UK Housing Prices Up 9% from Low But Remain 12% Below 2007 Peak

Housing prices in the United Kingdom continue their recovery with a 0.5% monthly rise in November and 2.7% year-over-year increase. Overall, UK housing prices are now up 9% from the lows set earlier this year, but 12% below the 2007 peak. UK housing prices have fared better than those in the U.S.

Recall that housing prices in London already set fresh all-time highs this year.

(See Marketwatch article for more details)


Inflation Expectations On the Rise in the United Kingdom

Inflation expectations are not only on the rise in the U.S., but also on the rise in the United Kingdom. The Financial Times reports in “Markets’ inflation readings edge upwards“:

In the UK, the difference between gilt yields and those on inflation-linked paper rose to 2.25 and 2.82 per cent respectively on five- and 10-year paper – the highest readings since immediately after the Lehman Brothers collapse.

Given that housing prices in London recently hit new all-time highs, we should not be surprised that more Brits are joining those of us on inflation watch on this side of the Atlantic…

Home Prices In London Surpass Record Set Two Years Ago

The Guardian reports that “London house prices surge past 2007 record high“:

Property asking prices in London have broken through the record high set in November 2007 as the drought of homes for sale around the country continues to distort the market. New research out today shows that the average asking price in London jumped 6.5% to £461,157 in the four weeks to 10 October, sailing through the high of £412,731 set in November two years ago…The survey by the property website Rightmove also shows that asking prices in England and Wales are now higher than a year ago, after climbing 2.8% in the past month.

Prices have soared thanks to a lack of supply and rising demand, especially amongst high-end homes. The article also notes the proposed regulations to tighten lending standards could dampen demand in the near-future. Until then, it seems that property markets in the United Kingdom are heating up all over again.