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

[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.