London Luxury Home Prices Increase Again

“London Luxury-Home Prices Increase Most Since 2008,” says Bloomberg. Which, on the surface is good news, but the underlying sales volumes are still extremely weak. Typical monthly sales volumes are around 12-14,000 units and sales are at around 7,000 units – 50% less than usual. They are admittedly up from the 2008 lows. In fact – the Land Registry just announced an “86% increase in the number of properties sold in London over £1 million,” compared to 2008.

Once again I wonder at the point of headlines such as this which set out to deliberately mislead. Things are confusing enough as it is. The entire UK is sitting and awaiting the next general election to see which way the hammer will fall regarding bank bonus payouts and taxes thereon.

Sales volumes are extremely depressed across the entire country, and it is extremely dangerous to base statistics on such a small sample. We do not appear to be out of the woods in the UK just yet and an average home price in excess of £160,000 still puts home prices well above the statistical norm of 3.5 times average salaries. Around double actually.

Artificially delaying the repossessions coming to market by persuading the banks to give a 6 month extension to householders in arrears is merely delaying the inevitable. RBS and a number of other big banks have agreed not to repossess or foreclose on houses until owners are behind by at least six months, and I suspect that teh incoming government (almost certainly the Tories) will have a rash of repossessions on their hands in the first few month of office.

Personally – I would like to see this dealt with ASAP and see a genuine correction in the housing market rather than dragging this out for years as seems to be the intention.

London Home Sales Volumes: