UK House prices – signal on recession graph rollercoaster?

10 Photography (aka Coroner)

The furore over banker bonuses doesn’t take one thing into account. UK house prices have been propped up by banker’s spending. The London market was super-charged by the bonus season as bankers cleared funds in the winter ready for a spring flutter on a 5-bedder in Islington or something a bit fancy in Epping Forest.

The shape of the recession graph may mirror house prices. If so, are we at the bottom yet? With sterling 30% off and property down 30% too, foreigners (with foreign currency) now have financial muscle that almost doubles their purchasing power. Get in, boys…

The FT reports that derivatives based on the Halifax index are pricing a further 32 per cent fall in property values – a 46.7 per cent peak-to-trough over the next two years.

What shape the recession graph? It’s still a nasty downward rollercoaster. So, while I’ve been calling an “L”… it looks like we are still on the down line if you’ve not already gone splat on the flat.

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