Originally posted by Drei
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A bit late with a reply but mate if I or the average Joe could not afford to live in central London in 1990 2000, the poor little "young immigrants" must have some fat wallets to want to live in central London these days. The Russian investor might buy a 4 mill mansion but in reality what they buying is the 40 mill mansions and digging the ground up making another mansion underneath. Are you telling me the "young immigrants" can afford these houses? Those houses (mansions) are left Empty hence why so many have squatter issues.
I think the reason is much simpler, more "young immigrants" coming to London wanting to live near Central London (to find work and be near the action, busy city life) or other Cities in other parts of UK therefore supply and demand. Yes these "young immigrants" living 8 in a 3bd house increase the prices, why? Well if a family rents a 3bd house they have 2 salaries let's say paying £1200 rent. Now if 8 people live in a house with 8 salaries paying each £350 a month... that is £2800... so what is it that you do not understand? The fact that paying £350 a person seems peanuts yet for a family it is completely unachievable?
However now the poor "young immigrants" want to pay less money too for accommodation, they want the £1200 family price and pay £150/200 a month per person so they are slowly moving out. Hence now the trains commuting into London or other major Cities get fuller and fuller.
So yeah the many many poor "young immigrants" living in shared accommodation drove the prices up. Supply and Demand, nothing to do with the mansions and sky scrappers the Oligarchs buy (regardless of their money laundering and business practises).
Its a circle of life which you seem not to comprehend. Pretty damn basic stuff, stop blaming the few elites, they really do not want your house. Unless they buy 50 houses at £200k not sure it is worth their investment. They want to buy 30 mill mansions then sell it for 50 mill in 2/5 years. If they do buy 50 small houses of course they rent them out and probably sell them later but I don't think I heard of any rich people buying up whole streets or new house areas. Feel free to point me to the streets of £200k+ houses purchased by a single individual and left empty.
Hypothetically: If you have a house for sale at £350k yet 1 2 zones away they sell mansions at £10 mill a pop, you decide to up your price at £600k who the hell is going to buy your house? Thing is that your neighbour sees your house at £600k and does the same thing, the next one too and so on until the norm price is now £600k, the 10 mill mansions become 20 mill and so forth. The average Joe for whatever reason buys your house at £600 then barely makes his £600k mortgage until eventually the bubble bursts. Or your neighbours are not greedy little tulips and sell the house at the proper price and everyone pays whatever they can afford.
Example: At one of the jobs I overheard this young woman talking about renting in central London. She and her 2 female friends decided to rent a 3BD flat with the 3rd room being a box room paying £750 each (she considered that amount a steal). Due to the box room the agreement was that every month they would take turns living in it. Would I agree to that, of course not but some people would and pay £2250 rent. £2250 rent to me is equivalent to a £500k mortgage. This means that the £300k flat it is now a £500k flat. Rent goes up by £100 add an extra 10k to the flat price
Thing is if the property has no mortgage that £2250 is pretty much the equivalent to £675k (2250/12*25=675000).
Now whoever pays 1mill for a studio is another crazy conversation.
Hopefully when these "young immigrants" stop considering £350/750 PP a steal or leave the demand will go down too and so will the prices.
I think the reason is much simpler, more "young immigrants" coming to London wanting to live near Central London (to find work and be near the action, busy city life) or other Cities in other parts of UK therefore supply and demand. Yes these "young immigrants" living 8 in a 3bd house increase the prices, why? Well if a family rents a 3bd house they have 2 salaries let's say paying £1200 rent. Now if 8 people live in a house with 8 salaries paying each £350 a month... that is £2800... so what is it that you do not understand? The fact that paying £350 a person seems peanuts yet for a family it is completely unachievable?
However now the poor "young immigrants" want to pay less money too for accommodation, they want the £1200 family price and pay £150/200 a month per person so they are slowly moving out. Hence now the trains commuting into London or other major Cities get fuller and fuller.
So yeah the many many poor "young immigrants" living in shared accommodation drove the prices up. Supply and Demand, nothing to do with the mansions and sky scrappers the Oligarchs buy (regardless of their money laundering and business practises).
Its a circle of life which you seem not to comprehend. Pretty damn basic stuff, stop blaming the few elites, they really do not want your house. Unless they buy 50 houses at £200k not sure it is worth their investment. They want to buy 30 mill mansions then sell it for 50 mill in 2/5 years. If they do buy 50 small houses of course they rent them out and probably sell them later but I don't think I heard of any rich people buying up whole streets or new house areas. Feel free to point me to the streets of £200k+ houses purchased by a single individual and left empty.
Hypothetically: If you have a house for sale at £350k yet 1 2 zones away they sell mansions at £10 mill a pop, you decide to up your price at £600k who the hell is going to buy your house? Thing is that your neighbour sees your house at £600k and does the same thing, the next one too and so on until the norm price is now £600k, the 10 mill mansions become 20 mill and so forth. The average Joe for whatever reason buys your house at £600 then barely makes his £600k mortgage until eventually the bubble bursts. Or your neighbours are not greedy little tulips and sell the house at the proper price and everyone pays whatever they can afford.
Example: At one of the jobs I overheard this young woman talking about renting in central London. She and her 2 female friends decided to rent a 3BD flat with the 3rd room being a box room paying £750 each (she considered that amount a steal). Due to the box room the agreement was that every month they would take turns living in it. Would I agree to that, of course not but some people would and pay £2250 rent. £2250 rent to me is equivalent to a £500k mortgage. This means that the £300k flat it is now a £500k flat. Rent goes up by £100 add an extra 10k to the flat price
Thing is if the property has no mortgage that £2250 is pretty much the equivalent to £675k (2250/12*25=675000).Now whoever pays 1mill for a studio is another crazy conversation.
Hopefully when these "young immigrants" stop considering £350/750 PP a steal or leave the demand will go down too and so will the prices.
Immigrants particularly from the Commonwealth have always shared rooms. Or did you never hear the jokes about the Australians when they came over to work because the pound was stronger than the Aussie dollar? I only know because I worked and socialised with some of these people, and lived in a shared house where 2 of my housemates had moved to escape that lifestyle.
And yes if you were canny up until 2000 you could find a room to rent in central London locations at cheap prices. All cheap rooms to rent were found via word of mouth not adverts.
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