Strutt&Parker report on a still active market

FOR IMMEDIATE RELEASE

ANALYSTS PREDICT GLOOM, BUT HOUSING MARKET MARCHES ON

In the past week various reports indicated the UK was lowest in terms of global confidence, financial directors were preparing for a second recession while companies had postponed or cancelled £4.7 billion of spending. On top of this, Sir Mervyn King, the Governor of the Bank of England, called the current financial crisis “the most serious… since the 1930s, if ever”, so it’s not surprising that those wishing to enter into the property market are being more cautious than usual.

King’s declaration that the financial crisis is the worst ever – even beating the 1930s post-war depression is an exaggerative attempt at justifying the bank’s quantitative easing measures. However the repercussions of his statement could have a negative effect on homeowners’ confidence.

Despite the woeful prophecies in the financial markets, the average UK house price rose by 0.2% last month, indicating that there is an active housing market which has not been too heavily affected.

Mark Wiggin at Strutt & Parker’s Shrewsbury office believes “Analysts have great influence in the media and need to be wary of the knock-on effects of their pessimistic statements. In a delicate economy, gloomy projections can compound fears across all sectors and discourage people wishing to buy or sell their homes. That said, we are finding that hard work, innovative thinking and, above all, correct pricing is key to the property market in difficult times; we have new, active viewers keen to buy, but their confidence is fragile.”

Wiggin added: “We all agree that we have to tighten our belts, but unhelpful forecasters who seem to be competing for who can give the darkest prediction should be aware of the effects of their pessimism on confidence. The former can eventually dictate the latter – creating a self-perpetuating circle of doubt, which could significantly slow down the housing market”.

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