dothesums blog

Link: http://www.dothesums.co.uk/blog/homebuyers

Now that Spring is here, All Fool's Day has passed and the G20 event has left town, where do property owners find themselves? We like everyone else have been assessing our own property ownership and have been trying to place this in the context of ownership of any asset class.

I think we can be fairly certain abut the following assertions:

1) The property market will recover when the dislocation in the general economy is repaired. The economic mechanism of supply and demand, together with price will ensure that.

2) The love affair with property that the UK public has had in the past, will return.

3) That demand will exceed supply, but be limited by funding.

4) That the market will not be homogeneous, but a web of many mini- markets.

5) That a tendency towards the long term trend of annual house value increases, of inflation + 2.9%, will re-occur.

6) A concentration on the stewardship of personal assets will be followed by most people.

7) The Black Swans, the unknown unknowns, cannot be excluded, but people will want to own more tangible assets, not pieces of paper.

8) Assets that lose value quickly, like new cars, will tend not be purchased.

9) People will still prefer assets that they can see and control directly.

10)Trust will not be regained quickly, if ever, by those who have proved to be incompetent in the recent past.

We still like ownership of residential property, both professionally and personally. We advise family and friends, as well as clients to own property. However, careful selection and monitoring of value is essential. We have recently rejected a number of 'bargain' properties because they are not in the places we prefer to buy. We buy for the long term. The 'mini-markets' we think will probably grow in value, rarely have 'bargain prices'.