The last few months have done much to change the outlook of unremitting gloom and doom in the property market that characterised the latter months of 2008. Higher mortgage approvals, increased buyer enquiries and sales and latterly indication from Halifax and Nationwide of price increases have done plenty to generate optimism. Add hints that the wider economy is bottoming out and things appear to be looking better.
Such optimism was highlighted today by the Building Societies Association, which revealed that the average prediction for house price change over the next 12 months was a rise of 1.4 per cent. In the previous survey in March the mean prediction was for a 6.1 per cent fall.
But are things really getting better? There are some distinct variances in opinion among the experts, as an Independent feature on the subject has noted. Capital Economics, for instance, has trimmed its forecast of a 20 per cent drop this year to ten per cent, but still expects declines of seven per cent next year and five per cent in 2011.
Director of residential research at Savills Lucian Cook predicted that the state of the market in the autumn will prove crucial, with a recovery of mortgage lending being essential, along with concerns that rising unemployment may hinder confidence.
However, he also stated: "At the moment we are bouncing along at what appears to be the bottom of the market and many people are applying the principle that further falls won't top five per cent. The herd mentality of seeing other people enter the market has bolstered buyers' confidence and helped get a greater degree of stability, suggesting the worst falls are over."
According to the paper, the prospects for different parts of the country are distinctly varied for a number of reasons. In Manchester, for example, the pattern is varied, with its tally of sales this year - 3,554 - second only to London, yet at the same time the city has too many flats and new builds lying idle.
Places described as being particularly cold with the prospect of major price falls and low sales numbers this year include Hartlepool - contrasting with price rises in nearby Middlesbrough - as well as Rutland and Kensington and Chelsea. Those where the market appears to be warming up include Tunbridge Wells and Southend.
Blaenau Gwent was also said to be pretty chilly, but nearby Cardiff may be doing better. A Daily Telegraph report noted that while prices have plunged, there has been a recent pick-up in activity, with agents selling 11 homes each last month, up from seven in April. However, back in the boom years the figure was usually more like 30.
For property investors, it may well be that investment decisions need to be based on geographical considerations. The Independent feature commented that the last 12 months has seen credit crunch-defying rises in Windsor and Pembrokeshire as well as Middlesbrough. The key to a successful investment may lie not in the overall pattern, but the story in any particular region, county, city or district.
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