And that’s why London is losing its soul and becoming an uninteresting place to live:
London housing price to earnings ratio
From 2.6 to 9.1.
This is a government choice. It is related to allowing the financial sector to take over London’s economy, with fake profits driving out real profits. It is related to the withdrawal from social housing. It is related to a decision to allow foreigners to buy real-estate they don’t live in most of the year. It is related to tax policy. It is related to the deliberate priming of the mortgage and housing markets by the central bank.
London is where the jobs are in England, but you can’t afford a home there if you’re an ordinary person and not attached to one of the various money hoses.
This same dynamic is playing itself out in world-cities worldwide: from Vancouver and Toronto in Canada, to New York, to Paris, to San Francisco, and so on. There are too many rich people, too many poor people, and too much pump priming from the central monetary authorities. If you live in the “rich sub-economy,” which can just mean being a retainer, you’re golden. If you don’t, you’re forced out.
There aren’t that many cities the global rich actually want to live in, play in, have vacation homes in, or retire to. There also aren’t that many financial centers in the world. Those cities that are both (like New York and London) are becoming impossible to afford the fastest, but so are all the “world cities.”
The irony of this is that huge real-estate prices drive up rents for businesses, and the interesting businesses (like book stores and one off retail outlets) are driven out of business. The artists, intellectuals, rebels, and so on that made places like New York, San Francisco, and London interesting are also driven out. The rich, being largely uninteresting and useless at anything but sucking from money-tits, make cities boring and sterile; they destroy much of what attracted them to a city in the first place.
What is left are expensive restaurants and overpriced chain fashion outlets: soulless and boring.
The rich, in numbers, are locusts, destroying what they think they value.
someofparts
“If you live in the “rich sub-economy”, which can just mean being a retainer, you’re golden. If you don’t, you’re forced out.”
That sounds right. It has seemed to me that framing things in terms of the 1% keep us from noticing how very many rich people we are really dealing with in our communities.
Brian
They are people who “know the price of everything and the value of nothing” as Wilde would have put it.
Stirling Newberry
2 things: one related to the topic, one unrelated.
1. Of course, the related thing, is that the growth in the worlds economy is headed for India (7.5% last quarter) and the poor are going to realize this is coming straight out of their pockets.
2. The unrelated thing, is I have said up a news service on my website. It is flourishing briskly, as one people want from the is news in various different languages ( English, Chinese, French, Spanish, Portuguese, Italian, German) which I speak.
cripes
Yes, they are a blight. New york and london are reduced to stash houses for international criminals to hide their loot, much of it in the form of overpriced real estate they won’ t live in. The other part of overpriced real estate owned by phony LLC’S and corps.
Pushing the rabble outside the city wall while carpetbaggers sleep in their homes? How could that go wrong?
Vice kindly illustrates this in map of London.
http://vice-images.vice.com/images/content-images/2015/03/29/dan-hancox-forced-out-of-london-data-body-image-1427669662.png
And related article.
http://www.vice.com/en_uk/read/dan-hancox-forced-out-of-london-data
John
When its torches and pitchforks time, they will be easier to locate.
That will occur when their bodyguards, protectors and paid retainers run or turn against them. Feudalism didn’t arise immediately out of the cratered ruins of the western Roman Empire. It took an adjustment period known as the Dark Ages before feudalism could arise.
That is generally not a pleasant time for anyone, but it certainly cycles through a lot of contenders before the toughest ones take charge.
And have you looked at the skyline of London lately. Mr. Market has certainly been busy killing the human scale of the place.
What the Brits call the Gherkin looks to me like an anal torture device from Gitmo.
alyosha
One implication is that the artists, intellectuals and so on move elsewhere, making second or third tier cities much more interesting and livable. Austin TX or Portland OR come to mind, but there are many other lesser known cities in the US where the interesting people flock to, having been priced out of the larger metropolises.
Monster from the Id
I expect that the people who are willing to sell their souls mostly consist of people who do not believe the metaphysical commodities which they are selling actually exist, so they are getting something for nothing.
Tal Hartsfeld
“Gentrification”, as is being presently perpetrated, is little more than a downright malicious social-engineering conspiracy.
Pure and simple.