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Even the Rich Are Being Priced Out of Central London

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Re: Even the Rich Are Being Priced Out of Central London

#171

Post by PieterH »

monknomo wrote: post #129
TheOtherHobbes wrote: post #122

Earlier quoted context omitted.

UK artists are heading to Berlin, Paris, Barcelona and Warsaw - at least they were, until Brexit. Now there's some interest in the cheaper seaside towns - Margate, even Bournemouth. Brighton used to be on that list but it's almost as expensive as London now. Likewise Bath and Bristol. (Not seaside towns, but a big arts scene in the 60s and 70s, now very much gentrified.) I suspect if people can't get out they'll head…

It's tough to figure what pulls a place out of the dilapidation phase. I've heard people say a microbrewery is a good harbinger. I have this unformed suspicion that a hipstery cheap-fancy restaurant can do it, or the "right" art gallery

My area of Brussels has been slowly pulling itself out of dilapidation for decades. The signs are e. g. new bars and shops that don't close after six months, and of course the inevitable loftification of older buildings. There is no single event. It takes masses of people to move, invest, and thrive.

Re: Even the Rich Are Being Priced Out of Central London

#172

Post by ben_jones »

pjlegato wrote: post #167
ghughes wrote: post #162

Earlier quoted context omitted.

So your solution is to put an end to the rental market?

True. How about a punishing tax on any kind of unoccupied property, rather than specifying that it must be owner-occupied?

Wouldn't that be easy to circumvent?

Re: Even the Rich Are Being Priced Out of Central London

#173

Post by Asooka »

rconti wrote: post #88
mtkd wrote: post #68

I walked from Kings Cross to Marylebone at dusk recently - half way, I took the road up from the main Euston Road - walking through mostly residential - barely an apartment window with a light on - it's just money parked in property - the parks don't have kids playing in them any more The recent Vancouver tax changes have worked, I suspect/hope we'll start seeing that repeated in every city thats had it's life sucked…

So... how long before property values collapse because it's no longer a desirable place to live, and the foreign money tries to get out as quickly as possible before values drop further?

My gut instinct says "never" because those aren't places to live, they're places to park your money. They are pricey because they're pricey, kind of like how a 10$ banknote represents 10$ of value because we say it does. London will remain an important and populous town even if some of its areas turn into money lots with no people living in them.

Re: Even the Rich Are Being Priced Out of Central London

#174

Post by hanoz »

largote wrote: post #142
ferentchak wrote: post #138

Earlier quoted context omitted.

I guess I am confused why they would not want to collect the money from renting the buildings out. Any ideas?

A lot of these cities have renting laws that basically give the renter more rights over the property than the owner. This causes it to make more sense to not rent it out.

> A lot of these cities have renting laws that basically give the renter more rights over the property than the owner.

Situated as it is, in Britain, London is a long way from being such a city. More's the pity.

Re: Even the Rich Are Being Priced Out of Central London

#175

Post by hkmurakami »

Tiktaalik wrote: post #107
mtkd wrote: post #68

I walked from Kings Cross to Marylebone at dusk recently - half way, I took the road up from the main Euston Road - walking through mostly residential - barely an apartment window with a light on - it's just money parked in property - the parks don't have kids playing in them any more The recent Vancouver tax changes have worked, I suspect/hope we'll start seeing that repeated in every city thats had it's life sucked…

I think it remains to be seen whether the Vancouver tax changes have worked. There's been a bit of a slowdown in sales, but that could just be investors taking a brief pause to evaluate the new situation.

They really need it to be an ongoing annual tax increase (ex: vacancy tax).

It's like a capital gains tax versus a wealth tax. The latter has way more impact then the former.

Re: Even the Rich Are Being Priced Out of Central London

#176

Post by stuaxo »

ben_jones wrote: post #172
pjlegato wrote: post #167

Earlier quoted context omitted.

True. How about a punishing tax on any kind of unoccupied property, rather than specifying that it must be owner-occupied?

Wouldn't that be easy to circumvent?

If it is circumvented by letting people live there that might be ok.

Re: Even the Rich Are Being Priced Out of Central London

#177

Post by stuaxo »

valkea wrote: post #166
r00fus wrote: post #112

Earlier quoted context omitted.

And that's why you use a tool like taxation to modify behavior to encourage positive outcomes.

Taxation shouldn't be used as a tool to modify behavior. That's actually the exact opposite of good tax policy. Taxes should be broad based, with few exemptions, to raise the needed revenue while minimizing side effects. The distortions in housing markets are often partially caused by tax policy, and those areas should be addressed (tax deductions for mortgage interest for example). Other than that, it's best to actu…

Taxation is a great tool for changing behaviour in many places.

Re: Even the Rich Are Being Priced Out of Central London

#179

Post by bogomipz »

Tiktaalik wrote: post #116
bogomipz wrote: post #100

Earlier quoted context omitted.

Yeah thats oddly dystopian. Can you elaborate on the Vancouver tax change? I have not heard about this.

"Foreigners [not permanent residents] who buy residential property in the Vancouver area will have to pay an extra 15-per-cent tax as part of a B.C. government plan to slow the foreign speculation that many blame for making the region’s homes the most unaffordable in Canada." http://www.theglobeandmail.com/news/british-columbia/bc-to-t... The tax is new and was enacted just before August so the impacts are still unce…

Interesting so was this a high profile issue then in Canada and B.C in general. For those unaware, in some places these foreign investors(speculators, non-primary residences.) are getting tax breaks. So not only on their making out on the appreciation on the property but they are receiving tax breaks on top of that:

http://www.businessinsider.com/foreign-billionaire-tax-break...

Re: Even the Rich Are Being Priced Out of Central London

#180

Post by adamiscool8 »

valkea wrote: post #104
r00fus wrote: post #19

And... this is what happens when you don't tax foreign cash infusions. For those who think we should get rid of taxes on cash repatriations - this is likely an outcome.

Foreign capital investment is great, so beneficial to the economy. The problem is with the housing market. Perverse subsidies, out of date zoning laws, and a lot of nimby based lobbying. Fix these things and I doubt anyone, including foreign investors, would be parking capital in property and just leaving it unused.

That's a very parochial view. Foreign capital investment is just a form of economic colonialism, unless properly managed to mitigate the risks it introduces.
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