Wednesday, May 27, 2015

Expected spike after election

Telegraph: London asking prices jump 17pc after the election

Once this pent-up demand is over, the inevitable decline will continue. Well, you didn't think you were going to have a never-ending boom did you?

Posted by hpwatcher @ 09:36 AM (5451 views)
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5 Comments

1. hpwatcher said...

The wonderfully absurd UK housing bubble continues....can't be much longer now, as the central banks are pretty much exhausted.

Wednesday, May 27, 2015 09:39AM Report Comment
 

2. Daveofhousegreyjoy said...

The banks can't run out money, because they are allowed to create new money everytime they issue a loan. Its no some old mans savings they are lending. New money needs to be created.

Wednesday, May 27, 2015 10:04AM Report Comment
 

3. reticent said...

This is surely all to do with the mansion tax. Asking prices haven't gone up at all. The average underlying value of properties listed for sale has gone up because no one was selling a flat for £2m+ last month. They even admit as much in the article...

"The average asking price was pulled up by wealthy home owners registering mulit-million pound homes for sale following the election result and the launch of several luxury developments."

This is one of the many reasons why the asking price indices are so rubbish: a sudden shift in activity in a wealthy area skews the figures. The mortgage-based indices at least mix-adjust their samples. Only the LR (and possibly Academetrics?) seem to look at the value of a given property relative to the last time it sold. Even this method presumably neglects to account for extensions/refurbishments etc.

Wednesday, May 27, 2015 11:02AM Report Comment
 

4. icarus said...

reticent - yes, no mix adjustment, no story. As for the use of asking prices the last line reads "there still remains a gap between what the buyer will pay and the sellers’ expectations".

And as for the logic these guys use - "(the election) has clearly helped consumer confidence and the effect of this on the property market is borne out by these asking price increases. So asking price increases reflect consumer confidence? Maybe, but there's a missing logical link in there somewhere.

Wednesday, May 27, 2015 01:29PM Report Comment
 

5. reticent said...

Consumers are presumably confident because they know that within 2 years, we will probably, after a great deal of uncertainty, have left a trade union with our biggest trade partner. This will force David Cameron to step down as PM, paving the way for Boris Johnson, a man with no political agenda beyond his own naked ambition, to lead the country.

This fills them with confidence because David Cameron and Boris Johnson are both Tories, as is every Telegraph reader and, by extension, every consumer whose confidence actually counts, not just towards London asking prices, but GDP and any other economic measure you can think of.

Wednesday, May 27, 2015 01:52PM Report Comment
 

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