The upper-middle class poverty line

[denny]

http://women.timesonline.co.uk/tol/life_and_style/women/the_way_we_live/article1719509.ece

The author borders on insufferably self-involved, but the core point is worth discussing... I know plenty of fairly 'well paid' professionals, mostly geeks, who are living in grotty shared housing and/or still sliding into debt. Why? Because housing is so stupidly expensive that just 'well paid' isn't enough any more... if you want to live 'comfortably' in London, you either have to be paid in the sort of brackets the financial sector waves around, or you simply don't make the grade.

I'm bemused by the article's conclusion that this is all due to 'globalisation'. I'd have pinned the blame squarely on a combination of city bonuses driving the housing prices in London up at a stupid rate, and buy-to-fucking-rent doing the same thing across the whole country (albeit somewhat more slowly).

If you can't afford to rent or buy somewhere halfway nice to live, everything else you can do about your quality of life is pretty much window-dressing.

Discuss?

Comments

[booklectica]

I sympathise about the house prices issue, but the rest of it just made me want to shake him.

Specifically, if professionals (and particularly MPs) can't afford to send their children to fee-paying schools - good. Maybe that'll provide them with motivation to improve the state schools.

And the description of this as 'poverty' - god. As the comments say, he has no idea.

[kotenok.livejournal.com]

And all this becomes even more magnified when you lack the skills or qualifications to even come *close* to the 'professional' status. There is always going to be a limit to how good a salary one can expect to acheive when working as an administrator. Rather depressing, really!

[dennyd.livejournal.com]

No offense, but this isn't about you. This is about people who are fully-qualified and experienced professionals, who you'd expect to be doing very nicely thank you, who are in fact almost as fucked as everyone else. That's kind of the point the article is making - there's an increasing amount of financial difficulty in the places you wouldn't expect to see it, as well as in the places where it's perhaps less surprising.

Not that experienced office workers should be paid below the break-even point either, but that's not the subject under discussion here.

[kotenok.livejournal.com]

No, I realise that. I was just throwing in my two pen'orth..

;)

[deerfold.livejournal.com]

Wow, those schools are expensive. And I speak as someone who went to a Private school. My parents were a part-time teacher and a greengrocer - but this was back in the days of assisted places - about a fifth of the people in my year were there based on intelligence/exam-passing alone with no regard to the earnings of their parents.

For some years I have earned far more than my dad ever earned. I'm earning a little under the national average wage and quite a bit under the London average. My girlfriend earns what I would have considered to be a fortune just a few years ago. We can't even think of buying somewhere in London to live. We're being outbid on 2-bedroom flats and we're nearly in Bedfordshire. In a few years we'll move North and become part of the problem of pricing locals out of their houses up there. My gf's lucky - they're keen to relocate Civil Servants up North; most people don't have the option as the work is down here - I'll probably have to take a severe pay cut when we go.

[deerfold.livejournal.com]

And I speak as my girlfriend is a professional. And I, erm should be. Getting closer from an odd angle at the moment.

[ladynina.livejournal.com]

Upper middle class London centric rubbish. Values are internal, not tied up in the money you make or the property you own.

[dennyd.livejournal.com]

Values? It's talking (I thought) about standard of living / quality of life, not 'values'. As you say, those aren't really financial in nature, which the article clearly is.

[ladynina.livejournal.com]

It was comments such as "turn their backs on professional status" and the younger sons of an Earl being "both stony broke? These are hardly natural-born losers". Or "One, a merchant banker, is flourishing; another, an architect, is doing all right; and another is living in a council house."

He is equating status, property ownership and money as measures of success. They are what he values. That's his right. I don't see it that way.

As to the standard of living, move out of London or accept you'll be paying ridiculous prices to rent and don't have a chance of owning. Private education is a luxury. Capitalism won.

Sorry, but I've always worked in wlefare related jobs with people who are experiencing actual hardship, so I've little sympathy with people who have shelter, food, safety and an income moaning because they're not getting what they think they deserve.

And as to the trickle down theory, don't get me started.

[kilinrax.livejournal.com]

He is equating status, property ownership and money as measures of success. They are what he values. That's his right. I don't see it that way.

Then you'd be in something of a minority :)

I don't think he's talking about money, but purchasing power, which is a factor in 'standard of living', by an useful definition of such above the poverty line.

And as to the trickle down theory, don't get me started.

It's called 'voodoo economics' for a reason, that reason being that it's complete bullshit :)

Proud minority.

[ladynina.livejournal.com]

Call me an unashamed idealist if you will, but I believe one day humanity will collectively wake up from its mesmerism by shiny capitalist toys.

(shiny things)++

[dennyd.livejournal.com]

My money's on the apocalyptic end-days scenario personally - nothing says 'shiny capitalist toy' like a Big Fucking Gun(fight).

Re: Proud minority.

[kilinrax.livejournal.com]

I don't think they'll do that until they run out of toys.

Re: Proud minority.

[arachne.livejournal.com]

And I'm proud to be in that minority with you.

At least, I *hope* they will.

[denari.livejournal.com]

there's a lot to say about the subject, but as am at work will restrict myself to a few points.
- We are all living in smaller and more expensive houses than the previous generation. Some of this is housing going up, some is that there are just more people around. In fact housing has gone up at the rate it has because of supply and demand. True, not many people can afford to buy a house in London/South East, but you can still get a decent rental property (although yes you will most likely have to share - see expanding population point).
- People who are still sliding into debt: the housing market I don't think is to blame here (at least not in it's entirety), I think it's lifestyle. We live in a 24/7 kind of lifestyle in london where we can do pretty much anything we want, when we want if we can afford it. There are lots of cool expensive gadgets around to spend money on and is much easier to get into debt. In our parents day, there were less disirable expensive things available to tempt us. And of these, less were advertised as there was less pervasive advertising.
- the fact that it's up to globalisation? Bullshit, it's because we want to live harder and faster than the previous generation. We were born at a relatively untroubled time. No big war or any great thing to worry about, a generation without too much of an identity, apart from excess. It's only now that we're starting to realise the issues that define our time period. The main ones being Enviromenalism, Terrorism & globalisation.

[blanche-carte.livejournal.com]

Aside from the article itself...

, who are living in grotty shared housing
It's quite a big difference I've noticed since coming to London - that just about eveyone in their late 20s / early 30s is still living in shared houses.

In Edinburgh, quite a few of my friends rented places on their own (not in the plushest of locales, but certainly quite ok) and were prepared to pay a high % of their salaries to do this (e.g. rent of £350 - £425pcm when on £15 - 18k pa gross), not necessarily expecting that they would be buying in a few years' time whether they shared or not. They always seemed to feel as if they had a higher quality of life than people in flatshares, even if they didn't spend as much on some other things.

Whereas here, pretty much everyone I know, many of them with significantly higher salaries than the friends in Edinburgh, is living in a shared house and paying a rent which could get a studio or small 1-bed flat in another part of town. (I've recently seen several ads for rooms in the NWs at the same price as my whole flat.)

I'm not arguing for one way or the other being better (after all, communal living is better for the environment, it might be nice having people around, and I'm wondering about sharing again). But I do wonder about this difference, especially whenever someone says that they wish they had a flat to themselves.
Is it habit? Do people want to have more money for all the things there are to do in London?

[dennyd.livejournal.com]

I choose to live alone because I'm a bit mentally unstable :) I find that three days is about the most I can take of having other people around, then I need a day alone to recharge. It does eat a fair chunk of my money though.

I vaguely recall my dad telling me that a good rule of thumb for reasonable quality of life is that you shouldn't spend more than 1/3 of your monthly wages on your rent. I'm a fair bit over that line since I got promoted, and I was a long way over it before that.

Globalisation

[blanche-carte.livejournal.com]

I can see why he makes the point about globalisation - much of the time when there's a story about some house worth millions being sold in record time, it seems to be someone originally from abroad who bought it.

But as for the example of the Polish nanny sending her money home, less likely. Most of the East European workers I've spoken to (mostly in an advice work capacity) are spending their money in the UK enjoying life here.

I do wonder if a property-market "correction" in the low to mid range may happen though, as foreign zillionaires - who would continue to prop up the top end of the market by the logic cited - aren't really interested in the average 3-bed semi.

[ulorin-vex.livejournal.com]

One of the major 'depressing' things I sometimes think about re: my life is that I don't see how I will ever be able to afford a place of my own to live, even if I find a decent professional job using my degree.

[dennyd.livejournal.com]

Depends where you want to live of course - for me, the most realistic career options are in London, and I find commuting extremely bad for my quality of life. Besides, I like living in London, it's fun.

It is horribly expensive though, and I'm not sure that's as inevitable as some people seem to think - if all the flats in my area hadn't been bought by people who are just renting them out for profit, then surely there would be more cheap flats available to buy? If the landlords are making a profit, it's the people renting that they're making it from - and we can't afford it.

[ulorin-vex.livejournal.com]

Well, for the work I'm looking for if I want to use my qualifications, London and maybe one or two other large cities are the most likely options. I do think a lot of the problem is buy to rent too

[mooism.livejournal.com]

The planning permission framework has a lot to do with it too. If we had lots more houses and flats, they wouldn’t cost anywhere near as much.

[cybermuppet.livejournal.com]

...and most of the southeast of England would be covered in ribbon developments.

[mooism.livejournal.com]

If you get rid of the planning framework, yes. If you change the planning framework to something more sensible, no.

[robert-jones.livejournal.com]

I don't think BTL landlords have overall effect on property prices. They reduce the supply of property for sale but increase the supply of property for rent. The result is declining rental yields, which is quite right and proper, because rental yields have been artificial high for decades.

In fact, many landlords aren't "making a profit", because the rent is only sufficient to service their mortgage debts. They are relying on capital growth to get a return on their investment. If house prices continue to rise at 10% a year, then they'll be rolling in it (particularly bearing in mind the degree of leverage commonly involved). However, although I lack any sort of expertise in the housing market, I think it fairly obvious that prices can't continue to grow at that rate for ever.

I do think that the significant capital inflows are an important reason why house prices are rising so dramatically (particulary in London). Everybody buys the best house they can afford, so if the top tranche are taken out by Russians, the price goes up all the way down the ladder. I think that the fashion for BTL is an effect, rather than the principal cause, of the housing boom, although it undoubtedly helps to sustain it.

[robert-jones.livejournal.com]

I apologise for the numerous typos in the above. It's been a long day.

[bluecassandra.livejournal.com]

"Indeed, when I return to the agreeable parts of central London that I know so well from earlier periods of my life, I realise that I am looking at the attractive stucco houses in just the same way that a tramp looks through a restaurant window at a group of people enjoying a carefree meal. I am effectively an exile in the city where I was born."

You know if it had just been an article about how our generation our being priced out of the housing market (even if I think it a bit odd that the professional class who arguably kinda started this is now whinging), I'd have had some sympathy, but this section just imbued me with stabbing rage instead.

I also have no sympathy whatsoever with not being able to afford private education. Maybe the fuckers will start actually giving a shit about state schools now.

Also is it my imagination or is the gloibalisation argument just anti immigration racism in disguise?

As for the housing market, it'll collapse at some point, so thats that sorted.

[kilinrax.livejournal.com]

I also have no sympathy whatsoever with not being able to afford private education. Maybe the fuckers will start actually giving a shit about state schools now.

Agreed, though I do feel that people are rather missing the author's (valid) point due to him coming across as supercilious arse. There was definitely a prejudice against state schools in my parents generation.

Also is it my imagination or is the gloibalisation argument just anti immigration racism in disguise?

I read his point as being more against outsourcing to India than anti-immigration. Even if it was, I don't think you can claim being anti-immigration is fundamentally racist (though the two are often associated).
I for one would be for restricting foreign property ownership if it enabled me to own a house.

As for the housing market, it'll collapse at some point, so thats that sorted.

I'd like to believe that. We'll see. The signs are there, I only hope that it falls far enough. I know plenty of people waiting to buy property who could take up some slack in the market.

Agreed

[cybermuppet.livejournal.com]

It's city bonuses and buy-to-let that is to blame.

Buy to let is really only attractive with large capital gains: The rental yield is pretty rubbish and is probably only just enough to cover the mortgage repayments, but when combined with 10-15% growth a year in the housing market every year, it is a spectacular investment - especially if you have the minimum amount of capital possible actually tied up in the property. If you meet the mortgage interest from the rent, you then trouser 15% growth on about 80% of the value of the property you've borrowed.

Doesn't work nearly so well without house-price inflation though. Not unless you sit it out for the long term.

Needless to say, I suspect that a lot of city bonuses go into buy-to-let property.

[tribeca-tom.livejournal.com]

I stayed in Lambeth for three weeks in a friend's flat trying to get a job in 2001 but I couldn't find anything that would get me much leafier than Tower Hamlets or the Elephant & Castle, despite me just having graduated from a would-be masters. I shudder to think what it's like now. If I were Ken Livingstone or David Milliband, I'd be making affordable housing a top priority that's on the BBC news podcast at least once a fortnight.

Living in New York, I've had a shared apartment arranged for me by work which is being taken away on conclusion of work. I've never found out how much it costs exactly, but being where it is I can only imagine I'd be pretty rich I've they'd paid me the money instead. Where it is has taken something of a downturn since 9/11, and indeed it couldn't have been much fun living here 4 to 5 years ago and recovery of the area has been slow compared to intial expectations. It's what we have the film festival for. I'm moving to Washington Heights among the Dominicans and the Yeishevah students. It's going to be something of a culture shock.

I have two friends who are in their early 30s now and are both owner occupiers from '97; one in Edinburgh, one in New York.

Edinburgh one was ordered by her mum while a student to use some money she came into to buy a two bedroom on Bruntsfield Links. She now lives in London as a postgrad student.

New York one was similar, though this time on the Upper West Side, not far from the Dakota Building on 72nd Street. (This would be like living in Hampstead) She could afford to live in Oregon for three years by letting out this apartment. She now lives in a brownstone studio in 63rd Street for $1800 (about GBP900) a month and her parents live in the original apartment.

In both cases, the price they bought the places for in '97 is now pennies compared to what they're worth today. It was such a sound investment for both of them.

On a final note about New York, they've started having affordable housing lotteries here. It was in the paper the other week, a couple in their 20s 'won' an apartment in a place that's really only comparable to Mayfair with a rent of $780 per month (almost GBP400 a month). I wonder if they have these in London?

I have a friend from the south as well who'd love to live in England and has half a million dollars to spare. (He has a six figure salary) Such a sum would only get him a two bedroom condo on the outskirts of London. However, if he wanted to stay where he is in North Carolina he could build a 4000 square foot mansion with a long drive and fountain out front, a pool out back and multiple garages.

'Tis indeed a popular topic of discussion in the modern world.

[arachne.livejournal.com]

Assuming half a million dollars is approx £250,000, he can do a lot better than a 2-bedroom condo on the outskirts of London. I'm living in a 3-bed house with front and back garden and *so much space*, on the outskirts of London, that cost a chunk less than that 4 months ago.

[original-hell.livejournal.com]

Yeah, I'm loving the idea that "to live comfortably" means sending two or three kids to private school. And the idea that they "can't afford to eat out" is ridiculous; maybe not in the best restaurants, but good god.

'As Arthur Dent would have put it: this must be some new definition of "hardship" I was previously unaware of.'
-Jen Yockney, Manchester, England

The housing stuff is a serious point but really, this article does not discuss it in sensible terms.
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