The Lloyds Bank England and Wales regional PMI numbers released today reinforce, if any evidence were needed, that London is indeed another country.
Interestingly, Savills also had this to say about London property, "London faces an oversupply of high value homes". While we know that 80% of demand is from foreign buyers, 2/3 are for investment and with more supply destined to come on stream "any further supply might not find demand from tenants." I suppose that not all Asian and expat buyers are insensitive to income returns. If they were all cash rich, the property market of Hong Kong would not have halved and doubled a couple of times in the past 15 years!
The point here however, is not to start another discussion about the bubble that is London property prices but to highlight that the "surprise," growth we keep reading about is in fact very patchy and is more likely a direct result of QE which has been building asset bubbles without raising real incomes across the country in any fair and reasonable way that might be described as beneficial to the whole.
In fact, most families appear to be going backwards and we're building up an even bigger shock in the pipeline and when the bubbles burst the easy money will have been made and fast disappeared, and the remainder of the population will again pick up the tab. Many people are now forecasting that growth will ratchet up into 2014; I wouldn't be so quick to believe that.
Unbelievably, I'm about as right wing as they come but the short term inept and bungling clowns we have running things are turning even me into a socialist and for that, I do despise them.