London property scene

A couple of interesting stories illustrate the way rising property prices have an impact on people, particularly those living in the London area. The Evening Standard has one on a disused basement flat off Sloane Street in West London that is on the market for £170,000 even though its a wreck at the moment and the living area is only 6ft x 12ft, the size of a snooker table.

I know its in a fashionable part of town but it always seems ridiculous that for this amount of money, over $300,000, you get a shoebox. Unfortunately that is the going rate in London and the UK right now and there’s no sign of house price inflation stopping any time soon. The estate agent says there have already been three offers even though it needs another £30,000 on repairs to make it liveable. It makes me laugh though when she says the ‘flat was ideal for someone who needed room for a housekeeper or au pair.’ Why so generous, just move them into a kennel.

A lot of people have seen their wealth on paper increase due to rising proprerty prices, the average London property is now over £330,000, but there’s a kicker from the government in the form of inheritance tax. The level you have to pay inheritance tax has been set for a long time at 40% on assets over £285,000. When this Labour government came to power in 1997 most people weren’t effected because their main asset, their house, wasn’t worth that much.

Suddenly the value has shot up and millions of people face a massive bill if a family member dies and leaves a property. Chancellor of the Exchequer Gordon Brown, lined up as Tony Blair’s replacement for this summer, is the man who controls the tax policy and he only knows one way to work, find new ways to tax people and increase the ones already in place. He’ll sit there buddha like while families watch their life savings go down the toilet.

For visitors coming to London for more of a long term stay, finding affordable accomodation will be one of the hardest things to do. The more mates you can get together to share the better your chances.

By Chris | Permalink

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