The Evening Standard’s reporting on London’s overheated property bubble is thin on stats, long on individual cases, leading me to wonder about cherry-picking, but they do quote an estate agent who sounds near-suicidal (“There’s no end to how far prices could fall”) and cite unnamed “foreigners” who have stopped bidding on London property because they’re afraid of mounting xenophobia and racism.
They do cite one plausible sounding stat: 1 in 6 listings of the “reduced” listings on Zoopla were cut since the Brexit vote (it’s not clear whether this is unusual, though). There’s also the undeniable fact that a lot of City bankers will be leaving the country, relocated at employer expense, and their houses will go on the market.
Even without a sound statistical footing, these stories are important, because the London property market is one of the most overinflated bubbles in real-estate history, and like all bubbles, it is liable to panicked stampedes. Everyone who lauded their own financial brilliance for having bought into the market (or took out second and third mortgages to buy rental property) has also heard a nervous voice in the back of their heads, asking how long it could all last, and whether it would have a “soft landing” when it was over, or explode like Mr Creosote. If even a few speculators decide to cut their losses and list their properties now, it will increase supply, suppress prices, and cause more people to sell. …
As ever, this crash will be more of a hardship for regular people than for 1 percenters, who will take steps to cushion themselves (if you live in Vancouver, New York, LA or Seattle, get ready for an all-out assault on your housing stock!). But it will be an especially hard landing, thanks to all the special measures and conjuring tricks pulled by successive governments to keep the bubble inflating: cheap capital gains tax, no disclosure requirement for beneficial owners of properties, cash subsidies to “get on the housing ladder,” the virtual elimination of tenant protections, inheritance holidays for property bequests, and so on.