London house Prices

My son is renting a small ground floor flat -one bedroom, sitting room, kitchen and a bit of a garden - at the bottom end of the Fulham road for around £280 a week.  It is in a two story Edwardian terrace house so -presumably - the landlord is getting an equally good rent - or perhaps a bit more as it is a two bedroom affair - for the one above.  This would give him a gross rent of some £30,000 a year which equates to an open market value of this poxy house at around £500,000 (rent = 7% of value)
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Given this exorbitant rent charge you will understand that I take a keen interest in the London property market - should I buy or should we continue to rent- it is the big question.  Savills kindly sent me a copy of their Residential Property Focus and in it they forecast that London Prime (though surely arse end of Fulham cannot be 'Prime' - can it ? ) will rise by 23.8% over the next five years.

Well all I can say is that if Savills are right it is good bye to London as a commercial centre because the cost of housing will have driven everyone out of London. Going back to my son's flat. If he was to pay the rent without any help from me (or from a lodger who kips in the sitting room) he would need to be earning £40,000 a year. That is actually quite a good salary but after travel and rent it wouldn't give him much more than £200 a week to live on.

Over the last four years salaries in London have stagnated or fallen, the financial sector has shed buckets of jobs and bankers bonuses are increasingly a thing of the past yet London house prices are up some 20% on 2008 - it is a joke.

At the end of the day London prices will have to reflect the ability of those who live and work in the place to pay for them otherwise work and people will leave the metropolis for more salubrious fields.  Yes I know foreigners are buying and keeping prices up but one day they will find that tenants strike and refuse to pay ridiculous rents.  London property is a bubble and my forecast for the next five years is -in real terms after taking inflation into account - a drop in prices of 25%

So take your pick - Savills or Fulford - it's your choice.     




 

Ash Die Back disease

A prophet is not without honour, save in his own country, and in his own house  

Eighteen months ago, when Rachel Johnston and her acolytes where campaigning to 'Save our Forests' I wrote a blog saying that 'if they where really serious about 'Saving our Forests' they ought to campaign, not to stop the sale of the Public Forestry Estate to the private sector but to stop the importation of plants from abroad, as the biggest threat to our woodland was not a change of ownership of some woods but the bugs and diseases which where coming into this country via the plant trade.

Well there was - surprise surprise- a deafening silence on this matter from Rachel and her chums and sadly what I predicted then has come true far quicker than even I anticipated with the arrival of Chalara Fraxinea, or Ash die back as it is now popularly known, in East Anglia and Kent.

I wrote a letter to The Times on the topic the other day which they kindly printed. It went as follows: 

Dear Sir

The outbreak of Chalara Fraxinea fungus in ash trees was entirely predictable and thus entirely avoidable.  It has happened because DEFRA has totally failed in it's primary function of protecting the biodiversity of these islands. I and others have been warning of the inevitability of this tragedy for some time but successive governments have refused to ban the imports of trees and plants from foreign nurseries which are the source of not only Chalara Fraxinea in ash but of the Processionary Moth in oak trees and of P.Ramorum in Larch. the excuse successive governments ministers have given for their failure to implement a ban on the importation of all foreign plant materials is that would be contrary to our obligations under the EU Single market. furthermore when I recently questioned DEFRA officials as to why, when they knew Oak Processionary Moth had arrived in this country from Holland they were still allowing imports of oak trees from that source I received the amazing reply, that, as now the Oak Processionary Moth was in the UK we could no longer ban the importation of trees which might carry further infestation.

It is only by the banning of all plant imports into this country that we can protect our unique biodiversity and it is high time this was recognised by the government.