This is my ongoing horrified face
November 5, 2015 9:33 AM   Subscribe

People camp overnight for chance to buy "affordable" London "flat" (slTheGuardian)

(Emphasis quotes mine given the size of said flat and the price.)
posted by Kitteh (50 comments total) 5 users marked this as a favorite
 
> “Buying property is quite a high return and you can be sure the mortgage is paid. I’m thinking about my retirement. I believe after 20 years, I’ll have a good income so I can retire.”

This seems to be the mindset in Toronto, too. "The value of my house/condo is going to go up forever, and one day I will sell it and be rich." We'll see, I guess.
posted by The Card Cheat at 9:40 AM on November 5, 2015 [2 favorites]


Here's another bargain
posted by fearfulsymmetry at 9:41 AM on November 5, 2015 [1 favorite]


I said to a friend on FB that insofar as I know, no one is queuing for a condo in TO, but it is probably just a matter of time. Just the idea of that much money for 301 square feet leaves me sad for everyone I know in London who worry about making sure they don't get evicted from their flats, much less have money to buy any sort of home.

On edit: re: fearfulsymmetry's link -- what the ever loving shit.
posted by Kitteh at 9:43 AM on November 5, 2015 [1 favorite]


Rumour has it that the Tories are going to massively reheat the property market as with their other austerity tactics it's the only way they'll get the economy going / stop a massive crash before the next election. And if you're not already on the property ladder I guess you're shit out of luck.
posted by fearfulsymmetry at 9:43 AM on November 5, 2015 [1 favorite]


"The value of my house/condo is going to go up forever, and one day I will sell it and be rich."

This was the mindset of much of the mortgage banking industry up until about 2008.

One of the effects of the CFPB's qualified mortgage (QM) and ability to repay (ATR) rules is that it sort of forces banks to value mortgage backed securities based on the future value of the cash flows (the aggregated payments from the all the mortgages) rather than the expected future value of the underlying collateral (the house).
posted by VTX at 9:48 AM on November 5, 2015


1 in 4 MPs is a landlord, so it's not really in their interests to have affordable homes to buy
posted by fearfulsymmetry at 9:50 AM on November 5, 2015 [7 favorites]


As a pied a terre, a tiny £200K flat seems like a great idea for someone of upper-middle-class means who lives outside of London but works there during the week.

Shelinder Singh, 25, a business manager from Hounslow, had been in the queue since 5pm. He is a first-time buyer and the studio flat, if he secures it, will be the first home for him and his wife, who have been renting since they married in 2013.

Yeah, this, no so great. Yikes.
posted by GuyZero at 9:50 AM on November 5, 2015


> I said to a friend on FB that insofar as I know, no one is queuing for a condo in TO

I haven't seen any lines (I wouldn't bet against them having happened, though), but my wife and I went to one of those open houses for an under-construction Brad Lamb condo in Leslieville a few years ago, and it was a frenzy. It was one small step down from those Black Friday sales where people riot and knock each other down.
posted by The Card Cheat at 9:50 AM on November 5, 2015


This seems to be the mindset in Toronto, too. "The value of my house/condo is going to go up forever, and one day I will sell it and be rich." We'll see, I guess.

Yeah, a freehold home in Toronto maybe. A condo? Not likely.
posted by GuyZero at 9:51 AM on November 5, 2015


"The value of my house/condo is going to go up forever, and one day I will sell it and be rich." We'll see, I guess.

Well as real estate is about location3; when you say the value of your house will go up, what you're really saying is that you think the city you live in will increase in desirability, a.k.a some combination of: 1) there will be more people on the planet 2) people want to live where you live 3) they're not making any more of where you live

So I think as far as bets go, London is a pretty good one. And those specific prices sure as hell beat what we're currently seeing in SF.
posted by danny the boy at 9:55 AM on November 5, 2015


People lined up 48 hours ahead of time for a new housing development in my hometown in SoCal. It was the only way to make sure you got a chance to put down your 20%. Each tract sold out on the day it was opened up.

But, that was in 1978.

So, I really don't see how this is new or horrifying. Especially since the condos seem to be priced much cheaper than most of what is built in London these days.
posted by sideshow at 9:55 AM on November 5, 2015 [1 favorite]


re: fearfulsymmetry's link -- what the ever loving shit.

What that article is basically saying is that an empty lot at that location is worth 950K pounds plus the cost of tearing down that dilapidated shack. They certainly plan to build something nicer and bigger there.

Similar sales happen in Palo Alto all the time, but kind of worse; a perfectly good, but modest and a bit shabby, 2 bed / 1 bath house on a large-ish lot will sell for $2M and they'll promptly tear it down and start building an enormous super-modern house.
posted by Joey Buttafoucault at 9:57 AM on November 5, 2015 [4 favorites]


which is so misguided, because even after you've sunk all that money and time into buying the land and tearing down the old house and putting up a new one, you're still stuck living in Palo Alto.
posted by You Can't Tip a Buick at 10:04 AM on November 5, 2015 [15 favorites]


Actually the Tories are stopping tax relief on buy to let mortgages. The real good days for small property investors are over, because it was too good for the middle classes renting a flat or two in the 90s, and these Eton guys have to push the money further uphill than that.
posted by colie at 10:05 AM on November 5, 2015 [2 favorites]


I don't often try to predict things, but I have one now:

this won't be the last of these camp-out-while-waiting-for-a-house kinds of things we see happening. they may also happen in other cities in the world over the next couple years.

And at one such event, someone's gonna get on someone else's nerves, they'll start by having words ("what the fuck, man? Why are you pushing me?" "I didn't push you, I tripped, asshole,") and that will draw other people in and then it will escalate to blows and then it'll spin out of control and start a larger-scale riot.
posted by EmpressCallipygos at 10:05 AM on November 5, 2015


There is something weird that happens inside a lot of people when the opportunity to buy a home rears its head. "But we OWN it" doesn't really hold water as a benefit when what you own is a closet with a window and a shitter behind a screen, or whatever.

I've got no sense of what 28 square meters looks like, but napkin math tells me I've stayed in hotel rooms this year larger than that flat. Possibly hospital rooms.
posted by Sternmeyer at 10:05 AM on November 5, 2015


28 square metres laid out right is a very decent studio room plus a kitchen and bathroom separate.
posted by colie at 10:08 AM on November 5, 2015 [2 favorites]


Regardless of what political party is in control we have seen the end of 'affordable" housing in England. It is essentially a tiny Island, the most densely populated major country (England) in Europe, working diligently to maintain its countryside, and supporting a banking/manufacturing/service economy that is essential to the long term stability of the Island. In reality, one could take all the country estates/manors/royal property, multi-million dollar homes etc and convert them to working/middle class housing and it would not make a dent. Too many people, too little land, too many internal/external pressures. I guess they will just have to move to Wales, Scotland, Canada, Australia or the plains States. Cheers
posted by rmhsinc at 10:10 AM on November 5, 2015 [1 favorite]


I don't think anyone lines up for condos overnight in the GTA (Greater Toronto Area), but a lot of that is because big agents and other people get allocated units to sell before the leftovers are marketed to the general public, so if you really wanted that condo unit you probably already would have gotten it. Plus condos are no longer the investment they used to be.

There are overnight lineups for houses however, which makes some sense because while resale profits on condos is now pretty low houses are still seeing big gains. We'll see how long that lasts for though.
posted by any portmanteau in a storm at 10:12 AM on November 5, 2015


we have seen the end of 'affordable" housing in England.

I am not English, but I suspect there are plenty of cheap houses in England.

There are not, however, cheap houses in London or any other major city where there is demand for them. But specifically London which is not really a city for English people any longer, but a real estate investment vehicle for the global elite.
posted by GuyZero at 10:18 AM on November 5, 2015 [14 favorites]


1 in 4 MPs is a landlord, so it's not really in their interests to have affordable homes to buy

And about 2/3 of English households own their home, so any policy that actually lowered housing prices would be political suicide.
posted by ripley_ at 10:22 AM on November 5, 2015 [2 favorites]


GuyZero--I am not at all sure you are correct--most all of the property in England is very pricey( except perhaps some areas in the North where there is higher unemployment). it is easy and convenient to blame the 'rich" but I would assert the real issues is simple too many people--too many poor, working and middle class people. Southeast England is essentially one giant housing project with a few allocated green spaces.
posted by rmhsinc at 10:24 AM on November 5, 2015


This is my "was-Malthus-right-but-more-about-shelter-than-food?" face.
posted by telstar at 10:24 AM on November 5, 2015 [1 favorite]


By the time I get around to buying a home I'm going to have to knife-fight a drifter for the chance to put in a down payment on a cardboard box under a bridge.

Not even the nice bridge.
posted by the uncomplicated soups of my childhood at 10:27 AM on November 5, 2015 [12 favorites]


"But we OWN it" doesn't really hold water as a benefit when what you own is a closet with a window and a shitter behind a screen, or whatever.

That's a bit of a misunderstanding of this situation (and of large, in-demand cities in general. The point isn't to own a tiny closet. It's so you're not forced out of the city you want to be in, because your rent is too high.

Property value increases because more people want to be in your city. It's not some abstract growth value, intrinsic to the property itself. Things are expensive because everyone else had the same idea as you.
posted by danny the boy at 10:31 AM on November 5, 2015 [10 favorites]


By the time I get around to buying a home I'm going to have to knife-fight a drifter for the chance to put in a down payment on a cardboard box under a bridge.

Make that a college-educated former professional, and I think you've got it.
posted by ryanshepard at 10:40 AM on November 5, 2015 [4 favorites]


This is the development. Those are some tiny tiny flats. And Hounslow isn't even that nice!
posted by Catseye at 10:42 AM on November 5, 2015


GuyZero--I am not at all sure you are correct--most all of the property in England is very pricey

So me being wrong is generally a safe bet.

But luckily there's some fairly recent data on UK housing affordability! - if you look at the "House price to earnings ratio" it's definitely going up for the UK overall but it's much worse in London specifically. As in it's gone from 50% higher in 2012 (London over the UK overall) to nearly 100% higher now: "First time buyers in London are seeing house prices at a record 9 times average earnings. For the UK as a whole, the ratio of 5.1 is still above long term trends. It is a higher ratio than the end of the 1980s housing boom."

The analysis at the bottom of the article seems pretty good to me, but I'd like to hear some feedback from locals for sure:

What Explains the Lack of Affordability?

1. Lack of Supply
2. Low Mortgage Payments
3. Demand from abroad
4. Regional differences
5. Population Growth


It seems to be a little bit of everything.
posted by GuyZero at 10:43 AM on November 5, 2015 [3 favorites]


The U.K. is not a crowded island. It is, however, an island where the infrastructure is overwhelmingly concentrated towards the south-east, and within that area concentrated within London… and then within London, concentrated on a small area at the city centre.

So it's not really a surprise that everybody wants to move to within spitting distance of the one area that has reliable levels of infrastructure investment. If you choose to live anywhere else, particularly areas outside commutable distance to London, you'll not receive the full benefit of your taxes, because that money will fund infrastructure for London.

Now, as an intelligent mefite, I think you've probably got an idea as to how to solve the problem of unequal infrastructure spending; so does the British political system. Faster, more expensive trains to London!
posted by The River Ivel at 10:47 AM on November 5, 2015 [9 favorites]


starting at £199,000 for a 28 sq metre (301 sq ft) “studio suite” up to £355,000 for a one-bedroom apartment

Affordable?

How much do Guardian columnists make if they think that's affordable?

This seems to be the mindset in Toronto, too. "The value of my house/condo is going to go up forever, and one day I will sell it and be rich." We'll see, I guess.


It's not the house. Certainly not the condo. The property. The land. Developers in Toronto buy up blocks, bulldoze them, and put up highrises. I know people who bought houses in Toronto for next to nothing in the seventies who are millionaires now because they sold their small, decrepit, never-maintained pieces of shit to developers.

The mindset of the people who buy new homes in Toronto seems to be "I just don't feel yuppie enough."
posted by Sys Rq at 10:55 AM on November 5, 2015


And Hounslow isn't even that nice!

Much of Hounslow is actually blighted by noise from nearby Heathrow airport (the world's third busiest). A third runway will soon be approved and I wouldn't be surprised if these very tarted-up apartments are being sold fast before that happens. If you're buying off-plan as an investor based in China or Singapore (and many will be) you might get ripped off along these lines...
posted by colie at 10:57 AM on November 5, 2015 [2 favorites]


tax the shit out of the banks, use the money to build council housing and related infrastructure (including the occasional train line), repeat until crisis is solved.

Really the only flaw in this plan is that it requires control of the government. Unfortunately, the finance industry, despite their tendency to think of things in the short term, can be remarkably long-sighted when it comes to maintaining their position of privilege. As a result, they've short-circuited the tax-and-build process by seizing control of the government, the press, and (until the Corbyn revolt) all the major parties, thus preempting any attempt to get our money back from them.

admittedly, my take is maybe not the soundest, due to my material position and political philosophy. Most notably, 1) I'm an American and 2) There's a good chance I'm about to join a socialist party that's in the same international as Militant was.
posted by You Can't Tip a Buick at 10:58 AM on November 5, 2015 [4 favorites]


Population density of London: 5491 people per square km.

PD of England: 413
PD of Wales: 149
PD of Scotland: 68

I'm really happy we were able to move out of London. Our quality of life out here in Gloucestershire is much higher in terms of good food, recreation, scenic beauty.

We used to live in Bloomsbury and sometimes when I blew my nose, dark soot came out of it. Thats how bad the pollution was.
posted by vacapinta at 10:59 AM on November 5, 2015 [5 favorites]


I live in a Paris suburb now, and with Paris real estate being amongst the most expensive in the world, I didn't even blink at that article.

I lived in a 25 sq.m studio (270 sq.ft) with a 5sq.m balcony before I found my current 54 sq.m (580 sq.ft) place. That studio? Cost my landlord 220K euros TEN YEARS ago. And is not in Paris proper, but in a chic suburb a five-minute walk from La Défense. I was paying just under a thousand euros a month in rent for it.

The current 1BR I rent is also in a chic area, but all praise be to socialism, is managed by a licensed public housing management company, and is "intermediate" social housing. Not for those in poverty, but for those in between (hi that's me). As a result I "only" pay 860 euros a month in rent for it, which is so reasonable in the area it is not even funny.

So yeah, £199K for a brand new 28sq.m studio? That IS affordable. It's a gosh-darned steal in London proper. I know people who paid more for two-hundred-year-old 18sq.m chambres de bonne (service rooms) in Paris proper.
posted by fraula at 10:59 AM on November 5, 2015 [5 favorites]


So yeah, £199K for a brand new 28sq.m studio? That IS affordable. It's a gosh-darned steal in London proper.

In San Francisco there wouldn't be so much a line as a massive riot and/or a major protest involving a overturned, burned-out Google bus.
posted by GuyZero at 11:07 AM on November 5, 2015 [4 favorites]


srsly though I'm starting to feel like we should put trigger warnings on comments or threads that touch on the Bay Area housing market. It is kind of sick that I can read an article about London housing costs and think "ehhh... could be worse..."
posted by You Can't Tip a Buick at 11:10 AM on November 5, 2015 [9 favorites]


£199K for a brand new 28sq.m studio? That IS affordable. It's a gosh-darned steal in London proper.

But there is no way that Hounslow counts as London proper. It's 10 miles out at least. These apartments are not a good buy as an investor - your 199K would be a lot better spent in a more edgy urban area like Holloway where you won't get photos of silky purple cushions on a website, but you'll get nice hipster tenants who work in web design etc.
posted by colie at 11:11 AM on November 5, 2015 [7 favorites]


Yeah, but Rightmove has a grand total of one flat available in Holloway for under £200K, and that one doesn't appear to have windows.
posted by Catseye at 11:17 AM on November 5, 2015 [1 favorite]


Oh wait, no! I take that back, there's a few. Including places with windows. Luxury!
posted by Catseye at 11:17 AM on November 5, 2015 [2 favorites]


To be fair there was only one available at under 200k in the Hounslow development. The whole thing is insane and horrific but I just meant that this Hounslow development with overnight campers may have had its media campaign worked out to get attention.
posted by colie at 11:24 AM on November 5, 2015 [2 favorites]


Not even the nice bridge.

London Bridge.
posted by urbanwhaleshark at 11:25 AM on November 5, 2015


'The Hound of Hounslow.' Probably not a Scorsese movie anytime soon.
posted by colie at 12:24 PM on November 5, 2015


Just give them tridents and nets and let them settle it the way the rich really want us to.
posted by Nanukthedog at 12:26 PM on November 5, 2015


If people are queueing for these apartments, it means the price is too low. i.e. there are more people willing to pay X for the apartment than apartments available, so it's first come first served. Are the prices for these apartments inelastic due to regulation?
posted by gertzedek at 12:42 PM on November 5, 2015 [2 favorites]


Are the prices for these apartments inelastic due to regulation?

They're probably a loss-leader for marketing purposes (although I doubt they're being sold at a loss).
posted by GuyZero at 12:56 PM on November 5, 2015


> If people are queueing for these apartments, it means the price is too low. i.e. there are more people willing to pay X for the apartment than apartments available, so it's first come first served. Are the prices for these apartments inelastic due to regulation?

The article notes that there is no social housing on site.

Nevertheless, the argument I see you reaching for there (apologies if I'm reading too much into your statement) is that market allocation of housing when allowed to operate on its own terms will tend to adequately supply housing, or is in some other way virtuous. By saying that "the price is too low" — that under entirely free market rules these units could possibly fetch more money — you are suggesting that it is objectively bad or wrong when market-based allocation turns into a mixed market-and-queue allocation system. In terms of monetary gain, in an immediate short-term sense it's certainly bad for the company renting out the flats if they get less than full market value for them, but it is by the same terms good for the people who end up getting the flats. Although my sympathies aren't exactly with either side here, they're more with the renters than with the landlords.

Supply-side responses at this point tends to include the claim that an unregulated market (setting aside for the moment the likelihood that these particular flats are not priced at a level where they draw queues because of regulation), uh, anyway, supply-side responses at this point tend to involve the claim that an unregulated market over time will tend to efficiently supply housing at a reasonable level and price for everyone, and that the current housing crises happening in cities in countries on both sides of the Atlantic are the result of overregulation rather than with any flaws in how market allocation allocates. As a counterargument I present Industrial Revolution-era Manchester and early 20th century New York City. Both of these places experienced rapid population growth in a context where there were effectively no constraints whatsoever on development. In both of these places, housing tended to for the most part be terrible and expensive, with a bit of decent and very expensive housing for the middle class, and a few very, very, very nice but also astronomically expensive places to live for the upper crust. I would argue that this pattern is what tends to develop in unregulated housing markets, because this pattern allows landlords and developers to extract more profit from renters than a more egalitarian distribution does. If I had to guess why, I would say that firstly the "lots of substandard housing, some decent housing, a little fantastic housing" pattern keeps everyone in the system anxious about either falling into or being seen to fall into having to live in worse housing than they do, and thus inspires everyone to pay more for the best housing they can find, even if it's kind of crappy, or even really crappy. Secondly, it's because (aside from the glitch that happened from 1950-1980 when North America and Western Europe adopted partial social welfare states in response to the threat of Bolshevism) most of the money tends to fall into the hands of a few extraordinarily rich people, and so it's more profitable to massively oversupply those few people with luxury housing in desirable areas than it is to adequately supply everyone with housing.

Often at this point supply-side housing advocates start arguing that even if market methods result in inadequate housing for most people, they're nevertheless preferable, because they are in and of themselves virtuous — that, like, it's nanny-statism for government to intervene in housing markets, or that the market sorts people into a few elect people, that it rewards, and a bunch of preterite people, that it punishes, and that this is good because fuck the preterite. (I believe another way of saying this was given by one of the dads from South Park, who in an early-season episode taught his son that the world consists of Gods and Clods and that he shouldn't care much about people who turn out to be Clods). At this point in a conversation with a supply-side housing advocate, I start looking for the exits and then extract myself from the conversation by any means necessary.

Theory aside, it is in fact likely that the chief constraint at play here isn't government regulation, but instead marketing needs. The marketers for this development engineered a queue and then pitched a story to a reporter at the Guardian about it, a reporter who (if they're anything like reporters in the U.S.) is massively overworked and thus totally eager to run any press release they get more or less unchanged, especially when it's on a buzzy topic like the London housing market. This strategy is necessary, as it's an effective way to drive up the exchange value of tiny flats in a shabby neighborhood out by the airport, much like the tacky-luxe interior design showcased on the website is a way to drive up their exchange value.

HTH HAND.
posted by You Can't Tip a Buick at 1:22 PM on November 5, 2015 [6 favorites]


oh em gee they try so hard to make these apartments look nice but all the furniture is right up against all of the other furniture. all "and as a special feature, the dining room features a microwave oven and kitchen countertop conveniently right at your fingertips!"
posted by You Can't Tip a Buick at 2:22 PM on November 5, 2015 [2 favorites]


It is kind of sick that I can read an article about London housing costs and think "ehhh... could be worse..."

I live in San Jose, about to move back to LA, and my thoughts are "I thought London was supposed to be expensive".
posted by sideshow at 4:11 PM on November 5, 2015 [2 favorites]


-Housing is defining politics and the repercussions are dreadful[*]
-"both the banking and political systems are structured to favor ever-rising home prices"[*]

also btw singapore (paragon of 'less wrong', rationalist libertarian, neo-reactionary fever dreams ;) has a land authority that restricts ownership in deference to the public good! "The compulsory acquisition of land by the government was effective in keeping the costs of building houses and industrial premises affordable."

on that note...
The Increase In Inequality Is Necessarily Caused By Policy[*] - "We have a ton of room to install institutions that would distribute the national income more evenly than it is currently distributed. In fact, we don't even have to innovate on this front because other countries have already done it. We just have to steal their ideas. There is little question that adopting much more egalitarian distributive institutions, e.g. raising taxes and providing generous social benefits, would have been sufficient for heading off inequality rises (or, at minimum, keeping the rises very low)."

What's the Secret to Joining the 'Rich-Country' Club? Redistribution, welfare, and government programs for economic security[*] - "Prosperity requires a welfare state."
posted by kliuless at 10:56 PM on November 5, 2015 [3 favorites]


when I'm feeling moderate I advocate for strict price controls on housing (price controls, not rent controls) and massive state-managed housing developments. When I'm being realistic, though, I accept that what the Anglosphere needs, beyond just increased public housing, is genuine land reform — the uncompensated transfer of property from the people who own it to the people who live and work in it.
posted by You Can't Tip a Buick at 7:34 AM on November 6, 2015


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