The Null Device

There's a piece in the Telegraph (yes, the Torygraph) about the London housing crisis; the prognosis is not good. Basically, it's going to get much worse. Private tenants are, of course, screwed as they've always been, and there'll be no relief as the Invisible Hand Of The Free Market tightens the screws on them (and this will increasingly apply further from London, encompassing the entire South-East of England; basically, anyone living anywhere where a commute to London is not utterly soul-crushingly miserable will be paying through the nose for the privilege). The lucky few who have managed to grab a tenuous grip on the bottom rungs of the housing ladder as it started to pull away are also not out of the woods; as interest rates start to rise, many will find it difficult to keep up and some will fall off. As for their houses, and the thousands of flats being built around London, they're unlikely to help: virtually all of them (other than the super-premium ones bought as investments and “bubble-wrapped” by foreign investors) will be snapped up by buy-to-let landlords, flush with cash from their healthily growing rents and looking to build up their portfolios further, aided by preferential mortgage terms. The end result looks pretty bleak for everyone. Well, everyone with the exception of landlords, for whom life is good and can only get better:

The Joseph Rowntree Foundation extrapolates and suggests that by 2040 private rents will rise by more than twice as much as incomes, resulting in a majority of future private renters in England living in poverty. Social renting, currently the tenure of one in seven people, will house only 10 per cent of the population by 2040.

And don't expect relief from any of the major political parties; none of them have submitted any proposals for fixing things, save for ones which would further push housing prices up, and keep the cash flowing into the pockets of landlords. Perhaps the fact that a third of MPs are buy-to-let landlords has something to do with their collective reluctance to in any way interrupt the party?

The elephant in the room is the assumption that the normal state of affairs is owning one's own home; this is a peculiarly Anglo-Saxon ideal, perhaps imported from the broad suburbias of the United States, where the average working stiff could buy and pay off a detached bungalow (at least in theory). Whereas in a lot of other countries, renting is seen as the normal state of affairs, in the UK, people live with the belief—or delusion—that it's a temporary state of affairs, a stepping stone on the way to being a fully-fledged adult member of the property-owning democracy. John Steinbeck famously said that socialism never took off in the United States because poor Americans, in their eternal optimism, saw themselves not as exploited proletarians but as temporarily embarrassed millionaires; perhaps in Britain, the idea of rent control, regulation (even such supposedly uncontroversial regulations as preventing landlords from evicting tenants in revenge for raising a fuss about problems), or even not rigging the system to funnel billions of pounds of taxpayers' cash to landlords, stems from a similar sentiment: that the hard-pressed renter, paying 60% of their income for a mouldy bedsit, will somehow eventually become a property owner, and, ultimately, graduate to the hallowed echelon of landlords, funding their golden years from the property portfolio that they will, in the fullness of time, inevitably own?

¶ economics gilded age london neoliberalism 0

House prices in London keep rising; London housing is, after all, a de facto reserve currency, and most sales in the "super-prime" market—places like Chelsea, Mayfair and Belgravia—are done in cash to foreign buyers, often from economically or politically troubled regions whence getting one's wealth out is a sensible idea; also, if one wants to hobnob with the world's movers and shakers, a pied a terre in London is essential. One result of this is that demand from the unimaginably rich global titans pushes the merely locally rich further out, and triggers a wave of outward-moving gentrification ending in cash-strapped working stiffs moving out to remote corners of Norfolk and spending several hours a day commuting to their London jobs, collapsing exhausted when they get home, but not before setting the alarm for 4:45 the following morning to do it all again:

The "extreme commuter" appears so regularly in demographic updates these days that it will be a miracle if, like Mondeo Man and Worcester Woman before him, he doesn't become a prime target for next year's electoral pitch. A recent Radio 4 exposé of the phenomenon came crammed with horror stories of single mothers rising at 5am in the Essex hinterland to drive their offspring to the childminder's before proceeding, via train, Tube and pavement to some sweating house in Threadneedle Street or Holborn Circus. Ominously enough, there was very little in it about that search for the fulfilling rural lifestyle that we hear so much about, and a whole lot more about ground-down wage serfs forced into five- or six-hour daily round-trips by domestic circumstance or the lack of affordable housing near their place of work.

While some resign themselves to the joyless grind of extreme commuting, others have found different solutions; such as living on no-frills floating slums on the Thames (the London property market's own answer to the Chinese zombie fishing trawlers), with a combination of low-wage service-industry workers, the economially desperate and a smattering the sorts of oddballs one finds drawn for one reason or another to the fringes:

The room I chose had a smashed window and was open to the elements, meaning I could see my breath when I was in bed (March 2013 was to prove one of the coldest on record). The only upside was that the draft offset the fumes from the stove, lessening the dread caused by the occasional sounding of the carbon monoxide alarm. Better to be cold, I reasoned, and wake up the next day.

This way of life inevitably attracts colourful characters. A few longer-term residents, some of whom had been on the boat for years, genuinely enjoyed the life of the river. They had pets, and were often heavy drinkers, chain smokers and drug users, partying until the early hours. The boats meant freedom from rules and regulations, and form-filling officialdom. Most residents bought bottled water rather than consume the drinking water that was filtered straight from the river, but one man told me it didn't bother him because he never drank water; his entire liquid intake came in a cider bottle. He once advised me to cover my food in the kitchen; not because of rats – they were dead – but because they had stuffed the ceiling full of poison and had no idea where it might fall out. Included in this group were some of the younger crowd on my boat, people who liked the communal living, sitting out on the deck in the summer with a barbecue and some beers. It was enough for them to forget the conditions. Some of them admitted that they could afford to live elsewhere. They worked full-time; one designed computer games; another was a football coach; one young woman worked for a local council. They had no plans to stay in the long term, but were saving money by tolerating the boats.

Perhaps less romantically, some 289,000 families in England and Wales have taken to sharing homes with other families, in a laudable display of thrift of which George Osbourne would certainly approve. Fewer poor families selfishly demanding their own homes, after all, means more homes to be done up, sold, and left empty and "bubble-wrapped", the better to retain their investment value.

Meanwhile, one person has calculated that it is cheaper to rent a place in an upmarket district of Barcelona and commute to London each day than to rent one in London. The downside, of course, is spending several hours a day on Ryanair.

Finally, a Buzzfeed listicle, enumerating 14 signs you're house-hunting in London:

You need to consult your Oxford English Dictionary, because £720,000 for a flat certainly isn’t your definition of “affordable”.
You examine your finances and decide to delay buying for a couple of years in order to save up a bigger deposit. A year of working over time and living off baked beans later…and house prices have risen by £40,000. See ya later hesitater.

¶ gentrification gilded age hypercapitalism london the precariat uk 1

As their ranks and fortunes grow, the world's super-rich have been ploughing increasing amounts of money into buying art, often motivated primarily by its investment value; a Picasso, you see, is not so much a pretty object to hang on the wall of your grouse-hunting lodge in the Scottish Highlands, but rather a sort of high-denomination banknote. As such, airports in countries like Switzerland, Luxembourg and Singapore are sprouting networks of high-security art warehouses for storing their wealthy clients' collections; these remain airside, where import duties are not payable, and now are sprouting facilities to make it easier for the artefacts (which, for legal purposes, are still “in transit”) to be exhibited (though only to potential buyers, not members of the great unwashed):

The goods they stash in the freeports range from paintings, fine wine and precious metals to tapestries and even classic cars. (Data storage is offered, too.) Clients include museums, galleries and art investment funds as well as private collectors. Storage fees vary, but are typically around $1,000 a year for a medium-sized painting and $5,000-12,000 to fill a small room.

The early freeports were drab warehouses. But as the contents have grown glitzier, so have the premises themselves. A giant twisting metal sculpture, “Cage sans Frontières”, spans the lobby in Singapore, which looks more like the interior of a modernist museum or hotel than a storehouse. Luxembourg’s will be equally fancy, displaying concrete sculptures by Vhils, a Portuguese artist. Like Singapore and the Swiss it will offer state-of-the-art conservation, including temperature and humidity control, and an array of on-site services, including renovation and valuation.

The idea is to turn freeports into “places the end-customer wants to be seen in, the best alternative to owning your own museum,” says David Arendt, managing director of the Luxembourg freeport. The newest facilities are dotted with private showrooms, where art can be shown to potential buyers. To help expand its private-client business, Christie’s, an auction house, has leased space in Singapore’s freeport (which also houses a diamond exchange). The wealthy are increasingly using freeports as a place where they can rub shoulders and trade fine objects with each other. It is not uncommon for a painting to be swapped for, say, a sculpture and some cases of wine, with all the goods remaining in the freeport after the deal and merely being shifted between the storage rooms of the buyer’s and seller’s handling agents.

¶ art economics gilded age globalisation 3

Websites asking contributors to write for free (“for exposure”) is old-hat, it seems, now supplanted by websites allowing contributors to write for them, in return for a fee; i.e., the old vanity-press business model, now refurbished by Mumsnet (best known as the online forum of “penis beaker” fame):

‘Webchats are actually something Mumsnet often charges for, because they’re such an effective way of promoting things; they tend to get many thousands, if not hundreds of thousands, of page views. In other circumstances (as we were thinking here) we do them on a no-cost basis (on either side) because it’s an issue our audience is interested in, and people who want to campaign on something or drum up interest see it as an opportunity to get their message out.’

This blurring of the lines between editorial and advertising (hint: look at the direction the money flows to see which is which) is apparently a symptom of the New Gilded Age; the hollowing-out of the middle class and the erection of a new privileged stratum above its straitened remnants, a stratum differentiated from the unworthy rabble below by the ability to pay to unlock doors and elbow one's way in (see also: the unpaid internships required to start careers in the media and other industries; or, indeed, the abolition of free university education coupled with a bachelor degree becoming the minimum requirement for any work from secretarial work (now rebranded as “PA”) upward). So, naturally, if the indicator of which stratum in society one belongs in is one's (or one's parents') ability to pay, it makes perfect sense for the invisible hand of the free market to raise itself, palm forward, in the faces of the jumped-up serfs who have the temerity to think they have a right to be heard:

Readers suffer because British writing is no longer a meritocracy but becoming a vast system of vanity publishing. Editors are not nurturing talent, but looking for passengers who can pay their own way. As Julie Burchill says, ‘once rich daddies bought their daughters ponies now they buy them newspaper columns’. For all the babble about ‘diversity’, an ever-narrower class of people dominates journalism, broadcasting, drama and publishing.

¶ economics gilded age inequality media uk 0

From an article by Nick Cohen about the current Frieze art fair in London, an observation on the function that huge, tacky-looking artworks fulfil in validating their wealthy purchasers' status; Cohen's argument is that monumental kitsch is a peacock-tail-like mechanism for (expensively and unforgeably) demonstrating that one has status putting one beyond the criticism of one's inferiors:

The justifications from the critics whom galleries always seem able to find to dignify the shallow add to the melancholy spectacle. They talk of challenging our notions of what is art as Duchamp did with his urinal. They forget that Duchamp offered his "fountain" to a New York show in 1917 – almost a century ago, and his once radical ideas are now so established they will soon deserve a telegram from the Queen. "Everything changes except the avant garde," said Paul Valéry. Yet Frieze shows one change, although not a change for the better.

Collectors do not buy Koons because he challenges their definitions of art. The ever-popular explanation that the nouveau riche have no taste strikes me as equally false – there's no reason why the nouveau riche should have better or worse taste than anyone else.

What a buyer of a giant kitten or a gargantuan fried egg says to those who view his purchase is this: "I know you think that I am a stupid rich man who has wasted a fortune on trash. But because I am rich you won't say so and your silence is the best sign I have of my status. I can be wasteful and crass and ridiculous and you dare not confront me, whatever I do."

¶ art damien hirst gilded age jeff koons kitsch peacock tails society status 0

Spare a thought for the latest victims of London's runaway property prices, mid-ranking bankers on less than £500,000 a year, who find themselves priced out of the property market, whose super-prime properties are being snapped up by global oligarchs, with the merely rich moving further downmarket:

“People here are already carrying a lot more debt than they used to,” said a senior manager at one European investment bank in London – again speaking off the record. “A member of my team has a £750k mortgage on his house, which is a huge burden for him. A lot of other mid-ranking people here can’t afford to live in Zone 1 and are having to move out to Zones 3 or 4 – which is difficult when you’re a VP-level banker working very long hours.”

As for other Londoners, the crunch point reportedly comes when bankers hit their early 30s and start having families. Until then, they’re happy to live in house shares or small flats conveniently situated in central London. Once they have families, they need larger London properties and aspire to pay private school fees. “People suddenly see their disposable income pared down considerably,” said the European banker. Traditionally, the head of HR says senior bankers would have moved their wives and children into the cheaper British countryside and bought themselves a weekday pied-a-terre so that they could live in London. Now, however, she suggests that bankers’ wives often have jobs of their own and want to continue living in the city – even if they’re not contributing much towards the cost of doing so.

However, help is at hand. The Tory-LibDem government has just announced a “help-to-buy” scheme which seems tailored to the squeezed bankers' very needs. Let it never be said that the Tories don't have the welfare of the little people at heart...

¶ con dems gentrification gilded age inequality london 2