In his latest column, property commentator Jonathan Rolande, provides his take on the biggest stories from the past seven days.
This week was dominated by one story - the latest update on house prices.
According to the Nationwide report, prices have seen their sharpest drop in 14 years – 3.4% in the year to May.
Well that’s the headline. But if you dig a little deeper and you’ll find that prices actually only dipped 0.1% in May itself so the majority of the hit has already happened and has already been reported.
That is not a reason to think the market isn’t under threat and that things could get worse. But the reality is prices are still only 4% below the mega-peak of Summer ’22 – and really this is not that bad. What’s more, I firmly believe we can expect better news in the next month or two as sales figures are released for the Spring market.
From what I have picked up, the market performed noticeably better for home sellers and estate agents alike.
But how worried should we that things could be about to get much worse?
Those of us in the property industry would do well to remember the old saying ‘ hope for the best, plan for the worst’ – and there are factors at play that could undermine even what is proving to be a pretty robust property market.
Interest rates are high and may possibly get higher still. Most economic commentators are predicting another rise when the Bank of England next meets. And then, one more beyond that.
As many landlords exit, property supply will increase. There are fears that the market is simply propped up on cheap borrowing and when that stops, the market will tumble.
No one can say for sure. But whatever the outcome, it is never a bad thing for us to look at our businesses and cut unnecessary costs where we can and increase the amount of fee-earning work we do. It's just good housekeeping but something that is neglected when the phone just doesn’t stop ringing and selling prices break new records every month.
Good agents should be able to adapt to the new sales environment but those that don’t change in the hope things will soon get back to normal will be disappointed. The boom that we’ve all enjoyed for the last three years in fact isn’t ‘normal’. This market is what it is, and we need to get used to it. Fast.
The other story that caught my eye this week was an independent survey of 1,323 UK homeowners which found that just 21% feel the government is taking sufficient action to address the country’s housing crisis. A significant majority (69%) stating that the lack of affordable housing is one of the most pressing social issues in the UK.
This left me with one unanswered question – who the hell are the 21% who feel that enough is being done?
Wherever you look there are problems - interest rate hikes, the cladding scandal, unpopular rent reforms, a generation destined to never own a home, spiralling rents, falling prices, leasehold reform dithering, housing targets missed and then abandoned. Whatever your political colour, surely it is difficult to think of any policy that has been successful in addressing the imbalances which exist in this unfair property sector.