I was asked at the FT Weekend Live festival last week what I thought was going to happen to London house prices. I said what I usually say about the glut of new build properties: demand always creates its own supply, and there are a limited number of people who can afford to buy at bubble prices.
But I went on to say that while London is clearly horribly overpriced, while prices in prime central London have been falling for some time now (prices in Chelsea are down 9% on the year), and whiIe wouldn't want to be long houses in non-prime areas I wouldn't want to make big bets against the best houses.
Why? The pound. The more it falls the cheaper the fabulous political safe-haven that is the UK looks to foreign buyers (note, by the way, that the Brexit vote has shown us to be even more politically stable than even the greatest of optimists ever dreamed possible).
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
So it is entirely possible, I told my audience of buy-to-let investors (a show of hands made it clear where their loyalties lay), that the next year could see volumes and perhaps prices rise again. I'm glad I added that little face-saver to my answer as that seems to be exactly what is happening.
A report just out from Knight Frank declares "cautious optimism" on the market. Since 23 June the firm has seen a 22% rise in "prospective buyers", a 49% rise in viewings and a 19% rise in the number of properties under offer over the same time period last year.
This might not translate into actual price rises, given the dynamics of the London market as a whole (over priced in a time of overall oversupply), but it could easy stem the prime London property price falls of the last year.
-
Water companies blocked from using customer money to pay “undeserved” bonusesThe regulator has blocked three water companies from using billpayer money to pay £1.5 million in exec bonuses
-
Will the Bitcoin price hit $100,000?With Bitcoin prices trading just below $100,000, we explore whether the cryptocurrency can hit the milestone.
-
House prices to crash? Your house may still be making you money, but not for much longerOpinion If you’re relying on your property to fund your pension, you may have to think again. But, says Merryn Somerset Webb, if house prices start to fall there may be a silver lining.
-
Prepare your portfolio for recessionOpinion A recession is looking increasingly likely. Add in a bear market and soaring inflation, and things are going to get very complicated for investors, says Merryn Somerset Webb.
-
Investing for income? Here are six investment trusts to buy nowOpinion For many savers and investors, income is getting hard to find. But it's not impossible to find, says Merryn Somerset Webb. Here, she picks six investment trusts that are currently yielding more than 4%.
-
Stories are great – but investors should stick to realityOpinion Everybody loves a story – and investors are no exception. But it’s easy to get carried away, says Merryn Somerset Webb, and forget the underlying truth of the market.
-
Everything is collapsing at once – here’s what to do about itOpinion Equity and bond markets are crashing, while inflation destroys the value of cash. Merryn Somerset Webb looks at where investors can turn to protect their wealth.
-
Value is starting to emerge in the marketsOpinion If you are looking for long-term value in the markets, some is beginning to emerge, says Merryn Somerset Webb. Indeed, you may soon be able to buy traditionally expensive growth stocks on the cheap, too.
-
ESG investing could end up being a classic mistakeOpinion ESG investing has been embraced with enormous speed and zeal. But think long and hard before buying in, says Merryn Somerset Webb.
-
UK house prices will fall – but not for a few yearsOpinion UK house prices look out of reach for many. But the truth is that British property is surprisingly affordable, says Merryn Somerset Webb. Prices will fall at some point – but not yet.
