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Comment by pjc50 | Hacker News Reader

The UK has effectively decided to run the country as a property export operation: selling real estate to the global rich. This is setting up a future where we pay a significant fraction of our trade balance in rent to overseas landlords. Is this really politically sustainable? It'll require a lot of funding of newspaper propaganda to keep it that way.

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> The UK has effectively decided to run the country as a property export operation.

That's an insane hyperbole.

There is an element of truth in what you call hyperbole.

Gordon Brown (in the treasury) produced a report to see how UK could integrate with the EU. The output was basically that the UK economy is not flexible enough.

A very large portion of the UK's GDP is based on housing and housing services. The amount of debt on UK housing is astronomical.

http://news.bbc.co.uk/2/shared/spl/hi/europe/03/euro/pdf/fin... Page 55 onwards

"mortgage debt 60% of gdp"

http://www.ft.com/fastft/309012/how-would-uk-housing-correct...

http://www.imf.org/external/np/ms/2001/121101.htm

https://en.wikipedia.org/wiki/Five_economic_tests

Table 1.5 line "Mortgage equity withdrawal" is particularly revealing: in the other countries it's negative, indicating that people are building up home equity, whereas in the UK it's positive, indicating that people are turning house price rises into spending money through financialisation.

Because we have a single-generation home ownership culture. In Germany and France, most people rent their whole lives and never own. In Switzerland (not EU I know but just for example) you get a 100-year mortgage and pay it off over 3 generations. This is NOTHING to do with an oil sheik buying a £10M mansion - he is not even in the same property market as you are.

Perhaps, but it's a big part of the problem.

http://www.thisismoney.co.uk/money/mortgageshome/article-234...

A slightly counter view with different numbers: http://pdf.euro.savills.co.uk/residential---other/spotlight-... : still points out that large amounts of UK assets are held overseas and that in 2013 there was $10bn of office property inward investment.

Have you seen this yet?

http://www.private-eye.co.uk/registry

I hadn't, that's an excellent piece of journalism.

Good isn't it. I agree it's great, in distinction to the utter tripe pouring out the BBC these days.

Canada is doing the same with Vancouver.

What makes yield collected from real estate properties any different from yield collected from bank deposits or dividends from shares on the stock market?

Also, I don't think that yield from real estate is classified under the "trade" item in the Balance of Payments

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