In the US, the property bubble was big, but it wasn’t nearly as big as in the UK. Everywhere there was a property bubble in the US, rising house prices were a good thing for the city in question – and falling house prices are a bad thing. Eventually, however, if a property bubble inflates enough, rising house prices can be a bad thing and falling house prices a good thing. Such is the case in London:
Anything that lowers London house prices is probably a blessing from a social point of view. For the quality of life in this city, it is much more important that its key workers (teachers, police, fire fighters, nurses, bus drivers and train drivers etc.) be able to afford a home reasonably close to their places of work than that a few millionaires/billionaires be willing to honour us with their presence.
London house prices have reached the point at which even cabinet ministers can’t afford anything central, and have long since passed the point at which anybody with a blue-collar job could ever hope to afford to buy or even rent a market-rate house. That’s not the case in, say, New York, where there are many pockets of affordability in the outer boroughs; the only US cities I can think of in London’s position are small and economically not-crucial places like Aspen.
While the US bemoans its housing bust, then, many Londoners are keenly awaiting their own, which is showing signs of gathering steam. I have a feeling they might not have to wait long.