April fools day was Apr 5th this year
Thursday, April 14, 2011 by Ed Mead
When Nigel Lawson telegraphed the end of double MIRAS (Mortgage Interest Relief At Source) in the budget of 1988 it helped create the stampede that led to absurd price gains into ’89 that preceded the crash. No one is equating the similarly telegraphed introduction of 5% Stamp Duty Land Tax for transactions over £1m with that but having watched several terribly pleased with themselves top end agents swan about as if the good times were back it’s been vaguely interesting seeing them scratching their heads again as volumes in the £3m plus bracket fall away. Anyone involved in London Property knows that unlike 07/08 this is not a market where anything is selling at silly money. Yes, excellent stock is selling at greater than peak prices, but there’s a lot of stuff not selling at all. Buyers have reached the end of their elasticity and although average prices in D&G land are up c. 11% over the last 12 months I’d say asking prices are up by at least double that as desperate agents scrabble for stock. So I’d say we’re entering a period where sellers’ expectations are definitely higher than buyers’, certainly judging by the last three buyers through our doors who’ve all said they’re aghast at where prices are.
Whatever you might think you can’t buck the market though, and with 20% less property and 20% more buyers than a year ago simple economics again must dictate that prices will be higher.
April is likely to be a write off as school hols, two bank holidays, Easter AND the Royal Wedding mitigate against much action. But hopefully buyers will find sellers more attuned to their needs come May when I think we could all see a revitalised market with volumes recovering some of their lost ground, we shall see.