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Crystal Ball Gazing

THE LOCAL PROPERTY MARKET JANUARY 2010


A big welcome to 2010 to you all.  I take my job of advising local people buying and selling homes in the local arrears very seriously.

We are all living in an “instant Society”.  Instant means,  instant learning, instant gardens, instant meals, etc.  Its demanded of us “so called experts” to make “instant” predictions regarding the property market which in my view is a total impossibility.  Why?  -  because it is!

All properties are individual, even “identical” properties have different appeal according to their layout, furnishings and life style they portray.

I have spent the holiday period reviewing the forecasts of some so called “professionals” and with the thanks to the Financial Times, these are some of their opinions for 2010.

                           UP                                               DOWN
                 Citygroup – 10%                          Capital Economics  - 10%
                 CEBR       -   4%                          Fitch                            8%
                 RICS        -   2%                           Savills                         7% 
                                                                       Knight Frank              3%

In trying to make some sense of this I first examined the experience and expertise of the contributors.  In doing so I first looked at the opinions of the  RICS and Hometrack, Knight Frank and Savills, for their information is gleaned from their staff/members/contributors.  All rely on Estate Agents, and in theory they should be the best source of information.  In point of fact,  like bookies,  jockeys, owners and trainers of racehorses, they invariably turn out to be the worst tipsters.  Of those agents I know well and have personally quizzed, they are hopelessly clueless and that’s why I totally discount their advice and forecast.  The Halifax were Estate Agents and now only represent a Bank/Building Society.  Investec is primarily a Bank come Equity Investors, as is City Group.  That leaves CEBR, Fitch & Capital Economic, as independent researchers. Just look at their forecast and they go from minus 10% to plus just over 4%. 
In short, you pay your money and take your choice.

As I have stated time and time again the market that should interest us, is our Local micro-market.

As the grand-daddy of the local Agents I am constantly called upon by most of the major Banks and Building Societies for advice when they are contemplating lending on local homes, whether assessing the value of new developments, or in relation to a single homeowner looking for a further advance on their mortgage.

I rarely make predictions as in reality it is only a guessing game.  All I know is that with local quality homes becoming in increasingly short supply, prices for these and in particular certain “Premium Trophy Homes” will, barring a total unforeseen catastrophe, always increase in value.

My rationale is quite simple and risking the accusation of stating the “bleeding obvious”, if many of us are accepting pay cuts and the rest of us pay freezes, with rises in income tax and stealth tax ahead in 2010 an absolute certainty, how can anyone afford to pay more for property or rent.  My forecast is therefore No asset or growth in rental yield in residential property in 2010 with the possible exception of some trophy houses and apartments in the very best areas, anything else will continue to remain at their retrospective high in 2004. So if you are selling to trade down or out of the market it does not really matter when you make your move.  However, if you are trading up there is no time like the present to place your house on the market, and take advantage of buying a great property or one with the potential of being great.

Phillip Leigh is principal of Phillip Leigh Associates, Estate Agents.  Tel: 020 8501 2424 e-mail info@phillipleigh.com