3
Sep
Big Bang Theory Exploded
Nick Churton of Mayfair Office shares his own
Big Bang Theory and how it relates to the property market.
"Take millions of particles –
let’s call them houses, and load them into a particle
decelerator – let’s call it the Atlantic. At the
other end of this tunnel get morally and financially bankrupt
financial institutions to load up their own particles –
let’s call them sub-prime mortgages.
Then run both sets of particles up to enormous
speeds and smash them into each other. It was one of the
greatest economic experiments, with other people’s money, of
all time. Would the whole thing backfire? Would the
result be a black hole into which all things disappear or would
there be life after the big bang?
Well it did backfire but there was no
extinction event. All the particles were very shaken up and,
to a certain extent, continue to be so. But there is new life
after the explosion. First to climb out of this newly-created
soup seem to be investors. They recognise that hardening
rents and softening house prices are having their own beneficial
collision.
Then first time buyers will benefit from those
correcting prices and from an easier mortgage environment.
Also they will notice that rents are rising, making buying more
attractive. Add some lowering of fuel prices and, while life
may not return to how it was, a brand new life will
evolve.
It is already evolving, helped by savvy
sellers who understand about the basic building block of life in
the property market – competitive pricing. People still
need to buy and sell and those that are sensible to this are making
the decisions that mean their lives will flourish after the big
bang. Better still, this is the time to take advantage of so
much choice in the market. After the experiment life, and the
property market, goes on."
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