House prices in the UK were up by 8.2% year-on-year in November. And up 3.4% on the quarter (the fastest such growth since 2006).
Housing bubbles cripple an economy when they burst. And unlike every other investment bubble, they leave no legacy of cheap infrastructure on which to build a future boom.
They just leave indebted, possibly homeless individuals; bankrupt housebuilders; and a devastated financial system which then wreaks havoc on every other sector.
But it’s not just the eventual bust that’s a problem. The boom is rubbish too. A lack of cheap housing makes it harder for people to move for work. It makes it harder to start a family. And it adds to the feeling that we live in an unfair society.
What is driving this near-global boom is low interest rates and cheap credit. And the thing to remember about the housing market is that it lags behind moves in the Bank of England rate (assuming that even moves).
If you’re buying or remortgaging, just make sure you can afford it and lock in the longest cheapest fix that makes sense for you (within reason). Beyond that, don’t put all your eggs in one basket.