Monday 8th September 2008
Do Not Hesitate
27/05/08
Fantastic! Last week for the first time in months, the press relented. The Daily Mail ran a front page headline “House Prices won’t crash”. A housing economist had at last issued a correct analysis of the true relationship of Demand, Supply and Price.
It would also sadly be true that world events caused the media to look elsewhere than the housing market for its major stories.
The BBC has run out of Bearded Bespectacled Professors from the University of Doom and Gloom to predict a massive price drop. And the programme “The Truth about Property” so full of inaccuracies to be laughable has finished. The presenter of which thought prices were going to slump several years ago and so moved his family into rented accommodation. Prices continued to rise and so he and his family have lost capital growth. He would love prices to fall so he can jump back into being an owner occupier once again.
People will gladly go out and buy a car, not just for transport but for status, looks, speed or boot space, knowing full well that when they come to sell, they will have lost money. Some will go and buy shares, a true gamble with money, the volatility of the stock market being hard to predict at the best of times.
Property is not a wasting asset nor is it a piece of paper that sits in a drawer. It is a useful thing and can be many things to many people, but most of all a home.
When most people buy a house they do so to occupy that property for a period of time, not to immediately sell in the hope of profit. Short term, 2 or 3 years plus, the property will show profit especially in comparison rental payments for the same property over the same time period. Long term investment in property, 8 years plus, is a no brainer, it works.
The current level of sales in the East Midlands is lower than for the same period last year. Builders therefore have restricted construction and most home owners would rather stay where they are rather than reduce the price significantly.
I genuinely believe that there is still a demand for property, but fear of speculation based on poor statistics have restricted this currently. The interest being shown at our offices indicate there will be an active Autumn market and the smart buyer will make a sensible offer now and buy the home they want.
The media would also have you believe that it is impossible to get a mortgage, NOT SO. There are many deals available now and the banks and buildings societies are stronger now than 6 months ago and do still want your business.
Yes it is true you may need a deposit of say 10%, but is that such a bad thing?
Sell the car and use the money for that deposit. House purchase is a sound investment. Forget the media, you know it makes sense.
Stephen Boxall BSc UES FNAEA
Partner
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