London house prices rocket 10% in just one month

[cailin maith]

Crikey -

Is this the smallest flat in London? Home measuring 10ft by 8ft goes on sale for £90,000 | Mail Online

Double Crikey!!!

Property for sale in Store Room between First and Second Floors of, 27 Kensington High Street, W8

[NorthWestPerm2Contr]

It isn't only London though. The property market is overheating in a bunch of global cities. Just another side effect of QE, i.e. asset bubbles. The end of QE will likely be the trigger, but will it end?

What goes up must go down. A bubble which is constantly fed with air will eventually burst - hence the term.

[sirja]

It seems some in the BOE don't think rising house prices are a bad thing

'Rising house prices not such a bad thing' says Bank of England's Martin Taylor | Mail Online

[scooterscot]

Let's say a key driver is foreign money (Arab, Russian, HK, Chines, Singaporean, Greek, Italian etc. etc.) money seeking a safe haven investment in London property. What might happen when the conditions that drive the flight to a safe haven change?

Not only that but the correction will be lightening quick too.

[Ticktock]

It seems some in the BOE don't think rising house prices are a bad thing

'Rising house prices not such a bad thing' says Bank of England's Martin Taylor | Mail Online

I fail to spot him saying it's "not a bad thing" in that article, other than the headline.

He seems to be saying more that it's to be expected if supply doesn't increase and that it shouldn't be his job to police house prices.

[sirja]

Let's say a key driver is foreign money (Arab, Russian, HK, Chines, Singaporean, Greek, Italian etc. etc.) money seeking a safe haven investment in London property. What might happen when the conditions that drive the flight to a safe haven change?

A good point and I agree that would affect the price in Central London/Zone 1. But I still contend that the basic factors for sustained price rises in London as a whole, are it's global nature(Main port of call for new migrants/students hence large rental demand), lack of new house building and govt support. Of course if most or all of these factors were removed (UK leaving the EU?) then you would have an almighty crash that would dwarf 2007, but I think the powers that be are aware of this and will conspire to keep this train moving for a long time to come

[NorthWestPerm2Contr]

It seems some in the BOE don't think rising house prices are a bad thing

'Rising house prices not such a bad thing' says Bank of England's Martin Taylor | Mail Online

It seems we never learn the lessons of the past

[sirja]

I fail to spot him saying it's "not a bad thing" in that article, other than the headline.

He seems to be saying more that it's to be expected if supply doesn't increase and that it shouldn't be his job to police house prices.

Well he's def saying something different from the Governor who says the BOE will be keen to avoid a housing bubble. At the very least it indicates some difference of opinions re House Prices in the MPC, which could have a significant impact on rates one way or other.

[eek]

Let's say a key driver is foreigners (Arab, Russian, HK, Chines, Singaporean, Greek, Italian etc. etc.) seeking a safe haven in London .

From the ones I know the money and any loses is irrelevant. They just want a bolt hole if things change....

[jamesbrown]

Well he's def saying something different from the Governor who says the BOE will be keen to avoid a housing bubble. At the very least it indicates some difference of opinions re House Prices in the MPC, which could have a significant impact on rates one way or other.

This is an area for the FPC rather than the MPC, but Carney chairs both. The difficulty here is the geography; as Carney has said, it's the BoE not the Bank of London and the boom is squarely focused on London, with declines still ongoing in some areas. Help to Buy should largely boost house prices outside of London, if anything (part II seems a bit of a damp squib), and the real source of the boom inside London is foreign money - cash buyers - as others have noted.