Something just feels very… off
Hard to put the words together.
Looking for properties now in London and everything is being snapped up instantly. Had a friend who went to a first-round viewing and 2 hours later got a call saying it was off the market. The market is fucking madness.
Inflation is soaring. Russia is going AWOL.
I’m not sure how to really put it, things just feel very off. Like we’re in a big bubble about to burst.
Am I catastrophising?
Wealth inequality is on the rise
Competition is high and everything feels crowded
Outlook is bad - therefore people adopt a scarcity mindset
peaky fuckin' blindas
Sir this is a Wendys
Things are getting our of hand for sure. The government kept interest rates artificially low for a long time and now that they've taken their foot off the pedal, everything is going crazy. My rent increased by close to 10% and have heard others see theirs jump by 15-20%. Interest rates are going up and home owners are seeing higher mortgage payments. Additionally, the increase in taxed and national insurance has strained everyone. People are going to face some hardship in the coming years, unless employers adjust salaries to deal with the rising cost of living. Brexit and the War have also had a big impact, especially on food and consumers goods. But to your original point, yes the real estate market in London is crazy right now.
It is crazy although most people aren't competing on a level playing field. A lot of properties are being snapped up by those who aren't paying for it themselves. Over the past few weeks some friends have moved into new places, largely subsidised by their parents. Most grads outside of banking/consulting in the UK start on £25k-£30k which just isn't enough to live in London. Even IB analysts are struggling to snap up 'decent' places given the price rises and competitiveness of it all. These levels can't sustain themselves for much longer and there will be a crash inevitably at some point.
The housing market in London is absolutely insane and I can totally relate to that story with your friend. There was one building that had loads of properties refurbished and listed, a few days later and they were all gone.
Well things will probably get worse before they get better. Too many clowns who have been given money to invest when it was basically free are now faced with the reality that the stock market is losing them £££. They are thus pulling from stocks and into another bubble which is London RE (seriously, its all foreigners investing, there aren’t enough Londoners for all these luxury apartments that are popping everywhere).
If we enter a recession (and I really hope we don’t but it seems inevitable), you’ll see those “investors” freak out and try to get rid of their vacant properties. Hence prices will go down
Yes, it is fucking insane. Paying £1,300-£1,500 to be in a Non-impressive flat share is ridiculous. As someone said, if investment bankers are struggling with rent, I can’t imagine how coffe shop workers do, I think most of us literally pay minimum wage in rent.
You are looking at the worst period though with 1) rents expiring and everyone looking to change right now 2) the summer internship and uni cycle starting again 3) foreigners coming back to London now that COVID is over ?
Sucks for us plebs that don't have wealthy parents. The boomers got fantastically wealthy through asset inflation (not begrudging them), the smart ones dumped their holdings on our head top and now can buy junior a house. Tons of my friends getting 1-2m houses bought for them by their parents. Feels like a bad dynamic for society tbh.
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