Posted by: Dirk | October 14, 2013

The return of the Landed Gentry?

Living off rental income used to be big in per-modern times, especially in the UK. The class was called landed gentry, and they blocked the “newly rich”: the industrialists. The NYT carries an article which argues that we might see a return of this style of living among the rich:

Matt, who had been looking for a house for more than three years, summed up the reason for leaving best: “I don’t want to be a slave to a mortgage for the next 25 years.” Given the astronomic rise in house prices here, he wasn’t speaking metaphorically.

This is what happens when property in your city becomes a global reserve currency. For that is what property in London has become, first and foremost.

The property market is no longer about people making a long-term investment in owning their shelter, but a place for the world’s richest people to park their money at an annualized rate of return of around 10 percent. It has made my adopted hometown a no-go area for increasing numbers of the middle class.

This is a sad development. The speculators are back, and it is housing again! I just finished reading a satirical novel with a late 19th century background, and a return to those times is nothing to look forward to. Money is either inherited or gained through marriage, there is no return to hard work. Let me end with a quote from that novel:

‘You think him honest, don’t you?’ asked Lady Carbury. Mr Booker smiled and hesitated. ‘Of course, I mean honest as men can be in such very large transactions.’

‘Perhaps that is the best way of putting it’, said Mr Brooker.

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