The last 3 Recessions
I have particular memories of 1990 because I bought a house at the beginning, and sold one at the end of the collapse in property prices – fortunately for me someone else was picking up the difference in prices, the house that sold went for £125,000 – down from an asking price of £175,000 in 9 months. That collapse was brought about by the end of tax relief on mortgage interest, and was preceded by a bubble of frantic activity all summer as prices went through the roof. Then one day in autumn someone turned the tap off, and the market died literally overnight. As a house hunter I was in and out of Estate Agents several times a week, one day it was “please wait over there I will be with you in a second”, the next it was an office like a morgue.
What sets this market apart is the unprecedented support that it has had both from within the industry, and from government. Property Press has been calling a recovery since January, and finally the market has followed what it has been repeatedly told it ought to do. London has benefited in particular as the collapse in the pound has made anything British very cheap for foreigners, and so in the face of a worldwide collapse in property prices, Real Estate money has come to the literal pound shop of the global High Street – London.
Many in Property in their economic ignorance openly yearn for a Conservative Government – they fail to appreciate that “Quantitative Easing” of £175,000,000,000 and interest rates of 0.5% are unprecedented intervention, which has prevented a 70% collapse in property prices – who would believe that the best friend Bankers and Estate Agents ever had would be a Socialist Government?
One of my first blogs written almost a year ago makes very interesting reading a year on!
Margaret Thatcher famously observed “There is no way in which one can buck the market”, and 20 years later this still applies. The Government has declared it’s intent to wind back Quantitative Easing as soon as it can, everyone else’s Real Estate market is recovering ahead of ours ………….
Here is the graph – YOU fill in the dots for Q4 2009, & 2010 ………
UK Property Prices
So what do YOU think that the graph is going to do?
