Chartered surveyor gives 2010 housing market predictions

Chartered surveyor gives 2010 housing market predictions



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In an exclusive article, industry pundit David Tropp, of Orion Asset Services, has given Bridging & Commercial his predictions for the housing market in 2010:  

Being a qualified chartered surveyor I am always asked the question, what do I think is happening in the market and what will happen in the future? Unfortunately, I have never understood how the media can refer to a national house price average or make general statements of what the property market is doing on a national basis.

 

Talking about the UK residential market is very difficult as it is so diverse, complex and regional, that you can not possibly refer to two different areas in the same sentence. In fact there are areas where values can be completely different just a few streets apart.

 

I think it is safe to say that in 2009 things did not deteriorate to the degree everyone had predicted and the number of repossessions was not nearly as high as everyone had imagined they would be, despite the poor liquidity in the market.

 

We can point to a number of factors; the banks being bailed out so the pressure to repossess was not as intense, unemployment, although on the increase, did not increase to the expected levels and we witnessed some “prudent” lending by banks.

 

Despite the above, I think the main reason was low interest rates. This made the difference between people either losing or staying in their homes. It bought people time to either sell their property or adjust their life style sufficiently enough to ease any financial pressures.    

 

2010 will be no different. I suspect there will be continuing repossessions as some families and business will just not be able to meet their rising debts, but this will stay around the same levels of 2009. Property sales and prices will remain static as there are always people needing to move because of work, death and divorce etc.

 

Additionally, in certain areas we are now facing a shortage of family homes. Over the last 15 years or so as space became a scarcity and as the demographic of families has changed, flats were built instead of traditional homes. Family houses are in short supply which will certainly keep up the prices of such properties, especially those close to good schools.

 

Bank lending is clearly now more prudent compared to pre-credit crunch times, not only in terms of LTVs and favouring better credit histories, but also evidenced by the fact that they are obtaining professional guidance, assisted by companies like Orion, which can offer banks a professional property advisory service to complement their underwriting.

 

As well as more prudent lending banks are starting to realise that they need to have a different approach to repossessions then the one of the early 90’s. Our firm provides banks with a more thought out strategic approach to dealing with difficult loans instead of opting for repossession.

 

To sum up, I believe as liquidity and prudent lending continues to return to the market, there will be an increase in the supply of property, but this will not be able to match demand. This will contribute to ensuring that the market does not fall. The question in all of this however is, what will happen to the market after the general election?   

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