“Your Majesty, We Have a Problem”, UK Housing Bubble is Scary

We’ve always been sure by the fact that China was having the worst housing bubble in the World, but now the data coming from the United Kingdom show an even worse situation

(original publishing date 06/18/14)

As the Financial Timesreports, London is having a problem it can no longer ignore:

The Office for National Statistics said on Tuesday that the cost of purchasing a home rose 9.9 per cent in the year to April across the UK, with a double-digit growth rate of 10.4 per cent in England.

The rise, including a 2 per cent gain in April alone, comes as the BoE’s Financial Policy Committee meets on Tuesday to consider imposing restrictions on risky mortgage lending in an attempt to cool the market. The FPC will, however, only announce any decisions it takes on June 26.

Representatives of mortgage lenders urged the FPC not to take draconian action even though house prices were growing at a pace. Peter Williams, executive director of the Intermediary Mortgage Lenders Association, said: “With house prices continuing to climb we are staring at a glaring mismatch between a rampant housing market and subdued mortgage activity that needs handling with care.”

The ONS measure of house prices is based on mortgage approvals of all the leading lenders and shows house prices at a new record level, now 6.5 per cent higher than the previous peak in January 2008.

The 2 per cent monthly change was the fastest pace of house price gain recorded on this index since the housing market recovery started to gather momentum last year.

So this is officialy worse than the Chinese bubble:

And Zerohedge shows an even worse chart:

Do you remember what everyone used to say in 2007 in the US ? “A housing bubble ? Now ? Naaah, we won’t be fooled again”.
There you go, we’re just waiting for BOE to rise rates to see the collapse.