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Down with the market? - 6 December 2007

Posted by Paul Collins No comments


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There is little doubt that the UK property market has endured a bit of a torrid time in recent weeks and months, and with what many of the doomsayers point out is a significant watershed, prices fell for the third month in a row in November.

While there will be a huge amount of hand-wringing, coupled with a good bit of gloating, for some people at the long-heralded beginning of the end for the property boom, there are still plenty of people who are optimistic about the state of the market here in the UK.

The combined effects of the global credit crunch, the Northern Rock fiasco and the introduction of Home Information Packs across the whole of the property market have knocked the wind out of both buyers and sellers, but this doesn’t automatically mean that we should all be hiding under our beds or trading in on whatever property assets we have and stuffing the cash in a mattress.

I was talking to an analyst yesterday from the research group Datamonitor who said that according to the numbers, for this is what he deals in more than anything else, in order for the dreaded spectre of negative equity to reappear on a widespread basis, house prices would need to fall by around 30 per cent. Although those moping already over what they imagine will be the loss of everything they have ever owned will say that is a perfectly possible drop, it will take a special set of circumstances for it to actually happen.

For my part, as someone who is currently renting just outside of London, I’ll be keeping an eye on what offers developers will be coming up with in the New Year. Some will be keen to sell stock and finish off developments quickly in order to fund the next project, and hopefully there will be some bargains to be had.


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