Wednesday 19 February 2014

The Play's The Thing

According to Zero Hedge today, the hymn sheet we should be singing from is tell me the old old story dealing with the London property market and its risks.  It has the engaging idea of Cameron, Carney and Osborne acting as three witches chanting their nostrums over the cauldron.

As this concept derives from The Scottish Play, name forbidden to be mentioned because it brings ill luck, this has an added poignancy to the business.  Another bubble, another crash could have many unexpected consequences in the coming months. 

It is my thesis that the London property market began to go wrong in the 16th Century with the Dissolution of the Monasteries, which included almost all the religious houses.  The rush to get in on the act when that property hit the market had many and various effects.

One was that a Midlands property agent and developer became an impresario in the fashionable public theatres buying into the new celebrity culture of the time.  With a shortage of decent and popular entertainments to fill them he started scribbling his own, being an ace cut and paste writer with a gift for words.

One was The Scottish Play, sadly with an ethnic stereotyping of that nation being run by a pack of aggressive nobles who would stop at nothing in their ambitions, could not be trusted and engaged in deceits.  How unlike the family life of our own dear leaders. 

Perhaps William Shakespeare was writing about the London property markets but felt obliged to remove the story in time and place.  There was a lot of hot money around as the landed classes piled in with their increased incomes from larger land holdings.

Among the many complications at the present day is the issue of so many properties being left empty with many not paying Council Tax because ownership is hidden abroad.  When new projects are being marketed internationally first as investment this is adding a great many more to the unoccupied listings. 

Even where Council tax is being paid, it is far less than those elsewhere.  Add to that the many residences used for short periods.  This is compounded by other matters. 

In the 1911 Census one of the questions asked was the number of rooms available for family and residential use, sculleries, laundries and closets etc. excluded.  For very many the idea of a bedroom to yourself was a fantastical prospect.  Essentially, those on low incomes or some form of support would be found as lodgers.

Today, in the Benefits row, if a single unemployed person is in a two bedroom rental on benefits then to reduce the payments to cover only one is regarded as a vicious tax and an affront to human rights.

That unrestricted payments and massive state support for rentals has played a large part in the property bubble which is going to leave everybody worse off in the end is disregarded.

Worse still, and to the horror of all, more and more families are beginning to live together and for rather longer than they expected. It could get back to the 1950's. What we do not realise is that if another crash occurs and the inflows continue it may be back to 1911.

In 1851, in a very high class residence in Lowndes Square close to Hyde Park in London, I counted 39, and this was one of the richest men in the land.  And he hadn't dug out the basement to provide for increased room.

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