In fact, let’s not kid ourselves: it has been the most eventful year politically for generations. I keep pinching myself to see if I’ll wake up.
Anyway, don’t worry, I’m not here to pontificate about the US election result and the ramifications, political and economic, for nation states globally. The mainstream and social media are saturated with every view and opinion possible right now.
No, instead I’d like to focus on something FAR more important than Donald Trump and the new global order — you guessed it, property prices. Well, that and the state of the UK property market. And it’s not in too bad a state at all, despite the current climate.
Since the beginning of the month, both Halifax and Nationwide have revealed numbers that show a property market that is proving relatively resilient, in spite of everything that’s being thrown at it.
Now there’s no doubt that demand is down amid such uncertainty, but as the latest mortgage approvals statistics published at the end of October revealed, it’s by no means out.
In fact, the Royal Institution of Chartered Surveyors confirmed as much only recently, saying demand saw a modest recovery in September and October after a period of "post-referendum jitters”.
- Dragonfly rebrands to Octopus Property
- Dragonfly funds £18.5m acquisition bridge
- Dragonfly expands risk team
Once again, the low cost of borrowing, weak supply levels and a robust jobs market are preventing prices from falling more sharply. The lack of supply is proving a particular support pillar.
But there are economic as well as political challenges ahead, of course. As inflation rises, and it appears to be rising quite sharply following the decimation of sterling, people will feel less well-off and could become more cautious, resulting in subdued transaction levels.
But even then, I don’t expect people to go into their shells altogether. Now I’m no Sigmund Freud, but I do believe people today are arguably a lot more resilient psychologically than they were a decade ago. They don’t just head for the hills at the slightest whiff of uncertainty.
Many of today’s homeowners have been through the global financial crisis and what's happening today is simply not in the same bracket as 2008 and 2009.
Those dark days post-Lehman Brothers really were a white-knuckle ride – unless you were shorting collateralised debt obligations. In which case it was a licence to print money.
Anyway, looking forward, whether we have a hard or a soft Brexit could well determine the medium-, if not long-term, performance of the property market. It’s largely seen as the defining narrative for the years ahead. But even then, with the structural issue of weak supply running so deep, I simply cannot see prices falling materially.
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