My old council flat sold for half a million – this madness can't end well

My old council flat sold for half a million – this madness can't end well
Whether there's a crash or not, this property bubble is devastating. London is being hollowed out, turned into a playground for international finance, its communities left to hang



It was smaller than I remembered it. Cramped and with a strange smell. "Why is the fridge in living room?" I asked the perky estate agent, who sensed my alarm. "Well, it's more rentable that way. Do you know the area? It can only go up." I did indeed know the area, inside out. The flat I was looking at had been mine just over 20 years ago.

It was a two-bedroom council flat in King's Cross and I had loved it. It was spacious compared with the one-room squat I had come from. My daughter now had a bedroom; it was a joy to have my own place. Seven years after I moved in, Camden council gave me £15,000 to leave it. The biggest sum of money I had ever had enabled to me to enter the property market via shared ownership and the rest as we know is … endless boring on about loft conversions, fireplaces, kitchen tiles and water features. So let's not. The thing is, I bought a house.

My old flat was on the market for more than half a million pounds. It is an investment because anywhere in London is an "investment". This is the way to think. A house now has to be multifunctional: a home, a pension pot or a buy-to-let. The last budget has made it easier to release pension funds to buy property. A house in London, everyone says, just keeps going up in price whatever you do to it. Every viewing is full of anxious, desperate people whispering about storage space while eyeing up the enemy: people just like them. I am not above or beneath this behaviour, as I have bought into it too, but as I sit in my goldmine and read of the booming London prices I don't feel smug. I feel afraid. And sad.

House prices, like Saharan smog or the Ebola virus, are just one more thing beyond my control and understanding. As demand outstrips supply, the capital becomes unmoored from the rest of the country: the buzz feels hollow, showy, over-caffeinated.

Once you have signed that mortgage application, you have already bought into free-market madness, whatever your vague notions of an alternative may be. Because you wanted a home of your own. Some kind of permanence. Because whatever your views on Little England-style conservatism, home owning feels like some kind of freedom after renting. Without rent controls, which won't happen under this government, without tackling extortionate letting agents' fees, which Shelter is asking for, rents will spiral up while conditions worsen.

International finance moves into the centre of London as families cling to its edges. Money is spent on commuting. It's still worth it to get on that ladder. You can't fall. Or look down. Keep the faith and the bubble will not burst. Wages will not rise much but huge personal debt is being encouraged. Off-plan schemes sell shares in flats before they are built. Old council estates are spruced up. The dread basement dig-outs clog the pavements with skips of earth.

They symbolise the trap we are in. Dig underneath your own foundations so you can rent bits out. Cling on tightly to your castle, which is not just a place to live but is now decorated to reveal your inner soul and has to provide an income when work dries up.

My old flat was lovely because all it had to be was a home. How simple that sounds.

As people overstretch themselves, gazump each other, go frankly barmy to buy places in London, we can only look to other cities to see what can happen. New York, where I lived cheaply in the 80s, drove out artists and creatives through its rents. In Tokyo, the bubble burst in the late 80s. Yet few here talk as if property prices will crash. This is some kind of madness. Ordinary people without much clue are encouraged to think of ourselves as super-smart investors. We are not. London's housing market is pulling so far away because of foreign capital. Saudis, Russians, Chinese, Brazilians and Indians want to protect their assets from risk. They want access to London's schools, shopping and financial markets. This class of globalised super-rich people are not the same as couples who want a place so their child can sleep in a separate room.

Such investment is not sustainable as a strategy for growth, or for the ecology of communities. London lives by its social bonds as well as its bond traders. Imagine a time when it becomes a theme park for the global rich, its youth and artists forced to leave. You don't have to imagine. It's here.

Your home is meant to be the place where you feel safe to dream. So what happened? As Fight Club had it: "The things you own end up owning you." For that is very much how this bubble feels. And I am one of the lucky ones. This wealthy centre, with its huge restaurant barns booked out every night by frenetic monied people, is now ringed by outer boroughs of those on low incomes.

It's all too jittery. Not a cosy feeling at all. My old flat went for way over the asking price. Of course it did. The whole of London is now way over its asking price.

http://www.theguardian.com/commentisfree/2014/apr/02/london-housing-bubble-property-market-madness

I think that describes exactly what is happening in London, with a very personal view from the writer. It's scarey.

....Especially when, if the Tories get back in office, they intend to restore the 75% discount.   

sadly london is only sinking at 3cm per year, so we will have to suffer its presence for a while yet.

Are they quite mad? Don't bother answer that!

Sassy wrote:Are they quite mad?   Don't bother answer that!

*cough*

I always said that i was up to buying the flat, in the end...But we would have to take DSS. End Of.

I have looked....I have found a very nice new, two bed house in the NE, an up and down!...Near to the hospital   

....They are always coming on the market!   

And your solution is sassy? There are a number of places in the world where property prices are ludicrous.

How many millions of foreign people have come to live in London over the past 20 years?

I wish people would make it clear they were quoting someone else when they start threads. I thought Sassy was talking about herself.

Anyway, this person was given £15,000 to leave their rented flat. Why?