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According to the old story from the Great Crash of 1929, when shoe shine boys started suggesting share tips to their customers, it was the final indication that a disaster was coming soon. In the run-in to the bursting of the dot com bubble, and again in 2007 ahead of the financial crisis, observant sceptics in New York knew their feeling of alarm was justified when they heard from cab drivers taking them to JFK who had borrowed on their credit cards to buy shares and loaded up with four mortgages on houses that had gone up so much in value in the late 1990s and early 2000s they could not lose. You know what happened next. They and a lot of other people did lose. By the time the mania has reached the mainstream, it is too late. When it all too good to be true, it usually is too good to be true
To that I can add the “bubble deflating” tale of the taxi driver who took me home the other evening from work in central London. He liked the area near where I live, and he used to live there himself. He had kept hold of his property and rented it out, he said, but several years ago he moved east and back into his other house, a large but dilapidated Victorian property he had bought for around £250,000 at the turn of the century, pre-regeneration. The area has changed in a dramatic fashion since. There are, he said in wonder, lesbian neighbours and bankers and basements being dug out in the street now. His house there is worth – for now – around £1.5m, he claimed.
Good on him and all who have done well in the explosion of property prices in London, the South East and beyond. Realising early on the power of property and working multiple jobs to keep up the payments down the years, he has built a decent-sized empire, although he lamented it all being tied up in bricks and mortar.
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