House prices: London revival continues- but can it last?

History tells us that the housing market cycle begins in London. Last year, while London and the South East saw only modest prices rises, areas such as the North East enjoyed a boom – classic final throws of a bull run. Now, it’s gone the other way. Is it possible, that this time, we have missed the downturn altogether, and that we really are at the beginning of a new boom? Is it really possible that the great house price-crash of the second half of this decade, will be consigned to the dustbin for false economic projections?

The latest data from Hometrack would suggest this is the case. House prices rose 0.6 percent in July, says Hometrack, taking the annual rate up to 3.2 percent, that’s the highest rate of annual increase for 18 months.

Examine the data more closely, and you see the signs of a new cycle written all over it. Prices in London soared by 1 percent, but in the East Midlands prices were static, with the area recording zero inflation, while Yorkshire and Humberside saw a modest 0.1 percent rise. [...]

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