Rose tinted spectacles?
Thu 23 Jul 2009
I read an article on Tuesday this week in the Telegraph, in which the writer was of the view that property professionals who saw improvements in the housing market were wearing rose tinted spectacles. Neither he nor I can actually predict what is going to happen to the property market in the coming months but I wanted to share how Marsh & Parsons is currently experiencing the market in London. Firstly, its obviously nonsense to depict the entire UK housing market as one entity. Its made up of many micro markets with specific conditions. The fact remains that buyers continue to enter the market in great numbers. Sales are being agreed most within 4% of the asking price, some in excess of the asking price and although mortgages are still hard to come by, prices in some specific areas of the capital have actually returned to where they were at the height of the boom. This is because of one fundamental lack of available stock. It may sound crazy but it is true all the same.*
More generally, I believe the market will fluctuate as markets usually do, with some areas being more in demand than others. There has been a large influx of overseas money into London from a wide variety of sources. Lets not forget, London is still a World City and continues to be viewed as a politically stable safe haven with a strong currency and a mature real estate market providing excellent choice and proven long term growth.
Consequently, I would like to predict that prices in Central London will not fall further however, I do not make this claim for areas of the UK where there is a gross over-supply of unwanted one and two bedroom flats. Already we are seeing the start of a new era of house builders buying residential building land to build houses rather than residential boxes. We arent going to see any big improvements this year and these small changes up or down - will continue for another six months.
* The Primelocation Price Index has reported that Prime London sales stock levels have fallen for the second successive month with a slight increase in Prime London sales values.