Talk of renaissance in UK property PLC possibly premature
Thursday, August 29, 2013 by Ed Mead
It must be the silly season. One quarter of positive news from the UK housing market and everything thinks the garden is rosy – really. Selling property is never easy, or at least reaching sellers’ expectations isn’t, and current sentiment strengthens the impression we’re back in an ‘07 type market with everything selling for record prices. We aren’t, and it won’t. Press speculation ignores the real facts out there. Property outside London is down in real terms over 20% since ’07 so how come a tiny turnaround has been extrapolated into a supercharged housing recovery countrywide.
We all know London has been blowing inert gas into a carbon fibre balloon for the last few years but what’s happening here is of no relevance to what’s happening everywhere else. Indeed as a London agent the consequences of all this hype are potentially devastating. Given buyers are already being turned off by some of the most absurd asking prices ever witnessed sellers are convinced that this new paradigm means they should be asking MORE.
The reason some ex-London UK property is beginning to move is perhaps as much to do with the relatively un-trumpeted fact that asking prices are finally beginning to come down, 1.8% on average last month according to Rightmove, and about bloody time. Combine this with CML figures showing a spike in lending which is possibly as much to do with a rush to fix before rates go up as Help to Buy, 33% more mortgage products as a year ago and it’s clear why the buying public are at least beginning to look.
The Gov’t must be rubbing their hands with delight as the one thing that seems to win elections is a buoyant house market allied to a growing economy, but such short termism - endemic these days – belies the fact that anyone who thinks either UK PLC or more relevantly UK Property PLC is out of the woods needs their head examined.
(This article appeared on www.primeresi.com last week)