By James Bailey – MD, Henry & JamesCourtesy of Henry & James
The British weather has had a dampening effect on the property market. With the spring months characterised by unseasonably low temperatures and lots and lots of rain, the traditional spring bounce just did not happen. Psychologically, people thought we were in a protracted winter so rather than new buyers emerging with the daffodils, things remained alarmingly quiet.
Thank goodness the sun has come out at last. As I look out our windows, the sun is shining, people are walking down the street and the office is buzzing. We are scrambling to get our already overbooked photographer out to shoot yet more new instructions now that everything is looking so glorious. Okay, the weekend’s forecast is for rain again but we are going to make the most of it while we can. We can feel a palpable sense of people attempting to make up for lost time and being even more proactive than normal.
This is why I think a lot of property research reports are simply shots in the dark. How was anyone supposed to predict that this would be the coldest spring on record since 1962? Property pundits are supposedly experts on the property market, not meteorologists. Still, things like weather, currency market fluctuations and political instability around the globe have huge repercussions for the London property market. It was only last year that the big research departments predicted a mediocre five per cent rise only for us to see yet another year of double digit growth.
As we all know, these indices are guestimates at best. The estate agencies’ research departments have a “basket of properties” that they ask their agents to re-value each quarter sight unseen. It is nothing more than a guess. Meanwhile, the other indices are based on asking prices which may not be achieved, what prices are appearing on various property portals and mortgage lending rates. The only figures which are accurate are the Land Registry ones and by the time they are published, they are hideously out of date. My favourite research company is one that famously predicted a 30 per cent drop in values only for the market to go up 50 per cent over the next five years. Well, a stopped clock is right twice a day. Maybe if they keep zigging when everyone else is zagging, they might be proved right one day.
In the meantime, things have picked up considerably and Mervyn King is now predicting a property bubble thanks to the newly launched Help to Buy scheme. I truly doubt that will happen but even so, I did not see any of these economists predicting the scheme’s launch, either. Problem is, to accurately gauge the property market, you need to be on the ground, viewing properties and talking to vendors and buyers every day… not stuck in some ivory tower in front of a computer screen.
James Bailey – MD
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