For reasons I won’t bore readers with, I could really use a nice fat housing bubble burst in London. Having turned down a chance to buy a house in 1996 on the grounds that it was overpriced and the downturn imminent (one recently sold in that street for five times the then asking price), my judgement on timing the crash is not terribly good.
However, I just came across a comment on a newsgroup about whether the author of a TV series was a millionaire (in US dollars). One respondent mentioned in passing that there’s been a sharp fall in Silicon Valley property prices for the past year. Despite the claims of estate agents and mortgage lenders – both have an interest in inflating reported prices which makes a “House price index” produced by a lender suspect in my eyes – there seems to be a drop in the number of really expensive houses for sale in London (a subjective impression of mine) but rents are clearly crashing (only three times equivalent Paris prices, from four times last summer).
This will no doubt be reported as terrible news for homeowners and the leftist class-hate merchants on Channel 4 news will have a field day. The bigger problem is that the correction in the housing market looks set to occur just when the government gets round to intervening. So there will be subsidies paid to public sector workers, planning controls will protect derelict industrial slums as “monuments to working-class culture” whilst hideous boxes with tiny (eco-friendly) windows will be built on water meadows (to be flooded each spring). Council officers will be sent on “search and destroy” missions to eliminate greedy landlords by regulation, just in time to prevent home-hunters from benefiting from a buyers’ market. And the accursed Housing Benefit, a bigger creator of crime and fraud in Britain than drugs,will be raised, thereby distorting the lower end of the housing market even more.
