8
Jan
"Events, dear boy, events"
Nick Churton looks back in history and draws parallels to the
property market over the past twelve months.
"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”.
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