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	Nick Churton, who heads our Mayfair Office in London, is well placed to guage the pulse of the UK property market and contributes regular market comments for the national press.  Here are his most recent offerings, in his amusing trademark style:

Waiting Isn’t Working (March 2010)

 

Putting off moving until after the summer holidays or waiting until after Christmas are the usual causes of home buying inertia.  But now we have lots more reasons to put off the evil day.  First there is the General Election.  The World Cup in South Africa will quickly follow in June.  Quite how differing outcomes of these events will affect the market is hard to fathom.

 

A brief period of euphoria may sweep the nation should England win the Jules Rimet Trophy but this is hardly going to kick-start a housing boom or usher in a slump.  Likewise there will be few surprises, no matter who wins the election.  Labour, Conservative, Liberal Democrat, Green, UKip or even the Monster Raving Loony Party – it is hard to see how any new government will not oversee a rise in interest rates, income tax and even VAT to claw back our crushing £101 billion deficit.

 

So if we know we are in for a tough few years of readjustment - no matter who wins the World Cup or General Election - perhaps the prudent thing to do would be to act now.  For those who anticipate financial difficulty, downsizing and lowering the mortgage might be a sensible option.  Others may wish to go eco-friendly ahead of inevitable rising energy prices.  Still more may wish to release funds ahead of the increasing cost of their children’s educations.

 

For those who see this time as one of golden opportunities there are certainly some of those.  Our lowest interest rates for hundreds of years make stepping up in the market or even getting onto the first rung of the property-owning ladder easier now than for a long time – just as long as funds are available.

 

But despite the opportunities offered by this market there will still be those happy to put things off: and of course there are plenty of other events coming up in the months ahead to help them stave off moving day.  Later this year there’s the Commonwealth Games in Delhi and the G20 meeting in Seoul.  Or for those who want to wait for the big one, what about the London Olympics in 2012?

 

But really, the best time to move is when our own lives dictate that it is right to do so, rather than waiting on the outcomes of national or world events.  Currently there is a dearth of property on the market because so many people are waiting in vain.  This is even causing prices to rise in some areas and bringing uncertainty in others.

 

However one thing is very certain: as far as the property market is concerned, waiting isn’t working.

The Truth About Climate Change (February 2010)

 

The question of climate change is one of the great issues of our time.  Will the climate warm up or, as some would prefer to argue, will it become cooler?

 

Well, the evidence across the UK is that the climate in the property market is improving.  A warm current of opportunity is pushing away the poor conditions caused by the recession.   But lack of property for sale brings with it an area of high pressure that inevitably re-inflates prices when so many forecasters suggest the opposite should be the case. 

 

But facts are facts and forecasts are only forecasts.  Certainly so little stock, combined with buyers anxious to take advantage of low interest rates, has made for a strong wind of change.  This market of low supply and high demand is frustrating for buyers but it is ideal for sellers.  After a torrid few years, where buyers have had the upper hand – albeit with the other tied behind their backs through low mortgage availability – the pendulum appears to have swung back in the sellers’ favour.

 

There is little doubt that this is an excellent time to sell property.  Now is certainly a far better moment to move than waiting for a time when more property enters the market.  Then the pressure on buyers will be lower and competition to sell will be greatly increased.  Some forecasters predict that this could be when the market slips back again.  But all the signs show that the market is more robust than any of us dared hope and thus should slowly continue to improve, despite economic and political after-shocks following the credit crunch.

 

So those considering when to go to the market this year should bear one thing in mind - that in warmer climes it’s best to be first in the queue for the sun-loungers!

Events (January 2010)

Harold Macmillan famously said that the greatest obstacle to political achievement was, “Events, dear boy, events”.  He may well have been speaking about the greatest obstacle to stability in the property market.

Whilst the political classes reflect on the events of last year, and indeed on an annus horribilis, the property classes look back at 2009 with a more benevolent view.  Unlike 2008, the property market has performed reasonably well - considering what might have been.  At a time when our MPs struggled with the aftermath of duck house construction, moat clearing and bell tower maintenance, and made into an art form the cynical habit of second home flipping (an advantage not generally exploited by those more scrupulous second home owners who have earned this benefit rather than had it given to them by the tax payer) the property market rallied to a reasonable extent in some areas and to a remarkable extent in others.

Prices in some regions have returned to their pre 2007 levels.  This was not anticipated, but then nor were the numbers of properties coming onto – or rather not coming onto – the market.  This alone has kept prices buoyant despite a real worry about rising unemployment and the prevailing dearth of mortgage funds.

In a year dominated by political scandal and shame, almost weekly reminders of the awful and tragic reality of war, rising concerns about rising sea levels, desperation in Dubai and yet more stories of banking incompetence and greed, the property market was one area that was quietly left alone by the headline writers who had other fish to fry.

Over the year we also loved to read the nonsense spouted by some industry ‘experts’ and armchair generals, all anxious to grab a headline or two for themselves.  Some predicted that property values would drop, some that values would rise and some that values would stay the same.  Some even managed to predict all three in the same sentence!

But despite the lack of any lead from the press the mood in the property sector seems to have changed and is changing still.  Buyers appear to be altering their spending habits.  Overt demonstrations of wealth and signs of conspicuous consumption appear to be on the wane.  Modesty seems back in vogue.  Value is the key to a new home.  Whilst not perhaps behaving with sackcloth-and-ashes remorse, buyers seem to be showing more restraint than in past years.  The bonus boys and girls have more things on their minds than the purchase of a palace to house their collections of expensive toys and gadgets – the threatened one-off bonus tax and higher rate income tax have seen to that.

Reviewing events of the past year is easy, but anticipating the next is more of a challenge.  A general election always adds some turbulence to the market and the coming vote should be no exception.  If the Tories get in we are told that we can expect the demise of HIPs – a badly conceived and woefully executed piece of legislation, even if the initial intent was a worthy one.  If Labour wins we can probably expect the tenth housing minister since the party came to power twelve years ago – not perhaps the most ringing endorsement of a strong commitment to the housing sector that some would wish for, or indeed expect.

Despite long awaited signs of improving access to mortgage funds there is still the threat of a double dip in the property market if the economy does not continue to improve.  Also of concern is a sudden glut of available property on the market that could yet stall recovery.  However, many would argue that we have lived under this shadow for over a year and Armageddon hasn’t happened yet.

Many in the industry will also be looking closely at the property portals - where the vast majority of homebuyers now begin window-shopping. These people could be in for an exciting year.  For those intrigued by this unfolding drama it is a fascinating prospect.  Will the UK industry giant, Rightmove, be sidelined by the global internet giant Google?  The latter plans a mega property search engine which could offer the property industry here the tantalising prospect of saving millions of pounds in resented expenditure?  Could the way the public search for property change forever?   How will this affect the industry?  All this and much more may be revealed in 2010.

But one thing is certain, what will affect the market more than anything next year will be “Events, dear boy, events”.