11
Jul
Hype and Hysteria
'Article from the HAMPSHIRE CHRONICLE, THURSDAY 3RD JULY 2008. '
Hype and hysteria are skewing perception of Winchester's housing
market and threatening to become a self-fulfilling prophecy of
disaster, a leading Hampshire estate agent has warned. Houses are
selling well, prices are holding up and now is a good time to take
the plunge, according to Graham Evans, Managing Director of
Penyards Country Properties, which has branches in Winchester,
Stockbridge, Bishop's Waltham, Romsey, Titchfield and Lyndhurst.
Talk of a collapse in the market is wide of the mark in Winchester
he says, and largely applies to less affluent areas of the country.
Yet he says potential buyers are being cautious after being put off
by widespread 'doom and gloom' talk. After a career in the region's
property market stretching back more than 30 years, Mr Evans has
witnessed the property crashes of the 70s, 80s and 90s, and reckons
this simply does not compare. In a broadside aimed at the 'wildly
exaggerated' popular national press, 'rudderless' government,
'wrong' economists and 'weak leadership' of the Bank of England, Mr
Evans is arguing that they are responsible for the widely-held
perception of a housing market in crisis. 'I think it's largely
hype and hysteria,' he said. 'I think there are four key elements
that are affecting this and I think that firstly it is media
driven. Bad news always sells and makes a headline, but it is
wildly exaggerated. 'Secondly, the Government appears to be
rudderless. They are saying they will ride out the choppy seas, but
they're not saying how. Unless you give people a reason to believe
they are not going to believe. 'Then there's the Bank of England's
weak leadership. 'They are reactive, rather than proactive, and
unfortunately overseen by a committee that didn't even forsee the
problem in the first place. 'Lastly there is the reliance on
forecasts by economists, who I've long berated for always getting
things wrong. 'They are always revising their forecasts because of
this.' He says he has been quizzing clients about their situation
and finds few in Winchester are feeling the bite of the credit
crunch. And while the market has slowed down, it's a far cry from
the nightmare being widely reported. In fact, Mr Evans' own
accountants, JB Wilkins Kennedy, has confirmed that Penyards
Country Properties is bucking the general trend, and in the first
five months of this year has surpassed the sales performance
compared to the same period last year. 'This is a problem of
perception,' said Mr Evans. 'If you talk to people and challenge
them individually whether they are being affected in the way that
it is perceived, a lot of people will say actually 'no'. 'If you
look at it other than the cost of a loaf of bread or the price of
fuel, then what is happening in the global economy is nowhere near
as significant as they lead us to believe in the housing market.
'Clearly there are a lot of people for whom it is very serious if
their food basket goes up by 10 pounds or 15 pounds, and these are
the people that are affected in line with the perception. 'If you
isolate those at the poorer end of the market, then the
commentators are right. 'But there are a lot of people in an
environment like we have in central southern Hampshire that
probably don't really notice. 'We are feeling it, but we are not
adjusting our lifestyles because of it. 'The type of distortion
that we see out there is that people will complain about the price
of milk going up by 10p, yet they wouldn't stop going to Europe,
despite the fact the pound is plunging against the Euro and you're
actually having to spend far more.' Despite this, dire
proclamations of economic gloom are widespread and that’s
having an effect. 'This perception is making people sit on the
fence. There is a lot of pent-up demand, but if you read the papers
you might hear there are 15 houses on the market for every buyer.
'Across the country that's probably true, but the variations are
huge. There are certain parts of the UK where the Government has
persuaded developers to build en masse and the supply outstrips
demand by 30 to one. 'But if you go to a beautiful Hampshire
village with a lovely country farmhouse, then the demand is
balanced at one for one. 'In fairness, it’s the first time
it's been like that for a decade, previously there would have been
a lot more buyers. 'But I don't think there's a lack of demand,
there are just a lot of people being cautious.' Mr Evans says
people are waiting to see the market bottom-out. 'Having sat in
this seat through the 70s, 80s and 90s, I know you only know you
are at the bottom when you are on the way out of it and prices are
rising.' 'All of these people are trying to gauge whether it is the
right time to buy or sell, but that's only based on the assumption
that it's never going to change again.' 'We live in a volatile
market - nobody knows. But if you are making a short-term decision,
a short-term strategy, it's only going to have a short-term effect.
You have to play the long game.' 'The market came back before after
real recessions - almost depressions.' A correction in the market
is underway though, he says, which will see 100 per cent mortgages
disappear from the market, and the very bottom rung of the housing
ladder disappear. 'When did it become acceptable that everyone in
the UK should live out the dream of buying a house as soon as they
turn 16?' he said.' 'Why should people be lent a quarter of a
million pounds at age 18?' 'Of course I have sympathy with people,
but owning a house is the ultimate in the luxury goods end of the
market. ' 'Irresponsible lending is the problem, and these are the
people in a rainstorm at the moment - everyone else is just under a
cloud.' He forecasts that an upturn is just around the corner and
claims now is a good time for people to buy. 'It is just as easy to
buy a property at the right price and sell yours at the right price
in this market - in fact it's easier.' 'The rungs on the ladder are
closer together, so it is more affordable.' 'Let's hope it remains
this way, and future growth is slower and sustainable as a result.'
'Mortgages are not as expensive as they were two years ago when
interest rates were higher.' 'Every day we have people coming and
wanting to buy houses because they want to move, they want to buy
and sell. All you have to do is remove the fear factor.' 'The
reckless forecasts are beginning to appear less frequently, and I
believe that the second half of the year will see a better
performance than the first half.' 'In time people will come out on
top as they always have done and will continue to do.'