How on earth is the property market still busy?

Mary's picture
Authored by Mary
Posted: Wednesday, September 2, 2020 - 17:11

There must be something very deep rooted in the British psyche that feels the need to own their own little piece of this fine country of ours.

Because on paper, the UK property market should be on its knees, wiped out, deceased, no more. Why?

Take your pick of reasons that almost anywhere else, would lead to massive price collapse and loss of confidence that would take years or even decades to restore.

Here are some of the reasons estate agents should be worried, but aren’t.

  1. Brexit deliberations. Years of uncertainty and a divided country yet still house prices increased.
  2. Brexit. It’s kind of happened now and like it, loathe it or don’t understand it, it’s going to change a lot of aspects of our lives, work and prosperity. Just how is unknown. And if there’s one thing a property market hates, its uncertainty.
  3. Online shopping. Thousands of jobs in our High Streets have been lost to online with one delivery driver replacing dozens of shop assistants, warehouse workers, store cleaners, maintenance people and everyone else who is needed in a bricks and mortar store.
  4. Sky high prices. For every up, there’s a down right? Well we haven’t seen it yet!
  5. Ridiculous income multiples. The average house costs 11x the average wage. The average deposit is a year’s salary which makes it nearly impossible for a first timer to buy without help.
  6. And talking of help, Help to Buy has pushed up the cost of new build homes, ironically pushing them further out of reach.
  7. COVID-19. This is the big one. Almost nobody moved during lockdown and prices fell. And yet, as soon as we were let back out of our homes people started looking to move. Even forecast job losses hasn’t stopped the demand and agents report increased prices (again) and demand outstripping supply (again).

So just how is it possible, given huge recent challenges for the property market to carry on regardless?

The government seem terrified of house price collapse with all the misery that can cause. So they bring in schemes to jump start it when needed – Help to Buy, the recent Stamp Duty holiday and bargain interest rates. And the alternatives to home ownership aren’t brilliant. Rents are high and many tenancies not particularly long or secure – people would rather own to be in control of their own future.”

So what does the future hold, surely prices can’t rise forever?

“That’s an impossible question to answer – COVID-19 has changed everything.” Says Jonathan Rolande. “I suspect that if the pandemic subsides and does not return in a serious way, we will indeed see a number of months of rapid price increases.

That will then settle to a more steady increase, similar to normal inflation. However, we are yet to feel the effect of the inevitable job losses as we come out of this stage and that may be more severe than hoped. If we had another national lockdown for a long period of time, well I believe that would destroy the property market – this recovery is very fragile.”

And the question that’s most important. Jonathan, are you still buying property?

“In short, yes! We’re being careful not to over commit but yes, people need to move and we’ll help them do it. It’s a gamble of course but well, that’s the property business!”

Jonathan Rolande is Director of House Buy Fast, a cash house buyer company located in West Sussex, and also a founding member of the National Association of Property Buyers which is striving to improve the quick buying sector.

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