Nick Churton of Mayfair Office comments on the state of the property market ahead this autumn.
Lots of buyers and sellers are currently asking us, “Where are we?”. What they mean is, now that the stamp duty holiday is over, where are we in the property cycle?
The property cycle can be looked at as a clock.
Twelve o’clock represents mad panic buying. Prices are going through the roof, there is little coming onto the market and what there is, is selling like wildfire. Buyers have no time to consider, they have to act. It is the classic sellers’ market.
Six o’clock is the opposite. There are lots of properties on the market and very few buyers – as most bought at twelve o’clock. Prices begin to steady and then may fall. Sellers reduce ambitious asking prices. Buyers make low ball offers. This is the classic buyers’ market.
Three and nine o’clock represent balanced markets. There are just enough properties for buyers. Buyers have some choice and time to consider, whilst sellers have time to wait for the right buyers. Everyone is reasonably happy as, all in all, things seem fair. Hitting this rare time of parity is seldom done through good judgement, it is more often achieved through circumstances and good luck. This market is a bit like the Hogwarts’ bus, one is never quite sure when it is going to arrive.
So where are we now? I’d say at about seven or eight minutes past the hour. The mad panic buying brought on by Covid seems to have passed. We appear to be working towards an equilibrium.
But this clock is not regular. The hand on the property dial moves at different speeds depending on interest rates, inflation, supply and demand, and confidence. Very occasionally, the hand could even go into reverse. Property does not act like clockwork.
However, we believe the property market is slowly working its way towards three o’clock, the perfect time to buy and sell. The Hogwarts’ bus could well be on its way.