Tales from the Front Line

Recovery, or worse to come?

by Rachel Webster
on September 11, 2009 in Properties

I read an article this morning on Bloomberg written by Matthew Lynn commenting on the UK property market. The article dismisses the theory that we have reached the bottom of the market and goes on to explain why we will see another dip in house prices before a sustained recovery occurs.

I have heard from various clients who work in the financial sector that we will look back on the second quarter of 2009 as the bottom of the market. This week alone the Bank of England reported July mortgage approvals at the highest level for 15 months, Moody’s confirmed Britain will retain its AAA rating and the Footsie closed above 5,000 yesterday for the first time since October 2008; it does feel as though life is slightly better. However, job losses are still on the increase, our budget deficit is amongst the worst in developed countries, and the Bank of England are still energetically printing money.

There has been enormous speculation as to the shape of the recovery in the British economy, Matthew Lynn is supporting the W theory and backs his argument up with good points, however, he is commenting on the ‘UK property market’ as a whole. I can’t comment on the ‘UK property market’ as it is vast, varied and not a single entity, however, I can comment on what we are seeing and hearing in the market we at Property Vision specialise in; the prime end of the market.

We are busy. We have seen an increase in prices agreed and realised in the prime market in the past three months, however, this is being driven, not by a change in sentiment, but by a lack of quality stock and the volume of transactions is pitiful.

My advice is if you see a house or flat you love, it works for you and fulfills your requirements, buy it. Your home is probably one of the biggest investments you will ever make, and you will feel emotional about it. Seek advice (this is why we have a business) but unless you have a crystal ball it is very difficult to predict when prices will stabilise and even harder to predict when they will recover.