Thanks to the Enormo Blog for prompting this question that has led to a lot of discussion on our Property tribes Forum.
Anyone interested in the property market, be it through work or investment, are waiting for the signs of “Green Shoots” - the term used to describe a recovery. Yet despite there being a serious economic and property recession, the experts are divided as to when the market will bottom out.
Figures issued by building societies are not helping either. Last month one major firm declared that prices gone up, while another claimed that they had fallen. How can anyone make an informed decision on that?!
The founder of Easy Jet, Sir Stelios Haji-Ioannou is interested in investing in UK property once more, as he feels that the time is now right.
Sir Stelios said: “I am tempted to call the bottom of the property market in London. I don’t own any property in the UK at the moment but now I am looking again at London real estate.”
For overseas investors, the UK market could be looking very attractive at the moment and indeed, if there were enough foreign investors, this could help the property market provided that there are not any surprises coming around the corner to upset the market.
Peter Mackie, the chief executive of PropertyVision, said, “There has been a visible and positive change in sentiment in the prime residential property market, with buyers cherry picking the ‘best of class’. The international buyer is focused on the truly international market, whether it is St James’s, Mayfair, Belgravia or Knightsbridge.
“This had led to a severe restriction of supply, as vendors hold off selling their prime assets at what they perceive to be the nadir of the market.”
The problem is that market in London cannot be used a gauge for the state of the property in the UK, this market is so different to the rest of the country.
Fionnuala Earley, the chief economist of the Nationwide, said: “There is a danger that people who are keen to see the light at the end of the tunnel attach too much importance to one month’s figures.”
The other factor that makes the UK property market interesting to foreign buyers is the low interest rates. An astute investor could get a good deal if they believed that the market had touched the bottom, if prices fall by another ten per cent and interest rates begin to rise a buyer could find themselves in trouble.
Simon Rubinsohn, the chief economist of the Royal Institution of Chartered Surveyors (RICS), said: “Most house price indices suggest that prices have fallen by up to 20pc from their peak. However, many of our members [surveyors and estate agents] calculate independently that the scale of price falls has been even greater – 30pc or more already. We aren’t at the bottom by any stretch.”
With the threat of massive unemployment and rising repossessions, I believe there's still more pain to come.
What do you think of the state of U.K. residential property? Have we reached the bottom yet or are there further falls on the horizon?
To have a view on this please go to my Property Forum - here -
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