My sojourn over in Blighty will be over soon enough, and looking at the BBC weather map, which shows temperatures plunging well below zero tonight, this may be no bad thing!
A few ramblings today from where I am staying in the area of Lincolnshire, known for its attractively cheap house prices (although the price of farmland up here is soaring, being as it is sheltered from UK Inheritance Tax) and for being home to some of the greatest concentrations of eastern Europeans in Britain, particularly Polish immigrants in the local town of Boston.
November 5 is Guy Fawkes night here. Not so sure about burning a Guy in this weather, but you definitely freeze one. Looking out at the north sea wind farms off the coast of "Skeg" yesterday, it was certainly a tad on the bracing side...
Not everything is freezing right now, however, and there were some massive moves in currency markets overnight with the Aussie dollar plummeting below 85.8 cents (wow! And largely welcome news), further falls in key commodity prices (especially iron ore, gold, silver) and US stocks hitting all-time record highs on political news.
Never a dull moment on the markets!
UK Debt Deflation 2007-
In news that Lincolnshire residents will take an interest in, the UK's Telegraph reported today that Polish migrants are almost 20 percent more likely than those born in Britain to be working.
Immigration is set to become a political hot potato at the forthcoming General Election, with plenty arguing that migrants add to the benefits burden and crime rates, despite yet another study finding this week that EU migrants to Britain pay 64 percent more in taxes than they receive in benefits.
Meanwhile, also at the Telegraph, hooray for Ambrose Evans-Pritchard, for finally someone in the mainstream media puts into print what we have been saying for at least the past two years - the "UK property bubble" which we keep getting lectured about is a complete misnomer.
As we have said on many occasions, most commentators who argue that there is a "UK housing bubble" have:
(a) never visited the United Kingdom; or
(b) don't know what an asset price bubble actually is; or
As Ambrose elucidates, strip out London and in nominal terms the average UK house price is £133,538, down from £158,494 in 2007, according to the latest round of Land Registry data.
While this may be a challenging hurdle for a low income earner despite the widespread availability of high LVR loans, if you try building for yourself a new house from scratch today you will quickly discover why prices at these levels do not fit any of the criteria for an asset price "bubble", even allowing for the generous VAT rebates on new builds.
Acknowledging the fact that Britain has spent much of the time since 2007 until recently away at the inflationary races, at least in part intentionally, real house prices are down by approximately 35 percent over the past seven years.
Yet even at the first hint of prices recovering commentary reverts to talk of a British housing bubble...
UK Housing market data
Indeed, we ran the Land Registry data at AllenWargent ourselves way back in January 2013 in our Buyers Eye report to make the very same point - there is a Prime Central London market which is being pushed to the moon, largely driven by foreign capital. Second tier London has been exceptionally strong too.
But away from London, and a few satellite conurbations of the south-east, including Cambridge, it's been a remarkably different story.
Below we have charted Nationwide's most timely data which underscores the point that while London's market has gone very hard (although we do note here that the London market is now slowing), across Britain there is quite clearly no bubble.
Whether prices now launch into a bubble is a different matter, but the latest mortgage approvals data from the Bank of England suggests that this is unlikely.
To be sure, one of the most interesting market recoveries to keep any eye on will be that of Northern Ireland, which, in the true spirit of Guy Fawkes night, exploded like a firework into a spectacular starburst of a bubble - the above index for Northern Ireland peaking at an outrageous 659.4 - before fizzling out and collapsing in a heap by more than 50 percent.
As the Irish economy recovers, will we see a in Ireland bubble 2.0?
It is true that the south-east of England, and particularly areas that are commutable to London, remain expensive.
When I worked in London around the years of the tech stock bubble, I commuted in from Colchester, which is about 45 minutes from the City on the fast trains. New starter homes can certainly be a stretch on local salaries from these commuter belt zones, although established flats can be considerably cheaper.
As for housing markets up in the more northerly regions of England, where so many perfectly fine houses have been hopefully listed on the market for more than two years?
Picture for a moment, if you will, a tepid, out of date can of John Smith's Bitter which has been left popped open for the entire duration of those two years. That's how bubbly the market is up t'north. And it's about that frothy too. In many such areas, almost nothing is selling and the market is devoid of life, utterly moribund.
By the way, if you want to talk serviceability, UK mortgage products are now available from under 1 percent. Completely ridiculous, yet true.
Regions versus capitals
One of the key lessons for us from the past decade in Britain's real estate market has been that house prices in out of favour areas where industries are failing can almost never fall so low that they can't slide lower.
I squirm every time I here this type of statement used in relation to promoting certain regional Australian markets.
Until prices fall to £1, which we have seen so many times in regional Britain over recent years, prices can always fall lower, and even then there is no guarantee that homes will be sold without incentives to buy.
The antithesis of this is that housing which is in high demand is never too expensive to surge higher still - too many years of watching terraces in London's W1 selling for tens of millions of quid bear ample testimony to that.
Investors should look for sustainable long-term employment growth, population growth and real income growth.
I took a short look earlier in the week at the recently released data on land values in Australia to show how all land is not created equal.
Moreover, the land which is consistently in the highest demand will outperform over time.
It's long been our belief that inner Sydney (and probably inner Melbourne) land values will follow London in their upwards spiral over the long term, to some extent also driven by foreign capital, which is more easily shifted around the world in the modern global economy.
Hark at the rhetoric in Britain today: prices have become decoupled from the rest of the UK, yet "inner London has little relevance for housing policy".
I understand why people sometimes prefer to invest in regional markets, and at certain stages in the cycle and it can seem to make a good deal sense - entry prices are cheaper and higher headline yields can appear superficially attractive.
But over the long term, surely enough - and we do think investors should treat real estate as a long term play - wealth is created by owning property located on the land which is in the greatest demand.
The focus of household wealth in London as compared to the rest of Britain is so marked that it almost seems absurdly comical when charted graphically, as done so brilliantly by CityMetric below.
And even within the capital, as our own research has previously shown, wealth is outrageously skewed towards prime central London.
In modern monetary systems and economies where rising prices create equity, equity creates deposits and loan debt is created at the click of a mouse button, the inherent scarcity and massive demand in these inner suburbs sees prices continuing to march higher.