A downbeat prognosis from the nation's chartered surveyors, a new Chancellor of the Exchequer, and a government walking back several more of the changes which rocked the UK economy keep property market watchers on their toes.
Last week, we looked at how the property market is on a rollercoaster ride right now. As if to prove the points, the last few days have seen yet more twists, turns and tumbles. On Thursday there was as gloomy a prognosis from The Royal Institution of Chartered Surveyors (RICS) as anyone has seen in years; then, on Friday, the Chancellor of the Exchequer was fired.
The warning shot from RICS was a serious one, since the organisation’s members are those who (among other things) value houses for mortgage lenders. The crystal ball gazing of some market commentators often comes with a dose of wishful thinking, but RICS don’t pull punches. So when their chief economist Simon Rubinsohn says that ‘storm clouds are visible in the deterioration of near term expectations for both pricing and sales,’ people take notice. Not that Rubinsohn’s note was all bad, as he pointed out that things look better than they did in 2008. ‘Lenders have been a lot more cautious through this cycle,’ he added, which ‘should help to limit the adverse impact.’
The RICS warning was doubtless one of the straws that led to the sacking of Kwasi Kwarteng after barely more than a month at the helm of Britain’s economy. The Prime Minister asked for Mr Kwarteng’s resignation before walking back several of the changes from the September mini-budget, a move designed to renew confidence in the government’s handling of the economy. It’ll take more than an afternoon to see how that change plays out, but the initial reception was definitely positive, with markets responding well to the news, and the City clearly feeling happier about the nation’s finances. ‘With more breathing room, lenders should feel the confidence to put more products back out to the market,’ says Lawrence Bowles of Savills. ‘As a result, we believe that some of the existing downward pressure on house prices and transactions will be tempered.’
A rollercoaster indeed, then, and an unpredictable one at that. We can only hold our breaths and wonder at what twist might come next.
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