House price growth continues to outpace earnings

Robert Gardner, Nationwide’s chief economist, said (according to BBC reports around the 2nd July 2015): “House price growth continues to outpace earnings …” What does this say about the way the housing market currently operates? It says there is something fundamentally wrong with it!

The French authorities appear to be doing little to curb flagrant attempts by illegal immigrants to storm and board trucks heading from France to Britain. In a similar fashion, the Bank of England and other financial advisors to the government appear to be turning a blind eye to the use of dodgy money in the hands of the relatively rich (often coming from abroad), finding its way into British bricks and mortar and forcing house prices up far beyond local earnings affordability levels in the process.

The financial institutions will, once again, have blood on their hands after the economics of this short-term folly has played itself out in the marketplace.
Anyone borrowing excessively to try and compete with such lunacy, risks a similar disaster as the one visited upon the yuppies in the 80′ when the housing market suddenly corrected itself after their bout of excessive borrowing. Caveat Emptor is the phrase that continually springs to mind for anyone contemplating buying in such unsupported and overheated market conditions as currently exist.

Anyone who tries to say that it’s just market forces at play or it’s because of a lack of sufficient houses overall is either kidding, joking or is complicit in wanting to stoke up prices themselves, having a vested interest in that happening.

It doesn’t look as if the forthcoming budget is going seriously to address these issues.

For a reasoned explanation of what is wrong and what needs to be done to ‘repair’ the UK housing market, please go to:

Earlier article on our blog site: - full details of our proposals for properly reforming the UK housing market.


One response to “House price growth continues to outpace earnings”

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  1. Steve says:

    Very nice post. My opinion is that the UK property market has always delivered very good return for its investors. The current downturn is part of the business cycle and this phase is about to complete quite soon.

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