How the super-rich are digging down in London | Hacker News Reader

How the super-rich are digging down in London

theguardian.com

I bet it's insanely hard to get approval to build highrise luxury condos in London, especially when to do so you have to tear down historical buildings--and practically every building in Central London is historic. This seems like a sensible, if extravagant solution. I just hope they're considering how underground buildings might affect the structural stability of what's built on top.

Actually, if you've been to central London recently, you'll know there is a huge amount of demolition and rebuilding going on: for example dead center on the west side of Tottenham Court Road. Office buildings in the centre, from the 20s onward, regularly get demolished and rebuilt to modern specs. There are brand new "luxury condos" around Tate Modern and the amount of building going on near Canary Wharf is incredible.

It's true that there are some preserved buildings that are unlikely to be redeveloped. But in the City proper (the square mile) there is a lot of redevelopment. Nobody lives there, though.

The reason for the basements is not that the houses are architecturally noteworthy, just that they are in conservation areas. It has to do with the look of the neighbourhood and all the property value that goes along with that. It's not an effective way of densifying the housing stock.

"Nobody lives there, though."

Hello from the Barbican.

What an exceptional place to live. Is there a good sense of community between the residents?

Point taken. I love the Barbican.

According to Wikipedia: "The City has a resident population of 9,401 (ONS estimate, mid-2016) but over 300,000 people commute to and work there." That is the breakdown I was trying to communicate.

No, there are very stric planning rules in London. It’s not just about not touching listed properties (though a lot of the city is listed) but also there is a web of line of sights from different view points which are protected and results in an invisible ceiling to new constructions. Add to that a very lengthy planning process and locals hostile to the densification of the area despite the crumbling transportation system, and you get the current odd situation where most of the city is made of low rise, 2 floors high tiny houses converted into even tinier apartments, and a few spots where you have a massive concentration of some of the highest residential skyscrapers in Europe.

There's a lot of history, but there's also a lot of low-mid rise cheap postwar developments (built on bomb sites) that are overdue for replacement.

We live on a long straight road in central London lined with Georgian townhouses. It’s possible to see exactly where the bombs fell as every few hundred yards the houses stop and there’s a 60s tower block or a park.

Never realised why until it was pointed out.

I would expect the seriously historic stuff to be underground. That is where the ancient Roman stuff would be best preserved.

I wonder how often an inconvenient archaeological site gets quietly disposed of.

They don't get 'disposed of'. Whenever there are large excavations it's a planning requirement to turn the site over to archaeologists first, who can find anything that's to be found before it's dug out. E.g., there was a lot of archaeology done with the Crossrail project: https://archaeology.crossrail.co.uk/exhibits/roman-moorgate-...

Yes, but that's a large excavation for public purposes, a private project is probably smaller - so does the same rules apply? Can those rules be avoided when done privately?

> I bet it's insanely hard to get approval to build highrise luxury condos in London

'Condo' isn't really a term we use in London. What's the difference between a condo and an apartment that you own?

There isn’t any real difference. It is just a difference in wording. Usually in the US we say apartment to mean a unit in a larger building that you are renting and condo means the same unit but you own it.

We call both things 'flats'. Apartment maybe in corporate marketing material or some historical names.

It's not necessary to change to the local lingo when you're talking about another place. When describing a trip to the US, Brits talking to Brits are perfectly able to say they rode an American lift.

But when you use a specific term like ‘condo’ rather than something generic like ‘home’ it looks like that specific term is there for a reason.

If you ask if building condos is hard does that mean you think building apartments instead is easier, for example.

It’s not really a specific use, it’s just terminology that doesn’t overlap in a the way you want it to. Most high rise developments, at least where I am, are condos, as it tends to be more profitable or convenient for a developer to sell all the units than for a single entity to rent them all out on an ongoing basis. Lots of the units will be rented out as apartments.

“High rise condo” May sound overly specific but it’s just the most common example of a category for which we don’t have a convenient descriptor.

In addition to the consideration burke mention, there is just the fact that in American English we generally don't have a term equivalent to flat (i.e., condo or apartment). (In this situation, "home" is not appropriate since that word is much more general.) This sort of use of a special case as an abbreviation of a more general case is a very common linguistic phenomenon.

Synecdoche (which I eventually learned is four syllables) is the name of that linguistic phenomenon.

“Free hold” and “lease hold” would be the British equivalents to describe ownership.

EDIT: That applies to England and Wales (and Northern Ireland?) I believe the law is different in Scotland.

Yah, {flats} = {condos} ∪ {apartments}.

I've come to understand that a condo is an apartment block with added features - a concierge, a gym, pool etc.

A block of apartments is just a grid of rooms/apartments with nothing else

Isn't condo just the apartments plus a legal entity managing the common areas and structural stuff (all of which are jointly owned)?

No, "condo" means they are owned by the occupants. "Apartments" are generally rented, although you might hear someone say "I bought my apartment" if they purchased a dwelling in a building that is mostly for rent.

Actually, it is more specific. Condos are like apartments that you own where the roof, plumbing beneath the floor (sometimes), and exterior are owned and maintained collectively by something like an HOA.

But if you own and maintain the roof and exterior of your place up to the place where it adjoins to other units, then it's actually a townhome.

I wasn't claiming that condos are defined only by being owned, just that they are necessarily owned.

It doesn’t have anything to do with occupants. Condos can be rented out too. It’s a legal term having to do with division of titles, common area ownership, etc

Sure, sorry, yes. It's not the occupant's ownership per se, it's that the units are owned individually (and hence have to have rules governing shared-use stuff like elevators).

Pretty much what Mark said. The simplistic definition as most people in NA use them would be:

Condos are typically a building where all the units in it are owned by their respective tenants.

Apartments are typically a building owned by a Company that rents out all the units, so none of the tenants have any ownership of the place they reside in.

"condo" implies a specific ownership and monthly fee structure.

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

where i'm from, apartment is usually considered somewhat lower end, it's usually a unit that is fairly standalone in a building, and offers minimal amenities. apartments are not often gated. a condo is usually gated, with a human concierge or security guard, with much more luxurious amenities such as a nice pool and fitness centre.

Condo is one sort of ownership structure in a multi-unit building. I imagine there are more than two, but co-op is the other structure that I'm familiar with.

"Condominium" also implies luxury (and especially new) apartments rather than mid-level or down market or generally older units.

I agree with the first bit, but:

> "Condominium" also implies luxury (and especially new) apartments rather than mid-level or down market or generally older units.

Condo does not have that connotation in my form of English vernacular. There are definitely older or down-market condominiums.

The US basically has two kinds of multifamily development: dirt-cheap apartment blocks used to house the urban poor (as rentals), and luxury apartments built to cater to yuppies and investors (as a mix of rental and ownership). Essentially all “normal”/middle-class people live in detached houses in sprawl, where multifamily buildings are illegal. While homeownership is quite normal, the only urban homeowners are the rich. So almost all condos are high end.

There are many smaller suburban condominiums as well. These are typically much cheaper than luxury condos, and tend to be occupied by single parent families, the recently divorced, or retirees.

Some suburbs do not allow much apartment construction, but will allow these. They provide a more affordable lodging option that still contributes toward building equity.

"Condo" stands for 'condominium", i.e. the building is mutually owned.

In the UK it would be the equivalent of each flat owner owning a part of the freehold for the building. So in a condo all owners are mutually responsible for the upkeep of the building as whole.

An "apartment" is a flat, it could also be in a "condo", in theory, but is generally used to refer to rented flats.

Note that in Scotland, we don't really have the freehold/leasehold distinction in the vast, vast majority of cases - instead all flat owners are responsible for the upkeep of the building and there is no separate freehold, through a default set of rules defined by statute which may be overridden by the title deeds for each flat. This is different from the rest of the UK, where the freehold is a separate legal entity that is responsible for the upkeep of most structural elements of the building - although each flat owner may own a share of the freehold in many cases.

I read through some of the replies and they miss the point: "Condo" signifies wealth in American terms. When you say you live in a condo, it's a very subtle indication of your social and economic status.

I am sure I remember reading reports a few years ago where there excavation has caused serious issues/subsidence and even collapse.

There’s always the Mole Man of Hackney who spent 40 years digging tunnels under his house. He dug so much that the pavement outside collapsed.

https://www.theguardian.com/society/2006/aug/08/communities....

At the same time some properties are being held purely for speculative reasons and going derelict. I would much rather have a new construction rather than a rotting 'historic' building.

Point in case: The luxury Principal Tower [1] and buildings just across it [2].

[1] https://www.google.co.uk/maps/@51.5213362,-0.0786701,3a,75y,...

[2] https://www.google.co.uk/maps/@51.5213362,-0.0786701,3a,75y,...

Time for some taxes on foreign property ownership or uninhabited buildings then.

No need to target foreigners really; speculative land ownership does the same harm regardless of which side of the imaginary line an owner was born on.

https://www.youtube.com/watch?v=AGXbiSwcqtM

Tom Scott on the 'Protected Views' or 'Sightlines' of London. It explains some of the legal issues about heights in London.

TLDW (even though is 3 frickin min. long): You have to be able to see St. Paul's (and have nothing behind it) from a few special vantage points. Something he didn't mention is the issues about London vs. The City of London, which also affects building heights, though less so.

Regarding limited building height in a capital city, my brother worked on a refection/reconstruction project in Paris (just next to the local Google office, near St-Lazare train station). They removed all the insid of the building, but they left the roof in place, because if they removed it to rebuild it, they would have to rebuild it lower (3 meters I think).

This video from 2015 about the subject is interesting.

https://www.youtube.com/watch?v=sLJ0zZQb9x0

London, vs the rest of the UK has always been one or two steps (depending on Bath vs Sheffield..) above in absolute terms of "class"/wealth for my entire life, this is just more of the same from that standpoint..

The entropy can only increase and nobody with any modicum of power has any incentive to fix it.

And it's a constant feedback loop because more investment goes to London and therefor it attracts more money and because there's more money it attracts more investment.

From a personal standpoint: I'm an above average earner but my quality of life in London is substantially worse than anywhere else I'd live (probably excluding San Francisco), we're coming towards a time where only the wealthy can live there, and the proles who actually do the hard work (cooking, cleaning, assistants, low-mid level employees) will need to be shuttled in from further afield.

The reason I mention that is because I was nearly paying 1.3k/mo for someones basement room in 2011, that same room is now on the market for twice that, I can't imagine how anyone can be comfortable paying that much for such a basic accommodation.

Purchase prices of London properties rose much faster than rent. That's coming to an end now, there's a finite supply of people who can or will throw silly money at it. It doesn't mean that prices will come down, but it does mean purchase prices won't grow so fast and relentless as it did the past two decades. Rents may rise, but mainly to close the significant gap between rents and mortgage payments and that will only happen as fast as people are willing to pay.

It seems to me that house prices can be approximated as a function of rents, interest rates (determining required return on owning a house), and anticipated growth in house prices (which again can be decomposed into growth in rents, reduction in interest rates and 'irrational' growth).

Rental yields appear to be around 3.5% at the moment, which suggests to me that a good deal of anticipated growth is priced in. But where can that growth come from? Rents are a function of incomes and are unlikely to outpace inflation. Interest rates seem to be more likely to go up than down. So it seems that house prices are unlikely to rise, and once that is realized by the market, prices may even come down as participants stop anticipating growth just because "London house prices always go up".

House prices going up faster than rents in recent decades can probably be explained by interest rates being in a downward trend over the same decades. Now we seem to be in at least somewhat of a bubble due to irrational future growth expectations.

I think your example is significantly higher than average. I think £800-1000 per bedroom is standard for relatively nice places in zones 1-3 for 2+ bed places. For single beds it’s a bit higher, but not 2k+ unless you’re in a very fancy place.

Yes, I was referring to Zone 1-2 to be fair, and I understand that being more central is obviously more expensive, but as you move out to the more affordable areas you get locked into public transport. The less options there are for public transport the lower quality of life in general..

I am paying £3.500/month for a four bedroom flat in Zone 1 near Kensington Palace. It's a choice if you want to pay a lot for rent or less of rent and a lot for the public transport. But I am going to buy something

What is your occupation? Curious as to how you are managing to afford that rent while saving for a deposit.

I still think you were paying on the significantly higher end for what you were getting, unless you were living in The City, or had a pool in your building or something like that.

I expect that I probably pay about average. Most of my colleagues seem to be paying a little more than me. Some of my friends in lower paying jobs are paying much less than me.

> The reason I mention that is because I was nearly paying 1.3k/mo for someones basement room in 2011, that same room is now on the market for twice that, I can't imagine how anyone can be comfortable paying that much for such a basic accommodation.

In 2011 I was paying less than £800/mo for a stunning first floor bedroom in a beautiful Georgian house, 20 minutes south of the square mile where I worked at the time. Today, my wife and I pay a bit less than 2.6k for a large, modern all-round tip-top two bedroom in central Camden - it's a lot of money, for sure, but it's a far cry from someone's basement room.

Are there any particular reasons why you are not buying?

First, rental yields are actually very low in London, so it's not actually very expensive to rent vs. owning -- the benefit of owning comes from equity growth, and it seems prices are finally plateauing, so it's not an obvious investment, at least not for anything less than 10 years.

Second, the kind of place we'd actually like to live in is ~£1m, and we could probably only afford to buy at a bit more than half that. That might be sensible if we were in it for the long haul, but we're not, it's unlikely we'll stay in London long term, not the place we'd want to start a family.

Interesting, thanks - I am in a very similar situation.

>From a personal standpoint: I'm an above average earner but my quality of life in London is substantially worse than anywhere else I'd live (probably excluding San Francisco), we're coming towards a time where only the wealthy can live there, and the proles who actually do the hard work (cooking, cleaning, assistants, low-mid level employees) will need to be shuttled in from further afield.

I absolutely agree. I've personally noticed lots of people getting pushed out further and further due to rising costs of living. The situation we're in seems classist to an ever increasing extent. Directors, managers, people in finance etc all get paid enough to live comfortably, while even skilled workers in essential sectors are often not paid enough to live in a 1 bedroom flat within reasonable commuting distance.

For anyone wondering I did some Googling: average salary for a software developer in London is £43k (£32.6k after tax), and San Francisco is £77k (£52k after tax), about 60% higher. Cost of living in San Francisco is about 15% higher. This doesn't include healthcare or property taxes so take it with a grain of salt.

IMO it's not just rent that needs to go down, salaries need to go up. When I worked in a company that did client facing work they actively tried to hide our billable rates from us because it was so laughably higher than our actual salaries (about 20x, not including tax or huge amounts of unpaid overtime). A lot of people in skilled work are not comfortable with demanding pay rises and moving jobs if they don't get them, and a lot of un-skilled workers are not in the position to make such demands. That needs to change, far too much money gets funnelled not only to c-levels and directors, but out of the country entirely.

> salaries need to go up

The UK still seems to have such a classist attitude. Anything 'unskilled' in London is barely above minimum wage, and some people would react in horror if they demanded any more than that.

See also: "How could train drivers strike when they earn 40k+. Nurses don't even earn that" - the problem is that nurses earn too little, not that the drivers earn too much. It sometimes feels like people here would rather pull everyone down to just above subsistence level, rather than supporting everyone doing better.

>For anyone wondering I did some Googling: average salary for a software developer in London is £43k (£32.6k after tax), and San Francisco is £77k (£52k after tax), about 60% higher. Cost of living in San Francisco is about 15% higher. This doesn't include healthcare or property taxes so take it with a grain of salt.

What. 77k? From what I hear on HN here everyone earning less than $150k as a software engineer in the US is selling themselves short.

I can't help but think of Trantor from Asimov's stories. We're at the stage where London is like a mini Trantor. It seems inevitable that if we were to colonise other worlds there would eventually be a Trantor.

I recommend visiting Tokyo. The view from the observation dock atop the Tokyo Metropolitan Government Building is essentially just concrete extending in all directions as far as the eye can see:

https://cdn.theculturetrip.com/wp-content/uploads/2017/10/15...

There is a lot of Khaleeji wealth in London and they are not shy about showing it off (the "super cars" with Saudi plates, for example). They own a lot of property around the city.

Is it legal to drive with the Saudi plates or is it just that no one wants to stick their neck out to enforce the laws for rich people?

In short, it's legal as long as it's somewhat temporary (ie. less than 6 months).

Full details: https://www.gov.uk/importing-vehicles-into-the-uk/temporary-...

It’s legal they fly their cars on special jets the summer period around my flat is irritating as hell and I’m not even getting the brunt of it they other side of the park around Knightsbridge is a nightmare.

What’s worse is that many of them have diplomatic immunity which means that when they get involved in an accident there is fuck all you can do about it including being unable to claim compensation for the damage they cause.

Does your own car insurance reimburse you if you have comprehensive coverage?

It should, but I believe you'd still be out the deductible.

It’s not just the car insurance, a former colleague was hit in what essentially would be a hit and run because the driver might as well have run off as the outcome was the same.

They have pretty severe health problems now and pretty much lost the use of one of their arms.

Not only was the driver not punished but it was also impossible to claim further compensation form their insurer or from them directly.

I'm tempted to apologize on behalf of my countrymen, but hell no- those reprobates are a national embarrassment to us all over Europe, and deserve the antipathy. I'm sorry you have to suffer through their douchiness, however.

I audibly groan whenever I see GCC license plate on the road in London; these fuckers are part of the reason why I have to either lie about my nationality when asked, or to slowly explain that most of us drive Hyundais back home, not Bentleys.

Edit: regarding the diplomatic immunity, it's not as much of a carte blanche as most assume it is. The bills aren't waived by any means just due to the immunity- they just go to the embassy instead. The embassy usually pays up then chases them down back home to get reimbursed, though often unsuccessfully I'm afraid.

I don’t blame you, I don’t even blame the rich assholes that drive those cars (if I was that rich I likely would do the same at least once) I blame the stupid politicians that allow them to do so because they bring some of their wealth with them.

And yes you can try to sue the embassy but it’s not that simple, especially in cases where you need to prove who was driving and that the accident has even happened.

It’s also likely differs from country to country and who exactly was involved (specifically if there were any “embarrassing” circumstances around the accident).

to the best of my understanding it's legal to drive around the UK with foreign plates for up to 6 months, provided that the full value of your car is held in bond by a carnet de passage. if you're a rich gulf state resident you'll have no problem with a $300,000 carnet.

There’s lots of weird rich people faulting their wealth in certain parts of London.

The photographer Dougie Wallace is well known for documenting some of it in his Harrodsburg work.

http://www.dougiewallace.com/harrodsburg

90 Billion a year of dirty laundered money goes through the UK - mostly into the (London) property market - and stopping that flow is likely to cause a housing collapse

I really recommend Ed Milibands podcast "reasons to be cheerful" - the above fun fact came from the episode on money laundering. It is a hell of a surprise to find out how easily we could stop the dirty money - and how close we came. Another thing brexit scupperdd

It's the same in the west coast of the US. An absurd amount of money laundering is going on and its exacerbating the housing crisis here.

This is the best part:

https://www.newstatesman.com/business/2014/06/bizarre-secret...

Previous: https://news.ycombinator.com/item?id=7862870

Clive James, in 2009, recorded an amusing piece about this on BBC Point of View. Basements in London are nothing new, and this was before the boroughs started cracking down.

https://soundcloud.com/pointofview-clivejames/london-undergr...

Also reminds me of this: http://www.newyorker.com/magazine/2015/06/01/house-of-secret...

The photo at the top of the article is bizarre, especially with the caption of the property having a dance floor and a DJ while in the photo there is also a pram.

An artificial beach sounds like far more money than sense if it underground.

How does someone become super rich any way

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