Saturday 23 January 2016

Five reasons I think London house prices will crash - FT.com

Five reasons I think London house prices will crash - FT.com:

"This week I feel a bit embarrassed. Some readers might remember a column I wrote some years ago about buying a large house in Edinburgh. It was, I said at the time, likely to be one of the worst financial decisions ever but my family needed to nest — so we wanted to own a house.
It hasn’t turned out to be completely awful. We could probably sell it for roughly what we bought it for in nominal terms. So we are only down about 15 per cent in real (inflation adjusted) terms. I’ve made worse decisions. So that’s not the embarrassing bit. It is: we just bought a tiny studio flat in London. When I say tiny, I mean tiny. The entire thing is around the size of our family bathroom up north.

But still, given my firm and often expressed view that London property is hideously overvalued, you’ll be wondering what on earth I am thinking. The answer, once again, is domestic. I travel up and down the east coast of the UK like a yo-yo. I need somewhere to leave my “giving a talk” clothes and heels that isn’t the lost property department of Virgin East Coast rail, and somewhere to sleep when I miss the last train to Scotland. It’s a utility purchase I intend to depreciate over 20 years, not an investment."



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