Phil Spencer looks ahead to the next 12 months in the property market…

Phil Spencer

The Future’s Bright…

Across the country, in the normal course of events, around 1.2m people move house each year. Last year only around 600,000 managed it. This year – we might be lucky to see 500,000. Numbers have not been this low since the end of WWII.

It is therefore not unreasonable to deduce there are already upwards of one million people living in homes that, if they had been able to borrow the money or had the confidence to do so, they would have liked to have moved out of by now. The longer the downturn lasts, the higher that number becomes. So my conclusion is that once full confidence returns (return it will do -it’s just a question of time), there could easily be two million people all wanting to move home at the same time.

If interest rates were to be at today’s levels – things would get very busy indeed. And just in case there’s any doubt – consider the in-built problem we have on this island between the total numbers of homes, in relation to the total numbers of people. Even before the market headed south, only 40,000 of the government’s target 60,000 new-build houses were being finished every month. That was a shortfall of a quarter of a million each year. And that was before the market turned.

Today, many developers have been forced out of business and whole schemes have been mothballed – which means supply of new stock is in danger of drying up altogether. It follows that when the market eventually recovers this shortage will have become significantly worse. Which again adds weight to my synopsis that – at the end of all of this there’ll be an almighty bounce. I don’t believe it’s a good thing – but I do believe it will happen. As always it depends on what you buy, where you buy it and how much you pay for it – but I believe the case for buying property as an investment remains just as valid as ever.

Our British love affair with home ownership doesn’t seem likely to change. Factor in the social trends like immigration, the fact that people are leaving home earlier, getting married later, divorcing more often. As well as the fact we’re all living much longer nowadays – in my opinion these can only point to increasing demand for homes as the years go by.

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