Nick Churton of our Mayfair Office takes a look at the property market as we enter the springtime prime buying months.
In property there are top-down people and bottom-up people. The top-down people seem to believe that it is the wealthy who drive the property market.
On the other hand, the bottom-up people think that first time buyers drive the market. They think market entrants kick-start the chain of events that gives momentum to the market as a whole.
But whatever one believes there is little doubt that from top to bottom most of the action in the market right now is being propelled by need rather than ambition. With fewer aspirational buyers around, all UK regions saw a slowing in price growth in the first quarter of 2023, with most seeing small year-on-year falls - according to Nationwide.
But these falls are not great. Indeed, they probably represent asking prices that are more optimistic than realistic in these conditions, and certainly do not reflect some of the gloomy predictions of a number of property market commentators about falling values this year.
Without a number of kick-start incentives such as stamp duty reduction and the help-to-buy scheme the market is once again on its own. Higher interest rates have caused house buyers to take a breath, while buy-to-let investors, severely hit by those mortgage rates, are holding fire.
Whilst the property industry often dislikes government intervention, it is the government who can kick start the market again. This will not be through direct intervention but by making the correct economic decisions for the UK as a whole. Because the market isn’t driven by the bottom or the top. It is driven by national confidence through fiscal competence.
Having said that, let’s not forget that some savvy people will be taking full advantage of this lull in the market. Perhaps they are heeding the words of the legendary billionaire oilman, J Paul Getty, who said, “Buy when everyone else is selling, and hold on until everyone else is buying”.
