Welcome to the tent of Mystic Damiano' foreteller of the future. Well' so far as the local property market is concerned. If your interest lies in a tall handsome man/woman/as yet undecided' I believe there are apps out there!
Fourteen years ago in 2007′ bankers decided they were not making enough millions so’ devised a plan to sell sub-prime mortgages to people in the USA. If these people ever had a job’ it involved a lurid uniform with a name badge. When they defaulted on their repayments’ the bankers threw the global economy under the bus.
As a result’ bankers had to order a slightly smaller yacht for next season and the rest of us were forlorn. At Heaton Property we were inundated with home buyers who had bought at the top of the market but were now on a slippery slope into negative equity.
Our advice was based upon an understanding of the property market and’ in particular’ of Heaton which was starting to pull its socks up and become the go-to hipster location we know today. Our advice was “Hunker down’ hang on’ wait out. Interest rates are low. The market will bounce back”.
It has taken fourteen years since the hubris of bankers dropped us all down the pan’ and here we are. Mystic Damiano was right and the market is rather more sensible today. The market today is looking rather sunnier than it did back in 2008′ but has it returned to normal? Not really. There is still massive churn and a dire shortage of affordable new build properties. Rents have gone up’ partly as the result of over regulation. This has attracted big’ corporate investors who now see a residential lettings portfolio as an attractive long-term investment.
They are led by Lloyds Bank who intend to become the UKs largest private rental company within a decade. You do not need a crystal ball to determine this is probably a better plan than investing in US sub-prime mortgages’ so hopefully we will all be spared doom and penury this time round.
The downside of these newcomers entering the market is’ they are snapping up affordable homes’ often off-plan. So’ the housing stock available for first time buyers is severely diminished. And it is not only first-time buyers who are being squeezed.
Homeowners stuck in negative equity for a decade are delighted to be cashing their chips to move up the housing ladder. Only to find the ladder is full as they cannot find a property in their price range and location. We have seen several chains collapse for this reason.
So’ the new normal? Big corporate beasts with deep pockets stalk the land. The shortage of affordable housing continues to be an issue and gazumping has become the rule rather than the exception. Would I care to make a prediction for the next ten years? I will be delighted to. “You will meet a tall’ handsome stranger”.
