Monday 4 February 2008 4.28pm
As for the newspapers, they're the biggest cheerleaders for 'property ladder' there is. Falling prices don't actually make great copy.
Tell that to the editor of The Express. When not fixated on Saint Diana, the prospect of a property crash is their next best standby for a headline.
The editor of the Express is the worst! Owns a large property portfolio and, on the day after house price falls of over 1% were announced for the month just gone used the annual figures to declare "PROPERTY PRICES STILL SOARING" on the front page!!
Um, no Beingjdc. House prices have not been "falling by up to around 1% a month for several months". That is such a vague generalisation as to be worthless.
OK, here's a specific one. In the Halifax House Price Survey, prices in London fell by 6.3% in the 4th Quarter of 2007.
All anyone can be reasonably certain of is prices over the longer term always show a rise. That term and the size of the increasse are the only variables.
Maybe - for as long as we have inflation, nominal prices of everything will go up 'in the long term'. However we don't know how the current situation will end, as we've never had a bubble on this scale. The only comparable one would be Japan, where prices now are still significantly lower than at the peak, almost twenty years ago.
I can't see prices in SE1 falling anytime soon. The very central location, the walking distance to the City, the relative inexpensiveness compared to other central postcodes (Clerkenwell, Hoxton, etc.) make SE1 a very desirable place to live in for hords of young city bankers and professionnals. Hence all these fancy new developments and warehouse conversions that pop up like mushrooms after the rain.
An excellent argument for why prices will fall in that area. The location has always been central, the distance to the City is unchanged. Demand will fall - mortgages are harder to get, and jobs are now being lost in the City rather than created, but supply has risen, thanks to all those new developments.
Everyone always seems to think their area is different. It usually isn't.