Every investor – Market Comes Up For Air But London Has A Bad Day
Lucy Pendleton, Founder Director of independent estate agents James Pendleton, said:
“The housing market has come up for air, which is incredible in a month that saw one of the least conclusive general elections ever.
If Theresa May’s disastrous election gamble was the first shock result, then the performance put in by the housing market in London has to be the second.
London had a bad day in the office in June but it always bounces back.
Thanks to its stellar performance stretching back years, we’ve been confidently relying on London to shrug off any slowdown seen nationwide but the tables have turned, if only briefly. If this trend continues in July then that is going to turn some heads.
For the market to bounce slightly across the country as a whole in such adverse conditions says something about the way solid demand and weak supply are cushioning the market.
However, it may be short-lived. A gentle slide in prices could continue but it’s got less to do with Brexit and more to do with four factors that can be the Four Horsemen of the Apocalypse for markets – inflation, consumer credit, wage growth and mortgage activity – all of which have been dragging their heels recently.
In May, mortgage approvals hit an eight-month low, wage growth slumped, inflation rose unexpectedly to 2.9%, a near four-year high, and consumer credit also fell dramatically.
This combination of factors is not fertile soil for house price growth. What I expect to see from those buyers and sellers who don’t have to come to market right away, is the classic wait-and-see wobble as vendors put off selling, and buyers hold out for better deals.
It’s this wait-and-see approach that can cause short-term falls to become a bit of a self-fulfilling prophecy but solid demand, particularly in urban areas, will cushion any retreat in prices.”