22
Dec
Hopes for the Future
As we fast approach the end of 2008 we have the opportunity to
reflect on the trials and tribulations of the economic crisis which
seems to have effected every corner of the globe and impacted
significantly on the UK housing market. We have seen unprecedented
falls in property values. Many across our region are now running on
average in excess of 20% below their highest point. However,
surprisingly since the end of October there has been a noticeable
positive change in the number of properties sold and the
willingness of ready and able buyers to make their purchase.
November is not a month that one would traditionally rely upon for
good results. For Penyards this year it has proven to be the best
month since April. The last two weeks of October were also above
expectation and the first week of December has not been
disappointing. Predictions fast became a reality in terms of
substantial reductions in interest rates and the reduction in
inflationary pressures. The change also became more apparent once
the government intervened with their financial ‘bail
out’ to the banks. I have to say there is little evidence
that the banks have been forthcoming in changing their lending
policy, however, we have to assume that pressure will soon be
applied and as a consequence funds will be made more readily
available. Our forecast is that the first quarter of 2009 will
conceivably continue to show a further decline in values, albeit
considerably less by comparison, perhaps only a further 4% or 5%.
If as anticipated interest rates and inflation dip to very low
levels, by which I suggest 1.5% for both, and there is an increase
in mortgage lending we might then see the restoration of a more
normal balance in supply and demand. It is that combination that
will make the difference to confidence. The second quarter will be
fairly static in my view in terms of values, with the most
encouraging signs coming in the second half of the year. I slightly
hesitate before suggesting this but there could even be an upward
bounce in values. There are without doubt a considerable number of
global issues which will contribute to the uncertain future of the
UK property market. Nonetheless we must note that this is the first
time, when going into recession, that we have seen the cost of
borrowing, cost of living and comparative property prices at such
remarkably low levels. For those who feel secure with their future
employment confidence is quite likely to return and more buyers
will reappear before prices start to rise again in the near future.
If history repeats itself, and it always seems to, there will be an
inevitable outcome. Penyards are very keen to start 2009 with a
very strong and influential marketing campaign, positive in the
belief that our market share will continue to grow. Our offices
remain strong and determined to protect and develop our core
business. When we engage with vendors in the New Year you can
expect a very robust, but disciplined approach, to the selling of
your home. On behalf of the Directors and staff at Penyards we
would like to offer our best wishes for a Happy Christmas and a
prosperous New Year. Graham Evans, Managing Director