London house prices are having a relatively bad December

It seems that the recent price development is due to higher taxes on second homes (and expensive purchases) which deter capital investors. This could be a good thing as it means that a higher share of houses will be owned by people living only in London, instead of second homes.

And even though it only directly effects the most expensive property, it ultimately lowers prices for a lot of houses due to the inelastic nature of housing demand.

This assumes that you never sell your house to fund your retirement. High house prices also imply higher real estate taxes, which pressures the older generation to sell.

I know all about that commute- just paid £5k for my annual season ticket. It it is the only economical way to work in London if you have a family.

In terms of empty property, this is what the Land Value Tax is good for (especially in C London, were most of the house price is for the land). Its a shame the Lib Dems never win general elections.

House prices in london have always been expensive. That 200k house in Earls Court adjusted for inflation would be £410k now.

But back in 1990 interest rates were a whopping 14% - that means that a 25 year mortage would have cost the equivelent of £4935 each month.

Today that house is worth 1.5 million. The same 25 year mortgage at today's interest rates would be £5158 a month.

So really house prices haven't changed that much, it's just that the money is going to different places.

I think it's a reference to the so called "mansion tax" which would end up including a lot of mid-sized London flats.

But then again, your economy will get a large boost. Construction is awesome source of growth. No construction means stagnation.

If you don't piss off homeowners today, tomorrow situation will become even more dire. Pricess will be bigger, price growth expectations would be even more insane, regular people will be more disgruntled. So it should really be "piss early, piss often". Or face downward spiral.

It's pretty obvious how this should resolve: suppose there's two nearby towns (inside metro area) - one is building up but another one doesn't. Property prices will lower in both of them but onle one will be getting economic benefits, leading to second one following the suit. It only becomes problematic when cartel forms, blocking the development of entire area. Such cartels should be fought with.

From my analysis of London super prime ( I use two groupings £5-10m, £10m+ ), it appears that there is such a disconnect between this group and the "normal" London housing market, that they may as well be different countries.

In some sections of the housing market, lets say £1m, a devaluation appears to have a significant effect on properties beneath that valuation. The correlation is extremely high. In this bracket of buyers you have (well off) working professionals, lawyers, finance etc. Rich by almost everyones standards. Lots of them around means lots of competition for a certain stock of housing.

What you also have is high thousands of extremely rich people from around the world (particularly Russia, Saudi and other ME). London is a refuge for super high net worth individuals for a variety of reasons, culture, relative freedom, history, availability of beautiful mansions. The most important reasons probably being national stability (financial and security) as well as a comprehensive and enforced legal system. Not to mention, a subset of these buyers are parking money stolen from the people of their country. Try physically confiscating a 250 year old Mayfair townhouse! UK legal protections means a seizure of the property is unlikely/very difficult.

The property desired by this group as so disconnected from usual London housing that it is unlikely to have knock on effects if prices decline. This type of person is not going to downsize to 'normal' housing.

This is just something to bear in mind when reading reports on London property prices declining. The last year saw a single digit percentage drop in asking prices, except the majority of this was in the £10m+ plus range.

Yes, but remember that the distribution of wealth (and related things like housing stock/demand) are heavily skewed towards the bottom-end. More availability higher up will ease demand lower down, but proportionally much less.

Yeah, you can't read too much into it, but consider the following: to buy a Zone 2 house in London right now requires a fair bit of money. We're talking typically more than $1m US. Even a flat on my street is upwards of 600,000 US. So who can buy this kind of property? That mostly means successful professionals. A fair few of this category are either foreign-born themselves or have spent significant time overseas. Nearly all of them work in extremely international offices. This category skews Remain extremely strongly. Remainers are, for the most part, pretty chary about England's prospects right now.

The broader data shows Outer London still going up, but Outer London's a huge place. Areas like Sidcup and Plumstead skew Leave and I'm sure property prices are still doing fine right now. Longer term, it'll depend on what happens, but I do think property prices are literally skewing on the basis of the political views of the prospective buyers right now.

Point 5 is really significant, there has been a lot of noise from politicians on both sides and the media about the negotiations, in reality we have such a weak hand it looks like the negotiation is going to be rather one sided.

Regarding 5.

From talking to brits, there seems to be this idea that the UK is pulling Europe along. Europe is just a dead weight pulling them back. I shit you not. I think this is why so many brexiters believe that in the negotiations the UK has the upper hand.

Point 1 is unfortunately a symptom of the fact the non-tariff barriers which really are most significant to trade (recognised standards for goods and services, financial/legal passporting) were both co-opted by the Leave campaign to make puerile populist arguments about the evils of the EU ("they make stupid rules about bananas", "they are the wealthy elites")...

That's like saying if Canada doesn't try to join the EU it doesn't understand what trade looks like.

Yeah, actually, you can do trade and do it successfully without tying all treaties together into a political state-building project. Everywhere else in the world manages this pretty successfully.

Political parties' opinion polling is probably the least reliable way of gauging this, since the Conservative party is at least notionally very pro-business, was divided on the issue of Brexit and its Leave faction made numerous claims that leaving would benefit trade with the wider world, and (outside Scotland) the major opposition parties have been in total disarray for the last couple of years for unrelated reasons.

More reliable indications would be that 48% of people voted Remain, and a non-trivial percentage of those that voted Leave did so because they believed claims that disengaging from the EU would allow the UK to pursue more free trade arrangements than before.