A FAVOURITE DINNER PARTY TOPIC OF CONVERSATION
Published 27 October 2017
Religion and politics may still be taboo subjects at a dinner party, but that staple conversational theme, house prices, remains a favourite topic for discussion over the lamb tagine and cous-cous.
A report last week will have got those dining table pundits buzzing: statistics drawn from official data show that prices in more than half the neighbourhoods in England and Wales are still lower in real terms than a decade ago.
There are several caveats that need pointing out before everyone starts panicking about that perceived dwindling house value. First, there is a huge north-south divide: the vast majority of those areas where house prices have fallen in real terms are outside the southeast and east of England. The figures show how misleading national ‘averages’ can be in a market which is so polarised by region.
Secondly, the words ‘in real terms’ are important. The failure of house prices to return to their pre-crash levels in real terms does not mean that values have actually fallen; it just means that they haven’t risen as fast as inflation over that ten year period.
We should also take into account that 2007 was the absolute peak of the noughties boom, so it’s a bit of a false comparison.
All of that, or course, won’t stop those who are in the market from sitting up and taking notice of the report. So how should vendors be reacting to the news?
The main thing to take into consideration is that prices are entirely driven by supply and demand – and currently, with historically low levels of new home building and a shortage of homes on the second-hand market, supply is limited. That means that prices are likely to remain robust, in our part of the world at least.
What the new statistics do show, however, is how important it is to get the asking price right. Buyers have access to more market information than ever before; the BBC website last week had a widget which allowed you to put in your postcode and find out exactly what has happened to house prices in that precise area.
With such savvy and well-informed buyers, there is no place in the market for greedy over-pricing. It simply doesn’t work any more, even if it might once have done in more bullish times. Buyers will simply ignore properties which have over-optimistic price tags.
As ever, the market will find its level. The past ten years have been something of a rollercoaster, and we shouldn’t be surprised if in some areas prices have not fully recovered to 2007 peak prices in real terms. For most of us in Norfolk at least, the market remains robust.
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