….and now the Fog

Two extraordinary pieces of news that were almost completely buried underneath a blanket of snow over the last week – interest rates down ANOTHER 1% and the Halifax reporting a an INCREASE in house prices.

In 2006 and 2007 as we came ever closer to a housing bubble burst, we were consistently faced with competitive counter-bidders against our clients looking to pay more than we thought sensible. I looked to hedge by betting the property market short, but there were no indices used by any of the exchanges that seemed to bear any relation to the ACTUAL market.

The Halifax figures, as they themselves were good enough to admit, are a blip. Prices have dropped and those houses that reflect an idea of the NEW values are being bought and sold – and that has to be 30-35% off the peak of 2007.

In our market appraisal tool bag, we are using a new index of value – how much would it cost to build this house? When that figure (not including the land) is more than the asking price it makes you think.

The market has shown definite signs of life – but only the faintest of blips. House are selling at all levels of the market, but only in limited to numbers to those people who have to move, can move or want to bag a bargain. The majority market remains sat on it’s hands.

It is very difficult for may people to have any idea what to do. They are faced with a fog of financial, employment and political uncertainty – all of which lead to inactivity and stagnation.

If you are thinking of buying a property for investment purposes, or just swapping homes, now is the time to take walk into the mist. Look at houses, check your finances and talk to professionals who are in the market all day – we can’t guarantee total clarity, but we can give you a guiding hand over a landscape we know well.