September 2009

With wave after wave of bad news it’s difficult to swim against the tide, but I really do believe this is the time for serious buyers to come out from behind the sofa.  My concern is that the Press headlines are masking a pent up demand.  The average cost of a detached house rose by 4.9% between December 2008 and January 2009, according to the Department for Communities and Local Government.  Average prices for other property types fell during the same period, but only by between 0.4% and 2.3%; which seems not to support the further 15%-20% fall forecast by PriceWaterhouseCoopers for this year.

The shortage of mortgage finance and the loss of confidence in the housing market are causing serious frustration, but also a lack of supply.  Developers have scaled back or stopped new building and existing homeowners will not sell at (what they see as) a massive discount unless they have to.  Preying on the vulnerable will not help either; it’s unlikely that many of the Council of Mortgage Lenders’ forecast 75,000 repossessions for this year will be properties that suit the majority of buyers.

A new YouGov survey shows that 88% of respondents stated that they regard home ownership as a sensible investment in their future.  Bad as the current economic climate is, it will eventually ease and, when it does, unsatisfied demand will risk putting upward pressure on house prices once again.  Buyers need to be cautious, but they should not be afraid to get into the market, especially if that means they can get ahead of the herd.