Looking for a flat here in London was probably the most inefficient and frustrating processes I've ever had to deal with. Individual estate agents with street-front shops with exclusive rental listings. $200 fees to find a place. Can't get a flat without a UK bank account, can't get a UK bank account without a flat Catch-22.
But at the end of the day (actually, the ten days) I got my flat. 500 pounds a week (I think that's about $4000 a month). 1 bedroom, 1 1/2 bathroom. But a pretty kick-ass place overall - in Chelsea, rooftop patio overlooking a park. But good god, this is the most expensive city hands-down. Even my cable bill is going to be 85 pounds a month (what's that, around $160US) - and that's without any movie channels!
When the worldwide bubble blows, it can't come too fast for this "Get on the Property Ladder!" city.
Anyway, I should be all caught up and back in the groove starting today. But since I'm not "on the ground" or in ground-zero (Arizona), please send me your local bubble news (housingpanic@yahoo.com) or post any interesting links here.
Cheers mates
February 01, 2006
HP is getting settled in London (finally, and in an overpriced flat)
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12 comments:
I see you're settling down in Chelsea.
Be careful of theft. You neighborhood is a well known target. It is well over hyped. If you moved to North London (Swiss Cottage area), you would have saved yourself lots of money for a slightly bigger flat.
Most of the fools now buying property in London are foreigners. There is lots of new Russian money.
Enjoy the most over hyped city in the world.
Cashed-out Former Londoner.
500 British pounds = 886.8 USD
$886.8 * 4 = $3547.2
That's still very expensive though. What's the median salary over there?
Yup, Chelsea is definitely over hyped. North London has lots of cool spots and is half the price.
But the good news is the US dollar is climbing against the pound You did keep the bulk of your money in the USA, didn't you?
out at the peak,
"what the median salary"
In europe the employer pays all income taxes and the business pays all sales taxes.
When Housing Panic gets back to you. Add 15% for federal, 7% for state tax and 5% for sales tax to come up with their equivilent salary.
The cost of living to income is bad, but not as bad as one would first think.
"what the median salary"
Around 22 K GBP in London.
Only the few working in the "City" make big money. Everybody else is struggling.
Cashed-out Former Londoner.
So I guess you are beginning to see how "cheap" the USA house market is compared to other cities in the World. Good you finally got out of your shell. Now you need to visit other cities like Shanghai or Buenos Aires to see the disconnect between incomes and costs. You can live in a pretty nice place in San Fransico or Hawaii or even NY City for what you are paying in London. And your ground ZERO Phoenix? You think paying $2000 a month before tax credits a bubble for a 3000 sq ft home with a pool and 3 car garage a bubble compared to London? Oh and people make more money in Phoenix if the average is 22,000 GBPs to pay for those "bubble' prices. I'm not saying that houses in Phoenix are not over priced, but compared so so many other places; London, Sydney, Rome, Paris, etc, what American's get for the money in size of lot, house, ammenities, neighborhoods, is still a great buy for most of the world.
foxwood - it is amazing that $4000 a month gets you a small flat here, or $1.2 million
and yes every city in the us is a deal compared with this. heck, even go to dublin and you'll see similar craziness
so, the question to be answered is why has london and the uk and other european countries lost their minds when it comes to the price of owning a home - or even renting in the central city?
I don't have the answer yet
it is interesting to watch the news and see the concern though over home values - their bubble stopped inflating 2 years ago and has skipped along the top, with some declines. the tone of the media though is "dammit - what's the government going to do to get increases going again"
they also call it "the property ladder" and talk about first time buyers saving for 5 years to get their downpayment to "join the property ladder"
sound like a ponzi scheme to you? sure does to me
but alas, now that home values are stuck in neutral to decline, how's that property ladder looking? without the prospect of future appreciation, why join?
the biggest difference does seem to be rent - in the us, $4000 a month rents you a castle. here - a small flat
but that is chelsea, zone 1, brand new refurb of the highest caliber, highly highly desireable area. definitely could have rented for much much less by going outside zone 1, and an older place. probably around $1000 a month.
so it comes down to location location location. lots of saudis, russians and germans in this 'hood. i'll post car pics one day - ferraris, lamborghinis (sp), mercedes, bmws, etc - it's almost laughable. so the big money all wants to live in one area, and it inflates values. makes sense.
so, stay tuned. i'll figure this market out soon enough. and at $1.2 million for a small flat, a long long way to fall potentially, but not a long long way to go up
cheers
foxwoodlief: Even if US is cheap compared to the rest of the world, it doesn't mean Americans can afford it unless our spending habits completely change. Perhaps that is the card that has to be turned.
dogcrap green: You are right, I should have asked for the median net salary.
I agree that just because homes are more affordable in the USA and you get more for your money doesn't mean that people have lost sight of value. I still am appalled at the many homes I see all over the USA for $150-300,000 that are dumps and I wouldn't live in if they sold for $85,000. I do understand inflation and the fact that our REAL inflation rate is so much higher than the FED reports. As I mentioned in other blogs my parents home in the Bay Area was purchased in 1963 and in today's inflation adjusted dollars cost $160 per sq ft for chicken wire and stucco, a very basic starter home they couldn't afford without help from an Aunt for the $500 down payment. It cost them the equivalent of $1200 a month today but at least they could make that payment on one income.
The problem today is the two family income is all that has kept most families afloat and those two income families can't afford what our parent's lifestyle brought with just one. Credit card debt and taking out equity from their homes is all that has kept familes afloat today. Talk about a bubble and you have to go back to the root cause, the deestruction of the middle class and the exporting of US jobs to start. The globalists are not interested in the average American worker. They are only interested in the super rich elite who rule seek to rule the entire world economy at the expense of the workers. These new robber barrons forget that their predecessors at the turn of the 20th century almost caused the USA to go the way of Russia and the socialists almost brought the revolution to the USA until those greedy bastards decided it was in THEIR interest to give the proleteriat a piece of the pie.
There will be a revolution in this country if our economy goes into a melt down. The give it to me now generation will not tolerate the economic suffering say of a country like Argentina. but then, Argentina thumbed their nose at the World bank and International creditors and got away with it. Investors keep pouring money into Argentina and with the settlement of their debts to Internationalists for pennies on the buck didn't permanently keep investors at bay. They are back and Argentina is back to where they were before the default with much less debt. The US economy is too valuable of a market and if we default the world will have no choice but to keep funding our appetite for their goods and their capital.
Keith, you'll learn alot in Europe. I lived there for three years and two in Asia and I can tell you our economy is more flexible and fluid and adaptable. The current generation of Americans have never spent less for so many items they take for granted, food, rent, gas, autos, etc. The only mystery to me is why England can have such an inflated Real Estate market or some of the other nations of the G7 or the First, hell, the second and Third world and yet everyone gets more nervous because Americans pay $300,000 for a house that would cost three times that for the same size and quality outside the USA.
The steam needs to come off the US housing market and incomes need to RISE and the Super Rich need to share the wealth or risk a revolution. Bernake may talk inflation control but I doubt that will be the case. Only by monetizing the debt and inflating incomes will Americans be able to continue being the worlds major consumers and absorbers of other nations products.
I'm hoping for a slow leak, fearing a burst, and trying not to let irrational fear ruin my life. Enjoy London. Bring a fresh perspective on US home prices and the US economy. I'll be in London next month and I can agree everything is EXPENSIVE. Hotels, food, you name it. How europeans can afford to live is beyond me.
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