UK house prices drop 2.5% in March

Well, it appears that even UK house prices follow the law of gravity. This is not really big news, as anybody that has studied a little bit the history of markets knows that what goes up has eventually to go down. It happened many times before, and it is happening now. Every time, before happening, there were all sort of reasons why that time was different (remember the internet bubble? feel free to list the reasons why internet stocks were not supposed to follow this simple rule). For UK, and especially for London, the reasons are/were:

• the Russians’ and the Chinese’ buying spree
• limited supply of houses
• economy not in recession
• capital of Europe, somebody would even say of the world
• the city and the bankers

you name it. Same arguments (with the exception of the Russians and Chines for obvious reasons) were around for the Japanese real estate bubble. Just days before it started a free fall it has yet to recover from.

When you hear estate agents that try to convince you that 10+ million pounds for 5 bedroom in Chelsea is a can’t-miss-opportunity, well maybe you start thinking that’s probably a bit of a stretch. Thanks God it will be a buyers market for a while now.