Compact and bijou - the slums of tomorrow?
http://news.bbc.co.uk/1/hi/magazine/7612384.stm


I'm so glad I sold my flat in Docklands back in 2005. OK, financially it was looking like a bad move until last year, but lifestyle-wise, it's a no-brainer.

After the big slide of the next 2-3 years, City Centre flats may bounceback faster than
those in the "stranded suburbs".

I sincerely hope so! Then I can pick up a nice house in the country with a decent garden (like the one we rent now) for a sensible price.

We're not quite self sufficient, but do grow a lot of our own food, and buy much of the rest of it from the farm next door.

Why I'd want to give this up and live in a cramped shoebox, I've no idea.

Yeah I agree with DrBubb, lots of the more central areas in London are at least a little more like smaller towns which have been absorbed as the city expanded. Could well make them a better bet in the future.

I managed to get my Father out of 2 of his 3 london flats in 2006, bit early, now I am working on getting him to rent and sell the one he lives in now before the equity in that shrinks to zero... When I did the sums it was hard to find any reason to hold on to it.

DrBubb what is your current thinking on the sort of declines might we see from peak to trough?

I don't think that this will be the case in the UK. If the flats drop 50% from where they are now then they will be ripe for purchase by the local council to turn them into council flats. I can even see this process being accelerated by councils where they are given extra funding to purchase from the beleaguered mortgage company at a reduced price. I think that this would be a cheaper option than bank or building society bailouts as the mortgage company will be only too willing to take on a government secured debt.

The council will then do its normal and not select a suitable candidate from its waiting list but the next one on that list. The nice dockside apartment block filled with well heeled workers will have the single parent with five kids living next door. The block might have got away with one or two families but the council will be buying flats like no tomorrow as it will not cost the council and more ‘families’ will move in. This only has to happen in one block in an area to begin to scare the well heeled of the blocks. Those that can will accept a lower value or the debt just to escape the forthcoming plague nightmare that is about to ensue the area.

I am sure that some blocks of flats might not get this plague and this might not be the case in other countries, especially ones that have a functioning legal system like Singapore but it will in the UK.

MAYBE 40-50% overall, and it could be more.

Unless the UK heads into hyperinflation


At some point, the councils will realise they are being turned into bag holders,
and stop this reckless practice.

They have been doing it since WWII, sadly I think that it will take either a very long time or a regime change for it to stop.