Saturday, October 23, 2010
Will ridiculous London house prices be immune?
London house prices compared to wages fell 39% in 1989-92, more than the national average. Supply in the capital is even more constrained than in the rest of the UK, meaning that prices rise more in the boom times and fall more in the bust. (Draw yourself a demand/supply chart if you don't believe me.) Anyone who thinks that we have reached a permanently high plateau and that things are different this time is in for a rude awakening.