Are We Over The Worst (Or Am I Losing It)?

October 14, 2008 at 5:00 PM Lawrence Hall 5 comments

Last week I asked whether it was time to start buying again. Among those who responded 65 per cent said no, the market has further to fall and 35 per cent said yes, we’re over the worst.

My own view is this: the market does have further to fall, but yes, we are over the worst (talk about having yer cake!) .

That might sound like lunacy, not least when you look at today’s report from the Royal Institution of Chartered Surveyors. But with the benefit of hindsight we will, I suspect, view this RICS report as marker of the market’s low point.

FindaProperty’s editor considers the property space-time continuum (while riding a bike)

Why? The problem in recent months has been mortgage availability, and yesterday’s announcements should make it easier for home buyers to get their hands on the money they need to move.

Not as easy to get hold of as it has been in the past, for sure, but easier.

That will boost transaction levels and as a consequence I expect the supply/demand imbalance, which currently favours buyers, to start edging back in the direction of sellers.

Prices do still have further to fall, but the pace of the falls will ease (that’s already happening) as confidence gradually returns.

Come next spring – if (big if, I know) the mortgage companies deliver – we could be looking at a very different situation. I don’t expect prices to have recovered by then, but I do expect things to have stabilised.

So for buyers sitting on the sidelines, the coming months could present a real window of opportunity.

It is, as I noted last week, always better to buy close to the bottom than to end up on the wrong side of the revival. We’re not quite there yet, but we’re definitely heading in the right direction.

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Entry filed under: House Prices. Tags: Credit Crunch, House Price Predicitons, Market Crash, mortgage.

Keep Calm And Carry On Wise Old Bird

5 Comments Add your own

1. Toasted Teacake | October 15, 2008 at 11:10 AM

Mike, whilst I value and trust your opinion as an industry insider, my vote is cast in the mad as a hatter category. Nothing personal, mainly because of the gown you’re sporting in the photograph, although it does make you look intelligent.
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2. Ben | October 15, 2008 at 3:44 PM

After reading your opinion – I really do think this will happen in 2009. Maybe in Q3+ before we see a noticeable change in the property market IF banks follow with the BOE Interest reductions, as for now all they do is increase the level to low deposit buyers which will not help anyone even if properties continue to fall.

The only way people will start buying again is when the interest rates will be affordable again form banks themselves, but until then – nothing will change unfortunately, and will either stabilise or continue to fall….
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3. Alex neil | October 15, 2008 at 5:49 PM

were are over the worst and moving forward…long live the uk property market!
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4. David Lawrenson | October 16, 2008 at 3:53 PM

Hi Mike

Mmm, I’m caught in two minds here.

I’d dearly love to start buying again close to home – i.e. here in London. I haven’t bought in the capital for 5 long years because I have viewed prices as being simply too high.

I still think they are too high and I expect another 8 to 10% fall from now (mid Oct 2008) because the proverbial brown stuff from the city hasn’t hit the “real economy” yet…. that is for everyone who doesn’t go to work in pin stripes and wear braces.

And so much of the fall in house prices is accounted for by flats, especially those of the “me-too-identikit” type in oversupplied pockets.

Prices on terraced houses here in London have barely fallen at all – and only now are vendors budging a bit on price.

But you are right, if you can get a good deal, get it now because when the upturn comes it could come fast, especially as the lowest rate of housebuilding for 60 odd years will quickly translate into property shortages.

l have commented more on this at Letting Focus
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5. Uncommonadvice | October 20, 2008 at 5:23 PM

Looking at this article on Monday 20th (I think!) it’s obvious that the banks are not going to hand over new and sexy rates. Also, property prices are still going to fall (why buy a legit 2nd hand prop when a repo is available at 15k less along the road). However, if you can find a good enough deal then YES now is the time to buy.
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