A recent report by Halifax revealed Britain’s property crisis was continuing – with the average home now reportedly worth £1,000 less than this time last month.
So as we head towards the Autumn, are we heading towards a house price crash? Or, are there any signs of optimism for those living and working in the City of London?
Here, in his latest column our resident expert Jonathan Rolande delivers his verdict.
Nobody reading the recent bulletin from Halifax on house prices will have been jumping for joy. According to the bank, homes had almost £1,000 wiped off their value in the past month. And in one area they are worth an average of £15,000 less than they were a year ago.
But there are, I believe, chinks of light.
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Halifax themselves have described the situation as a slow decline. I agree this is the case. We’re not seeing a crash in the City or elsewhere and, remember, that prices are still higher than a year or so ago.
I am also quietly optimistic that thanks to reduced fuel costs, a slowdown in consumer spending and the bad weather, inflation may be falling as quickly as we hoped it would
Hopefully this will deter the Bank of England from increasing rates – a reprieve we all need after 14 rate rises.
It is now absolutely vital that those people who are effectively dictating the finances of tens of millions of families across the UK take measures to help relieve the strain.
What will the market look like in London over the next three months?
Well, August is always a pretty flat month in property – children are off school, buyers, sellers and many in the property business itself are either away or preoccupied with thoughts of being away, especially with the recent unseasonably bad weather. We can expect the figures for house prices and the number of transactions to reflect this when they are released in a month or so – they will be bad but they are only part of the picture.
It’s what happens in September and October that are really important. Why? Well these are the months that mean the market will finish the year with a bang – or a whimper. November and December still see activity but mostly just the completions of transactions that took place in the months before.
This year, after 9 months of flat sales numbers and falling prices, the next two months are more crucial than ever.
Predicting the property market is a bit like predicting the weather but by looking at the data, using experience, and by monitoring public mood and looking at the numbers it is possible.
We won’t see any miraculous bounce in prices in September but it will be a welcome break from the constant cycle of bad news we’ve all been enduring for the past year. I’m confident that we’ll see much improved figures on inflation – something down to 6% is what the wise pundits are predicting and this will mean much less pressure for interest rates to increase again on the 21st of next month. Don’t expect a cut, but even a ‘hold’ will feel like a gift to millions of hard-pressed buyers and owners.
I’m anticipating a mini post-summer boom in activity and those sellers that have taken notice of their estate agent and been realistic on price will benefit from a new influx of buyers to the market.
And with more and more people now switching to cash this could present a golden opportunity moving into the Autumn for those in the city who do have resources to invest in property.