forcing prices up so that 'local' people can't afford to buy or rent. I suspect those moderately well off working families and young professionals are the 'rich' outsiders.

 

A potential problem for the Borough of Kensington and Chelsea is that it is a conglomeration of areas of totally different original characteristics - varying in historic terms from the glitz of parts of Kensington and Chelsea to the opposite extreme of parts of Lisson Grove (and similar areas) which had long been areas of poverty and comparatively poor housing until council building provided decent accommodation for those who couldn't afford their own homes.

 

You then chuck in the fact that some parts have for many years been areas to which newly arrived immigrants gravitated because private rented accommodation was cheap (although frequently atrocious) which was all they could afford from the sort of low paid jobs they could get.   So things didn't exactly start on an historically even keel.

 

What has happened in recent years is typical of much of London and the South East in that people moved into some of these areas because the property was all they could afford to buy (nowadays they perhaps tend to move further out of London for the same reason) thus the character of the area began to change.  Grenfell Tower would, from emerging information such as the BBC item, appear to be typical of that sort of change with a few private rented units which are let at far higher prices than those owned by the council.  The change has nothing to do with the oft misused term 'gentrification' and far more to do with the realities of affordability (within a London context) in this sort of area.  But there are no doubt other parts of London - such as parts of Islington for example - where a similar economic imperative has resulted in something perhaps more akin to 'gentrification' because of the sort of people who have tended to congregate there.

 

The real drivers of it all are very simple - prices will rise because of demand (from a growing population or aspirational potential house owners within the existing population) and price rises can readily be fuelled by the availability of cheap money.  It is noticeable over the years that prices have tended to escalate (inflate) more rapidly when money has been cheaper although another factor now in London is off-shore buyers, which causes even more distortion.   But at the root of a lot of it is population growth which, for various reasons, has been artificially stimulated over the past quarter of a century or so.

 

Don't forget that many people - probably a majority - would like to live 'somewhere nice' so if they move into an area which they regard as 'affordable but improving'  they would no doubt wish to see that trend, but particularly the latter, continue.  So change will inevitably continue because of the economic imperative and because it is what people want, you can't really control that by any sort of diktat in a democracy although you might exercise simple economic control through house building (if land is available). interest rates (if the wider economy allows), and something like a ban on offshore buyers or a tax on empty properties.

 

By the way it isn't just London but most of the south east - I sometimes think our town has more Porsches and BMWs left overnight at the roadside or in a public car park than would expect to find in a street of terraced houses.  People moved in and bought property which could once be afforded by 'the average working man' or was let out at reasonable rents and prices were pushed up.  Opposite my former infants school - itself long since redeveloped as housing - there is a row of terraced cottages and 60 years ago they were owned by a local engineering company and rented out 2/6d per week with most of the occupants being pensioners.  One with no change to the original accommodation (2 beds and 1 reception room but with an added bathroom. plus the kitchen of course) sold for £295,000 in 2012, a similar one went for £325,000 in 2014 - Zoopla currently estimates them at £420,000 (which is based solely on house price inflation I presume).  Not so much 'gentrification' but the sheer force of economic change plus there obviously being a market to buy them.

[The Stationmaster]

Ivan a bit radical and knowing you its mostly tongue in cheek/irony.

 

On the other hand all over the country in desirable areas wealthy individuals and companies are buying second homes/holiday let properties, which make it impossible for locals to complete. Walking back to the hotel in St Ives I went past many ex-fisherman's cottages, all of which had been either turned into holiday lets or commercial premises.  This was common in most of the coastal towns and villages, the exception was Clovelly (which you paid to enter) which has strict occupation rules.

 

 

 

I noticed this year while gawping in estate agent's windows in Penzance that prices seem to have dropped in West Cornwall for what would otherwise have been obvious 'holiday home' contenders so maybe teh taxation changes have had an impact?

[Horsetan]

Ivan a bit radical and knowing you its mostly tongue in cheek/irony....

 

It has actually been considered before, albeit not in London - I seem to recall it was seriously considered for parts of coastal Cornwall to prevent or reduce the "second home" phenomenon, and many years ago, County Clare in Ireland imposed regulations which banned the sale of certain properties to those not already long-term resident in Clare....which reportedly had an adverse effect. That ban is still in place, as far as I know.

[hayfield]

Try getting MP's to move out of London!

 

The value of investments can go down as well as up; when this happens to ordinary people it's tough and you have to live with negative equity!

 

Mark Saunders

 

 

Mark

 

I think most of us would like to get rid of MP's and as far away as possible

 

Houses are a supply and demand commodity and you can have market corrections which affect prices in the short term. Negative equity is only a problem if you are trying to sell/remortgage.

 

What has been suggested from some areas is not a period of negative equity, but a wholesale reduction in property prices to a level which all could afford, this would collapse the banking industry whose balance sheets rely heavily on rising property prices. 

 

We could build more houses, but look at the size of land banks which are carefully brought to market to maintain/ increase land values, what land owner would sell land below its value?. Then if land was made available show me a building company who is willing to cut their profit margins to sell houses cheaply. If you pass this hurdles find a bank willing to lend on an unprofitable project.

 

Another thought is who should social housing be for, and for how long.

 

Example 1

 

A person who earns enough to either buy a property or pay for private rent, should we subsidise their rent? 

 

Example 2

 

When a person(s) circumstances change, should we change the type of property they are entitled to. If its right to give them a larger property when their family grows, surely the opposite is also right when family leave home

 

I used to live near a housing estate where after the war was build for homeless Londoners, by the early 80's there were more Rolls Royce's on this estate per square mile that most other local areas, which were supposedly better off.

 

The rental sector in my opinion needs a rethink, prior to the change in legislation allowing Short hold tenancies the balance was too much weighted in favour to the tenants, resulting in homes which became available being sold rather than re-let, Now the balance is too far in favour of the landlord. We need a rental sector which works equally for both landlord and tenant. Landlords are always looking for good tenants and I think in many cases good landlords try to look after good tenants, we need to squeeze out bad landlords, but also protect good landlords from bad tenants 

[Horsetan]

.....who should social housing be for, and for how long.

 

.....Example 2

 

When a person(s) circumstances change, should we change the type of property they are entitled to. If its right to give them a larger property when their family grows, surely the opposite is also right when family leave home....

 

I think this is already done in the context of public housing, certainly in London if not elsewhere. Back when I was doing Housing Law, I saw it happen within the borough of Camden and also in Westminster.

[Mark Saunders]

I think this is already done in the context of public housing, certainly in London if not elsewhere. Back when I was doing Housing Law, I saw it happen within the borough of Camden and also in Westminster.

 

The rot set in when the housing stock was sold off and not replaced.

 

Then the stigma was created by calling it social housing.

 

Mark Saunders

[PhilJ W]

The rot set in when the housing stock was sold off and not replaced.

 

Then the stigma was created by calling it social housing.

 

Mark Saunders

Indeed, and what has happened where I live prices have increased to such an extent that the 'working man' has been priced out of the market. This is because former social housing is being snapped up by private landlords resulting in a majority of such properties going into the private rental market at far greater rents than those still in public ownership. Whats more those properties are often overcrowded (3 couples in a small two bedroom house) and many poorly mantained into the bargain.

[jjb1970]

Whatever politicians might say, they've supported house price and asset inflation as it creates an impression of wealth and unlocks access to credit which allows people to believe they're richer than they actually are and drive retail sales and political "feel good" factors. If politicians want that then fair enough, we all have opinions and many of them are wrong, but what irritates me is that after years of credit fuelled spending and asset inflation being basically unwritten government policy, in 2008 it was apparently all the fault of bankers. Now I'm no apologist for greedy bankers but they were one part of a triad of bankers, borrowers and politicians who were in cahoots. If banks were irresponsible lenders then many individuals were irresponsible borrowers and while the pseudo Ponzi scheme lasted politicians liked it as they could bask in the glory of having banished boom and bust.

[APOLLO]

Crazy place is London. SOOO expensive. I honestly don't know how locals with "normal" everyday jobs can live there.

 

We had a great day out there by train a few weeks ago. The 0709 from Wigan arrives just after 9.00am - usual visits for the kids, science & V & A museums, lunch in the Churchill Arms pub in Notting Hill - (a wonderful old London pub with a nice Thai restaurant in the attached conservatory) - Harrods (now YUK !!), walk down the Thames to Borough Market, walk down Oxford street (again YUK) - back to Euston, a bite to eat in the nice new Sushi Bar just outside, then onto the best thing in London in the evening  - The 21-10 Pendolino home, arrives 23-30, taxi home & in bed just after midnight !!.

 

I'll not knock London or Londoners (wife's mate is a cockney, a proper east ender and all - great friends) - but the place is really getting out of control in many ways. Unless you are a millionaire (and there are plenty there) you do not live - you exist - just (and it is beginning to show).

 

The place will go "POP" soon I fear.

 

Brit15

Edited September 29, 2017 by APOLLO

[Horsetan]

Crazy place is London. SOOO expensive. I honestly don't know how locals with "normal" everyday jobs can live there...

Eventually the only people who can afford to live in London will be the very rich (who won't be there much of the time) and the very poor (because, in a weird sort of way, they can't afford to move)....

[Oakydoke]

?..What has been suggested from some areas is not a period of negative equity, but a wholesale reduction in property prices to a level which all could afford, this would collapse the banking industry whose balance sheets rely heavily on rising property prices. 

 

There are "some people" who wish to engineer such a collapse of the housing market, as one of the methods to deliberately bring about a collapse in the banking industry (as well as to damage and ultimately destroy the very notion of private property ownership).

A collapse of the banking industry is one of the cornerstones of the drive to bring about a radical change in the social, political and economic structures of British society.

It's being "Wargamed" already, apparently.

[chris p bacon]

There are "some people" who wish to engineer such a collapse of the housing market, as one of the methods to deliberately bring about a collapse in the banking industry (as well as to damage and ultimately destroy the very notion of private property ownership).

A collapse of the banking industry is one of the cornerstones of the drive to bring about a radical change in the social, political and economic structures of British society.

It's being "Wargamed" already, apparently.

 

This isn't the same group that wishes to borrow vast sums of money by chance ?  on the premise that money's never been so cheap....and yet the BoE said rates are certainly set to rise next month....

[jjb1970]

This isn't the same group that wishes to borrow vast sums of money by chance ? on the premise that money's never been so cheap....and yet the BoE said rates are certainly set to rise next month....

Let's cut them some slack, if they can't figure out how a train seat works then it's unlikely that they will be able to understand much else.

Edited September 30, 2017 by jjb1970

[hayfield]

The rot set in when the housing stock was sold off and not replaced.

 

Then the stigma was created by calling it social housing.

 

Mark Saunders

 

 

I totally agree with you it was wrong not to replace the houses that were sold off, but the stigma of being a council tenant was always there. People were looked down if they lived on the Merridan, Hollywell or South Oxhey estates etc. The right to buy has greatly improved these estates for both tenants and owner occupiers.

 

Right to buy should have helped to increase housing stock rather than increase the councils reserves

 

Indeed, and what has happened where I live prices have increased to such an extent that the 'working man' has been priced out of the market. This is because former social housing is being snapped up by private landlords resulting in a majority of such properties going into the private rental market at far greater rents than those still in public ownership. Whats more those properties are often overcrowded (3 couples in a small two bedroom house) and many poorly mantained into the bargain.

 

The only reason houses are bought by private landlords to rent out has been the fault of the benefit system in the past being far too eager to pay any amount in housing subsidies, which has made this possible. In the early years it was very different as rents did not cover costs unless you had large sums to put down as a deposit. It was first time buyers who were setting the prices and the buy to let market struggled to complete

 

Quite simply the buy to let investor asks what rental income would this property let for, the purchase price is calculated from this. Whilst people and or state benefits are willing to pay/support high rents they will continue to push up house prices

 

Here is an example, two identical houses next to each other being rented by different landlords. Landlord A has low fixed overheads of say £400 per month, Landlord B has recently bought so has costs of £1200 per month.

 

I will keep the numbers simple for this example

 

These houses are renting for £1600 per month, on the face of it there is a nice profit, but drill down and the reality is totally different. Take away 10% agents fees and the profit is £240 then there are costs which have to cover insurance, maintance, periods of non occupation etc. Landlord A is fine, just the profits are not as large, landlord B may just be breaking even and is consoling them selves on the increasing property values.

 

Now throw in a hike in interest rates, landlord A is still fine, but landlord B may now be having to subsidise the rent. He could try and put up the rent, which might be met by a tenant who is paying the whole amount themselves, but someone who is dependant on housing benefits cannot pay any more

 

Both tenants leave, but in the meantime owing to a downturn in the economy prospective tenants can only afford  £1400 per month

 

Now do both landlords hold out for wealthier tenants and have no income, or accept a lower income for cash flow purposes. Not an issue for landlord A, just not as profitable as it used to be. Landlord B has a major problem, their asset is making a loss. They decide to get out of the rental market, but the housing market has changed, due to falling rents housing is not worth as much now, which in turn makes property more affordable to owner occupiers, add in rising interest rates and it becomes even less valuable to the buy to let buyers. Home buyers are now pricing the market

 

Quite simply to aid the owner occupier market, the returns of renting need to be reduced. Rents need to either remain static for a long time and or state housing benefit needs to reduce and stop artificially inflating rents thus house prices

[Horsetan]

I totally agree with you it was wrong not to replace the houses that were sold off, but the stigma of being a council tenant was always there. People were looked down if they lived on the Merridan, Hollywell or South Oxhey estates etc. The right to buy has greatly improved these estates for both tenants and owner occupiers.....

Um, I'm not sure South Oxhey has improved.

[hayfield]

Um, I'm not sure South Oxhey has improved.

 

Back in the 6's Teddy boys with cutthroat razors, all the original trouble makers have grown up, still a bit iffy but no where as bad

[jjb1970]

Eventually the only people who can afford to live in London will be the very rich (who won't be there much of the time) and the very poor (because, in a weird sort of way, they can't afford to move)....

We're pretty much already there anywhere near central London. You have to go quite a way out into Greater London before most people could afford to buy.