Labour does such a nice line in hypocrisy.

Massimo A. Allamandola suburbanstudio at
Tue Aug 21 09:31:41 BST 2007


In 1999 the UK government set out its principle of Sustainability  :

- social progress which recognises the needs of everyone;
- effective protection of the environment;
- the prudent use of natural resources;
- the maintenance of high and stable levels of economic growth and 

These aims should be pursued in an integrated way through a sustainable, 
innovative and
productive economy that delivers high levels of employment, and a just 
society that
promotes social inclusion, sustainable communities and personal well 
being, in ways that
protect and enhance the physical environment and optimise resource and 
energy use.

The above is an extract from the PPS1 ( Delivering Sustainable 
Communities  ).
It is interesting to underline the bit that stress :
<<a just society that promotes social inclusion>>

 From Policies to Reality :

"This is where Tony Blair bought," says Fatemi, the top producer at 
Foxtons Ltd.

Foxtons Chief Executive Officer, Michael Brown is the former chief 
operating officer of bankrupt energy trading company Enron Corp.'s 
European unit.


Gazumping London

By Simon Clark
Bloomberg Markets September 2007

Gazumping London

Spiraling home prices have made the British capital the world's most 
expensive city.
Real estate brokers are getting rich as the surge fuels worries of a bubble.

By Simon Clark
Bloomberg Markets September 2007

One late-June morning in London, a real estate broker named Becky Fatemi 
eases into her black Porsche Cayenne and heads for Connaught Square, 
just north of Hyde Park.

As her sport utility vehicle turns into the square, Fatemi--who, by her 
own account, handled about 55 million pounds ($113 million) of home 
sales in 2006-- nods toward one of the Georgian town houses.

"This is where Tony Blair bought," says Fatemi, the top producer at 
Foxtons Ltd., the biggest residential property brokerage in London.

Through Foxtons and another broker, Blair purchased the five-story 
stucco house for £3.65 million in 2004, when, as prime minister, he was 
still living on Downing Street. Fatemi, 31, says Blair's place is worth 
as much as £4.7 million now--a 29 percent increase.

Blair is no real estate savant. A confluence of powerful forces from low 
mortgage rates to Russian petroriches to the teeming wealth of the City 
of London, Europe's largest and most dynamic center of finance, has 
supercharged home prices across the British capital.

The average price of prime London homes, the ones brokers consider the 
most desirable, has soared 254 percent since 1997, when Blair's Labour 
Party came to power, according to London-based real estate broker Knight 
Frank LLP. Defying predictions that the market would sputter, that 
average rose 28.7 percent in 2006, the steepest increase since 1979, and 
then jumped 18 percent during the first half of this year.

These days, buyers who dillydally risk getting gazumped. That's British 
slang for what happens when someone arrives on the scene at the last 
minute and offers a higher price.

The decade-long leap in prices has made London the most expensive city 
in the world for high-end homes--costlier per square foot (0.09 square 
meter) than Monaco, New York, Hong Kong or Tokyo, according to Knight 
Frank, which says prime London houses cost about £5 million and prime 
flats run about £2.5 million. The most-sought-after property in areas 
such as Kensington and Chelsea, the priciest of London's 32 boroughs, 
sells for an average of £2,300 a square foot, according to Knight Frank. 
Comparable living space in Monaco, the world's second-most-expensive 
locale, costs £2,190 a square foot. Similar digs in No. 3 New York fetch 
£1,600 a square foot, according to Knight Frank.

The unprecedented surge has brought with it unprecedented risks. Blair's 
successor, Prime Minister Gordon Brown, must now contend with a host of 
dangers- -from accelerating inflation to rising interest rates, to 
mounting mortgage debt--that could puncture the housing market and 
threaten the nation's longest period of economic growth in more than 200 
years. The housing market hasn't been this heady since the 1980s, when 
prices almost tripled. That boom, touched off by falling interest rates 
and rising stock prices, ended when a subsequent increase in inflation 
drove interest rates as high as 15 percent. London home prices sank 27 
percent from December 1988 to December '92.

Now, the thunderheads are gathering once again. As the U.S. Federal 
Reserve battles a subprime mortgage crisis, the Bank of England is 
tightening credit to combat inflation. As of July 11, the U.K. central 
bank had raised its benchmark lending rate five times since August 2006, 
pushing the benchmark lending rate to a six-year high of 5.75 percent.

Tightening credit will squeeze people who've gone deeper than ever into 
debt in order to buy homes. Since May 1997, the amount of U.K. mortgage 
debt outstanding has ballooned, soaring 168 percent to a record £1.12 
trillion as of May 30, according to the Bank of England. British 
homeowners have never been so stretched. A decade ago, first-time buyers 
typically took out mortgages equal to 2.4 times their annual salaries. 
Today, that figure has climbed to 3.2 times. About £120 billion of 
short-term fixed-rate mortgages may have to be refinanced this year at 
new, higher rates.

London, long attuned to old money and social class, is increasingly a 
city divided by new wealth. The capital is being split between the rich, 
who can afford homes, and a growing number of ordinary folks who can't. 
Laying out his agenda on July 11, Brown told Parliament that many people 
in Britain have been priced out of the home market. He vowed to build 
more low-cost housing. "Putting affordable housing within reach, not of 
the few, but of the many, is vital," Brown told Parliament.

No broker has fed the frenzy like London-based Foxtons, which has helped 
drive up prices and, in the process, its own commissions, by inflating 
home valuations, wooing buyers and sellers--and pushing agents to close, 
close, close.

This year, Foxtons itself, along with another British property broker, 
Countrywide Plc, was gobbled up. The buyer in both cases was the new 
power in global finance: private equity. London-based buyout firm BC 
Partners Ltd. bought Foxtons from its founder, Jonathan Hunt, in May for 
about £390 million. New York-based Apollo Management LP bought 
Countrywide in May for £1.07 billion.

Hunt's exit is a bad sign, says Peter Nicholls, who sold his own London 
real estate firm, Royston Estate Agents Ltd., to rival Douglas & Gordon 
Ltd. in May for an undisclosed price. "When Jon Hunt sells, you know the 
market's going to be in trouble," Nicholls, 44, says. Hunt declined to 
be interviewed for this story, as did Foxtons Chief Executive Officer 
Michael Brown, former chief operating officer of bankrupt energy trading 
company Enron Corp.'s European unit.

"I am happy to hand over the reins, knowing that what we have started 
has a very long way still to go," Hunt said in a May 21 statement. 
London's real estate mania has been good to Hunt: In 2005, he spent £14 
million to buy a mansion in Kensington, opposite the home of steel 
billionaire Lakshmi Mittal.

Hunt, 54, electrified the real estate scene by creating a snazzy company 
with a gladiatorial sales culture. From the moment Hunt founded Foxtons, 
in 1981, he never tolerated excuses from his brokers, former Managing 
Director Peter Rollings says. In the early days, Foxtons' attitude 
toward its brokers was simple: "There's your desk, there's a phone, 
there's your car--now bugger off and sell some property," says Rollings, 
who left Foxtons in 2005 and now runs rival broker Marsh & Parsons Ltd.

Today, the firm Hunt founded in a former pasta restaurant in Notting 
Hill employs 1,300 people, most of them fresh out of university and 
willing to work weekends. Foxtons' 780 brokers race through London in a 
fleet of 635 Mini Coopers. The cars are painted British racing green and 
emblazoned with names like "Park Lane Prince" and "Fulham Flyer." Top 
producers are rewarded with BMWs.

Inside Foxtons' glass-and-steel headquarters in Chiswick Park, in west 
London, hundreds of telebrokers with headsets work the phones as dance 
music thumps. The young crowd cheers, claps and exchanges high-fives as 
brokers reel in new clients. Foxtons employees staff the phones 8 a.m.-8 
p.m., seven days a week, and typically process 1,000 applications a day 
from people looking to buy or rent.

Suddenly, one broker leaps to his feet. "I got a val!" he shouts, to 
huzzahs from his colleagues. Val is Foxtons-speak for a request to value 
a property.

Photos of employees, ranked by valuations, are projected onto one of the 
walls. On Friday nights, the team gathers for a meeting during which 
brokers shout out their weekly sales numbers. Newbies who cut their 
first deals are rewarded with bottles of champagne.

 From his perch in Chiswick Park, manager Jean Jameson, a 37-year-old 
from South Africa in a gray suit and pink tie, plays a Foxtons version 
of Big Brother. He can peer into Foxtons offices across London via video 
camera to check up on brokers and see who's available for assignments.

Foxtons lets its brokers choose how they get to be paid. Some collect 
£22,000 annual salaries and no commissions. Others opt for £10,000 
salaries and 10 percent of the fees they generate. Still others choose 
to take 20 percent of their commissions and no salary at all. Fatemi 
brought in £1.5 million in fees for Foxtons in 2006 and says she pulled 
down six figures.

"You can write your own check if you work hard enough at it," Jameson says.

long the way, Foxtons agents have bent--and sometimes broken--the rules. 
In 2000, the London borough of Camden fined Foxtons for staking signs 
outside homes of people who hadn't hired the firm, a practice known as 
fly-boarding. The same year, Foxtons issued an apology after one of its 
signs ended up in the front yard of Alastair Campbell, Blair's press 
secretary. Jameson says Foxtons stopped fly-boarding years ago.

Foxtons has always played tough, Rollings, 45, says. It has gone to 
court to collect a commission from a seller when a buyer backed out of a 
purchase after making a down payment. "They're just incredibly hard, 
unforgiving," Rollings says.

Fatemi says competitors are worse. Unscrupulous rivals goad buyers into 
raising their offers by lying about how many people are bidding on a 
home, she says.

"That's sales, isn't it? It's putting the pressure on," says Fatemi, who 
left her native Iran in 1979, at the age of 3, after the Islamic 
revolution there.

Her advice: Buy now, before prices rise even more. People who are 
unwilling to pay top dollar can end up getting gazumped. Gazump is a 
Cockney corruption of gezumph, a Yiddish word that means to swindle or 
overcharge. Gazundering is gazumping in reverse: It happens when a buyer 
threatens to pull out of a deal unless the seller cuts the price.

These days, London is a gazumper's market. Old landmarks vie with new 
monuments to Londoners' love affair with bricks and mortar.

Not far from Kensington Palace, brothers Christian and Nicholas Candy 
have dreamed up the most expensive address in town: One Hyde Park. 
Apartments in the glass-and-steel complex, scheduled for completion in 
2010, have sold for a city- record £5,000 per square foot, according to 
Edward Lewis of London-based Savills Plc, one of the brokers contracted 
to sell the 80 homes in the development.

Nearby, Knight Frank partner Rupert des Forges steps through an 
apartment in what was once a warehouse for Harrods department store. The 
two-bedroom flat, adorned with silk-and-wool carpets, a white Yamaha 
grand piano and a bespoke bar, was for sale for £6 million in late June. 
A parking spot in the garage, next to three Aston Martins, two Ferraris 
and a pair of Rolls-Royces, costs an extra £250,000.

"You can name your price right now," des Forges, 38, says. He's still 
bleary- eyed from a trip to Moscow where, he says, he pitched six 
Russian billionaires on the London market.

To the east, a thicket of 30 construction cranes rises around the dome 
of St. Paul's Cathedral, Christopher Wren's 17th-century masterpiece. At 
nearby Millennium Bridge, on the River Thames, developer Amir Zarbafi is 
converting a building that once housed a tea company into luxury flats. 
Zarbafi, 43, bought the building in 1997 for £3 million. It's worth £50 
million now, he says.
Zarbafi says he's stunned by the prices that people are paying for 
homes. "But I haven't seen anything that suggests the momentum is 
stopping," he says.

People have been warning of doom for years. So far, the market has 
confounded home buyers and research analysts alike.

Former JPMorgan Chase & Co. banker Mario Vaccarino says he bought a 
three- bedroom flat overlooking Porchester Square Gardens, in west 
London, for £275,000 in 1998 and sold it for £420,000 in 2002, when he 
moved back to his native Italy, figuring prices had topped out. "I 
thought prices were going to fall," Vaccarino, 33, says. Wrong. His old 
flat is now worth about £770,000, Marsh & Parsons broker Keith Gorny says.

Analysts at Lehman Brothers Holdings Inc. predicted in 2005 that the 
market would sputter. In a May 25 report, Lehman analysts Alan Castle 
and Peter Newland said it was hard to explain why prices have kept 
rising instead. By their reckoning, U.K. home prices may exceed fair 
market value by as much as 15 percent.

Estate agents and property developers say zooming prices reflect basic 
economics: Demand outstrips supply. Planning laws protecting everything 
from London's medieval street plans to views of the Palace of 
Westminster and St. Paul's make it difficult to build high-rise housing, 
Zarbafi says. At the same time, City bankers and rich foreigners, 
particularly from the former Soviet Union, all want to live here--and 
have the means to bid up prices, he says.

Ordinary Londoners can't compete with the money pouring into the market. 
Roman Townsend says he's lucky to have found a 400-square-foot studio in 
a building owned by the municipal government in Battersea, south of the 
Thames, for £110,000. For that price, Townsend, a 2002 graduate of 
Cambridge University who works in public relations, gets graffiti in the 
elevator and a view of Big Ben. "I looked around and found what I could 
afford," Townsend, 28, says. "I'm happy." He says he put no money down 
and financed the entire purchase with debt.

As prices have spiraled higher, a new breed of London real estate 
speculator has emerged. Londoners who can afford to buy several homes 
are snatching them up and then renting them out, a strategy known as 
buy-to-let. Nationwide, the value of outstanding mortgages for this sort 
of purchase rose 29 percent to £94.8 billion in 2006 from the previous 
year, according to the Council of Mortgage Lenders.

The buy-to-let trend troubles Simon Nimmo, co-founder of Alexander Hall 
Associates Ltd., Foxtons' mortgage brokering unit. "You think, 'Oh 
crikey, if this all goes wrong, you know, there's a lot of people 
exposed to property,'" Nimmo, 44, says. He sold his 30 percent stake in 
Alexander Hall to Hunt in 2003.

Fatemi says she's not worried. On a rainy June Monday, she's picking up 
keys to listed properties at the Foxtons office on Park Lane, opposite 
Hyde Park. The place looks more like a cafe than a real estate office. A 
beaming blonde receptionist offers cappuccino and sparkling water. 
Plasma TV screens flash pictures of hot properties. Buyers leaf through 
listings while sipping lattes. "We still get people coming in and 
saying, 'Can I have a latte and a hot chocolate?'" Fatemi says. "Like, 
no, you have to buy a property."

Fatemi has what it takes to court an international clientele. She 
graduated from University College London in 1998 with a bachelor's 
degree in Spanish and French. She joined Foxtons in 2000.

Fatemi is dressed to sell. She's wearing a black skirt and jacket by 
Spanish retailer Zara and a bright turquoise top. Her black Chanel 
handbag matches her high heels. Sparkling on her wrist is a 
diamond-studded Chanel watch, a gift from Hunt in 2005.

Over the next few hours, Fatemi will crisscross London in her Cayenne to 
inspect a one-bedroom duplex near Paddington station, listed at 
£450,000; a two-bedroom apartment in Marylebone, the area where Madonna 
lives, which can be leased for 48 years, rather than bought outright, 
for £1.495 million; and an interior- designed apartment on Green Street, 
in the hedge fund district of Mayfair, that's on the market for £4.65 

"It's still crazy," Fatemi says of the housing market as she pulls out 
of Connaught Square, her black hair swishing over diamond-stud earrings. 
"It's been going up and up and up."

Fatemi has had quite a run herself. She says she once tried to cram a 
Saudi Arabian princess--along with the royal's maid and security 
guard--into a Foxtons Mini. (They couldn't fit.) Another time, a Russian 
businessman asked her to find a £1 million flat for his 20-year-old 
daughter and ended up spending £6 million.

Then there was the time an Englishman kept her searching for an 
apartment for two years. Nothing would do. Finally, the man told her 
why: He was looking for a flat with a back door. "He said, 'Becky, I 
have a certain number of girlfriends, and if my wife's ever at home, I 
need a back entrance,'" Fatemi says. She says she found him a flat with 
a fire exit. The price: more than £2 million.

Feeding a parking meter on Green Street, Fatemi counts the ways anxious 
buyers send her bids. Offers come in over the phone and via courier, 
e-mail and text message. People have instant messaged £1.5 million 
offers, she says.

Inside the Green Street apartment, Fatemi surveys the mock-croc tables 
and blue- grey velvet sofa draped with a faux-fur throw. Martha Lane 
Fox, co-founder of travel Web site Plc, and members of 
the Saudi royal family live opposite, she says.

People who can afford a home like this won't be put off by a 1 or 2 
percentage point rise in rates, Fatemi says. "That's one or two less 
dinners at Nobu, do you know what I mean?" she says.

All the same, Fatemi knows firsthand how frustrating it can be to find a 
home in London these days. She bought a flat near Regent's Park last 
December for £452,000. It's now worth £550,000, she says.

"It was the most horrific thing I've ever been through," Fatemi says of 
the purchase. She says she had to fend off seven rival bidders.

Des Forges, the Knight Frank broker, has played the market too. He 
bought a home for £490,000 in 2001 and sold it in June for £1.05 
million. He's moved up to a larger, £1.4 million house in Hammersmith. 
"We're in an unprecedented market," he says.

Des Forges, the son of a Herefordshire farmer, is an architecture 
aficionado who favors Hackett suits with a traditional English flavor. 
He attended Ampleforth College, a North Yorkshire boarding school run by 
Benedictine monks, and went to work in real estate at the age of 19 as, 
he puts it, a "tea boy." By his own account, he sold £135 million of 
property from April 2006 to April '07.

On this late-June day, des Forges is padding across walnut floors in his 
socks inside a redbrick town house in Sloane Gardens, off Sloane Square. 
The Victorian interior has been gutted and given a sleek modern look 
that includes a laser-cut steel staircase, exposed brickwork and a 
seamless glass elevator shaft. The ground-floor maisonette--with a 
sweeping, cantilevered walnut staircase, storage for 1,200 bottles of 
wine and a 42-inch (1-meter) plasma TV hidden behind a walnut panel in 
the master bedroom--is on the market for £3.95 million.

Des Forges says an Italian banker and his wife have bought one of the 
places upstairs for £5.75 million. An Israeli couple has purchased 
another for £4.7 million.

When des Forges looks at buyers such as these, he sees the future of 
London and its housing market. London, a global nexus of finance, law 
and media, is luring the best and brightest from around the world, he says.

"I think it's just the beginning," des Forges says of London's ascent. 
"Where else is going to compete with it, really?"

Good times don't last forever. As the price--and risk--of buying London 
real estate climbs, many people are asking when this boom will end.

One June afternoon at Frankie's, a bar and grill in Knightsbridge, 
Savills broker Brian d'Arcy Clark is nursing a beer while a colleague 
sips champagne. Up walks the restaurant's French manager, 
Jean-Christophe Slowik.

"Les agents immobiliers!" Slowik exclaims. "It's crazy, your market, 
huh? Is it going to collapse one day?"

"Tomorrow," d'Arcy Clark quips.

"Good!" Slowik says. He's hunting for an apartment.?

Simon Clark is a senior writer at Bloomberg News in London. 
sclark4 at

#<257571.18602.># -0- Jul/26/2007 14:21 GMT

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