Why London Property Prices Are On The Hump!

“London rents are now twice the national average,” screams a headline article in one of the pages of news beat from Property drum magazine of July/August 2014. The Guardian’s on-line headline of 2 July 2014 read; “London house prices leap by 25% in rise unequalled since 1987, new data shows.” UK property prices are less interesting unless the focus point is on London. If not cheery dancing about rising rental prices, they will be hooting about ‘unaffordable’ house purchase prices. Is there a real motive behind the press’s fascination with house prices in London? Funnily enough, there is. This historical and loveable city constituted of thirty-three local authorities need to build more housing stock for its growing 8.3 million inhabitants. The cause of continued upbeat in property prices are simply the consequences of elasticity of supply and demand chain. London has seen chronic shortage of suitable housing for over fifteen years, amidst the boom and burst. How then is it that the solution to this housing crisis, though surmountable seems so gargantuan to tackle? The problem lies squarely with the NIMBYS – a beautiful acronym, meaning; not in my backyard sympathisers, and pressure group campaigners. These intelligent people understand that problems need solutions. But equally become hysterical when practical solutions are pitched closer to home. They moan and hug trees at the mention of structural development, aka new housing applications with target on Greenfield lands. Inasmuch as protesters reserve the right to legitimate protest, the fact remains that the city of London, United Kingdom, is Europe’s financial capital and therefore in dire need for housing. Fact: The heads at City hall and Westminster know this. Yet, government have been shy to commit the required investment to large-scale housing development. It will not get better. So what is the attraction? Compared with other major cities around the world, there’s really no place as ‘safe’ as in London for property asset investment. It welcomes anyone running away from real, imagined or constructed persecution. It is a haven for criminals escaping justice from their homeland. It is the land of refuge for all! Its beauty is the vibrancy, diversity and tolerance. It is a melting pot of all nations, making it the best city to live in. It’s also easy to obtain a job in London, if choice is not an option. And since housing is an essential human need, the factors that drive supply and demand will remain elastic. UK’s democratic process is deemed to be fairer in the West, because the system allows for abuse of state privileges. To some, the streets are layered with Gold and people still pick-up Pound sterling in the under growth, (by the very nature of state support, extended to those who have paid nothing into the coffers, but qualify to receive?) There is also strong connection between the common wealth of nations and the United Kingdom, who still look up to England as the colonial ‘motherland.’ But the reality is that London has two location prices. There are prices, which are more specific to prime location addresses, where oligarchs, wealthy Arabs and African heads of state come to hunt. And then there are others – the Greater London locations. To the wealthy international property investor, London is considered highly and wisely a favourable property tax haven. The motive being, to keep financial gain in the pockets of the investor, while legally minimising tax liability to the state, is hugely attractive. It provides an environment where anyone with any entrepreneurial imagination, can conveniently make a living, without being able to speak conversational English. It allows clusters to be formed amongst arriving immigrant communities who also import their own customs, because people tend to draw closer to their kind, and uphold what they are used to. The effect of assimilation growth impacts greatly on infrastructures like housing, schools and hospitals over a given period. London will continue to attract the good, the bad and the potentially ugly to its shores. There will be those with few pennies in their pocket on arrival, a smile on their faces, with little or no command of English, but with bucket-full of determination. There are also those with intent to defraud the indigenous generous system. However, the energetic young, willing to dirty their hands, taking chances and seeking their fortune, makes London rental prices seem cheap by collective responsibility. That is the spirit of London!