New-York tribune., 1910-11-06
THE LONDON SITUATION
Prices Asked for Real Estate
Rapidly Shrinking.
RENTALS DOWNWARD, TOO
Many Owners Told Local Exner+
That Free Trade Is the Cause
Of Conditions.

| NJ Morgenthau, jr., says in an art,o,a
about London Real Estate In the Mover,
Der Bulletin of the Real Estate Boaro y,
Brokers that London real estate is falling
| in value. and as result mortgage invest
ments are neither safe nor sought after =,
| The causes OF this situation. he save o.o
no doubt very complex, but some of them
NAV be of interest to the New York reaI
estate man. In the first place. the old
| leasehold system has had much to do with
the present status. Mr.. Morgenthau fur
ther says: 1T has prevented an adequate
DEVELOPMENT of many sections and has
forced a trade to spread over many blocks
which in our city would be concentrated
into very small district. Next IN impor-
tance to this is, believe, the general con-
dition Of the London storekeeper. Except
in the very best locations the storekeepers
are not making a decent living. I am In
formed on very good authority that many
of them fail and that those who hold out
even in the main streets, make a mere pit
tance. When I came to inquire into the
causes of this I was told everywhere that
it was due to free trade. We are COM
peting with the cheapest labor all over the
| world 1.-The profit is all ground out of
this business" etc, were typical answers
1 received.
"Of course there are many other causes
| for this state of affairs. and tried to dis
| Germ some of them. In the first place. 1t
seems TO me there are many times too
| many stores. Imagine a store in every
house below 59th street from river to river
| and you would say at once that only few
| could pay the rent Now imagine, besides
this, all of our tall buildings torn down
| and the buildings restricted to three. four
| and five story affairs; the population scat
| tered and thinned out. and additional stores
| In every second side street above 6sth
| street and in all the avenues right up to
125th street. Then you will get fair idea
of the conditions In London.
Too Many Stores.
THE result is inevitable. Rents are con-
tinually lowered; stores are vacant, and the
| competition is ruinous. No wonder realty
values cannot hold their own. An addi-
| tional cause of the lack of success of these
storekeepers is probably due to antiquated
| methods of doing business This, however.
| has nothing to do with the real estate
situation.
But how about living quarters. both
| houses and apartments, you will ask?
| Surely in centre like London these will
always be in demand, and the rentals will
| hold their own. I spoke to a well known
man in London about this He occupies
town house which is located in one of the
best West End quarters. This house was
built by wealthy merchant some years
ago. who was supposed to have lavtshed
close to $4,000 on the ground building and
furniture. 1t is a six story affair. over
thirty feet wide and with all modern i'm
provements. including an elevator. To-day
my friends pays a rental of about $50 a
week. or $500 a year. for this house. and
he told me he thought the widow of the
owner would sell for about 100000. AS this
man said to me, Either your New York
real estate is much too high. or ours is
ridiculously cheap l am inclined to think
that there Is some truth in both of these
statements.
Transportation a Factor.
"A very vital reason for the drop in Lon
don residence realty is the advent of better
transportation, including first of all the au-
tomobiles and taxicabs and lastly the mo-
tor bus and subway. This, together with
the energetic development of garden sub
urbs, has attracted the population away
from the old centres and has much to do
with the declining popularity of town
houses and apartments
Il called on some real estate men to see
what chance there was of placing New
York real estate in London, and you viii
be interested to hear their replies One
broker said: My wealthest clients have no
cash Their money is invested in land
which they cannot sell, and any surplus in
come they have comes in such small
amounts that it Is quickly absorbed by the
City (our Wall street,. Another said
Why should we buy real estate here when
it is constantly depreciating, or in New
York, when we have the example of London
before us" Still another said, There Is
one clause in my will which has remained
unchanged for fifteen years; that is
clause forbidding my executors to invest
in real estate or real estate mortgages
A Place for Investors
Surely this IS no. a promising field and
yet 1 believe that there is probably more
money TO be made in real estate in London
than in any other place in the world. There
is an old adage, Buy when everybody
wants to SELL That is the situation in
London to-day. With the passage of the
new budget. included in which is the first
English land tax, there is a Veritable rush
of land owners to unload. This is of
course. bound to change, and the men who
have the courage and the foresight to go
harvest, just as the men did who went into
New York realty after the panic OF 1873"