Friday, April 12, 2013

More opium for the masses (UK prices fell 0.1 percent on the month!)

U.K. House Prices Reach Five-Year High as London’s Lead Widens

I am seeing lots of reductions in my area but.... "London’s property market powered a seventh month of increases in U.K. house prices in March as values reached a five-year high, according to Acadametrics Ltd. The average cost of a home in England and Wales rose 0.2 percent on the month to reach 230,078 pounds ($354,000), Acadametrics and LSL Property Services Plc (LSL) said in a monthly report published in London today. Excluding the capital, prices fell 0.1 percent on the month. The Bank of England introduced a program to boost lending last summer, and today’s report signals that access to mortgages may be easing. It also adds to evidence of the regional disparity in the U.K. property market, with London prices rising at three times the pace of the national average."

Posted by hpwatcher @ 09:10 AM (2359 views)
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9 thoughts on “More opium for the masses (UK prices fell 0.1 percent on the month!)

  • What makes me laugh is the state of the REAL economy – now completely disconnected from housing (and reality).

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  • mark wadsworth says:

    Unreliable.

    HPW, house prices are very closely connected to the real economy, the real economy in this benighted country consists of collecting taxes, rents and subsidies and selling the family silver, which is why London is doing disproportionately well.

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  • Foreigners.

    An Englishman can no longer afford to buy a home in London, only an ex council flat.

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  • mark wadsworth says:

    Will, yes, as an immigrant to London (from Up North) I can confirm that the majority down here are also immigrants (from elsewhere in British isles, from Europe or wherever), the banks are owned by Yanks, the nice houses are owned by foreigners, the slum areas are occupied by second generation immigrants from the New Commonwealth, the cinemas are owned by international corporates, the coffee is served by Italians or Poles and so on.

    All the more reason to slap them all with a massive Land Value Tax (and get rid of taxes on income), the native population can then retreat a bit further afield and basically have everything paid for by foreigners mucking about in a safe haven which we have created for them. Land values are so skewed that the tax from Greater London would be about a third or a half of all LVT revenues.

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  • +1 Mark. LVT would be the match to the bonfire as far as inflated London prices go. But will we see anything like LVT in London in our lifetimes? The mansion tax is a start, but whether it yields results before we’re all too old to care is another thing.

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  • HPW, house prices are very closely connected to the real economy

    Not sure about that, especially not with artificial interest rates, FLS and the New Buy scheme.

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  • @2 HPW, house prices are very closely connected to the real economy

    yeah i disagree as well. house prices are correlated to the availability of credit, and have little to do with the real ecomony. If interest rates were market driven instead of being set by the BoE QE programs, we would get our HPC.

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  • mark wadsworth says:

    Toughegg: “will we see anything like LVT in London in our lifetimes?” If enough of us keep talking about it long enough, then yes.

    HPW, Nod, I was being ironic! Our “real economy” in the UK is about artificially low interest rates, taxpayer backed credit for land speculation, restricting new construction etc.

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  • Even the claims that London house prices are increasing significantly are to be taken with a grain of salt.
    Most of the increases can be attributed to a couple of W and SW postcodes and that’s it. That part of the market, the “prime” part follows different rules and is more likely to see sudden drops in a way that postcodes where prices are more dependent on “normal” workers living in their home are not.
    In East London prices are dropping slightly or stagnating and that’s in the face of rampant consumer price inflation.
    The international investors that are buying up a lot of property are more likely to have sudden kneejerk reactions to pull out of the market and with their investment portfolios, they have the complete flexibility to do so. They owe the London market and the UK nothing and if they feel like pulling the rug out of under the London property market, they will do so. This is something a lot of middle-class homeowners don’t understand: the laws of the markets do not follow any moral principles. in the same way, many voters who voted for an economic policy that “promised” drastic cuts in the budget that would ensure an AAA credit rating are still trying to understand why the markets and the credit agencies have turned against the UK almost as if they believe that these owe them something i.e. do what I say (i.e. markets were “asking” for budget cuts no question about it) and I will reward you with a good credit rating. The thing is, that’s not how the markets work. The markets cannot make the calls and dictate the policy of a well-run economy as there is little knowledge in the matter. Markets react mostly on short-term/medium-term prospects so for example, would react negatively to long-term investment EVEN IF that is what a country needs for a sustainable and healthy economy.

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