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The explanation in the article (people are moving out of London and seeking bigger properties elsewhere in the country) doesn't match the data (prices are flat
by dmurray 5y ago
The explanation in the article (people are moving out of London and seeking bigger properties elsewhere in the country) doesn't match the data (prices are flat in London, up elsewhere, up overall).
A move from the expensive city to cheaper regions would generally decrease house prices: the rise in the regions should be more than offset by the fall in London.
So we have to look further for the reason. Perhaps the move is disproportionately driven by Londoners rich enough to have bought a second home, either temporarily or permanently, so there hasn't been selling pressure in the London market. Perhaps there's a worldwide asset bubble and low interest rates, and Northamptonshire houses are just one small part of that.
- simonjgreen 5y agoI suspect house prices rise easier than they fall, because people will not willingly sell in to a negative equity position
- ludamad 5y agoWhen doing calls to secure a mortgage, I definitely got a lot of "... And when your house appreciates in value...". On principle, I didn't want that getting to my head. Especially as I really do rather hope prices fall sharply for Canada's sake, my equity be damned. That being said, if things were down I definitely wouldn't be looking to sell
- dmurray 5y agoThis only has a small effect, though. If the median London house was bought 10 years ago, it already appreciated 50%+. Selling into a 10% slump wouldn't put anyone in negative equity.
- Majromax 5y ago> A move from the expensive city to cheaper regions would generally decrease house prices: the rise in the regions should be more than offset by the fall in London. Only if the people moving out of London owned their homes and were putting them on the market as new properties. If a renter moves out of London, it would show up in these statistics as a net increase in demand for owned housing, and any price effects would take time to percolate through via rent changes.
- dmurray 5y agoAlso a good explanation. In this case it's a version of the "wealthy Londoners going from owning one home to two", in which they instead move from zero homes to one.