London, at Christmas 2014.
People
throng at the heart of the city’s West End.
Consuming
their way along Oxford Street.
Scurrying
through Westfield’s giant White City and Stratford malls.
Many trying to buy that special gift for a loved one.
Many trying to buy that special gift for a loved one.
Others seek a sense of well-being at the bottom of a designer shopping bag.
Forget
cricket and football.
You’ll
be forgiven for thinking shopping and sales are the national sports.
'Tis a season of good wallets to all mall kind.
A
merry footfall, as chain retailers cheerily say.
Yet
behind the tinsel and ubiquitous Christmas pap muzak in shops,
London festers increasingly divided and conflicted.
A
city where the stronger, more affluent and powerful – bloated by privilege, and
motivated often by greed and lust – do what they can.
And
where the weaker, poorer and powerless can only suffer what they must.
Masters
For
instance, City of London investment bankers rank amongst the strongest and most
powerful of Her Majesty the Queen’s subjects.
These
guys – and they are mainly men - reportedly enjoyed one of their best years
since the financial meltdown of 2008.
Tagged
‘Masters of the Universe’ by London’s mainstream media, they amassed
£54 billion in investment banking fees from floats, new share issues, and
multi-billion corporate merger and acquisition deals amongst healthcare,
telecoms, e-commerce and consumer giants.
Bumper
‘Universe
Masters’ at JP Morgan, Goldman Sachs, Bank of America Merrill Lynch, Morgan
Stanley and Citi are enjoying a ‘bumper bonus season’ as a result of this 2014 revival
in global finance.
And,
lower down inside City of London finance institutions, salaries are also
increasing to an average of just under £100,000, according to a survey by recruitment
firm Astbury Marsden.
That’s
some £76,000 higher than the average annual salary earned by the bulk of the
UK’s population.
Shot
London’s
mainstream media – especially publications dependent on real estate
advertisement revenues – welcome inflated finance sector bonuses and salaries
as a ‘shot in the arm for London’s property market’.
And,
like a shot in the arm, property remains London’s drug of choice for the City
of London’s wealthy and powerful.
“In
December, we’ve seen an 18% increase in new applicants working at investment
banks registering to buy apartments in the City and W11 postcodes between £2
million and £5 million,” says Giles Hannah, a senior vice-president of
Christie’s International Real Estate.
“They’re
expecting higher bonuses compared to last year and who see London as a place to
invest.”
And,
City of London firms are reportedly already seeking loopholes in new European
Union laws that cap and limit bonuses at the start of 2015.
Meltdown
Property
investment addicts create real social problems for the rest of London’s
subjects who see London, not as a place to invest, but as a place to live.
Indeed, where their families have
lived for generations.
Rising
bonuses and salaries also foments resentment against bankers.
After
all, bankers and their pals in central and local government and in Parliament caused the financial
meltdown in their first place.
But
this income inflation for a few also pushes property prices and rents way
beyond the means of Londoners earning closer to the average income.
Stress
Hence, many
Londoners on the city’s Christmas streets have seen better times.
For
instance, locked out of home ownership, increasing numbers of private tenants
face further hiked rents, as well as raised living costs and regressive taxes.
In
London, the average monthly rent is estimated to be £1,167.
Over
40 per cent of surveyed tenants struggle to pay their rent, according to the
National Housing Federation, a body representing England’s housing
associations.
Over
25% say they cut back on grocery shopping and on heating.
“We
have too many renters just keeping their heads above water, who are being kept
awake at night and suffering from stress over the worry of paying their next
rent bill,” says NHF chief executive David Orr.
Languishing
Politicians in London's local 'market states' continue to serve powerful private interests rather than local people.
Only
an estimated 43,000 so-called ‘affordable homes’ were built across England
during 2013-14, according to the Department for Communities and Local
Government.
That’s
nowhere near enough – with an estimated 1.4 million people waiting for public
housing and with 85,000 children languishing in temporary accommodation.
To
make matters worse, more and more homes are being offered as ‘affordable rented
housing’ – meaning tenants are asked to pay rents up to 80% of already
over-heated market rates.
Faced
with this matrix, many Londoners on average incomes and less face a stark choice in 2015.
Do
they try to cling on and stay in a prohibitively expensive city?
Or do they break traditional family ties and friendships – and let London become a financial playground for overseas property investors and those Masters of the Universe?
For now, at least for a few days, Londoners try to forget their future and enjoy Christmas.
Or do they break traditional family ties and friendships – and let London become a financial playground for overseas property investors and those Masters of the Universe?
For now, at least for a few days, Londoners try to forget their future and enjoy Christmas.
© Paul Coleman, London Intelligence, December 2014
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