Welcome...
“A hearty welcome again to the latest iteration of the Glentree Review.”
I hope you have been able to survive the economic and political storms that have besieged all of us over the last six to nine months.
Gyrations of the Stock Market and impending recession
Up until recently, you couldn’t pick up a newspaper without being harangued by negative comment surrounding the energy crisis, higher cost of borrowing, the gyrations of the stock market and the impending recession which, in aggregate, are designed to suppress sentiments in the residential property market and drive values down by at least 10%.
Truth from the coalface is far adrift from this paralleled world
This textbook thinking became echoed by all the media sycophants and whilst it may technically, have a logic to it, the truth from the coalface, is far adrift from this paralleled world. Admittedly, the feverish activity which we experienced in the Spring and Summer of 2022, has lessened, nevertheless there are still a number of unsatisfied, unencumbered buyers looking to purchase residential property in most price ranges.
As to the effect on values, I have tried to impart - to anyone who would listen – that notwithstanding the negative economic data, residential property values will not change, unless the supply of new properties for sale on the market increases significantly, which is not the case at present.
If they do, then buyers would then have a far greater choice and will use their newly empowered bargaining strength to negotiate values, downwards.
There is no such avalanche of new stock in the marketplace. Whilst we did have five buyers for every property for sale last summer (particularly in the Suburb and Kenwood area) in the £1.5m-£3m range, there is still enough residual buying interest today, to sell your home successfully, at a price not far adrift from the peak.
Overpriced properties, which carry an unnecessary burden, are still not selling and will remain moribund until the sellers’ expectations of value, mellow.
I have noticed of late, that even though the press were convinced the values would drop, they are now subscribing to the view that these will instead be stable, even though mortgage costs are greater today than hitherto.
Deepest, darkest, longest recession…
Inflation looks as though it may have peaked, and the prolonged deepest, darkest, longest recession, as foolishly predicted in the Autumn by Andrew Bailey, (Governor of the Bank of England) looks wide of the mark and
grossly overstated. 80% of borrowers will be shielded by their fixed rate mortgage deals for up to five years, which also serves to allay the fears of consumers in the short to medium term.
It appears, that we now have relative political stability for the next 18 months or so and analysists are predicting a UK inflation rate of somewhere between 2% and 4%, over the next two years.
I conclude that as mortgage rates start to fall, this could be a very good time to buy a new home and as Mark Twain so famously said, “Buy land, they’re not making it anymore.”
Employment will increase slightly but this level will still be one of the lowest in
the western world and there is no better hedge against inflation, than residential property.
From our 50-year provenance, we offer a bespoke, tailored service, using our global reach so that if you are selling or renting, we attract applicants not just from London, but across the major financial capitals of the world, thereby insuring we always achieve better prices but most importantly, “we hope you enjoy the journey with us!”
Trevor S. Abrahmsohn
Managing Director
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