Brixton news, rumours and general chat

[CH1]

Which is something Grace Blakeley goes on about.

Remember the first big financial crisis? At beginning the Bank of England was lecturing bankers on the moral hazard of bailing them out.

Hate to contradict on this - the FIRST big banking crisis was actually the one in 1973-75
This is briefly (and I think inaccurately) described here: Secondary banking crisis of 1973–1975 - Wikipedia
I actually have a book on it which is very comprehensive indeed.
The background is the Heath government of 1970-74 which came to office promising to conquer inflation with a tight money/high interest rate policy.
Within a couple of year unemployment was threatening to reach 1 million and the government did a 180 degree turn - the "Barber Boom".
Unemployment went down but inflation went up to about 30%. Money flooded into "property" - companies like Slater Walker which asset stripped.
Also companies building shopping centres and office blocks. And to a lesser degree companies building houses for the retail market.
High street banks were tightly controlled in the 1970s, but various fringe banks were set up to handle these large dodgy transactions - Bowmaker, British Bank of Commerce, Keyser Ullman, Mercantile Credit, Wagon Finance and many more.
These were not taking deposits from the public rather they handled investments on behalf of employee pension funds.
Mostly these fringe banks were involved in takeover deals and financing office developments.
When things went tits up in December 1973 a secret meeting was convened......................................


This banking crisis had everything. Jeremy Thorpe, The National Coal Board Pension Fund, Phoenix Assurance, the Union Pension Fund at Unilever and many more.
The Bank of England Lifeboat managed to unscramble things over a period of several years by persuading the major high street banks (Barclays, Lloyds, Nat West etc) jointly with the Bank of England to prop up a host of dodgy banks which nobody ever heard of, whilst letting the weakest go to the wall.

No sure what effect this massive banking collapse had on the economy. You may recall that this was the period when Prime Minister Callaghan was called back from Heathrow Airport and said "Crisis, what crisis?"
Chancellor of the Exchequer Denis Healy promised to put up income tax until "the pips squeak". There was the Lib-Lab Pact.
I was a student at this time, and don't remember much about it. I think finance and business were not much covered in the media at that time.
I do remember sugar being rationed - but that was apparently because we had just entered the Common Market who restricted sugar imports from Trinidad and Guyana when British (sugar beet) sugar was unable to fill the gap.

 

[Cat Fan]

I was referring to the aging profile of Urban.

Generation rent I meet on regular basis definitely aren't at it. Basically because to they don't have the means.

Maybe I'm meeting the wrong young people.

I do know a few who seem to float in a world of expensive houses. But they come from wealthy backgrounds to start with . And I mean not average middle class. People whose parents were high up. The ones with house in London and a house in the country.. They don't seem to me to be what I'd say was the average person. I'd say in the top few percent.

Yes, that was my original point that kicked off this discussion. Buying a house in London is now only for those with inherited wealth or the one percenters.

 

[BusLanes]

Well bank collapses do seem to be a frequent thing. I was reading about this one several years ago and it turned out to be one of those important in terms of reform.

City of Glasgow Bank - Wikipedia

en.m.wikipedia.org

 

[Cat Fan]

People tend to put a narrative around it where they blame Thatcher's right to buy, neoliberalism etc. That's part of it but it's not the whole story. We have to question why prices are sky high in London, New York, Auckland, Sydney, Amsterdam, Paris but not as much in Yorkshire, South of France etc.

For me it's about globalisation, freedom of movement, freedom of capital and increasingly large amounts of money chasing a finite amount of space.

In the times when London prices weren't going up as quickly London was either a less desirable place to live and/or there were fewer good employment opportunities and/or banks weren't lending for whatever reason. But it's been a very steady upwards trend over the past 100 years.

Final thing to think about is how much more common single or two person households are than they used to be. There are enough rooms to go around, if everyone opened up their spare rooms.

Lodging used to be more common in the overcrowded London of the Sherlock Holmes (late Victorian) era, no? In those days public transport options were limited so everyone was crammed into the centre.

 

[Cat Fan]

Well bank collapses do seem to be a frequent thing. I was reading about this one several years ago and it turned out to be one of those important in terms of reform.

City of Glasgow Bank - Wikipedia

en.m.wikipedia.org

As long as there have been banks there have been banking crises! Normally at least one big one every ten years.

 

[pbsmooth]

Yes, that was my original point that kicked off this discussion. Buying a house in London is now only for those with inherited wealth or the one percenters.

Not really, you just do it much later. most people I know worked OK jobs (but not mega bucks) until mid/late 30s then managed to buy something in London somewhere cheap. The idea of someone on an average salary being able to buy in their 20s hasn't been possible since the early 90s I guess.

 

[Cat Fan]

Not really, you just do it much later. most people I know worked OK jobs (but not mega bucks) until mid/late 30s then managed to buy something in London somewhere cheap. The idea of someone on an average salary being able to buy in their 20s hasn't been possible since the early 90s I guess.

There is nowhere cheap anymore, that's the problem nowadays. If people are buying at all they're buying small 2 bed flats or 2 bed terraces. They then don't have space to raise a family so will eventually be forced out of London.

Speaking as someone with friends are entering mid 30s.

I have a lot of time for John Harris, he has documented some of the latest stats here.

A lost generation are living with their parents – and Tory talk of housebuilding won’t help them | John Harris

Young adults stranded in the family home have been abandoned by politicians who view them as an afterthought, says Guardian columnist John Harris

www.theguardian.com

 

[CH1]

Lodging used to be more common in the overcrowded London of the Sherlock Holmes (late Victorian) era, no? In those days public transport options were limited so everyone was crammed into the centre.

I think you have a point there.

 

[cuppa tee]

forced out of London.

is anyone forced out ?
theres a choice involved for sure.
i was down in kent recently and every 'local' i met was from london originally.
and the latest wave has brought the same problems...prices going uo and no way for young people to buy or rent.
....also second homes. last year in wales i stayed in a village that is almost empty for 6 months a year.

 

[CH1]

is anyone forced out ?

Surely this is the complaint of those unlucky enough to have used right to buy on estates subsequently chosen for regeneration - Heygate and Aylesbury Estates in Southwark for example.
The compensation payments are simply not enough to buy equivalent in London so they are forced out.

Every Flat in a New South London Development Has Been Sold to Foreign Investors

When the Heygate Estate was demolished there were promises of social housing and a "community feel", but it's all fallen through.

www.vice.com

"As the remaining home owners clung on until 2013, Southwark Council cut off heating and switched off the lifts, leaving tenants – council tax payers – stranded. Those residents who owned their own properties were served compulsory purchase notices for insultingly low sums. At that time, a local one bed flat could be bought for £300,000, yet Southwark Council offered just £80,000 for Orho Okorodudu's Heygate flat. Another resident, Adrian Glasspool, a teacher, was offered £225,000 for his three-bed ground-floor maisonette. The equivalent on the new estate would set him back £1 million. He said, "Lendlease is estimated to make a £200 million profit from the expropriation of our homes. We have literally been sold out by our own council."

Edited to add: more on the case cited in Vice

Heygate residents forced to move out of London

Flats on the Heygate Estate: Terry Redpath with wife Brenda and former resident Orho Okorodudu. Evening Standard/London Dozens of residents of the Heygate estate have...

www.gulf-times.com

 

[cuppa tee]

Surely this is the complaint of those unlucky enough to have used right to buy on estates subsequently chosen for regeneration - Heygate and Aylesbury Estates in Southwark for example.
The compensation payments are simply not enough to buy equivalent in London so they are forced out.

Every Flat in a New South London Development Has Been Sold to Foreign Investors

When the Heygate Estate was demolished there were promises of social housing and a "community feel", but it's all fallen through.

www.vice.com

"As the remaining home owners clung on until 2013, Southwark Council cut off heating and switched off the lifts, leaving tenants – council tax payers – stranded. Those residents who owned their own properties were served compulsory purchase notices for insultingly low sums. At that time, a local one bed flat could be bought for £300,000, yet Southwark Council offered just £80,000 for Orho Okorodudu's Heygate flat. Another resident, Adrian Glasspool, a teacher, was offered £225,000 for his three-bed ground-floor maisonette. The equivalent on the new estate would set him back £1 million. He said, "Lendlease is estimated to make a £200 million profit from the expropriation of our homes. We have literally been sold out by our own council."

yes of course but thats a separate issue, i was really talking about raising families and
the need for space....i wonder if this is one reason why people now settle on 'fur babies'.

 

[Cat Fan]

yes of course but thats a separate issue, i was really talking about raising families and
the need for space....i wonder if this is one reason why people now settle on 'fur babies'.

You're right there's a choice, but the choice is either move far out of London to raise a family or accept living in cramped conditions or multi generational living.

It's a step backwards for young people compared to their parents' generation. But by historical standards no one had it so good as the baby boomers, I suppose?

 

[CH1]

yes of course but thats a separate issue, i was really talking about raising families and
the need for space....i wonder if this is one reason why people now settle on 'fur babies'.

Funny way of putting it. But yes it must be the case that family living in Brixton is extremely beyond the reach of normal working people.
The going rate for a house in good condition in my part of Coldharbour Lane is £1.2 million.
Thornton Heath or even Sutton is half of that.

 

[pbsmooth]

There is nowhere cheap anymore, that's the problem nowadays. If people are buying at all they're buying small 2 bed flats or 2 bed terraces. They then don't have space to raise a family so will eventually be forced out of London.

Forced to the cheaper edge of London for sure where you can raise a family but it's less attractive perhaps. I mean it must be 30+ years since a normal family could afford a family home in inner London.

 

[editor]

is anyone forced out ?
theres a choice involved for sure.
i was down in kent recently and every 'local' i met was from london originally.
and the latest wave has brought the same problems...prices going uo and no way for young people to buy or rent.
....also second homes. last year in wales i stayed in a village that is almost empty for 6 months a year.

I know plenty of people who have been forced out of Brixton.

 

[cuppa tee]

I know plenty of people who have been forced out of Brixton.

so do i, but i'm not including ones who did it cos they wanted ro raise a family, that is a lifestyle choice.
and in context if you cash in your inflated london prperty and use that to drive prices up somewhere 'on the up' then
youre creating house price inflation where you move to...

 

[editor]

so do i, but i'm not including ones who did it cos they wanted ro raise a family, that is a lifestyle choice.
and in context if you cash in your inflated london prperty and use that to drive prices up somewhere 'on the up' then
youre creating house price inflation where you move to...

I'm talking about people who had been renting here for years - decades - but found themselves being priced out of their homes and their community by unaffordable rent rises.

 

[cuppa tee]

I'm talking about people who had been renting here for years - decades - but found themselves being priced out of their homes and their community by unaffordable rent rises.

likewise...butl that doesnt mean that other people don't move out for different reasons .
one guy i know of rented out a sub-let council flat and lived 9 months a year in india.
( only 9 due to visa requirements)

 

[editor]

one guy i know of rented out a sub-let council flat and lived 9 months a year in india.
( only 9 due to visa requirements)

What's that got to do with anything?

 

[Gramsci]

People tend to put a narrative around it where they blame Thatcher's right to buy, neoliberalism etc. That's part of it but it's not the whole story. We have to question why prices are sky high in London, New York, Auckland, Sydney, Amsterdam, Paris but not as much in Yorkshire, South of France etc.

For me it's about globalisation, freedom of movement, freedom of capital and increasingly large amounts of money chasing a finite amount of space.

In the times when London prices weren't going up as quickly London was either a less desirable place to live and/or there were fewer good employment opportunities and/or banks weren't lending for whatever reason. But it's been a very steady upwards trend over the past 100 years.

Final thing to think about is how much more common single or two person households are than they used to be. There are enough rooms to go around, if everyone opened up their spare rooms.

Lodging used to be more common in the overcrowded London of the Sherlock Holmes (late Victorian) era, no? In those days public transport options were limited so everyone was crammed into the centre.

Don't quite follow this.

It was Thatcherism/ Reaganomics that brought in the globalised world you describe in second paragraph.

Thatchers Big Bang deregulation of the Stock Exchange contributed to it becoming world class financial centre which helped push the gentrification of London.

So it's historical fact not a "narrative".

You end your post with saying to deal with this people should take in lodgers.

I don't know what to say to that.

I did ask you previously whether you supported Khan proposals for a freeze on rents for a year. And use the time to set up a London specific rent control system.

You didn't answer on that so far. Unless I missed something.

 

[Gramsci]

Well bank collapses do seem to be a frequent thing. I was reading about this one several years ago and it turned out to be one of those important in terms of reform.

City of Glasgow Bank - Wikipedia

en.m.wikipedia.org

That I didn't know about. And see it led to reforms of the system.

The 2008 crisis was partly due to light touch regulation of the banking system. That was part and parcel of the neo liberal idea.

 

[cuppa tee]

What's that got to do with anything?

relates to Gramsci talking about about older people renting out their city accomodation.
and the conversation about people moving out, my suggstion is that they do so for varying reasons at different stages of life, raising a family is one, getting old is another, priorities change
i know plenty of people who left in the last few years, could be argued that they were forced
because town is getting more expensive and they have found gentrication in london suffocating .

 

[Gramsci]

relates to Gramsci talking about about older people renting out their city accomodation.
and the conversation about people moving out, my suggstion is that they do so for varying reasons at different stages of life, raising a family is one, getting old is another, priorities change
i know plenty of people who left in the last few years, could be argued that they were forced
because town is getting more expensive and they have found gentrication in london suffocating .

Well yes and no.

I've tried to make clear in previous posts , to take this away from individual decisions, that the underlying process has been the change from housing being predominantly a "use value" ( that is bought for a social need of housing) to being a commodity that is used as an asset to make a profit. The "financialisation" of housing.

To add to this housing as a commodity is not in a free market where all social actors are equal.

One of the issues with capitalism is that it presents itself in particular in neo liberal version as being meritocratic.

But the other argument is that the recent response to economic crisis has been to prop up asset values through Quantitative Easing.

Which leads to well off global elites pursuing asset based profit by for example investing in UK property.

 

[Cat Fan]

Forced to the cheaper edge of London for sure where you can raise a family but it's less attractive perhaps. I mean it must be 30+ years since a normal family could afford a family home in inner London.

According to ONS the average household income in Lambeth is around £40k. Assume the bank will lend 4.5x income (£180,000) and the family has 0.5x (£20,000) in savings.

So where is this famous cheaper edge of London where the average household can buy a family home for 200k?

 

[Gramsci]

There is something to admire in way capitalism operates. It is the creative use of very complicated mechanisms to make a profit. Such as the rolling up of sub prime ( mortgages to those who could not afford to service them) with reliable mortgages Collaratised Debt Obligations CDOs for example. Ever expanding the area of profit.

End result was the "financialisation " of housing pre 2008 crisis.

With QE extra more recently I don't see much has changed.

Things like rent controls are anathema to this free market way of working.

A problem I have with all this is that when it goes wrong or does not deliver housing ordinary people are treated to homilies about how the "market " should not be disturbed with things like rent control.

Despite the "market" being propped up

That the problem is nimbys/ planning "red tape" holding things up

 

[Cat Fan]

Don't quite follow this.

It was Thatcherism/ Reaganomics that brought in the globalised world you describe in second paragraph.

Yes, that's the political explanation, but I was looking more at the macroeconomic side of things. It's the same (or even more capitalist) system in China and Japan.

Thatchers Big Bang deregulation of the Stock Exchange contributed to it becoming world class financial centre which helped push the gentrification of London.

So it's historical fact not a "narrative".

All history is a narrative. History is the stories we tell each other. Literally the word history = his + story

You end your post with saying to deal with this people should take in lodgers.

I don't know what to say to that.

I'm not saying everyone should take lodgers, I'm saying that the distribution of property wealth in society is extremely inefficient. A tax based on property values would help, like in the Netherlands. But politically I would struggle to see it happen.

I did ask you previously whether you supported Khan proposals for a freeze on rents for a year. And use the time to set up a London specific rent control system.

You didn't answer on that so far. Unless I missed something.

It's completely unworkable because of the legal implications. It would require a massive amount of legislation and be challenged all the way.

Do you think this is what the Labour government should spend their first 100 days in office on?

I don't, so I don't support it. It's a pipe dream.

rent is far too high but I would rather see Labour implement reforms to make renting more secure, increase the responsibilities that landlords have and protect tenants from unfair eviction. I would like to see 3-5 year contracts be the norm rather than 12 month. And tenants should be able to fix the price for 3 years and the rent increase at the end of the 3 years should be capped.

 

[Cat Fan]

With QE extra more recently I don't see much has changed.

Well right now the bank is doing the opposite of QE, QT. This will eventually strangle off economic growth and the housing market if they keep doing it. But their stance is it's a price worth paying to control inflation.

 

[Gramsci]

Well right now the bank is doing the opposite of QE, QT. This will eventually strangle off economic growth and the housing market if they keep doing it. But their stance is it's a price worth paying to control inflation.

Tbf every time I read your posts I really can't see where you are coming from

Are you saying that previous policy of QE that is propping up asset prices. Thus fueling house prices was a good thing?

Do you support Khan's proposals for rent controls?

 

[madolesance]

Hey Gramsci, how about taking this conversation to another channel as its general relevance to Brixton news, rumours and all that is not very relevant?

 

[DaphneM]

Hey Gramsci, how about taking this conversation to another channel as its general relevance to Brixton news, rumours and all that is not very relevant?

I think there’s a general purpose gentrification thread that would be a good fit