The media has been predicting more doom and gloom for the property market – again. A BBC report this morning read that property prices are predicted to fall. However when you read the article and use some common sense, it seems they are making a Mount Doom out of a mole hill.
The figures on which this headline were based were provided by The Royal Institution of Chartered Surveyors (Rics) which stated that 44% of its members saw prices fall in the past three months. Interesting that the BBC should pick out this figure instead of the 6% of respondents who reported that prices rose, while 50% said they had been stable. With 56% (the majority, by the way) saying that prices were stable or rising, it really calls that headline into question.
It wouldn’t be surprising though to see prices fall somewhat over the next two months for the very simple reason that November and December are generally quiet months in the property market. Traditionally, the last two months of the year are quieter with many would-be home movers too busy making merry over the holiday period to offer for new properties. Given the lack of activity in the market at this time, asking prices often drop to attract buyers. In fact, Northfields Estates Managing Director, Richard Palfreeman has always taken advantage of the lower prices at this time of year by buying his own properties during this period. So do expect that asking prices will lower in November and December.
There is an added factor that may impact on prices this year, Palfreeman suggests. “The Government Spending Review will be announced on Wednesday October 20th and we are expecting that it could change market confidence and make some buyers nervous about committing to additional spending”. That may mean that prices set by home sellers may need to be more competitive especially during November and December.
Given that one way or another, house prices may very well lower over the next two months, is that not reason for doom and gloom?
The pessimistic commentators will say that the property market is going to experience a double-dip. However, many areas are reporting a correction, rather than dramatic falls in prices, and vendors who are prepared to be realistic with pricing are still able to achieve a sale.
Also keep in mind, that London tends to be a very different animal to the rest of the UK property market. At the onset of the downturn in late 2007, London reacted much more quickly than the rest of the UK. It should not surprise us therefore that it was also the first area of the property market to enter recovery and enjoys a very different dynamic to the rest of the UK’s property market.
London property also has the advantage of being extremely appealing to overseas investors and corporate buyers. With the current shortage of rental properties on the market rents continue to rise as less property becomes available to rent, causing the ‘buy to let’ market to make a recovery.
London residential property will increase in popularity as larger numbers of corporate buyers will enter the market in expectation of healthy returns. This corporate interest in property in the nation’s capital could cause prices to rise.
In the end, the news tends to report UK-wide trends and the London market does not usually follow these generalised comparisons.
So, if you want to be to take advantage of our corporate connections at Northfields, we will be pleased to guide you through the process and help you to get the sale you want, at a price and in a timescale that works for you. Call us now on 0208 840 6666 to schedule your free, no obligation valuation or request your valuation online here.
If you want to emulate our Managing Director and buy property at the same time of year as the experts do, call us on 0208 840 6666 or register online here.