This article is from the source 'independent' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.independent.co.uk/news/uk/home-news/london-could-face-economic-crash-if-1-of-top-earners-do-not-loosen-their-grip-on-the-housing-market-warns-oxford-academic-danny-dorling-9739559.html
The article has changed 2 times. There is an RSS feed of changes available.
Previous version
1
Next version
Version 0 | Version 1 |
---|---|
London could face economic crash if 1% of top earners do not loosen their grip on the housing market, warns Oxford academic Danny Dorling | London could face economic crash if 1% of top earners do not loosen their grip on the housing market, warns Oxford academic Danny Dorling |
(1 day later) | |
London could be headed for an economic crash similar to the meltdown suffered by Tokyo in the early 1990s if the capital's housing crisis does not improve, an Oxford University academic has warned. | London could be headed for an economic crash similar to the meltdown suffered by Tokyo in the early 1990s if the capital's housing crisis does not improve, an Oxford University academic has warned. |
A change in the attitude among the 1 per cent of top earners towards the '99 per cent' will mark the turning point for an improvement in living standards, Professor Danny Dorling, a leading social thinking and professor of human geography has predicted. | A change in the attitude among the 1 per cent of top earners towards the '99 per cent' will mark the turning point for an improvement in living standards, Professor Danny Dorling, a leading social thinking and professor of human geography has predicted. |
The very richest of the 1%, or super rich, is made up of people with £21m ($30m) or more in assets apart from their main home. Estate agent Frank Knight recently reported that 4,224 such families live in London. Drawn in by Briain’s tax regime, the number is expected to rise to 5,000 by 2024, Professor Dawling has cautioned in his new book Inequality and the 1%. | |
“There are certainly not enough people in Britain with incomes high enough to purchase London property at London prices today if they were to rely on mortgages to do so,” Professor Dorling told The Independent. | “There are certainly not enough people in Britain with incomes high enough to purchase London property at London prices today if they were to rely on mortgages to do so,” Professor Dorling told The Independent. |
“There are currently enough investors worldwide with enough interest in London still to hold the market up at the top. However their interests in Britain may not be as long term as people who live and work here,” he added. | “There are currently enough investors worldwide with enough interest in London still to hold the market up at the top. However their interests in Britain may not be as long term as people who live and work here,” he added. |
He described that if the cost of housing in London rises less than wages for two decades, property prices will return to a level where people are not forced to spend more than a third of their income “just to be housed.” | He described that if the cost of housing in London rises less than wages for two decades, property prices will return to a level where people are not forced to spend more than a third of their income “just to be housed.” |
But, if investors and major landlords continue to buy up family homes, prices will be continue to skyrocket and a Tokyo-style crash will be on the cards. | But, if investors and major landlords continue to buy up family homes, prices will be continue to skyrocket and a Tokyo-style crash will be on the cards. |
Professor Dorling went on to paint a bleak picture of the future awaiting young first-time buyers. | Professor Dorling went on to paint a bleak picture of the future awaiting young first-time buyers. |
“If you look at the salaries of young graduates and inflate them a little as they age from their thirties through to their forties, it is not possible to foresee enough growth in those salaries to allow many of them to purchase £500,000 and above property, even as couples,” he said. | “If you look at the salaries of young graduates and inflate them a little as they age from their thirties through to their forties, it is not possible to foresee enough growth in those salaries to allow many of them to purchase £500,000 and above property, even as couples,” he said. |
He added that those without university degrees have “almost no hope”. | He added that those without university degrees have “almost no hope”. |
Unlike the baby boom generation, who enjoyed a rise in living standards compared with their parents, the next generation of graduates will be strangled by the burden of £50,000 debts to repay. | Unlike the baby boom generation, who enjoyed a rise in living standards compared with their parents, the next generation of graduates will be strangled by the burden of £50,000 debts to repay. |
“If their salaries rise enough to begin to think of buying they will have risen high enough to have to make the loan repayments,” said Professor Dorling. | “If their salaries rise enough to begin to think of buying they will have risen high enough to have to make the loan repayments,” said Professor Dorling. |
Professor Dorling said a short term solution would involve basing council taxing on housing wealth, to replace a system where tenants pay the same on properties with equal monetary worth. | Professor Dorling said a short term solution would involve basing council taxing on housing wealth, to replace a system where tenants pay the same on properties with equal monetary worth. |
He gave the example of the inequality where a property owner in London’s highly wealthy Kensington area pays the same proportion of council tax as a homeowner in the much poorer area of Barking, east London. | He gave the example of the inequality where a property owner in London’s highly wealthy Kensington area pays the same proportion of council tax as a homeowner in the much poorer area of Barking, east London. |
Asked what would mark a turning point for the system, he said: “a change in the attitude among the 1 per cent is the most important," citing the 1920s and 1930s as the most recent example. | Asked what would mark a turning point for the system, he said: “a change in the attitude among the 1 per cent is the most important," citing the 1920s and 1930s as the most recent example. |
He added that when the swathes of recent graduates unable to find jobs or survive on their meagre incomes "stop blaming themselves", change will come faster. | He added that when the swathes of recent graduates unable to find jobs or survive on their meagre incomes "stop blaming themselves", change will come faster. |
Previous version
1
Next version