5:07pm Friday 20th July 2012
The legendary film star Mae West said “Experience is by far the best teacher. Ever since I was a little girl I knew that if you look both ways when you cross the street, you'll see a lot more than traffic”.
In the Property world, experience comes from opening your eyes and ears – and not being swayed by vested interests.
On that note, this week I received through the post an unsolicited gift – namely the “Little Blue Book”. It was subtitled as a helpful little book about property trends – researched and produced by those good folk at Rightmove.
Rightmove are far and away the largest on-line property portal – used daily by agents and house buyers across the country.
The book runs to 49 pages – the gist of the content is that the market has shrunk markedly since the boom years, and agents would benefit from understanding the new environment dynamics. The first section caught my eye, particularly the assertion that “the market is complex and littered with conundrums”.
This is followed by Rightmove setting their stall - providing relevant data to help agents “find the answers to daily questions from vendors, landlords, buyers and tenants”.
Property professionals and commentators often refer to transaction volumes (ie: numbers of sold houses) as the most valuable barometer for the health of the market. In the first section of the book, Rightmove focus on official Government transaction levels – which for the first four months of 2012 are at their highest level since 2008. On the face of it - good news.
However, they go on to say that in the 4 years since 2007, volumes have remained broadly flat.
Further, Rightmove are predicting that despite a promising start to the year, 2012 numbers will remain broadly in line with recent years at around 800,000.
To put that in context, between 1986 & 2007 residential property volumes exceeded one million every year.
Even more interestingly, they go on to say that longer term forecasts vary, with some analysts taking the view that volumes will not significantly improve until 2015 and are unlikely to exceed pre credit-crunch levels.
The level of mortgage approvals is seen by Rightmove as one of the major contributors to the current malaise.
In other words, limited mortgage finance availability (and therefore less mortgages approved / granted) means much lower sales volumes.
So – facts and figures that tell it as it is – and certainly not as rosy as some would have you believe.
Put neatly in context by the wonderful Groucho Marx - who said “The secret of life is honesty and fair dealing. If you can fake that, you've got it made”.