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

lukeh23

IronWolf wrote: »

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'

They never really are nationwide, even in the US.

AndyGuil

London expected to rise 63% over next 6 years.
http://www.standard.co.uk/news/london/london-house-prices-to-rise-by-63-per-cent-9642540.html

Jason74

Generally, I think anyone who makes predictions about house prices with confidence is either an arrogant fool or a Charlatan, but I would be pretty confident that London prices wont rise much from here over the next 12-18 Months. There was a recent RICS Survey that suggested that prices will be around 1% higher this time next year in London, and I think that is probably much closer to the mark. Of course, we're probably already close to 16% increases this year, so not a lot happening between now and the end of the year is already priced in to that report. It's just the double digit rise next year I can't see, not based on what is happening in my local market right now (and yes, part of this is seasonal, but nothing like all of it)

Longer term, I would agree, it's hard to see anything other than London getting more and more expensive all the time that London property continues to be used (to roughly quote the mayor) as Gold Bullion in building form.

AndyGuil

The fundamentals over the next year are very much in favour of rises. This alone gives confidence in the direction of the market. I think usual cycles during the year have distracted from what will happen over a year forward from now rather than on a month by month basis. I would even go as far as predicting that this year the demand for property in London is higher in June and July than it has been in previous years ignoring the exceptional 2013.

Jason74

Have to say, in the short term, I really don't see that. It really isn't much of an exagerration to say that my local market has more or less collapsed in the last two Months. It's gone from open days with sealed bids and multiple over asking price offers, to almost literally nothing selling. I spent ten years in the market as a mortgage broker, and have watched the market as an interested observer in the ten years or so since then.

That's the best part of 20 years of taking an interest in the market, and I've literally seen nothing like the turnaround of the last couple of Months. Even when the financial crisis hit,demand did not slow down at anything like the speed of the past 6-8 weeks. I think it's probably nothing more than prices having got ahead of themselves, and doubtless in the long term, London will continue to get more expensive. But in the short term, I just don't see how prices can go up much further in the context of what has happened recently.

And with the aveage house price being around 14 times median salary (a far more relevant figure than the mean average, especially in London where the latter is distorted heavily by a small number of very high earners), the fundementals of affordability would tend to support that view.

AndyGuil

If you are comparing to 2013 then absolutely. I think 2014 will still exceed even more usual years such as 2012. Supply and demand is normally unbalanced in June but as we have a flat change in price in June it points to a year that is more aligned with more typical years. Fundamentally the market can only increase due to the lack of building. Average salary values are meaningless when it isn't an average salary that can only buy property. The actual ratio for a FTB in London is 3.8 so very typical with the UK average.

Crashy_Time

AndyGuil wrote: »

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

Asking prices are heading down though.

AndyGuil

Crashy_Time wrote: »

Asking prices are heading down though.

They always do this time of year.

Crashy_Time

AndyGuil wrote: »

They always do this time of year.

Not at this rate though, something is up.

AndyGuil

Crashy_Time wrote: »

Not at this rate though, something is up.

Previous years were far more severe shifts unless you are literally only looking back one year.