- Mon 11 Aug 2014
Idle moments come rarely in my life, but on Saturday between visiting our local towns’ fruit and veg show to see if my runner beans or French beans had won (sadly they didn’t) and visiting the well-attended annual Yarcombe Terrier event and then onto a Scarecrow bar-b-cue (don’t ask me, ask my wife!) I grabbed my ipad to see a document flash up from the BBC regarding house prices.
Taking an interest in all things housing the article invited me to see whether my home had increased in value faster than my salary during the last year, based on the usual “put-your-postcode-in-a-box” format. I thought this was worth a try and using the wonderful BBC regional computer programme I was told that in Taunton Deane the average house price had gone up by just 3%. Having put in my monthly earnings I was told to keep up with the day job! How so when the BBC on the same page had countless articles saying how the housing market was booming!
This raises some questions. Clearly this article is available nationwide but is totally centred on the London market and based on a property price bubble that only covers ten square miles of the UK. Together with countless documentaries I have listened to or seen on the BBC there is a perception that house prices throughout the UK are spiralling out of control yet their own data tells a very different story. This is, at best, confusing! However as a property owner in the South West of the UK I may be mistaken in thinking that my own property value is rising on a daily basis. I know this as on Saturday at the various events I attended, countless friends and home owners approached me asking how the property market was doing - with a knowing glint in their eye expecting me to confirm they were indeed sitting on a personal goldmine! I hate to be the bearer of bad news!
Certainly the market has improved but our own statistics suggest, at best, there has been a maximum of a 5% rise in property values in some SW areas. But be aware of averages as each town is different and in some pockets within the South West we have seen no growth or even a negative growth within the same period.
The BBC is an institution and so is the Government Treasury and the Bank of England. If the latter two gain their information from the BBC or any other London centric institution clearly the message is now ‘damp down the market before the bubble bursts’, which they have sort-of done through political nudging over the past few weeks. This tampering of the market on a macro scale is not helpful unless you live in London, and at worse can be detrimental to more fragile markets throughout the UK. However vendors don’t hear this but BUYERS do
At the coalface of Estate Agency it is a difficult message to give to vendors at valuations when the high expectation of the value of a vendor’s house, fuelled by media speculation, has to be dampened when told the value of homes in that area have only risen in the last year by single digit percentage increase. Beware of the agent in each town that will tell the vendor what they want to hear rather than what the truth is. Their game is an old one. Appeal to the vendor’s expectation on price, grab the instruction, and then erode the vendor’s expectations over a period of time. Possibly one of the oldest tricks in the book!
All in all I can see this will end up creating two potential outcomes in the months ahead:
Whatever the outcome the next six months will be very interesting!
Bradleys Land & New Homes Director