Friday, 9 July 2010

UK PROPERTY - calm before the storm

Have you noticed?  'For sale' boards are back

The Hometrack survey for June is out and reveals that just 11% of postcodes in Britain saw rising house prices - yet the national average rose by 0.1%.  Weird, huh?  This repeats a general pattern we've been seeing since the market appeared to bottom out in the summer of '09:

A tiny minority of property transactions in high-end markets continue to skew the national figures, masking the fact that prices in most of the country are either flat or falling.  And with an unnaturally low number of transactions, true price discovery (finding the proper levels according to supply and demand) can't happen.

Ed Mead, 30-year veteran of the property business, Sunday Times contributor and director of London agency Douglas and Gordon, is increasingly worried.  Here's a post from his own agency's blog.

If we don't get another major economic shock this year, I'd expect prices to drift in the doldrums until the Chancellor's teeth begin to bite, public sector workers start getting laid off in numbers and unemployment begins rising in earnest into next year.  Anyone currently thinking of moving or cashing out of the market might prefer not to wait for that.