Musings of a London Property Finder

After the 2.6% rise in average house prices posted last month, the Halifax have reported a 0.5% drop in June, which is a sign of sensible buyers in our view.  Anecdotally, anyone looking for a home right now will know there is a lack of property available and some homes are going quickly or reaching sealed bid situations.

Martin Ellis, housing economist for the Halifax said: “ On a quarterly basis, the 1.9% fall in house prices in the second quarter was the smaillest since 2008 Q1.  These figures provide evidence that the underlying pace of house price decline is easing.”

He added, ” Improvements in affordability and low interest rates have stimulated housing demand.  This, together with a low level of properties available for sale, has helped to stabilise activity and reduce the underlying rate of house price decline in recent months.

Overall we expect to see a continuing mixed pattern of monthly house price rises and falls over the remainder of 2009.”

It will be interesting to see what the land registry, the house price index which tracks sold prices reports over the next few months.   Everyone in the know is noticing that the market seems to be stabilising but with a poor economic forecast overall, I would boldly suggest that sellers wishing to sell in the next 9 months should do so now and try to catch the tail end of the summer rush as we are predicting a slower Autumn. 

Longer term, we should also consider politics and if the tories get in next May as expected, then they will undoubtedly pressurise the Bank of England to raise interest rates to support savers who make up a significant proportion of their support.  If that happens, the affordability we are seeing today will reduce.  Whether house prices follow or whether there is enough pent up demand to sustain them remains to be seen.

In my capacity as a London Property Finder, the advice to buyers is simple.  If you find your dream home: buy it if you can negotiate a price you are happy with.  If you are under time pressure, go ahead and buy, but don’t pay more than the property is worth now, particularly if you want to make money.  Is it a good time to invest?  Absolutely, but only if you know what you are doing and you or someone else researches the property thoroughly.  There are more genuine bargains around now than there have been for a while, but there are some turkeys too.  If you need some advice or need an ROI-focused London Property Finder, you know where we are.

Technorati Tags: Halifax, House Prices, London House Prices, London property finders

Tags: Halifax, House Prices, London House Prices, London property finders

Musings of a London Property Finder

A month ago Anthony Bolton, frequently named ‘Britain’s leading fund manager’ gave an interview to Bloomberg predicting an end to the bear market and said that we are now at the beginning of a long running bull market. 

His reasoning is essentially that from his analysis of previous bear markets, in terms of length and severity, he believes we’ve passed the low point.  He regards sentiment as being at a low not seen since the 1970s, despite some recent improvements and that this has led to investors holding historically high cash positions.  Money market funds in the US are now half the size of the stock market, compared to just 20-25% in previous lows.  Further, on many metrics, stocks are on historically low valuations and he rejects the view that it’s different this time, and that we need to throw away what we’ve learned over the past 35 years. Specifically, he does not expect the S&P 500′s low of 666 to be revisited, and anticipates this rally lasting for several years. 

Bolton has been bullish about pretty much all sectors, including property and questionned the wisdom of holding only traditional ‘recession stocks’ such as government bonds.

This morning it seems rival fund manager Invesco Perpetual’s Neil Woodford has dismissed this view, warning that the downturn has ‘a hell of a long way to go’.  His reasoning is that economic recovery won’t occur until both the UK and global economies have rebalanced, which means reducing leverage and rebuilding the banking system to a point where it is prepared to lend to businesses again.

‘My view is the problems that led to this recession - problems of excessive leverage in the consumer economy, excessive leverage in the banking system - have not been corrected at all,’ Woodford said.

‘There’s been no discernible, no significant increase, in consumer saving. There’s been no rebuilding of balance sheets effectively in the personal sector.  If anything, leverage has increased in recent months and arguably because of course there’s been a fall in asset values and a fall in house prices. So there’s been no paying down of debt. The banking system has to some extent reduced its leverage but I believe it has a hell of a lot further to go.’

Certainly both views are based on truth and this London Property Finder firm certainly won’t be pitting their wits against these two city heavy weights, except to say that there still seems to be a great deal of cash sloshing about, certainly in property, both from within the UK and in-bound as foreign investors pile in.  Who can blame them?  They smell bargains when the Brits stop buying and sterling falls.  As we all know, many fortunes are made out of a recession and the canny are keen to invest where they see value. 

It is true that Joe Bloggs is probably more highly geared than he was 18 months ago, but then it’s unlikely he is going to get us out of the recession, except for the fact that he keeps spending and helping businesses to grow and banks to keep lending.  Also, we work closely with several banks and anecdotally they seem to be lending where the business plan stacks up and they think they are going to get their money back.  And that’s the point.  The mood seems to have changed, people with cash can see opportunities and they know they need to invest to keep their money working.

In my capacity as a London Property Finder, not a week goes by without me spotting a truly amazing bargain and if I had any spare money, I would certainly be shopping and it wouldn’t be shoes!

Technorati Tags: Bottom of the market?, London house price crash, London House Prices, London Housing Market, London Property Finder, London property prices

Tags: Bottom of the market?, London house price crash, London House Prices, London Housing Market, London Property Finder, London property prices

Musings of a London Property Search Agent

Of the property searches we have undertaken so far this year, all have involved an off-market property search, because supply is so low in all sectors of the market.  In Prime Central London, the situation is particularly acute, with many properties sitting around for ages and the gems being snapped up, in some cases before vendors have selected an estate agent and signed up.  And you know what?  That suits us down to the ground! 

We can really display our talents when there is little stock.  We advertise, phone all our contacts, speak to all the home owners we know with suitable property and inevitably an estate agent will be able to bring a reluctant vendor to market and we will find a few vendors keen to talk since we have serious buyers and before we know it, it’s all systems go.

Interestingly, advertising hasn’t borne fruit this year.  It always impresses our Clients, but we’ve not had a good response rate this year at all when advertising for property.

I digress.   Anyway, regular readers will know that we have seen gazumping coming back to the market and that as Property Search Agents who know what we are doing and what vendors will accept – we have also been very critical of predominantly overseas buyers who confuse property deflation with the collapse of sterling against some currencies, and pay far more than they would if they were buying through us.    It seems Knight Frank, who act for vendors are also seeing a return to gazumping and are yet another estate agent reporting rising prices achieved in the capital in May and a bumper crop of sales agreed.  Knight Frank have house prices in prime Central London up 1.6% in May, following a rise of 0.4% in April and we would expect other house price indices to reflect similar gains.

Another piece of anecdotal good news is the increase of first time buyers and buy-to-letters  to the market.. Enquiries are up tenfold on a year ago and with the bargains on offer we are really not surprised – for those who can get finance that is anyone with a deposit of 10% or more and a good credit record, it’s a great time to buy. 

So are the green shoots starting to flower?  It’s a bit close to call but with top accountants and business people predicting positive GDP from Q4 this year and those who lose their jobs often finding alternative work within a few weeks, fingers crossed normality is not far round the corner.

This London Property Search Agent has her fingers crossed!

Technorati Tags: green shoots, house prices rising, London House Prices, London property prices, London Property Search Agent, property

Tags: green shoots, house prices rising, London House Prices, London property prices, London Property Search Agent, property