Nick Churton of Mayfair Office looks at a resurgent property market that promises a great deal but still needs handling with some care.
July 2013. There is a new man at the helm of the Bank of England. The Chancellor’s stock has risen a little of late, the manufacturing sector is showing signs of improvement, the people’s bank, RBS, has just found £20 billion behind the sofa to lend to small businesses and the British Chambers of Commerce says that business confidence in the UK is at its highest level since 2007. We also learn that growth in the economy is marginally stronger than was suspected. Month by month we see small but encouraging steps on the path to a fiscal recovery.
But there is one harbinger which heralds an economic change unlike any other - the property market. Few signs can illustrate more how the mood is changing. In this respect we are now seeing mortgage offers on the rise, more first time buyers entering the market – some through the government's new initiatives – and more sales completions than at any time since 2006.
It has been a long time since the last boom and it has been a difficult period all round. But now there is a feeling of greater optimism with more people deciding that the time is right for a move. This is great news for everyone as this increased activity feeds through to the rest of the economy.
But we should also remember that memories tend to be short when the market strengthens and money can be made. Let’s not forget the looming threat of negative equity during a period of fragile recovery.
Interest rates are at rock bottom. But that won't last forever. When rates do increase some chickens will come home to roost. As an estate agent of course I want to encourage home ownership. But as an estate agent I never want to go through the past seven years again. Nor should anyone else. Very careful and responsible home purchase made within means and with a weather eye on the medium term should be a fundamental consideration when choosing property today.
Mayfair Office members advocate responsible home purchase and I hope that the rest of the industry follows suit – not just for the sake of the individual or the property market but also for the UK economy as a whole.