Leeds is England ’s largest financial center outside London .
Further expansion for Leeds over the next ten years as a leading financial services center is predicted according to a major report commissioned by the Leeds Financial Services Initiative. This report predicts that Leeds can become the largest financial services center in the world outside London by 2020.
The report highlights that steady economic growth and the increased corporate activity associated with it will drive the rapid expansion of the sector. Employment in Leeds in financial and related services has been growing at a rate of over 20% since 1995, well above the British national rate.
New industries such as retail, call centers, offices and media have contributed to a high rate of economic growth since the early 1990s. Nearly 100,000 people work in financial and business services – about a quarter of the workforce.
These facts and the fact that Leeds property prices average less than half those in London led us to invest a bit in Leeds property creating to my way of thinking a distortion.
I have been lucky to make a small fortune by spotting distortions in real estate, again and again.
How Distortions Affect Real Estate Value
In 1970 I lived in London , England for a year, then moved to Hong Kong . During that time I also maintained a home in Petaluma , California .
This was a time of great inflation. My homes in California and in Hong Kong appreciated tremendously. In 1976, when I moved from Hong Kong back to London , I noticed that London real estate was priced about the same as it had been in 1970. This puzzled me. This seemed to create a distortion.
Then I found out that there had been a huge London property crash in 1970 which was still dampening real estate prices six years later despite high global inflation.
This was also the time when the British pound collapsed from 2.4 dollars per pound to a new all time low of one dollar per pound. To my way of thinking London houses, which I thought were already very cheap by world standards, just became really cheap.
I could not resist and bought an old five bedroom house in Bedford Park in West London . I converted $10,000 to make a 10,000 pound down payment and took a 25,000 pound loan to meet the 35,000 pound asking price I had negotiated.
A couple of years later, the pound rose and I sold my London house and made some great profits.
London property had been under priced. I was able to sell the house for 115,000 pounds. I made a profit of 80,000 pounds. But the currency change helped enormously too. The pound had risen from 1 dollar per pound to 2.2 dollars per pound. The dollar sales price was nearly $200,000.
The distortion I had seen was between property prices in other international centers and London prices.
About the same time Merri and I saw a distortion in that houses on the beach in Naples Florida were much less expensive than those on Florida ’s east coast. We bought a house in Naples for $265,000.
Again over time the distortion corrected and we sold for four times our buying and remodeling price…net over a million.
Then we began looking for land in North Carolina and settled on our farm here in Ashe County . This is a big county with a land area of 426 square miles but on only 25,000.
Ashe County is isolated but I saw several distortions. First, prices were only a fraction of the county just south (Watauga). Second, the location is good. Ashe sits almost equidistant from the north and south of the east coast of the United States . The largest, wealthiest migration in mankind’s history has taken place in the last decade into this area. Now one in six Americans live in a county that touches either the Atlantic or Gulf Coast . Merri and I are almost the same distance from our old home in Naples and the northernmost parts of the U.S. in Maine .
We bought over 250 acres at less than a thousand dollars an acre. Today one of our neighbors has cleared timber land (which is a mess) without timber or water for sale at $5,000 an acre. Our land nearby has nearly a mile of wonderful creek and tons of timber. Some land nearby is on the market for $23,000 an acre. I have no idea how our appreciation has been, but it is a lot!
Plus we have been buying and buying in Ecuador , because the distortions I see there compared to US and European prices are huge.
I feel that I am a pretty bad investor. Had I kept just two of the houses I bought in London and Naples , I would probably have an extra $8 million. However one cannot look at investing this way. The money from each led to the purchase of the next and each move has enhanced our life style.
The point here is that even if I am a bad investor, spotting distortions has earned me several million dollars extra. I am grateful for distortions.
So let’s watch property prices in Leeds . This should be fun!
Until next message, may all the distortion in your life bring you good profits!
We hope to share with you ideas about distortions at one of our upcoming courses or correspondence courses.
Join us here and enjoy the beauty of the farm. We’ll have everyone up to the farm for a meal. If we are lucky our horse will come up and visit as well as they did with this group at last year’s September course.
Or join us in Ecuador and see its beauty there. Here is a group of young ladies in a small village preparing rose petals.
Our Ecuador schedule for the rest of the year.
Late September Super Thinking + Spanish with Free Oct 1 – Mon. Andes Extension & Real Estate Tour.
Self Fulfilled – How to write and Publish for Income, Freedom and Fun.