Nick Churton of Mayfair Office predicts what will happen to predictions concerning the property market next year.
It is the time of year when some in the property game are tempted to look into their crystal balls and predict what will be happening in the market in the year ahead. A quick look at how correct last year’s crop of predictions from industry spokesmen faired shows how dubious making predictions is. These outpourings won’t change anything and are pretty soon forgotten – if they were ever remembered in the first place.
What really affects the market is confidence and that’s something that is impossible to predict. Confidence doesn’t come from an upbeat industry or government prediction. It creeps unseen and unnoticed into the national psyche.
Borrowing remains difficult and new home starts remain limited. We are at a forty-year low in private home ownership and we don’t know when, if ever, this will change. The national economy is more than ever tied to the behaviour of other countries and regimes that we have little or no control over – any more than we seem to have over our own financial institutions. There are so many unknowns today affecting the market that prediction seems pointless.
Yet our Mayfair members have seen better trading for the fifth year running since the banking crisis. Are homebuyers choosing to enter the market because national circumstances suggest they should? Hardly. It is because personal or family circumstances suggest they must.
Market excess is when discretionary buyers sense the opportunity for a significant short-term capital gain. A balanced market is when buyers need a property as a home first and perhaps a long-term investment second. Right now we are in a more balanced market. Some predictions suggest that it will not be until 2019 when we re-attain the heady days of high property values that were encouraged by delinquent lending. We should all be careful for what we wish for.