The Daily Express newspaper reports today that house prices are to rise by 14% over the next four years to a record high. 'The strongest sign yet that the property downturn is over'.
The Express are pretty much the only UK newspaper that at least occassionally show a positive news angle with regard to the housing market.
Arguably, one of the reasons that confidence in house prices has been wrung dry in the last four years is because it's been an easy target for newspaper editors and the broadcast media to show a sensationalist bias toward housing 'crashes' and the like. The old self fulfilling prophecy malarchy.
But simply, the so called crash just never happened. Prices nationally have dropped 15% since 2007. Hardly a meltdown as was being prophecised, especially against a prior backdrop of prices having trebled since 1996.
There's still a fair bit of 'you can't get a mortgage' being peddled by the media, in fact a pundit on Sky News uttered those very ill informed words on their 'Paper Review' just last night. Th etruth is that there are considerably more mortgage products around now than two years ago and many lenders have returned to promoting 90% mortgages. Even 95%.
It's right that buyers should put down a financial stake in their own home and undoubtedly it was 125% mortgages from the likes of Northern Rock that heloed lead to the overheating in values that we saw in the early part of this decade. But let's not over play the condition of the UK housing market right now.
If you price sensibly then you will find a willing buyer. And they will, in general, be able to get a home loan as long as they are credit worthy and have some money in the bank.
Sales volumes are not low because mortgages are unattainable. They are low, half that of 2007, because sellers and estate agents are over pricing properties in wishful thinking terms and because the low volumes that result, are pounced on my news channels everywhere as indicating that there are no buyers. That just isn't true. There are
willing buyers out there but they will only pay 'correct' prices and not some over expectant figure that fails to take account of the softening in the market. Especially when it's an inflated figure conjured up by a High Street estate agent that thinks it's clever to over value properties on purpose so as to 'stuff the competition in getting the instruction'. A mindless approach.
Houses are a safe bet in the long term. And whether they increase in value in the next four years as the Centre for Economics and Business Research are suggesting in the Express, or stay broadly flat, mark my words that in ten years, any home bought today will be worth more.
But actually, bricks and mortar shouldn't just be seen as an investment in any case (although quite a good one compared to the stock market and pension funds currently), because primarily they are places to live in, surely?
Our property value obsession aside, houses are homes. And if they go up a bit in time, that's a nice bonus I suppose?