bloomberg housing-bubble-may-pop-entire-u-k-economy

JohnJLewis

You may not want to bring this up at any London dinner parties, but there are tentative signs that the bubble in U.K. housing prices that's helped boost the economic recovery by underpinning consumer confidence may be running out of puff.

http://www.bloombergview.com/articles/2014-07-28/housing-bubble-may-pop-entire-u-k-economy

AndyGuil

I guess they have a short memory or are unfamiliar with yearly market cycles. Fortunately mortgage approvals are up this month.

lukeh23

AndyGuil wrote: »

I guess they have a short memory or are unfamiliar with yearly market cycles. Fortunately mortgage approvals are up this month.

Where are you getting yearly from?

July marked the first month of no growth in London house prices since December 2012,

Also a change over just one month is relevant now?

AndyGuil

lukeh23 wrote: »

Where are you getting yearly from?



Also a change over just one month is relevant now?

Seasonal changes across the year. Normally the cycle drops in July. Last year was an exception to typical trends.

Jason74

AndyGuil wrote: »

Seasonal changes across the year. Normally the cycle drops in July. Last year was an exception to typical trends.

On a UK wide basis I would agree with you. I think London (based on what I'm seeing in my small corner of it, which is the only bit I claim to know well) is probably another matter entirely though.

Prices have risen at a stratospheric speed over the past year or so, and are probably about 40% up on last spring. The market has slowed dramatically in recent weeks though, and I can honestly say that I have never seen anything like the speed of slowdown like the one in the past couple of Months, not even in 2008 / 9.

Hometrack commented that "it is clear that there are bigger forces (than the usual seasonal slowdown) at work" in terms of the slowdown in the London market, and based on what I'm seeing, it's hard to argue with that. I don't doubt that prices will be higher in 10 years time than they are today, but the next 6-24 Months are (in London at least) another matter entirely imho.

AndyGuil

Jason74 wrote: »

On a UK wide basis I would agree with you. I think London (based on what I'm seeing in my small corner of it, which is the only bit I claim to know well) is probably another matter entirely though.

Prices have risen at a stratospheric speed over the past year or so, and are probably about 40% up on last spring. The market has slowed dramatically in recent weeks though, and I can honestly say that I have never seen anything like the speed of slowdown like the one in the past couple of Months, not even in 2008 / 9.

Hometrack commented that "it is clear that there are bigger forces (than the usual seasonal slowdown) at work" in terms of the slowdown in the London market, and based on what I'm seeing, it's hard to argue with that. I don't doubt that prices will be higher in 10 years time than they are today, but the next 6-24 Months are (in London at least) another matter entirely imho.

Very true. London was exceptional in 2013. This isn't typical and going by more typical historoc figures shows the market normally slows around this time of year.

lukeh23

Jason74 wrote: »

On a UK wide basis I would agree with you. I think London (based on what I'm seeing in my small corner of it, which is the only bit I claim to know well) is probably another matter entirely though.

Prices have risen at a stratospheric speed over the past year or so, and are probably about 40% up on last spring. The market has slowed dramatically in recent weeks though, and I can honestly say that I have never seen anything like the speed of slowdown like the one in the past couple of Months, not even in 2008 / 9.

Hometrack commented that "it is clear that there are bigger forces (than the usual seasonal slowdown) at work" in terms of the slowdown in the London market, and based on what I'm seeing, it's hard to argue with that. I don't doubt that prices will be higher in 10 years time than they are today, but the next 6-24 Months are (in London at least) another matter entirely imho.

On that note:

http://www.bloomberg.com/news/2014-07-30/londoners-cashing-in-flee-to-suburbs-as-home-rally-wanes.html

London estate agents had the largest increase in instructions to sell homes in Britain in June and the biggest drop in people seeking to buy them, according to the Royal Institution of Chartered Surveyors.

AndyGuil

lukeh23 wrote: »

On that note:

http://www.bloomberg.com/news/2014-07-30/londoners-cashing-in-flee-to-suburbs-as-home-rally-wanes.html

The ratio between supply and demand is normally highest on the supply side around this time of year. I.e. we typically get a surplus of supply.

Jason74

AndyGuil wrote: »

The ratio between supply and demand is normally highest on the supply side around this time of year. I.e. we typically get a surplus of supply.

Absolutely. Although the fact that both the pick up in supply and the drop in demand are greater in London than elsewhere does add further evidence to the view that there is a more meaningful slowdown going on in London that is probably not the case in the country is a whole.

AndyGuil

I think MMR will have had some effect on that. As the backlog of mortgagr applications clear we will see higher demand later than normal in the year. Demand has jumped this month already.

IronWolf

I dont think its even possible to have a 'bubble' when every man and his dog is calling it a bubble.

Select areas of London are in bubble territory, but the UK as a whole is not what I would describe a 'bubble'