A property web site reckons estate agents are desperately trying to cope with a 108 per cent increase in inquiries from putative buyers.
If it’s true it paints a picture of the few estate agents who are left – droves having been laid off as casualties of the Crash – being rudely awoken from their torpor and now in a state of frenzy, like the handful of brave survivors who fought off the Zulu hordes at the battle of Rorke’s Drift in 1879 when eleven Victoria Cross medals were awarded.
One hundred and eight per cent? It’s one of those truly bizarre figures. Like saying the Empire State building is as tall as five hundred double-decker buses piled one on top of the other ( I’ve no idea how many it would take). It’s an old journalistic technique which is supposed to bring arid statistics to life. But more importantly is a 108% increase true?
Well, there’s no doubt that reports of an increase in interest have been coming in from across the UK for a few weeks. Look back on some of the recent property articles here on TheLettingsite and you’ll see numerous such references.
You will also see – and this is the bit that really counts – that though there is more interest there is also a painful lack of lending which is acting as a brake on the property market. The situation has become both curious and painful.
There are some cheap mortgage deals around. But you’ll need to be credit worthy and to satisfy the lenders that you are in secure employment ( and who on earth is in this climate? ) and you must be able to stump up a hefty deposit.
After the Bank of England has consistently taken an axe to rates one would expect the mortgage offers to start flowing again. Interest rates for mortgages have fallen – though many insist that they would have fallen much further still if only the Scrooge banks and lenders had passed on the cuts in full. The freeing up of mortgages and cheaper interest rates is, after all, central to the government’s hugely ambitious recovery programme.
There are reports some sellers are actually increasing the asking price of their properties. They know that cash-rich bargain-hunters are gathering in force and that there has been a big cut back in the number of new properties being built and older ones being offered for sale. Is is smart thinking or false optimism? Are they are living in la la land?
Fewer properties are being built because developers have run out of cash. Banks won’t lend to them. So they have cancelled, postponed, or moth-balled projects. The reason there are so few properties for sale is because people who would like to sell are hanging on as long as possible hoping the market will improve and that prices will start to rise.
A rise in people wanting to get back into property is good news and should be applauded as a tiny signal that the property sector might, just might, be starting to stabilise a touch.
But without wishing to put a damper on the merriment, recessions are notorious for producing false dawns. People become so desperate to find any good news that there is a tendency to see the odd ray of sunshine as the beginning of a new dawn. In recessions, new dawns have a nasty habit of disappearing as quickly as they reveal themselves.
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