London's paper millions to destroy the capital?

I’ve seen this on a few housing programs lately, several articles in the papers and online. You have a situation that is frankly insane in which a one or two bedroom property in London is worth more that a castle set in 225 acres of land. I would move so fast!

Looking on Rightmove with a simple search for £1,000,000 houses in London throws up page after page or 1 and 2 bedroom flats and maisonettes like the one linked below. For £1,100,000 you can be the proud owner of a 2 bedroom ground floor flat in SW10.

Million pound London apartment on Rightmove

Not quite a luxury setting in this million pound flat in London - Rightmove

On the same road is another, bigger property, a freehold terraced 5-bedroom corner house:

In 1999 it sold in £675,000
By 2006 it sold for £1,250,000
In January (2015) it sold again, this time for £2,400,000

OR, for £1,000,000 you can buy a grade 1 listed castle :

Norris House, which is set in 225 acres of featuring parkland, woodland and over 1 mile of sea frontage. It offers 14 bedrooms, 9 reception rooms, 7 bathrooms, stables, outbuildings and cottages

Norris House, Isle of White, yours for only a million pound

One of the lobbies in Norris Castle

One of the reception rooms in Norris Castle, Isle of White. The grand piano at the back give you a sense of the scale.

Yes, the repairs and maintenance on the vast estate about would be eye-watering, but that’s not the point. The market rather misses the common sense factor. If I owned a pokey flat or terrace house in central London and realised I could sell it for £1,000,000, move north even east or west and buy a decent semi, with a garden for £100,000 and have £900,000 cash to invest (wisely) I’ll sell so fast.

If the best part of London’s 8.7 million population thought that way and upped sticks within a year all those left – the bankers, the executives, the highly paid professionals would be it a right old quandary. For a start, there would be such a glut of properties for sale prices would freefall, and those million-pound apartments would be effectively worthless. The banks, however, would still want the £1m mortgage paying. If they all say, stuff it, take it – then the banks and mortgage companies are in trouble again as they are holding a trillion pound in bad debt…

Regardless of the bank’s woes there’s another factor that will accelerate the situation:

If – when – all the homeowners on low wages wake up to this, sell up and move north the capital is in a world of trouble. A bunch of professionals with a trillion pound in mortgage debts and no cleaners, no babysitters, no baristas to serve overpriced cappuccinos, no hairdressers, no shop cleaners, no council workers… A million households taking a million pound each for their grossly inflated properties and running north. CRASH.

This is a bubble waiting to burst.


Update 3rd Oct 2015:
The Daily Mail ran a similar article today showing the madness of the situation: What £1million buys you in the UK: From castles in Scotland to council flats in London… how buyers can get 14,000sqft MORE for their money outside the capital.

Ack

Been playing with computers since the stone age, online since the '80s, and developing websites since the '90s.

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