It is almost one month since the government changed its guidance and allowed the property market in England to get going again, albeit differently.
Everything is requiring a rethink and this ‘new normal’ that everyone seems to be referring to is a very different experience from one person to the next.
But what’s really going on out there?
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There are so many mixed messages about the housing market it makes my head spin.
Estate agents are busy talking it up with a surge in enquiries, website traffic on the up and virtual viewings a plenty.
Those buying a property are talking the market down. Expecting a universal fall in house prices and as a result, a significant discount on the house they want to buy.
Potential sellers are stuck in the middle, wondering who to believe and what on earth to do!
Meanwhile the media are running stories on one side reporting competitive bidding for homes and on the other, warning of a deep global recession.
Who really knows?
A Phase of Price Discovery
Believe it or not average asking prices have actually increased since the market reopened on May 13th. Yet many home buyers who had already agreed purchases before lockdown have also been trying to reduce their offers.
People are understandably becoming very frustrated – it doesn’t make any sense.
While PPE in the housing market is here for a while, there is now PDP. While everyone works out what’s happening, we are in a ‘Price Discovery Phase’.
Various UK housing market reports use various statistics and numbers to justify each ‘opinion’. But it is just that, ‘an opinion’. Everyone is jittery and it can be deeply confusing.
I strongly urge people to remember the figures for the last few months. They are almost meaningless because there were so few transactions.
It’s also worth remembering that prices only go down if people are forced to sell if they are unemployed so can’t pay the mortgage, or things get tight financially preventing them from servicing their debt.
A Market in Limbo
While the government’s job retention scheme remains in place, supporting those in furlough, people are not going to be losing their jobs. That’s the point.
As I have said in previous blogs – it won’t be until all these excellent, but temporary support measures, come to an end this autumn that it is even possible to assess how things will look on a wider scale.
Before then – it is pure supposition.
That’s what the Price Discovery Phase is all about.
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