IT CAN be hard to work out when to jump onto the British housing rollercoaster. Each of the last three peaks in house prices—in 1979, 1989 and 2007—was followed by a deep trough. After the bursting of the 1980s bubble, inflation-adjusted house prices fell for seven years, losing 37%. This time the tide seems to have turned earlier, with prices starting to rise and the average loss, at 26%, much lower. Are houses still overvalued?

On some measures the recovery has been suspiciously quick. Affordability can be gauged by comparing house prices to incomes or to property rents. On both measures British house prices still look overvalued, perhaps by as much as 20% (see first chart). That suggests waiting to buy would be wise.

Yet comparisons based on averages are unreliable. Regional trends now vary so much that national figures are less meaningful than they once were. Prices in Northern Ireland continue to drop fast: they fell by almost 10% in 2012. In the north, prices have been flat since 2006; strip out inflation and they are back to 2003 levels. In these regions houses look less overvalued: the economy and property market are both slow (see second chart). In London, by contrast, prices are rocketing. Using affordability metrics, they appear to be defying gravity. But comparing prices to average incomes is less relevant there because large swathes of central London are owned by foreigners. Only half of high-end homes are now bought by Britons, says Liam Bailey of Knight Frank, an estate agent. Italian, French and Russian families account for another 5% each. All in all, Knight Frank sold to 71 different nationalities last year. Lots of Londoners are not British nationals. But another phenomenon is at work too: homes have become safe-haven assets. London property is a bit like gold or francs in a Swiss bank. Cash floods in when the rest of the world looks risky. The financial crisis and euro area depression lit a fire under property in the capital. London prices were 225% of the national average in 2005. Today they are 625% of the average.

Explore and compare global housing data over time with our interactive house-price tool

Like ripples in a pool, this pushes up prices in less glitzy parts of London and in the broader south-east. Strong regional employment moves things along, as does the return of 95% mortgages. In time the Bank of England will raise interest rates. Mortgages will become dearer, driving some to the wall. But that could be three years off. By then house prices could be 20% higher. For those storing potential deposits in bank accounts that pay pathetically low interest rates, the biggest risk could be waiting too long.