The Royal Institute of Chartered Surveyors have doubled their forecast for house price increases in 2015 to 6%.
This seems largely to be the effect of a severe lack of supply in the market. Interestingly the lack of supply seems to be present across the whole of the UK.
There are as always fluctuations in all areas and anomalies that will buck the general trend, but, as a whole prices are going up in a rather aggressive manner.
A perfect storm is potentially brewing where demand remains strong whilst supply stubbornly remains suppressed. People still being unwilling to take the leap of going to market when they cannot see a house for them to buy.
At some point the balance may start to tip and as more houses appear, confidence strengthens, more people place their property on the market, simultaneously strengthening demand, which convinces more people to sell and away we go.
A flurry of activity results and prices spike, immediately prior to a rebalancing of the market. We are not seeing this yet!
As interesting as the current situation is we are not experiencing this sudden rush. We may be building toward it, but we are certainly not witnessing it at the moment.
The hope is that we are progressing more carefully than last time and in actual fact prices are more controlled than the same period during the last series of price increases.
It may have something to do with the more sombre tone of the mass media.
It seems strange to people when I speak to them about the sales and lettings market and make two seemingly contradictory statements.
Firstly I tell them that more money is made in the sales market than in the lettings market.
Then I tell them to concentrate on lettings!
See the issue? Everyone has so far, and after a varying length of pause they ask “why”?
Sales is still the exciting side of the property market, it is where all the fast paced action is, it is where the real emotions exist when a vendor successfully sells their house and races toward their future home! It is full of potential and future possibility.
Oh and don’t forget boom and bust!
The sales market is volatile, prices and futures are almost impossible to predict, which is interesting because whatever the event is, there will always be someone saying “I told you that would happen”.
There will also be thousands of others who were quite simply wrong, the real knack is how to separate their advice out prior to the event.
The first thing that always shocks me when the sales market picks up is a number of Sales Agents selling their lettings portfolios. I simply don’t understand their thought process.
They are quite simply selling their future stability. The lettings market is steadily growing, even now, whilst the sales market is driving forward. So selling it doesn’t make sense unless the sales market will manage to grow steadily for the long term.
Optimism is something that I am well acquainted with, however, even I know that the sales market will almost certainly correct itself in the future and I doubt we are talking decades.
The only sensible business decision therefore seems to be to build a stable cash flow from which to operate safely before maximising the sales opportunity.
This is to me, sensible business advice. Thankfully the Franchise Owners who are currently on our training course have all taken this advice and are learning how to build a stable long term business with a foundation based upon a genuinely superior customer service operating in a stable and long term market.
Sales will be there whenever they are ready and following this carefully laid out strategy they will be ready to take full advantage, safely at some point.
There are many ways of entering into the property market, which is without doubt a fabulous place to work. If you would like to explore the excitement for yourself please contact me at Belvoir and we can explore how to fulfil your future aspirations within a stable and established business framework. You never know you might be our next MIllion Pound Sale, read about our first one here
I look forward to talking to you soon.
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