Demand means property market will recover

Published on Thursday 30 October 2008 08:49

ANYONE trying to sell property probably doesn't need reminding how tough it is out there.

But while the situation doesn't make for good reading, it's important that we don't batten down the hatches completely and talk ourselves into a housing market crisis.

In fact, it's probably time we started to be optimistic.

The truth is, there is every reason to believe that the property market is poised to make a quick return to normal.

Think about it, in 2006 there were some 11,500 houses sold through the ESPC; in 2007 around 10,500 properties changed hands. Up to the end of August, there have been only 4500 houses sold through the ESPC in and around Edinburgh.

What that means is there is a tremendous pent-up demand brewing. The same thousands of people who moved home in the last two years can't have suddenly disappeared.

Single professionals look to buy, couples get married or start families; partners split up or elderly people look to downsize – and above all, people continue to move jobs. These are all human factors that have no bearing on what is happening in the property market.

All that's happened is that these potential buyers have put house buying on hold because of lack of confidence in the market.

That means that once the market takes a turn for the better, the champagne corks will explode.

Before too long, the market will bounce back to the place it was, before what I always believe should have been described as a banking crisis and not a housing crisis, happened.

Of course, the big question here is "when"?

I think we are getting very close. The US banks are starting to clean out their toxic debts, the mass shake-up in the UK banking sector is settling down and attractive mortgage rates have slowly been returning.

The ducks are all starting to point in the same direction – so let's, for once, start to ensure we don't shoot them down.

&#149 William Frame is chairman of Edinburgh-based Braemore Property Management, one of Scotland's leading residential letting agencies.