[Ben Reeve Lewis has had a holiday…]
Aren’t holidays great?
I haven’t had a proper break for three years. Three friggin years of dealing with harassment, illegal evictions, training contracts, sorting out the problems of the world and his wife with nary so much as a breather.
Frazzy and I rented an apartment in Lanzarote from her accountant last week. 7 days of Paella, San Miguel, palm trees, azure blue skies, daily temperatures of 75 degrees, and I didn’t hear a single police siren all week. Quite a culture shock when you live next door to Peckham.
Sun during the day and evenings cosied up on the settee with crisps and Sangria giggling over some dodgy pirate videos bought from a local shop (4 for 15 Euros).
Including the excellent “Zero Dark Thirty” with Dutch sub titles, which for some bizarre reason you can’t help reading and “Man of Steel”, the new Superman flick that had us in fits at the sheer inanity of it all. Not meant to be a comedy I’m sure but it was to us.
Our Man in the Canaries …
Of course being the Landlord Law Blog correspondent for the Canary Islands I wasn’t entirely off duty and had more than a passing interest in the local estate agents windows.
A two bed apartment with communal swimming pool for 46,000 Euros? I can certainly see the appeal for would-be ex-pats, although I could do without the countless Irish Bars and “Full English” café’s.
Also I was reading some local ex pat magazines in the apartment about the rental market in Puerto Del Carmen, talking as in the UK about a buoyant market of rising rents.
Not for the first time I pondered on the cognitive-linguistic division between landlords and tenants. What landlord organs refer to as “Buoyant” = “Crippling” in tenant-land. And when I came back I found an article on the same thing in ‘Bloomberg’s Business week’ !
Will landlords be describing mortgage rates as ‘Buoyant’ when the rates start to rise I wonder?
With typical American subtlety (Apologies to my Noo Yawk mate Laurie), just like Superman pile-driving his nemesis through a range of tower blocks in Man of Steel the headline runs “Harvard study finds: The rent is too damn high”.
Of course my typically English, pedantic mind would point out that the rent is actually too “Damned high” not “Too damn high” but the issue is an interesting one.
Pity the cost burdened tenant …
The article introduced me to a new linguistic concept, that of being ‘Cost burdened’. Haha dontcha just love that one? I thought I was just broke but it turns out I’m ‘Cost Burdened’.
The explanation goes:-
“Cost-burdened” means you’re paying more than 30 percent of income for housing and “severely cost-burdened” means you’re paying more than half.
“By 2011, 28 percent of renters paid more than half their incomes for housing, bringing the number with severe cost burdens up by 2.5 million in just four years, to 11.3 million,” according to the Harvard study, which was conducted with partial funding from the MacArthur Foundation.”
I pay 71% of my take home pay in rent, so I am obviously “severely cost burdened” as are countless others in London.
Getting into debt for deposits
But at least I don’t have to find a deposit though, a search that Property Hawk this week informed us left many in debt with 40% having to borrow it from friends, family or that well known government franchise, Wonga.
In London it is common practice these days for agents to charge 6 week’s rent as a deposit. If you are looking to get in at the moment then including rent in advance you are looking at about 3 grand around my way, and that’s without moving expenses.
I can remember when 3 grand was a deposit on a house, in fact it probably still is in Lanzarote.
House price shocker
In fact the London Evening Standard told us that by 2020 the average London house price will be £650,000 according to a new report commissioned by the national Housing Federation.
It is estimated that this will be a staggering 18 times the average London wage and rents predicted to rise in the same report of analysts “Oxford economics” to 32% , an average of £1,854 per month.
Boris Johnson is of course defending himself when he said through his spokesman:-
“The Mayor is working tirelessly to boost housing supply. He is on track to deliver 100,000 low cost homes — a record number.”
Of course all for nowt when, as GLA Green Councillor Darren Johnson also points out that the Boris has a habit of selling properties to foreign investors, one of the major reason for overheating of the market raised by the report in the first place.
Ex pat scramble
In fact the spectre of rising prices is being felt in Lanzarote as the Telegraph informed us that estate agents are seeing a rise in enquiries from ex-pats looking to return home in a panic that they may be priced out if they don’t do something now.
The article encourages worried “Full English” noshers to invest in REITS and PAIFS (look it up I haven’t got time) as a way of securing their future saying:-
“The T M Hearthstone UK Residential Property fund for example is a property authorised investment fund.
It invests in homes of varying sizes nationwide, and aims to provide a simpler and less expensive way of tapping into the UK residential property market than a buy-to-let. This should mean any lump sums earmarked for future deposits keep their value, relative to house prices”.
Now I know that financial stuff is far from being my specialism, its like trying to learn Dutch from the reading sub-titles to a film about Al Quaeda but while financial investors get excited about the ‘Buoyant’ state of the returning Ex-pat market and the real estate investment business, wont this have a knock on effect in terms of property shortage, house prices and rents? Also will Lanzarote become a ghost island?
The small things in life
I find it difficult to get too wound up about it all though as half my head is still sitting under a date palm with a Mojito and part of me is mentally cruising to Xmas. In fact I spoke to a woman on the phone today who wanted legal advice. Apparently her landlord had not fixed her washing machine and, as she explained to me, she had to do her washing with her “Finger”….singular.
Whereas pre-holiday I might have advised her of various Torts and repairing covenants my actual advice boiled down to “Get a life, stop bothering me. The state of your smalls are of limited concern to me madam”.
The spirit of Christmas …
Xmas is a time I look forward to because I do Scrooge in reverse. Having to be kind and caring all year Xmas is my time off from all that crap and I can be as rude as I like.
Last year I was walking through Catford and a bedraggled drunk woman staggered up to me, hand out and said “Have you got 20p?” to which I barked “DO I LOOK LIKE A FRIGGING CASHPOINT?”.
Happy days to come.