The Bank of England, having caved in to pressure to keep the "housing ladder" heading back up and not down, has kept UK rates the same for way too long now. The bubble is re-inflating in places like London and Edinburgh, although most towns in England are still declining.
Prices though are still insane. My 1-bedroom Chelsea flat would list for about $1 Million US. That's about $700,000 more than I'd say it's worth, especially if you do the P/E.
HOUSE prices in Britain are still too high, the International Monetary Fund said yesterday.
The IMF said that last year’s sharp downturn in property prices, which followed three years of double digit increases, had failed to restore balance to the market. British homes, it said, “still seem over-valued by most conventional measures”.
September 14, 2006
UK house prices far too high, warns IMF as upward surge resumes
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8 comments:
This is a world wide bubble, and when the U.S. falls so will most of Europe. Cal. and Fla. will lead the down turn. Then, the rest of the nation! It will be bad! Think depression and people just walking away.
same housing re-inflation is going to happen here also. Ben Bernanke is bailing out housing by keeping rates steady while inflation skyrockets(ie lowering the "real" rate)
look at housing stocks as of past several weeks. defenite bottom.
there is no housing bubble when you have a FED willing to debase the currency to save it.
I belive the reason is that English Real Estate is measured in pounds. They should convert to the dollar and get a true currency!
Always happens at the end of a bubble. One last push for the suckers who think they're getting a good deal, then WHAM the rug gets pulled out from under. Look at the NASDAQ in 2000.
The DOW also surged up to 11K before it collapsed to 7700 in 2001
The British Magazine "The Economist" did a nice write up on this, musing that the housing market outside the US was perking up even as the US started to slide. But the concluded that on a rent vs. buy analysis things were still way to overvalued outside the US and that a US recession could affect everyone.
http://tinyurl.com/qbrx7
--Andrew
"Same housing re-inflation is going to happen here also. Ben Bernanke is bailing out housing by keeping rates steady while inflation skyrockets(ie lowering the "real" rate). Look at housing stocks as of past several weeks. defenite bottom. There is no housing bubble when you have a FED willing to debase the currency to save it."
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++++An astute comment, IMHO. So America is going to save the housing bubble and lose the value of the dollar. And all the poor people will either become poorer or go bankrupt altogether. Only people with money, like Bush and his cronies, will be able to survive the inflation....
Jesus, it's 2006 and people are finally figuring out the UK home prices are too high?
Was it the decrepit brick or shitty curtains that gave it all away?
Here's some other headlines that might interest these Rumplestiltskins:
Japanese Bomb Pearl Harbour!
and
Nixon Resigns!
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