South West Residential Property: Doom, Gloom or Boom?
Doom?
First time buyers, who are now finding properties further and further out of reach may well say “doom”. Many would probably feel that the first step onto the property ladder is almost a rung too far. Average house prices in our south west region are now around ten times more expensive than the average local salary.
The Times recently reported that figures released by the Royal Institute of Chartered Surveyors showed first time buyers spent almost five times more than they did a decade ago in getting onto the property ladder.
How such a group can fund their first purchase must be of wider concern, particularly in a changing economic climate. The debate for and against affordable housing is well rehearsed, and it comes as no surprise to hear of Government’s plans to build tens of thousands of such properties over the coming decade to mitigate the problem.
Gloom?
Even optimistic estate agents may start to feel “gloom” as the market appears to slow and properties seem harder to sell. A reasonably buoyant August has been followed by a sluggish start to September. Perhaps it is interest rate rises, or an ill thought through Home Information Pack policy. It might even be an economic bump as our institutional lenders adjust to the losses incurred in the US high risk mortgage market. Whatever the reason, early figures suggest that the market has seen a fall in four bedroom properties being released. Some agents are suggesting a return to a buyer’s market, with prices being more conservative than in recent years.
Boom?
Despite the pessimistic outlook suggested above, certain parts of the country and residential market sectors still seem to be bucking the trend of perceived market cooling and are boasting a lively property market. Who can forget the beach hut which sold in Dorset for £120,000 (more than double its asking price), when it was bought for £90! There are always likely to be pockets of real estate which are counter cyclical, and the old adage of “position, position, position” may well be accurate once again.
It is probably fair to say that we are a long way from the doom stage. That said, the general tone of the media on the subject of the economy is far more cautionary and pessimistic than previous summers. Bumpy times ahead are predicted, and it will be interesting to see how our local property market shapes up in Autumn when Home Information Packs settle in.
Tuesday, 11 September 2007
