The most elementary golden rule of commerce is that the price of goods in an open market is fixed by supply and demand. As demand rises so does the price, and conversely as supply increases the price falls and so too vice versa .
However having spent a few days in London, it is increasingly apparent that despite supply falling dramatically, prices have stabilized if not begun to fall, turning the above rule on its head.
It is further interesting to note whereas ordinarily the rest of the country follows London, here it is London that is trailing, as prices are flat, whereas they are falling across the rest of the UK. Finally if I had a penny for every property dealer or vested interest that are behaving like ostriches, believing it’s only a blip, or they are somehow cushioned because.. I’d be a very rich man.
Let’s pray and hope prices do not fall dramatically as we will all pay the price in the long run, though I am not holding my breath.
