He that can have Patience, can have what he will.
It’s all rather confusing. Driving to work at the beginning of this week I heard a report from the National Housing Federation which predicts house prices will rise by 25% over the next five years.
Only for it to be followed the next day by the report from Sir James Crosby which holds out no hope for a recovery in the mortgage-cum-housing crisis for at least two years.
Looking at the first report in a little more detail, it seems the NHF are still predicting a fall in prices for the next couple of years but believe that as we are still not providing as many homes as the population requires, the laws of supply and demand will kick in and prices will bounce back. With a vengeance.
Oh goody. For while most of us like to think of our bricks and mortar rising inexorably in value, one of the problems behind the rising rate of repossessions is the fact that people have had to borrow stupid sums of money that they can only afford to pay back at rock bottom interest rates. And they’ve had to borrow these sums in order to pay for houses which the laws of supply and demand have decreed are way more expensive than perhaps they should be.
A 25% rise is only nice if you’ve got it and you’re downsizing; lesser mortals still climbing up the ladder will still find the rungs too widely spaced. I can’t be the only person who is not expecting their salary to rise by 25% in five years’ time.
I googled a house the other day that I’d walked passed, idly wondering how much it was on the market for. Near a reasonably good school but in a rather unprepossessing road, although the interior was stunning, and was horrified to find it was half a million quid more than my top estimate (and I’d been generous). I know I live in the south east but that’s ridiculous.
Personally, I blame Sarah Beeny and her property-porn TV colleagues for encouraging people to put in the highest specs they can in order to achieve “top dollar”.
But then I saw another report at the weekend which warned householders not to spend money on home improvements simply as an investment, that extensions, double glazing, new kitchens and bathrooms, decking etc won’t add any value to houses in the current climate. In fact the report said the only thing that will add value is decorating. Which is nice for merchants, I suppose.
It seems the only thing to do is to sit tight and wait it out and see where you can save some expenditure in the meantime. As Travis Perkins are proposing to do, having scaled back their expansion plans to only those new branches/acquisitions which are already in the pipeline, by not filling vacancies and making some redundancies.
I’m sure there must be a silver lining somewhere, but I just can’t quite make it out.