We’ve had several positive signs floating from the press recently about rises in property prices. These seem to fit what one would expect to see in a tentative recovery…but that does not mean they are! I read an article this morning which contained some interesting figures from a well known economic think tank.
Apparently 56% of property owners have a mortgage, which makes them reliant on the state of the mortgage markets which themselves have stubbornly refused to recover at anything like the same rate. Without funding or overseas investment, it’s hard to see how the market can sustain any consistent price rises, even if the demand is there.
So why are prices increasing? Well the idea put forward is that a relatively small pool of cash buyers in conjunction with limited supply of properties for sale (we’re all waiting for prices to recover!) is pushing prices up. This may well be true, and if it is this signals trouble because it cannot last.
I don’t see much other than sideways movement for the moment.
