Looking ahead

Wednesday, January 13, 2010 by Ed Mead

There’s a lot being written about the year ahead and never have there been so many unknowns. Reading many opinions it’s easy to see whether their authors are vested in the property market as buyers or sellers and estate agents are always prone to talk the market up. Anyone who knows me and D&G will hopefully know that we will at least say it as we see it. Given that we have a 15% share of the market across our not inconsiderable area (not just central London) that also means that our opinion, if you chose to read it, should carry at least some weight.

The most common and easiest topic discussed by soothsayers is the Election, with most saying that things will most likely go quiet until it’s over. Difficult one this as surely moving away from this discredited and increasingly bitchy Government which is seemingly willing to pander to it’s putative core values and beliefs by milking those that actually create wealth has to be a good thing. Our experience thus far is that people aren’t rushing to sell and this must be good news for values if not volumes. The public and press call a good market one where values are rising. However estate agents want volumes and with those at 50% of the peak, but with values going up, I think we’d still be cautious about calling any sort of a sustained recovery.

Friends in the City seem to have halted their desire for immediate flight abroad to see if the Tories will roll back the more punitive taxes, and if that happens and they stay this will be good news for the medium term. The paucity of stock and weakness of Sterling looks as if it will help keep prices up in London and the only thing that’ll dampen prices is a dramatic rise in interest rates which looks unlikely in the short term, but must come soon.

It seems counter intuitive to me that you can cure a consumer led credit boom with a Government sponsored one, and there simply has to be a day of reckoning at some point. Luckily London seems resilient enough to perhaps prove more than a few pessimistic pundits, including me, wrong yet.

So my call is for a steady first half with volumes continuing low and prices creeping up, with a second half prone to all sorts of unknowns. A Tory win followed by an slight increase in volumes and a slide in values would seem a reasonable bet though.