Chris Bryant, Columnist

British House-Buyers Dance With the Devil

It'll take more than the Brexit vote to restore sanity.

August 23, 2016 at 10:14 AM UTC

Chris Bryant is a Bloomberg Opinion columnist covering industrial companies in Europe. Previously, he was a reporter for the Financial Times.

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What will it take to halt the U.K. housing market? Maybe not the Brexit vote. British builder Persimmon became the latest to challenge the "Brexit is bearish for building" thesis on Tuesday when it said home reservation rates are 17 percent higher since July 1 compared to the same period a year ago. Customer site visits are buoyant too.

To outsiders, this property obsession seems a kind of collective madness. Yes, British house prices are expected to fall 1 percent next year, according to economists at Countrywide, but they believe they'll restart the upward march in 2018. Brits' appetite for houses at inflated prices (see chart below) brings to mind former Citigroup boss Chuck Prince's infamous 2007 assertion that "as long as the music is playing [in terms of liquidity], you've got to get up and dance".