The Market - Why

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The Market - The Why.

“To solve a pain, you need to define the problem, to define the problem you need to understand the need, and to understand the need you have to experience the pain.”

'Generation Rent'– two words that represent the feeling of hopelessness of millions of consumers.

You don’t even have to follow the mainstream (or social media) to understand we are facing an existential generation-wide housing crisis, from London to San Francisco, Stockholm to Sydney the flight to secure capital in the real estate market by investors has driven housing prices out of the realms of occupier affordability and into a speculative asset class – the London property market is no longer being described as a accommodation market, but ‘tower blocks of suitcases full of gold bricks.’ – the dysfunction is so great in the supply/demand equation that many (especially non-domestic) property speculators no longer even bother to rent investment property out – buy to let has become buy to leave, relying entirely on a speculative bubble to generate return on capital that drives prices still further out of reach of those that simply want to find a home paid for by a normal job.

We have reached a critical tipping point – either a catastrophic collapse in property prices needs to occur to bring purchase prices back inline with affordability metrics, or the entire rental system needs to be made as frictionless as possible in order to address the dysfunction in the market, and try and solve at least some of the genuine life-altering pain it is inflicting on entire generations of consumers.

At the heart of the problem are 3 issues:

1: Excessive liquidity is driving capital flight from unstable markets into high-demand rental locations where all the work for consumers is, and therefore property demand is strongest.

2: The amount of capital liquidity far exceeds that available to the general consumer through a salary funded mortgage product, therefore blocking them from becoming an owner-occupier in areas of high demand.

3: A lack of supply in those areas is driving rents upwards, meaning only those with the deepest pockets can secure accommodation, leaving both the most vulnerable members of society, and those individuals who are often poorly paid but essential to the proper operation of society such as nurses, doctors, firemen, police officers are unable to live in the communities they serve.

This perfect storm of lack of supply coupled to ever-increasing demand is creating marketing conditions where the very worst excesses of a market that is not held accountable by consumer choice, and the actors operating within that market are taking advantage of that imbalance to extract unreasonable, profits, perpetrate fraudulent activities and generally conducting their business in a highly abusive manner towards the consumers they supposedly serve.