Transcription
It's ridiculous in a sense. There are super rich people who live in hotels, right? I mean, they're they're very rich people who don't. There's a weird billionaire, isn't there, who basically just moves from hotel to hotel. That wasn't actually that uncommon in the 1920s and 30s. Really rich people would just rent a country house for 3 years. Now, it's kind of ridiculous that we're forcing people they have to place a large six figure bet in the property market.
I also think it's a way to spend your money. Okay, let let me put it like this. Okay, let's say you've got quite a good job in a London bank and you decide you're going to buy a 3-bedroom house in Fulham, which is probably what 1.4 1.6 million. In 2024, you're prepared to spend about 50% of your discretionary disposable income in order to own something that a poor person would have owned in 1924.
The house itself is a piece of It's not an interesting house. It's the location that contains the value. The house is unbelievably boring. It's where a postman would have lived in 1917. You have this extraordinary competitive technological economy where you can buy jet skis and hot tubs and everything else. Right. No, no, no. I don't want any of those wonders of now. The postman in 1917 would have been a ghast at what we can buy with our money, the cars, the holidays, the jet travel, the, you know, etc. Yeah.
As I said, if Louis the 14th visited that house in Fulham, he go, you know, you've got the flat screen television, you've got broadband access, you've got a car outside, you truly are possessed of unimaginable wealth. What I can't understand is why you live in such a house. Right? That's what Louis the 14th would say. And so, we've produced these extraordinary consumer goods and yet the vast proportion of people's disposable income is spent in buying a location occupied by a totally house.
Most of the housing in London is dross. This is literally like having a 1970s Ford Cortina and then paying 60,000 a year for the parking space. That's what property is like. The actual buildings are utterly tedious and awful for the most part. And all the money is actually in the land. And people don't realize this. The land and the permission to build on that land basically are 90% of the value of that place. Actually rebuilding that place with something better would cost nothing.