Why London property costs so much

And how not to fix it.

Well, partly: a stellar piece by Ed Caesar in the New Yorker on Witanhurst & the Russians @Highgate. Quotes which hold no surprises but are nevertheless worth repeating:

  • Charles Moore … says that London’s property market has become “a form of legalized international money laundering.”
  • In recent years, more than seventy per cent of newly built properties in central London have been bought by foreign investors—often for cash. Billionaires, Pryor said, acquire “London property in the same way that they acquire expensive watches or high-powered motorcars.”
  • Many Londoners wonder whether the influx of rich buyers has provided any benefit to less affluent residents. Chris Hamnett, a professor of geography at King’s College London, has studied the effect of foreign money on the city’s property market, and likens it to a three-bowl fountain of the type often found in London parks. A jet of water fills the topmost and smallest bowl; overflow spills into the middle bowl and, eventually, into the bottom, largest bowl. In Hamnett’s analysis, the constant pump of water is money flowing into the most expensive parts of London. Residents who might have hoped to live in Kensington are priced out, and thus look farther from the center—say, in Islington. Prices then rise in Islington, and people who might have bought property there must look yet farther out. According to the mortgage lender Halifax, house prices in two boroughs of London increased by more than twenty-four per cent last year. “People are being sequentially displaced,” Hamnett said.

The solution? Well, as a part of any political fix, make sure you don’t end up with a legal system like Spain’s, where not only do prosecutors and judges regularly give the impression of being crooked and/or incompetent, but if you suggest as much on justifiable grounds you may still end up in the gulag. Sorry, that may not be the right word.

Similar posts


Your email address will not be published. Required fields are marked *