Sunlit uplands...pass me a bucket of cold water.

Thursday, July 08, 2010 | by Ed Mead

I went to a lunch yesterday given by a publisher. It’s an annual event and I usually give all such events a miss. Shy and retiring as I am I was persuaded by a colleague and it was actually good to see a few old faces I see all too often. The old timers are thinning out, one lovely guy has just bowed out with MS, it’s the sort of business here in central London that you only leave when forced through illness. Many have tried to leave but came back. But I digress.

One of their executives made a speech before we all had lunch and despite the best intentions made a few comments that might come back to haunt him.

He suggested that the London market had survived the recession [which he also implied was over for good] and was back. The two hundred assembled agents were expected to clap and managed a limp effort at best. Still, it was a very good lunch and the weird aura surrounding London and it’s revival is being enjoyed by those capable of living in the moment.

Having been around since God my natural spontaneity has been dampened with a healthy degree of realism. Part of the issue is that most agents will compare what they’re doing now with a year ago, and a year ago although things were starting to improve we had already had a year of very low transactions. When I say low I mean low. Figures show that there were only 27 property sales at £2m and over in 2008. You might say who gives a toss about sales at that level, but a 219% increase over the following 12 month period has still only produced a very thin market and many are excited by that. It’s amazing how anyone gets used to change, especially when it’s not healthy. It might have artificially sustained prices, but many can’t move and aren’t moving and unless that issue is resolved soon I have a feeling that many of those recently re employed by estate agencies will be looking for work again.

The budget was a bit close to Summer and so decision makers in central London have put off doing anything much until September and when they do make decisions I can’t believe it’ll be to buy rather than sell. Quite how that balance pans out will determine where we go, but anyone who thinks we’re out of the woods probably needs to stick their head in a bucket of cold water.