The Hunger Games imitates life in Britain’s property market. The evil President Snow has devised a ritual where young couples queue up overnight to fight for prison cell-sized spaces on the fringes of the city, enslaving themselves in debt while the mighty elite look on and laugh.
Will part two see the walls come crashing down? In Hollywood we know the baddies always lose … eventually (well, only when the franchise is truly wrung out). But this is Hounslow, where even the strongest of the rebels cannot overcome the malicious lords of the property market who decree that a 308 square foot space, called a “studio suite” (aka bedsit), should command a price of £230,000. For nine times average UK pay the buyer is still more than an hour by public transport to the city centre, although they are handily adjacent to Heathrow and the 4.30am jumbo jets roaring over their beds.
This is what goes for “affordable” in London, recently named the most overvalued property market in the world by Swiss bank UBS. What should we advise Shelinder, who the Guardian interviewed queuing overnight, who is hoping to secure one of the bedsits for his wife and himself, two years after marrying?
The “below the line” comment could be summed up as “you’re mad”, coupled with remonstrations to abandon the capital. Some reckon a price crash is around the corner, although that hope has proved cruelly false for years. Hours later a major piece of house price research was unveiled by Savills, suggesting prices will, across the UK, continue to climb – although at a far more moderate pace than in the past few years.
House price experts are generally people who know tomorrow why the things they predicted yesterday didn’t happen today, although Savills has a better record than most. It produced an unusually perspicacious forecast in 2008 when, amid collapsing banks and a tumbling stock market, it said that from 2012 there would be a renewed boom in the capital and the south-east, but prices would not reach their 2007 peak until 2016 in large parts of the north. Its latest five-year forecast is rather more tepid: the commuter hinterland of London will see rises, but at a more subdued level than the past few years
There is much talk about the “ripple effect” from London pushing prices everywhere else ever higher, but the good news is that stamp duty is taking its toll on the capital. Top-end properties are already falling in price, while the number of transactions above £1m is slipping. When Savills talks of prices rising between now and 2020, in reality the pace of growth is not much above predicted rises in inflation or earnings.
The property market has reached stalemate. On the one hand, a rising population and super-constrained supply supports prices, while on the other hand the affordability rules imposed after the financial crash mean that buyers can’t keep on borrowing ludicrous amounts of cash to keep the price momentum going. Meanwhile, the buy-to-let merchants are going to be hit by higher taxes and will find it tough to increase already rapacious levels of rent.
At a lavish dinner in Mayfair this week the bosses of a big lender told me we need to relax the affordability criteria so people can borrow more. Behind closed doors there is a massive push by the mortgage industry to have restrictions lifted. Maybe it’s working; in almost every recent speech by acting Financial Conduct Authority boss Tracey McDermott there is a reference to the need for a new balance in regulation.
Nothing could be worse. The chief thing holding back the house price spiral is the lack of easy finance. Long may that last. Sprinkle in further tax crackdowns on landlords and prices may even slip back a bit. Meanwhile, my top tip for Shelinder? Buy the worst house on the best road possible in the nicest town you can afford. I don’t think it’s likely to be a new-build studio in Hounslow.
www.theguardian.com/
The Hunger Games imitates life in Britain’s property market. The evil President Snow has devised a ritual where young couples queue up overnight to fight for prison cell-sized spaces on the fringes of the city, enslaving themselves in debt while the mighty elite look on and laugh.
Will part two see the walls come crashing down? In Hollywood we know the baddies always lose … eventually (well, only when the franchise is truly wrung out). But this is Hounslow, where even the strongest of the rebels cannot overcome the malicious lords of the property market who decree that a 308 square foot space, called a “studio suite” (aka bedsit), should command a price of £230,000. For nine times average UK pay the buyer is still more than an hour by public transport to the city centre, although they are handily adjacent to Heathrow and the 4.30am jumbo jets roaring over their beds.
This is what goes for “affordable” in London, recently named the most overvalued property market in the world by Swiss bank UBS. What should we advise Shelinder, who the Guardian interviewed queuing overnight, who is hoping to secure one of the bedsits for his wife and himself, two years after marrying?
The “below the line” comment could be summed up as “you’re mad”, coupled with remonstrations to abandon the capital. Some reckon a price crash is around the corner, although that hope has proved cruelly false for years. Hours later a major piece of house price research was unveiled by Savills, suggesting prices will, across the UK, continue to climb – although at a far more moderate pace than in the past few years.
House price experts are generally people who know tomorrow why the things they predicted yesterday didn’t happen today, although Savills has a better record than most. It produced an unusually perspicacious forecast in 2008 when, amid collapsing banks and a tumbling stock market, it said that from 2012 there would be a renewed boom in the capital and the south-east, but prices would not reach their 2007 peak until 2016 in large parts of the north. Its latest five-year forecast is rather more tepid: the commuter hinterland of London will see rises, but at a more subdued level than the past few years
There is much talk about the “ripple effect” from London pushing prices everywhere else ever higher, but the good news is that stamp duty is taking its toll on the capital. Top-end properties are already falling in price, while the number of transactions above £1m is slipping. When Savills talks of prices rising between now and 2020, in reality the pace of growth is not much above predicted rises in inflation or earnings.
The property market has reached stalemate. On the one hand, a rising population and super-constrained supply supports prices, while on the other hand the affordability rules imposed after the financial crash mean that buyers can’t keep on borrowing ludicrous amounts of cash to keep the price momentum going. Meanwhile, the buy-to-let merchants are going to be hit by higher taxes and will find it tough to increase already rapacious levels of rent.
At a lavish dinner in Mayfair this week the bosses of a big lender told me we need to relax the affordability criteria so people can borrow more. Behind closed doors there is a massive push by the mortgage industry to have restrictions lifted. Maybe it’s working; in almost every recent speech by acting Financial Conduct Authority boss Tracey McDermott there is a reference to the need for a new balance in regulation.
Nothing could be worse. The chief thing holding back the house price spiral is the lack of easy finance. Long may that last. Sprinkle in further tax crackdowns on landlords and prices may even slip back a bit. Meanwhile, my top tip for Shelinder? Buy the worst house on the best road possible in the nicest town you can afford. I don’t think it’s likely to be a new-build studio in Hounslow.
www.theguardian.com/