Property Recovery-Or The Eye Of The Storm?

Today I was reading a post from an estate agent in South West London on the ‘Linked In’ network who was going on about the fact that sales are going crazy and demand for property was up so much they had run out and were desperate to get vendors to put their properties on the market! What a laugh.

There is a lot of talk at the moment as to where we are in the ‘spike’ for housing recovery. By that, they mean are we in a V shaped spike or the first half of a W shaped one. My view is the latter for the following reasons.

The majority of house price/ sale data is from the South East-which is not replicated nationwide-some 89% of data in fact. The rest of the UK is experiencing a flat or falling market. The south east figures provide artificial data which everyone takes as the gospel truth.Journalists have a habit of quoting the Nationwide/ Halifax indexes which are are just two sources of data-again-not indicative of the whole market-even though everyone loves to quote them as THE source. Journalists are lazy, why look further than the end of your nose if you don’t have to?

The plain fact is that property is out of reach of ordinary folk who are loosing their jobs in the recession. Buyer confidence is low.We have an economy in backslide, banks who still do not want to lend-even though some have been rescued with billions of pounds of tax payers money. ( grrr!) Property is, and always will be, about supply versus demand.

Lack of supply at present due to the above situation is causing the temporary upward spike-not a blossoming economy. When winter sets in and fuel prices rise, taxes will also rise-the govt have to get their money back from somewhere. Added to this we have the very real possibility of interest rates rising next year, which in turn will put existing owners under even more stress. We then have a potential glut of property coming on to the market as vendors are forced to sell or face repossession. Excess property from vendors ( not forgetting investors with portfolios who will suffer when interest rates rise), which will then cause a knock on effect of another downward spike or drop, potentially of at least 10%-some economists state as much as 50% drop. The worst is yet to come.

My own view is that this is the eye of the storm. For those who quote that we are coming out of the recession, consider this:-when was the last time any country did that in less than 2 years? er…never. Positivity is all very lovely-but not very real.

http://www.mypropertymentor.co.uk
http://twitter.com/RobertaWard

LIKE THIS POST? THEN PLEASE SHARE IT WITH OTHERS!

Click Any Of The Buttons Below- or Click Above Right To Tweet It now!

Dont Be Shy! We Would Love Your Comments too-And We Always Respond.Thanks!