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By Mark Wadsworth blog
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Boom not bust

Tuesday, November 15, 2016 13:51
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Dan Denning of Moneyweek,on the back of Fred Harrison’s 18-year cycle is claiming that UK house prices will boom for the next ten years and now’s the time to get into property etc etc.

However, whilst the 18-year cycle seems to be an established fact, it is also a fact that interest rates are at a multi-century low, so, without a corresponding boom in average earnings, where is the money going to come from to fund this ten-year bull market in land? At the start of the previous bull market in land in 1993, average household debt was only just above 100% of income and it increased in line with the land price boom. Now we are starting from 135%, so if the boom is to be financed by increased debt, we will end up with average debt at nearly twice income, just before a crash.

If Dan Denning’s right, I think I’ll leave the country before 2026.


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