Time to Buy

At the depth of the collapse of the housing market in 2008/09 dire prophetic messages spoke of further collapse to levels up to 50 percent of 2007 levels. Householders were frightened into believing that the days of housing booms were over for ever.

It didn’t happen. According to the Nationwide, prices in March 2010 were over ten percent higher than a year before and only five percent to ten percent lower that the lowest point in the slump.

Ah well, say the doom-mongers, that’s it for now expect a slow grind upwards.

This sort of analysis does not take account of the reasons for house prices trebling over ten years and why they continue to rise.

Quite simply demand for homes comfortably exceeds supply. Demand is fuelled by population growth, and the even faster expansion of family units, and the natural human desire to move upmarket.

The shortage of development land and the reluctance of most communities to accept more green-field housing projects is a long-term constraint on new-build. Added to this now, is a shortage of capital to finance new growth from private developers and from central and local government.

Buyers with cash to spare and good mortgages are looking at bargains. They are choosy and picky about quality of build and location. But they are there and in greater numbers than is commonly realised. It is their activity that will drive prices higher for quality homes and desirable places.

You could be among their number. Search wissely, negotiate shrewdly, and you could be on to a bargain with a reasonable expectation of rising value in the years ahead.

01/05/2010