In full: verbum sapienti sat est — ‘a word is sufficient to a wise person’.
That’s a conflation of two expressions, one from Plautus, the other from Terence.
Michael Goldfarb has done a fine piece for the New York Times: he tackles the London property bubble with the sense, sensibility and astringency impossible for the [London] Times property section, or any other media outlet dependent on heavy estate-agents’ advertising.
Once past the anecdotal (see below), it is the numbers which should chill the marrow:
- According to Britain’s Office for National Statistics, London house prices rose by 9.7 percent between July 2012 and July 2013. In the surrounding suburbs they rose by a mere 2.6 percent. The farther away from London you go, the lower the numbers get. When you finally cross the border into Scotland, house prices actually decline by 2 percent.
- In 2011, at the height of the euro zone crisis, citizens of the two countries at the epicenter of the cataclysm — Greece and Italy — bought 400 million pounds’ worth of London bricks and mortar. The Italian and Greek rich, fearing the single currency would collapse, got their money out of euros and parked it someplace where government was relatively stable, and the tax regime was gentle — very, very gentle.
- Hot money from China, Singapore, India and other countries with fast-growing economies and short traditions of good governance is pouring into London… An astonishing £83 billion worth of properties were purchased in 2012 with no financing — all cash purchases. That’s $133 billion.
The only one-word summary is: unsustainable.
However, (as Goldfarb doesn’t say) the ConDem Government cannot afford the inevitable before May 2015 and the next election, so:
- the whole British economy is based on housing speculation in the capital. David Cameron’s government seems to think that is the case. Mr. Cameron may be pursuing austerity policies elsewhere in the economy, doing virtually nothing to help subsidize employment or industry, but his government has just started a “Help to Buy” program. The government will guarantee up to 15 percent of the purchase price of a house up to £600,000 ($960,000), if you have a 5 percent down payment.
Goldfarb’s anecdotal bit is about those who are baling out of London, either because:
- they are taking their paper profits and moving to bigger, more reasonably priced properties out-of-town;
- because they simply cannot afford London prices.
Malcolm admits to being recently one of these emigrants from the Metropolis.
Now in retirement from professional jobs which kept them in London, the Lady-in-his-Life and the boyo himself upped sticks and headed for the city of (old) York.
For barely a third of what the London house realised, they now have almost the same floor-space they had down south. Just down the line of the Roman road from Bootham Bar (as above – and, ignoring the traffic, little changed).
- They live amid older, good-looking housing, and in clear sound of the Minster’s bells.
- Transport is better — at a push, King’s Cross is two hours and some minutes, across Scarborough Bridge, front door to platform 9¾.
- At least three regional airports are conveniently on the railway line from York — for continental flights, all cheaper than Heathrow.
- They walk into town, almost all the way on old limestone pavings.
- York is still enough of a “county town” to have a number of “useful shops”.
- There are cultural and intellectual opportunities — perhaps not on the same level as London, but more immediately available (and Leeds, Scarborough and other places are as close, time-wise, as would be the West End from a London suburb).
- There are local tradesmen who learned their trades the proper way, and do a professional job, but not at inflated prices.
- Across the road or round the corner are two of the most successful schools in Britain (yes, there are grandsons …).
- Just out there, a short drive or a bus ride, lie the Moors and the Dales.
- Pubs and restaurants cannot rely on the Gold Card trade to the same extent, so service is better and prices acceptable.
- Typically, beer is around £3.30 a pint (and pubs not so loud — except in the centre, on race-days).
- People, strangers, talk.
What’s not to like?
Moreover, when the great property crash comes in London, there’s less distance to fall.
Oh, and York has a Labour Council.