Arguably, the “C-Word”, confidence, has always been the single most powerful influence on the property market. Confidence suggests that people regard risk as reducing due to a combination of factors, not least, what others are saying and doing. The herd mentality kicks in and before long we have a stampede.
However, whilst confidence levels are the highest we have seen for several years, we believe a stampede, or boom, is unlikely primarily because the sales volumes are not there to support it. There is simply not enough on the market. This does of course have the effect of maintaining gently increasing prices due to supply and demand, and as estate agents, we would welcome significantly more property available for sale. Indeed, the number of buyers is steadily increasing again driven by confidence in the future of the market.
People do not necessarily believe they will miss the boat however, although they certainly recognize that the market is unlikely to fall again. London in particular has produced strong gains, with prices in the Capital about 58% above the low of 2009, significantly driven by foreign investment not seen elsewhere in the UK. On average, London prices are up 3.2% on 2012 whilst national prices are up by only 1.1% – way below inflation. But it does look like things are certainly moving in the right direction, with some momentum beginning to kick in as the pace picks up.
Any significant growth could of course be moderated by the slowdown in employment growth and inflationary pressures on household incomes. According to the Nationwide’s Chief Economist, “in real terms, average wages are now back at the level prevailing in late 2003″ and it is difficult to predict how long the influence of foreign buyers will continue to underwrite the Capital’s strength.
From our perspective, we are pleased to report that our stock is moving more quickly and we are consistently achieving prices close to or even over our clients’ asking price. And whilst the market can take the credit for much of this, we remain proud of our expertise in advising our clients precisely how to position their property for a quick, satisfying and enjoyable sale. Perhaps now might be a good time to seek our opinion on your own property. You might be pleasantly surprised! Please feel free to give me a call on 07872 131 169 or pop into one of our office for an informal chat.
