Clearly the house prices and economic mini boom is timed to PEAK during the May 2015 at approx 12% per year, to just exceed the Labour mini-boom into the May 2010 general election. Which therefore implies that the prospects for the Conservatives and to a far lesser extent the Liberal Democrats should continue to improve right into polling day. Although 12% will not be on par with the booms of the noughties of over 30% so house prices are suggesting a very similar election result for the Conservatives at least to that of 2010.
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Thanks alot Nadeem! Was really looking forward to this. So to clarify if I'm looking to buy a house in the London suburbs it could well be in my favour to wait another 6 months?
Do you think a house is better in terms of value to flats because of the freehold and land associated? Even if for the same price as a flat you get a lower rental yield?
28 Feb 15, 12:06 Will the govt continue to support house prices?
Nadeem, as usual spot on forecasting of house prices over the past few years. I'm more curious about the future. Do you think the govt will continue to support the house price once the election is over? As you say the market is driven by sentiment - a 1% increase in rates could quickly reverse sentiment, especially in London where people are mortgaged up to the eyeballs.
I now live in London with a low 6 figure income, which I think puts me into the top 2%, yet I'm priced out. 98% are in a worse position than I, hence I struggle to see how it can continue.
No doubt without immigration London would die - I can't see British graduates on a reasonable starter income agreeing to move here and having to share bedrooms as rents are so high, when they could stay in their own towns and live far better.
Yeh, you could wait 6 months and then buy a house in the suburbs.
London flats are in a bubble, a lot of investors (mostly chinese and russian) are going to get burned.
Yes government will continue to support house prices because it will be WEAK, weak governments tend to bend over backwards to appease vested interests such as house owners.
Interest rates are irrelevant. Yes I understand that this is contrary to the consensus view, but if housing market sentiment is strong i.e. over 10% per annum inflation, then it does not matter if mortgage interest rates are 3% or 6%.
Thanks alot for your response Nadeem, much appreciated, and your content has been invaluable to me over the years.
Wanted to also point out the 20% discount for first time buyers site is now up to register, not sure what limit they will put on the amount, but 20% discount, and even 5% down, seems like a no brainer.
Yh I've been thinking this about the offplan luxury flats in zone 1-2. If credit tightens in China, then there may be alot of repos when it comes for completion. Although I've heard alot of them are cash buyers too. But if theyre buying for rental yield, zone 1-2 yields will be very low I reckon in 2016, there's already so much supply, and 3% yield is quite common in zone 1 prime areas.
Hi Nadeem - first off thank you so much for your insightful work over the years. Given the quality and accuracy of your work, I am amazed the mainstream press has not given you more attention. Anyway, thats another story. I just wanted to clarify something re your recommendation of houses vs flats in London. Apart from the fact foreign buyers are the dominant force in prime London, within that, there is a strong cultural preference for flats vs houses both among foreign buyers as well as overseas-born Brits like myself. I'm not sure why that should be the case, but from personal experience and anecdotes it may be a function of security (your front door does not open on to a public street), and a preference for lateral spaces. In many streets around Kensington (where we reside), a family sized apartment in a well maintained portered block has arguably appreciated more in £ per square foot over the past say 10 years than a similar sized terraced house in the area. Many Middle Eastern buyers I know looking to buy in the area will only consider flats and not houses. Could you please elaborate a bit more on the reasoning behind your preference for houses vs flats? I will declare my own self-interest in this question as we are considering selling our Kensington apartment and moving to a house in the suburbs (for family/schools reasons rather than any kind of bet on property within London). I am therefore quite intrigued, especially by your view of a "sellers window" existing between now and election time. Many thanks in advance for your time.