2
Jan
Events - Read this!
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”.