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London Property Prices. A personal view from George Oliver Property Partner at Gallowglass Security Partners LLP

  • Blog
  • 29th October 2013
  • By George Oliver

London property prices continue on their upward trajectory, as described most recently by the London Evening Standard with a headline that describes properties rising in value at the rate of 2% per month.

A number of different explanations are routinely put forward to explain the rise in the value of property by estate agents, academics, journalists and politicians. Namely government backed schemes to help first time buyers, artificially low levels of credit and the purchasing power at the top end from Russian oligarchs and the like. These are all perfectly fair points, and I don't doubt that they are valid, but I think that there is more to it than that.

A good starting point is Google, type in into Google, "greatest cities of the world"; it will almost certainly throw up New York, Paris, London, Sydney, Moscow and Istanbul. No surprise by contrast if one types in “greatest city" the vast majority of answers will be London.

I think Alain de Botton is on the bang on the money when he says City housing isn't expensive by conspiracy; it merely reflects how much money, power and fun is available nearby” and that describes London perfectly. London always has been, is, and remains a honey pot for native Brits and international buyers from different cultures, races and socio economic backgrounds, who are all content to live side by side.

It would be too simplistic to assert that London's real cachet and pulling power, is driven by its status as a leading financial centre. The same applies to Frankfurt, Zurich and Beijing, yet they don’t have the same draw as London, despite the immense financial opportunities. However, they are not world cities in terms of the diversity that London, New York and Sydney boast.

One of the big pulls of London is its diversity and tolerance. All forms of day to existence can be found in London, whether it's in business, the arts, fashion, religion or whatever, as Andrew Jackson was described, it’s "all things to all men". It welcomes all, and all takes on life, making it easy to be a part of London and London being a part of one. So if one wears a pinstripe or sports pink hair with a bone through ones nose, no one really cares. There are limits to this famed tolerance; notably cruelty to animals and talking to fellow passengers on the tube, which are particularly frowned upon.

London isn't the only tolerant city in the world; there are plenty of others with lots of opportunities for the educated, the misfits or the plain ambitious. San Francisco for one, with its incredible weather, very high quality of life, and of course for the Google generation it has Silicon Valley. A mecca of all things technological, the headquarters of Apple, Facebook, Twitter, are all located there.

It has many other advantages over London, cost of living for a start and although our great capital may be very diverse, it is not exactly always friendly, as Jeremy Clarkson put it "not knowing your neighbours is considered a national sport", not to mention commuting here is at best described as ghastly, and at worst, a financial massacre.

The question must be raised however, is why do so many multinationals flock to London, if other cities like San Francisco are such fantastic places to be? One answer to this could be, as suggested by Peter Rees, head of the city of London planning department. He believes that a key to London's successes is down to the humble British pub, the boozer, a leveller where people from every walk of life congregate.

In London it is common place to see a banker, plumber and a young trendy hipster all drinking pints, maybe not together, but all side by side. It is this melting pot provided by the good old British boozer, that Peter Rees suggests, that creates the gossip and a collision of ideas, albeit in a slightly hazy way, that makes life fun, and is a catalyst to making things happen.

True, San Francisco has its bars and its fun, but it is not quite the world of Scott Mackenzie. Their offices are all segregated, and instead of a varied collection of organisations and people all mixed together and all on top of each other; everything is operated from vast out of town campuses where no one mixes with people from outside their organisation or indeed their organisational culture.

Silicon roundabout in London's east end may be considered a poor relation by comparison, but like the roundabout of any public road it is a constant whirl of different people going in different directions at different times, with different ideas and this is what sets London apart. This is what makes it a truly unique place to do business and with a culture and lifestyle that is anything you want it to be it.

So when trying to explain the inexorable rise in London property prices, it's not "the economy stupid" it’s the boozer stupid"!




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