Although mature estate agents are apt to say that they have seen it all before, this time it is different. No one has seen this market under this set of national and international financial conditions before. But what is rather refreshing is that the uncertainty now cuts down the speculation aspect of a house purchase and strips the requirement to buy down to the real and age-old essentials. This makes for easier choices.
Le Corbusier, the pioneering architect, stated that, “The requirements for a house should be to provide a shelter against heat, cold, rain, thieves and the inquisitive”. He didn’t add that a house should also provide its owner with an investment return of seven per cent year-on-year.
For the first time since the 1960s property investment can take more of a back seat in the home buying mindset and, instead, fundamental life requirements can come back to the fore. Of course with other financial instruments providing so little in the way of return, property is a natural arena in which to invest but we are focusing here on home ownership. We are left with simpler decisions and choices – does a property suit our requirements in size, location, style and price? It is although our needs have been simplified in the way they may have been fifty years ago.
We quickly learn to expect that there is an investment opportunity to be gained from property purchase in a rising market. But we are rather slow to appreciate the reverse is likely in a poor market and none of us can really second-guess the uncertainty caused by the particularly adverse economic circumstances as we have now.
2011 was a good year for Cambridge property but this was not reflected in most of the UK where conditions remained hard. This year we may have new American, Russian and French presidents, the potential for more ructions in Europe and the Middle East, and greater privations at home. All in all a confused picture but for us the year has started well, with a reassuring level of market activity and as per the last couple of years we expect the Cambridge market to continue to outperform most other areas of the country.
In light of the above real buyers and sellers should not be deterred. Indeed they should be encouraged as the more life there is in the property market the more life there is in the economy. But those still insisting on the sort of financial profit they may have achieved several years ago should perhaps think again and re-evaluate their position. It will be the enlightened who get the most out of the property market in 2012, not those in denial.