So, new gig means having to read the Mail financial pages. Sigh.
At which point, properties for £3.25 million:
3 bed flat in St John’s Wood, 3 bed flat in Victoria (they call it Westminster) and 9 bed Georgian on 32 acre estate on Lansdown in Bath (OK, Battlefields, up by Beckford’s Tower maybe?)?
In what rational world are these all valued the same?
Yes, yes, I know, markets, what folks will pay and all that. But still. Really.
I’d imagine that once you factor in the running costs, you come out even.
Isn’t a 9 bed a council flat occupied by a Culturally Vibrant Family with Visiting Relatives?
Safe haven stuff for capital flight as far as London goes. Plus, London, not the sticks.
DH6 2EB – 7 bedrooms in 4 acres for 900k. Sadly it’s overpriced by 200 or so in my view, part of the reason there are no takers.
The rational part is that there are the high earners who want to be near the office, and maybe the odd person with inherited wealth who wants to party in the west end, everyone is chasing being as close as possible to prime locations, and there aren’t enough houses, so up it goes.
The problem is that this just doesn’t make sense with the remote work thing and how many city workers are in the office every day. It’s estimated at something like 27% of pre-Covid. Looking at rail journeys nationally (which is more than London), it’s holding at around 65% of pre-Covid.
My guess is that there’s still wishful thinking about London prices. Remote work is temporary rather than the future. When people finally figure out that it’s not, those prices are going to crash. £3m places become worth more like £1-1.5m places.
London’s where you live to make the money. Having made the money, you can live where you like. Having made the money, I can tell you, Bath’s a long way down on my choices of places to live. UK, for that matter. Or to put it simpler, Central London & Bath aren’t fungible. Entirely different market.
OT topic but somewhat connected; the ability to work at home may well define future unemployment. So be very careful what you demand. Discuss.
The housing market is not rational
Supply/demand is dynamic, purchase process is Byzantine, planning process glacial
Perverse incentives abound and there are far too many middlemen taking their cut, adding complexity and time while adding no value, mainly due to the incoherent legal directives, obligations and compliance
Interestingly the least efficient organ of government, local councils, have a monopoly on a significant part of the process
Surely there are examples of a rational efficient process somewhere in the world?
As you say, abolish the town and country planning act and its derivatives.
Why faff about with such low-rent stuff when you can have this 2 bed flat in central London for nine million quid?
https://www.zoopla.co.uk/for-sale/details/55150628/?search_identifier=92cba7c3c92428b350099b0fe7fb111e
bloke in spain,
“OT topic but somewhat connected; the ability to work at home may well define future unemployment. So be very careful what you demand. Discuss.”
I’m doing WFH because I save time and money and I’m as efficient as I am in the office. Clients who want me hauling my arse into the office are now competing with people who don’t mind. If they want me to come and work for them, they’re going to have to pay a premium.
It’s had no effect on my employment. In fact, I’ve never been busier than the past 5 years (I had some before Covid). Most of the people who want people in the office are idiots, in a way that’s observable in other ways. Somehow through a stroke of luck they got to be managers. They’re people who can’t measure output, except by things like whether you are at your desk at 8:45 and have had a shave.
And now, whether we as employees/contractors want it or not, it’s happening. The benefit to companies is a much wider radius of people. A London company doesn’t have to pay for people within 45 minutes by train, who cost a lot because of their rents. They can hire someone in Swindon or Folkestone, or even further if they don’t mind rarely seeing them. I’m working for a company in North Wales. And once companies realise that they can work like this, what’s the benefit of having an office in London? If the highly skilled people rarely need to come in, why not be in Banbury or Gloucester?
Is it going to lead to more offshoring? Possibly. But the limit on that is things like skills and there are issues like laws and timezones. And if it’s going to happen, it’s going to happen. If I insisted on office jobs, it’s not going to stop that.
How far do employers’ HSE responsibilities extend? To my kitchen table?
Do I get to make a claim to my employer (or HMRC) as to the resources consumed within my house when WFH?
What happens to total compensation?
I admire your complacency, BoM4. Most work that can be done at any distance from where the things are actually happening is, in computer terms, rules based distributed data processing. Most of the “work” involved in those sorts of jobs is the nodes communicating to coordinate the activity, not the activity itself. It’s ripe for autimation.
Brought home to me a few years back when I was dealing with what’s laughable called a stock broker these days. It’s a job I’ve actually done, both on the trading side & portfolio management. We did it without compute4rs because there weren’t any. it required a good memory & a good head for arithmetic. And we were working in £.s.d in those days. Memory in dealing meant knowing all the current prices in the stocks you were making a book in, the size & direction of current trades & positions & who’s & everything you’d done the previous day or two. On the portfolio side it was necessary to know what all the companies did for a living & have some idea of the markets they were operating in. You needed to be able to do all this because calculators were mechanical & weighed about 20 lb & information retrieval was from a physical library. I have no idea what this person was doing to justify whatever salary he was being paid. Basically, he was a data terminal in a suit. Certainly every question I asked him had him consulting a print-out or working furiously at his lap top. There’s a lot of this shit ripe for automation.
I see businesses as social organisations as much as anything else. People build hierarchies because people like being in hierarchies. So businesses create hierarchies because businesses are people. Move employees out of the offices & businesses are much less social organisations.
No doubt you think what you do is worthwhile & produces value because everybody thinks that about what they do. But don’t count on it continuing.
Ducky,
“Do I get to make a claim to my employer (or HMRC) as to the resources consumed within my house when WFH?”
No. You exist in a labour market. You pay for that stuff, and absorb it into your salary, same as how someone who commutes to London doesn’t claim for their season ticket, but just gets a higher salary to cover it.
And the resources are miniscule compared to commuting. I reckon I used to spend £180/wk going to Reading, and I spend, at worse, £20/wk on electricity, coffee and making lunch.
Ducky McDuckface -“How far do employers’ HSE responsibilities extend? To my kitchen table?”
The usual safety boxes still need to be ticked. Actually,at one co i worked at, you got paid a premium for working from home i.e. compensation for dedicating part of your home as a home office*. So working from Starbucks or the sofa was not acceptable. They had to set it up according to the same principles of a desk in the HQ, got allowances for desk,chair,lighting any number of anti rsi gizmos. Once a year someone would ring you and assess your set up for safety.
*very similar to the London weighting you lost so it kind of netted off, but I’m sure the legal distinction was solid.
I think I work in much the same business as BoM4. I’ve been working from home, off and on, for most of the last 20 years. Occasionally a client will insist I work from their office. I’m currently working with a client in Europe (despite Brexit!) and have in the past worked with companies based in the USA.
We know our work is valued, because we get paid for it and contracts get extended. And after 6 months, or 3 years, or whatever, a contract finally finishes and we have to find another client that is happy to pay for our time, experience and skill. I’ve not lacked for offers, I assume Mr M4 hasn’t either.
There has been an attempt at offshoring programming work to India going back decades. There are some large consultancies out there, with much the same reputation as Crapita here (eg Wipro). About the only advantage they have is that they are cheap. If that is what the client wants, then that’s up to them; I doubt that sort of client would be worth working with anyway.
Nothing lasts forever, but I’m not being kept awake at night wondering where my next contract will come from.
Tim,
the Speccie has an article on Bath property, or more accurately an advert for an estate agent
https://www.spectator.co.uk/article/a-house-buyer-s-guide-to-bath
bloke in spain,
“I admire your complacency, BoM4. Most work that can be done at any distance from where the things are actually happening is, in computer terms, rules based distributed data processing. Most of the “work” involved in those sorts of jobs is the nodes communicating to coordinate the activity, not the activity itself. It’s ripe for autimation.”
The automation has been/is being done. In the early 2000s I worked for a well-known mobile phone company and people would call in to upgrade their minutes, or request a bill, or change their bank account. That’s all automated now. There’s still the odd person who calls in for things, but most of the bread and butter is automated.
But you still need humans for many things. Like managing and improving all that automation. Or handling customer complaints. If you’re in a field like banking, investigating money laundering or fraud are still mostly human because each case is different, automation doesn’t help much.
Jeez, 4 bed terrace in Poets Avenues for £845 k? Bleedin’ ‘ell.
BiW,
“There has been an attempt at offshoring programming work to India going back decades. There are some large consultancies out there, with much the same reputation as Crapita here (eg Wipro). About the only advantage they have is that they are cheap. If that is what the client wants, then that’s up to them; I doubt that sort of client would be worth working with anyway.”
I’ve seen it done well. But it mostly works for larger teams. If you have some big project with 20 people on it and big releases, it saves some money. But I’ve seen companies try and offshore dynamic 2 man functions and they brought it back.
“Do I get to make a claim to my employer (or HMRC) as to the resources consumed within my house when WFH?”
Yes. You calculate an amount that represents the resources you’re using at home, and deduct it from your tax bill. Years ago I worked out I was using about 8% of my home for work, so that was near enough to just use one month’s bills as the numbers. A quick check of an old form shows it’s box E1/20. There’s a lower limit where the HMRC don’t even bother to check.
“A London company doesn’t have to pay for people within 45 minutes by train, who cost a lot because of their rents.”
No they cost a lot because they have many alternative things they could be doing. The price of anything depends on the price of the most expensive alternate use for it.
If there will be a lot of WFH permanently, then I suspect that a lot of people will be able to charge more, since they can live in a cheap place and work for a lot of different firms.
On the other hand, those people will still want a lot of places to spend money, often in person. So they may want to move somewhere more expensive (meaning more people want to be there).
DH6 2EB – 7 bedrooms in 4 acres for 900k. Sadly it’s overpriced by 200 or so in my view, part of the reason there are no takers.
Is that Rod Liddle’s place? 🙂
jgh – yes, that’s what we do, since we’re incorporated – a form of self-employment. What I was getting at is in BoM4’s comment, (net) salaries should rise to compensate (as per BoM4’s season ticket example), but as an employee, I would not be able make that same claim to HMRC. So, the firm, the employer, would potentially make some sort of saving on commercial premises, but that would be partially offset by higher total comp across some number of employees WFH.
Then again, there’s this;
https://www.constructionenquirer.com/2021/11/22/london-office-starts-rise-as-confidence-returns/
Those firms are putting cash on a bet right now.
Anecdotally, I know of some firms in the US, where WFH on a regular basis was offered as restrictions eased over the summer. Employees were desperate to get out of the damn house after ~18 months, so take up was lower than expected.
Further, WFH is probably being overstated right now – media bias from, er, intellectual opinion formers, AKA Guardian columnists, if you like. There’s a large percentage of workers for who lockdown simply never happened.
Hallowed Be’s comment is one way I’d expect things to pan out – but would that create a type of lien or equivalent on the proprty? How about upgrading security, or comms? Is there equity being created there? Insurance? Would councils start to adjust council tax to incorporate an element of business rates, once WFH happened consistently, at scale?
Ducky,
“Further, WFH is probably being overstated right now – media bias from, er, intellectual opinion formers, AKA Guardian columnists, if you like. There’s a large percentage of workers for who lockdown simply never happened.”
Nationally, possibly, but in the context of London, WFH is very big because its output is mostly services (and some bits of tourism and west end shows). The people designing Land Rovers, making ready meals and Nissan Micras still have to work, but they aren’t in London.
Another thing on this is that offices in smaller towns are still popular, because it’s not the same cost and ballache as London. I know 3 companies where most of the people are in every day, in north wales, rural Oxfordshire and Aylesbury. If it only takes a 15 minute drive, people do it.
BoM4 – yes, but that link is specifically about offices in London. There is a punt going on, and it’s based on WFH being largely transitory.
I have other suspicions wrt WFH based on Dunbar numbers and Allen curves.