UK HOUSE PRICES: RELENTLESS UPTRENDIn January 2025, the latest figures reveal that UK house prices have risen by 0.7%, pushing the average price to a staggering £299,238, a new all-time high. For the mainstream media, the narrative of an impending house price crash has been a constant refrain over the past two years, fueled by the belief that prolonged high interest rates would spell disaster for the housing market.
Indeed, these elevated interest rates have significantly hindered the natural upward trajectory of house prices, which typically rise in response to inflation, a growing population, and a persistent shortage of new housing construction.
The current stagnation in UK house prices resembles a pressure cooker, building up energy that is bound to release in a dramatic surge. The government’s ongoing strategy of printing money to appease voters will inevitably flow into asset prices, leading to inflation in these markets, much like the consumer price inflation we’ve already witnessed.
The government finds itself in a bind, compelled to continue this money printing to meet the electorate's demands for free money and to manage an ever-growing debt burden. As the debt increases, so does the need for borrowing to service it. This cycle makes it increasingly challenging for the UK to lower long-term borrowing rates, especially compared to the US, which still holds sway over the global financial landscape.
UK house prices are gradually regaining momentum following the fallout from the Liz Truss debacle, a situation she seems to remain blissfully unaware of, despite the havoc her brief six-week tenure as Prime Minister wreaked on the British economy.
The financial landscape was nearly sent tumbling into chaos, prompting the Bank of England to step in with an unprecedented commitment to purchase UK Government Bonds. The economy is so fragile that the UK is now compelled to invest in US government bonds to shore up its financial system against the spectre of another crisis reminiscent of the Truss era under Labour. We were perilously close to a financial meltdown!
Currently, UK house prices are inching towards a potential increase of around 10% per year, indicating a modest upward trend rather than a frenzied housing boom, while also avoiding the catastrophic price drop that the media seems to obsess over.
Ultimately, average house prices in the UK are set to rise, irrespective of government actions or economic conditions. Therefore, those considering the purchase of a standalone house should act without hesitation, as flats and new builds present more complicated challenges—flats can become a logistical nightmare, and new developments might be situated in flood-prone areas, among other concerns.
GBAHP trade ideas
Inequality.Now when we look at the old saying 'the rich get richer, the poor get poorer' most shrug it off as a pun or a joke in time of self reflection about a current financial situation ect. But the reality is its becoming a major problem in our modern societies.
So what does this mean for the average person, now we have all just lived through one of the largest ever increases in inequality during covid, now when we delve into the statistics behind where the furlough and stimulus ended up we can see how much inequality increased, what we saw is a debt passed on to every tax payer, in the UK I believe it was around £7000 a tax payer and in US towards FWB:12K , this wealth was then transferred to the rich, and saw staggering wealth increases in the 'rich' category, either through stock owners or landlords ect, rising interest rates.
In the UK we saw interest rates rises, but the usual correlation to house prices in which typically we see rate risers lowering the house prices didnt occur! I work in the building business and have contracts with wealthy clients, These guys are currently buying elderly peoples property in a nice seafront location local to me, they then destroy the house and rebuild modern second home £5m mansions! whilst UK house prices to salary is the same as it was in 1876! Is this not a serious issue to the working man!
What we are seeing is living standards drop generation to generation as well as asset purchasing becoming harder and harder to youngsters.
Inequality has been a trending issue since 2008 when the interest rates were kept low due to the broken economies world wide, during this time we have seen the price off XAU rise staggering amounts.
The problem we face is the constant lowering of wages due to inflation, since 2008 the UK government has pretty much been flat broke, we see it currently in the poor state of roads, NHS ect.
The real question is where is this money?
Part 2 coming soon