Despite the difficult economic climate, the property market in 2012 has (certainly in London and the South East) started much more positively than many were predicting.
The reason appears to be the simple old economic adage of supply and demand. Quite simply, in good markets such as London and the South East, demand continues to outstrip or, at best, match supply. This is having a positive effect on values which, whilst generally not rising in the UK (except in London & the South East) are certainly not falling as one might expect given the general economic picture.
Elsewhere across the UK the picture is less strong and there are many local and regional markets where values have fallen and supply exceeds demand. Locations particularly badly affected by unemployment and lack of investment being most vulnerable.
Reports show that the number of properties available for sale has steadily fallen over the last 12 months but our population continues to rise and with people living longer, the demand for accommodation is increasing and new home building, despite the Governments seemingly incessant PR about how they are bringing about positive changes in planning and new home sales, remains at woefully inadequate levels. This means the balance between supply and demand is likely to remain positive for those looking to sell.
My view remains that 2012 will not look too dissimilar to 2011 in overall volume terms and I do not expect prices to collapse either. I do however think that there may be further polarisation between local and regional markets and a widening of the “North South divide” with some areas suffering much more than others.
The private rental market has grown as people have found either retaining ownership or getting into home ownership difficult, primarily due to tougher lending criteria being applied by mortgage lenders. The huge increase in demand and only slightly increased supply in this sector has seen rental values increase significantly. These conditions look set to continue for the foreseeable future although there is growing evidence of tenants finding it increasingly difficult to meet higher rental obligations.
A by-product of the economic situation and of the Government’s “austerity measures” is a low interest rate environment. The UK’s triple A credit rating enabling UK plc to borrow at rates that most of Europe and the rest of the world can only dream about.
Whilst borrowing additional capital is not easy at the moment, managing debt has become easier and repossession number whilst rising slightly, remain well below levels that one would expect to see in a period of such economic difficulty.
Overall, the market remains OK for consumers with a sensible and pragmatic approach and both myself and my colleagues at Sansome & George are confident that with our experience, professionalism and innovative marketing, we will be able to assist you to achieve your moving plans.
Our acquisition of premises in Basingstoke is a clear indication of our confidence in the local market and our own business plans and we are looking forward to establishing ourselves as the “agent of choice” in the town as we are in Bramley, Mortimer, Kingsclere and Tadley.
David Sansome
Managing Director
