The term “self-fulfilling prophecy” was coined by American sociologist Robert K Merton in 1948 to talk about how expectations of a situation can affect behaviour. But, the phrase could be just as relevant to the housing market of 2017 if we continue to be harbingers of doom and gloom.
Latest quarterly housing statistics from Halifax point to a fall in prices of 0.2 per cent for the quarter just gone, compared to the preceding quarter. Halifax housing economic Martin Ellis describes the fall as a “stagnation” in the market.
However, such terms are not helpful, and do not paint a true picture of the situation on the ground. It is also a reflection of statistics which are influenced by the London and South East market, which are unique.
In the Eden Valley and North Lakes, what we’re seeing is a healthy, more buoyant market. Some sellers in Cumbria are even receiving above asking price offers and popular properties can sell within days. We have properties which are selling through sealed bids because several potential buyers are interested.
And, we’re talking about homes at all levels of the market. Properties suitable for first-time buyers are selling and there is also healthy interest in homes in the million-pound-plus category.
While statistics as a whole may show a tiny fall in prices quarter on quarter, in Cumbria, this is simply not the case. Our own number crunching has found that 54 per cent of properties in our portfolio are selling to people outside the area, or from overseas. Land Registry statistics show that sales volumes are growing and prices increasing gently in response to demand; conditions for a much healthier market.
Brexit brought focus
Brexit, far from leading to a loss of confidence, is focusing buyers’ minds on where to make the best investment. Recent purchases have come from as far away as the Cayman Islands, Dubai, Germany, Thailand and Abu Dhabi, with enquiries also coming from California and Iraq. Overseas buyers who have been considering a purchase here for some time have decided to make the move now.
So, let’s not paint a picture of a market which is stagnating or one which has lost confidence because that simply is not so. The Cumbrian market, at least, is thriving. And, don’t forget that the Halifax statistics also show prices this April were 3.8 per cent higher than last year.
Let’s not, then, put vendors off the idea of putting their homes on the market for fear that prices are falling and they won’t achieve the asking price they want or need. Because, while that may be true in pockets of the country, it’s definitely not the case for most.
It’s a universally acknowledged truth that talking about your problems makes them go away. But, in this case, talking about the problems in the housing market could actually make them worse by leading to a lack of confidence. Because, the truth is, the market is not stagnating. Far from it. There are still plenty of buyers and sellers out there, and buyers are willing to pay a fair amount to secure the home they want.