The state of the property market

There are some who want to talk the property market down.

It is true that institutional investors have decided to bank some profits, all at the same time, in open ended property funds. These funds have to redeem units for cash. They typically hold 20% as a cash reserve on deposit or in easily saleable bonds and REITs. If more than a fifth of unit holders want to cash up at the same time, they are asked to wait while the fund undertakes the slower task of selling some of the underlying properties. They are not anywhere near bankrupt, they are just illiquid and need time to realise their investments.

Meanwhile in the markets for commercial and residential property there are buyers and sellers agreeing transactions post Brexit just as they did before. Agents say to me there are viewings and offers under way again. June’s house prices rose by 1.3% on the month, though it is true most of the month was before the vote. I am not seeing any sudden marked down bargains in local estate agents windows. Property companies are also reporting that planned lettings prior to June 23rd are still going ahead post the referendum. I have also heard some property investors expressing interest in buying, in the hope that some of these funds will accept lower offers in their rush for the door.

Foreign investors in UK property are reported to be more interested. For them UK property is suddenly 10% cheaper, following the fall in the pound. I would be interested to hear from readers what they are seeing in their local areas in the property market.

The UK has just received a major liquidity stimulus, and a stimulus from a lower level of sterling. Bond yields have just fallen sharply and mortgage rates are low or falling. It would be unusual against such a background to see big falls in property prices, and more normal to see new buyers emerge.


  1. Caterpillar
    July 9, 2016

    I suspect as long as the Government (whichever PM) gets on with the large capital investments such as HS2 and is clear on the Leave strategy then commercial property developments will pick back up / continue. It is uncertainty that will delay these.

    The pollution and safety issues around runway 3 at Heathrow also needs to be cleared up,one way or another.

    UK unity and commercial investment problems will occur if either candidate returns to the London centric anti-UK approach (e.g. Cross rail 1 and 2 OK but HS2 not OK), in looking for ‘shire votes it would be easy for either May or Leadsom to mess this up, I hope they don’t.

    1. Antisthenes
      July 9, 2016

      Of the two candidates Theresa can be counted upon to be the one to mess things up. Her tenure of the home office casts considerable doubts on her competence. Andrea on the other hand comes across as being very talented and competent if somewhat understandably so not so much on the political(spin, untruths and obfuscation) front as yet (she has come from outside the Westminster bubble).

      However seldom are leaders these days elected on merit. Too many other factors come into play many of them disreputable. So her chances of winning do not look good with the malevolent forces and her lack of experience stacked against her.

      1. Caterpillar
        July 9, 2016

        Antisthenes (sorry this diverges from a response to you),

        Indeed democracy would be one area where it would be nice that merit triumphed.

        In the near future (a decade) when there is very large structural unemployment, as robotics and AI sweep into services, then the flow of returns to merit / luck /capital may be very problematic – further huge increases in inequality will occur. Not just the new PM, but the whole of parliament needs to be considering this alongside the Brexit + uniting UK choices now being made.

        Although growing national debt is a problem, tackling just the deficit allowed Mr Osborne to limit IDS’s welfare reforms, and now the former talks of more privileging (15% corporate tax). The future will probably need UK residents to readily access to both STEM education (so the hours of work available can be shared) and ‘leisure’ education (so that impossible comparative wants don’t grow limitlessly), there will need to be a move to a guaranteed basic income (so that diseases of poverty decline to bring down health costs, so that people don’t drop 15 IQ points focussing on the next meal or rent payment, so that the gap between elite ruler and voter doesn’t completely break), there will need to be redistribution of ideas (take the London galleries museums on tour), people will need to readily travel around the country …

        At the moment I think the Government recognises the economic problems, and through Brexit some MPs recognise the country’s divisions. I think Corbyn supporters recognise the serious state that inequality has reached, I think individuals like IDS and Field have recognised the need for welfare reform, I think Gove recognised a role for a basic knowledge canon, I think Cameron and Johnson recognised that the paternalistic part of one nation Conservatism could play a role, I think (maybe) Clegg and colleagues recognised the place for social liberalism, the Green’s have basic income as a policy etc. The ideas that fit the coming context are spread across parties … it is a huge leadership(management) role to bring that together. The responsibility will fall across parliament not just on the new PM.

        (PS apologies to Dr Redwood the above ended up long and tangential)

      2. Jerry
        July 9, 2016

        @Antisthenes; “Her tenure of the home office casts considerable doubts on her competence.”

        That must be why Mrs May is the longest serving Home Secretary in 100 years then….

        “Andrea on the other hand comes across as being very talented and competent”

        How, on wheat set of judgements, she has never held high political office, in fact she has hardly held any political office and no cabinet office, if elected PM she will be the least experienced politico since William Pitt the Younger to assume the office!

        “However seldom are leaders these days elected on merit.”

        Indeed and that is so scary, that Mrs Leadsom might well be elected party leader and thus PM not on her merit but on total party political/factional irrelevances.

        I’m not saying that Mrs May is necessarily best suited for the job either, all things considered (I think she is far to ‘politically correct’ for one thing), but nominations are now long closed…

        Perhaps both candidates should withdraw!

        1. Edward2
          July 9, 2016

          Well if you are a member of the Conservative Party Jerry you can vote for your favourite candidate.
          I’m assuming you are that keen you will not waste your vote.

        2. acorn
          July 10, 2016

          We should have a new rules for our two centuries passed its sell-by date, elitist democracy.

          (1) “You can’t change a Prime Minister, without a General Election.”

          (2) “You must have, in each of 325 constituencies, a non-partisan Primary Election, to elect the “Top Two” candidates to go forward to the General Election, regardless of those two candidates expressing a preference for any political party / ideology or none.

      3. Lifelogic
        July 9, 2016

        You might be surprised, though it seems to me that BBC and Channel four have certainly got it in for Leadsom and want May. Tory party members are rather more Brexit than voters in general. A lower taxes, right of centre, get out of the EU as soon as possible, cancel HS2, move to cheap energy, bonfire of red tape agenda should win it for Leadsom.

        1. rose
          July 9, 2016

          I am extremely worried about what Mrs May and Mr Hammond might give away. Neither seems to understand the basics and Mr Hammond in particular seems hellbent on making an arrangement he judges to be in the national interest rather than delivering Brexit. I.e. he seems to want us in the single market with all that that entails and we will be told it is the best he could do.

        2. Jerry
          July 9, 2016

          @LL; Once again you are trying to slay the messengers for reporting what you dislike and would prefer not to be reported, most people call that bias by omission.

          As for what Tory party members think, the fact that ten or so years ago they elected Mr Cameron, and that since then many europhobes appear to have defected to UKIP, again you seem to be suggesting what you wish to be a fact rather than what is a fact.

          1. Patrick Geddes
            July 10, 2016

            Lifelogic said that the BBC and Channel Four favour Mrs May and have it in for Mrs Leadsom.
            I think that it correct.
            And would add Sky and Channel 5 to that list.
            It would be nice to hear a balanced output with news and the views of both candidates but we are not getting that.

          2. Jerry
            July 11, 2016

            @Patrick Geddes; “I think that it correct.”

            Thus yours (and Mr Lifelogic’s) opinion is an assertion and not a fact, and that IS a fact.

            “It would be nice to hear a balanced output with news and the views of both candidates but we are not getting that.”

            Says who, those who had a favoured candidate or those who had an open mind on the next PM?…

    2. Richard1
      July 9, 2016

      Conservative MPs seem to have made a choice based on personal rivalries and hurt feelings. Michael Gove was the outstanding candidate of the 3. I’d be happy to be convinced otherwise but Andrea Leadsom seems very lightweight to me. It’s not an inspiring choice.

    3. getahead
      July 9, 2016

      “The pollution and safety issues around runway 3 at Heathrow also needs to be cleared up, one way or another.”
      Not sure that pollution will eve be cleared up whichever way. Shit happens.

  2. Antisthenes
    July 9, 2016

    The property market is a very distorted one. Disincentives and incentives to buying and selling abound because of government intervention or non action sometimes(like not curbing immigration). Restrictive planning practices, keeps land prices high and stamp duties become price controls by another name and just as unhelpful added into the mix (we should not be trying to emulate Venezuela) and help for first time buyers, foreigners taking advantage of a lucrative rising asset and high levels of immigrants arriving increases demand.

    There are also many factors at play that you have listed most of which cannot be altered. So actually blaming price rises or falls on Brexit or anything else is pure speculation. Of course like the Daily Mail who are currently engaged in a hatchet job of Andrea Leadsom (what has Theresa May’s team promised them post vote if she wins) there are those who will used the flimsiest of evidence to make outrageous claims for their own nefarious benefit.

    1. a-tracy
      July 9, 2016

      It’s not just the Daily Mail it’s the Times and the Telegraph doing a hatchet job as well, if the Telegraph continue with their biased reporting bigging up May whilst running down Leadsom and people like us as the Tory taliban and right wing loons I will cancel my subscription next week. I refuse to ever buy the Sunday Mail again too.

      We’re all sure May will Brexit but we’re also sure she’ll sell out along the way and leave us with some crappy compromise.

    2. forthurst
      July 9, 2016

      Perhaps the DM will need to persuade her sister paper to pull the serialisation of David Laws expose of the Coalition, “Let me be blunt,’ I was told by one senior civil servant. ‘The Home Secretary [May] doesn’t want a fully functioning system of entry and exit checks. She thinks it would only highlight the ineffectiveness of the Border Agency and the Home Office and their inability to identify and then eject over-stayers. Theresa May is saying that entry and exit checks would be expensive and embarrassing and would distract attention from tackling serious criminals and terrorism.’ This seemed to explain why month after month there was no real action in getting the system of entry and exit checks in place.”
      …and further, Laws says ‘Right-winger Philip Hammond made the extraordinary suggestion that “Schengen visas” ought to be valid in the UK – giving visitors to the EU an automatic right of entry’. Mr Cameron threatened to ‘fire’ any Minister who leaked it the Press.”

      We need a fresh start with a new team who are not interested in politics as usual, a la CMD, and Andrea Leadsom is the only one who can create that.

    3. graham1946
      July 9, 2016

      Andrea Leadsom was silly to grant an interview to a feature writer at this stage, no doubt hoping to increase her popularity, but actually backfiring badly.

      Anyone just talking like she was is almost bound to say something that can be twisted, unfairly reported and most without the whole context reported. Now she is having to try to retract and making things worse, each error magnified by the broadcast media. This shows her lack of experience, which in my view is not a problem, but an advantage – experienced politicians are more to be treated with suspicion as they almost invariably become infected with the spin bug. However, my opinion doesn’t count and I think that unfortunately she’s just holed herself below the water line.

    4. getahead
      July 9, 2016

      Strange the DM attacking Leadsom when it largely supported Brexit.
      To continue the journey we need Leadsom.

  3. stred
    July 9, 2016

    Here is a collection of Nationwide graphs. The graph showing real house prices shows that for the UK as a whole the price now has is around the same as in 2004. However London has gone far higher and the surrounding areas are also higher.


    House affordability by region also shows that for UK as a whole the line is flat. For London it is steep. But for the drop in mortgages after the crash it would be steeper.

    Now google Net UK migration( use same site) and the same shape of line is evident. The areas such as London with the highest migration have the highest price rises. These figures do not take into account the much higher number of migrants going home- and probably coming back- in less that a year. Mrs May’s department does not wish to count these.

    It appears that if we ever manage to stop inward migration increasing, it will still be many times the number of extra home, also shown on the above site. Because of lack of land with planning permission and other rising costs, the line is flat, at around 140k pa.

    However, because of tax grabs, sometimes on losses. on BTLs, many investors are having to get out. They may sell to cash or first time buyers and at lower prices. The lower pound may attract foreign investors.

    1. Lifelogic
      July 9, 2016

      Indeed London is just distorted by overseas buyers (who probably did not have to pay Osborne’s absurd 45% income taxes). Outside London prices are not really that out of line. Given the low interest rates it can still be cheaper to buy than rent at the cheaper end. At the expensive end the absurd SDLT rates from Osborne are the problem.

    2. Lifelogic
      July 9, 2016

      Indeed house prices (in real terms) up only about 50% over 26 years and will low interest rates. Also bear in mind a house now is not the same as a house used to be. They have flashier bathrooms, better heating, high pressure hot water systems, kitchens, more insulation, more power showers, more bathrooms, sliding folding doors and more technology and the likes – so it is not quite comparing like with like anyway.

      1. graham1946
        July 10, 2016

        They are also much smaller.

        Their size seems to be in inverse proportion to the furniture sold to go in them.They are built cheap, look cheap but cost a lot.

  4. Mike Stallard
    July 9, 2016

    “I would be interested to hear from readers what they are seeing in their local areas in the property market.”
    I live in a suburb of Wisbech, Cambs. It is the most northers edge of the London area. We are the place people go to when they find the inner city intolerable for a number of reasons. I suppose you might like to say it is a whit working class area of new estates, mainly privately owned.
    There is a housing boom at the moment. Gardens and spare land is at a premium and the houses go almost before the are built. They cost between sort of £150 to 350,000 each. There are some bigger houses being built on the outskirts of our suburb now too.
    Mind you, the new Irish caravan site is the same size as it always has been.

  5. Lifelogic
    July 9, 2016

    The main problem with the property market in the UK has little to do with Brexit, they are to do with Osborne’s absurd fiscal attacks on Landlords and Tenants. The 3% extra stamp duty, the absurd attacks on Landlord interest deductions (an attack on Tenants in practice), his attacks on non doms and his enveloped dwellings taxes. All need to be undone, as they do little but harm and reduce job mobility.

    Turnover taxes are usually a very bad idea in general for the economy. Turnover taxes at up to 15% are totally absurd. It might cost you up to 25% in fees, legal costs, agents fees, finance fees and other costs to get in and out of the market. Whereas in equity investments you can get in and out for well under 1%. No point in buying (for less than perhaps 10-15 years) or so the taxes are absurd.

    Who know they will be staying put for 10-15 years for certain?

    The liquidity problems of the property funds should not really be a problem if the banks were working properly. Then the funds could just borrow to pay out now, and then sell the properties later to clear the loans. But the banks are still very slow & dysfunctional, restrictive, over and very poorly regulated, they lack sufficient competition and are very expensive.

    There is also still the lack of competition in banking which makes property loans still rather slow, over regulated and with large margins and fees especially for development and investment loans.

    1. Lifelogic
      July 9, 2016

      The real question is why was the economically illiterate Osborne ever appointed by Cameron and why is he still there even now? His endless tax increases and tax complexity increases, his IHT ratting, his endless waste (HS2, Hinkley C, greencrap subsidies) expensive energy and other total absurdities have harmed the recovery hugely. They have destroyed UK competitivity, killed/exported high energy using industries and even lowered overall tax receipts too.

      He still runs a huge deficit and a very large trade deficit hardly surprising given his foolish approach. Get rid of the man and replace with someone competent.

      Osborne should be grateful for Brexit as he can (and has) used it as an excuse for his abject failures. Actually Brexit will help hugely once the dust settles.

    2. Lifelogic
      July 9, 2016

      I see that Mrs May went to a private school from 11-13, before getting in to Grammar and then going on to study Geography at St Hugh’s Oxford. Did she fail the 11+ one wonders. I also wonder what A levels and grades she managed. Is she rational, logical and numerate I wonder?

      Her list of backers is surely enough to put sensible people off, but they it might put them off the whole Tory Party too. All those dreadful pro EU, climate alarmist, tax borrow and waste, faux equality, no nation, PC, libdim types and career politicians.

      1. Lifelogic
        July 9, 2016

        After all she did assured the nation we “had control of our borders (within the EU) with Schengen”, so clearly she is not that rational. Or perhaps just not very honest?

    3. Mark
      July 9, 2016

      I agree that Osborne’s measures have finally punctured the market for BTL acquisitions – itself a mainstay of newbuilds, accounting for over half of them. I don’t think landlords were being done any favours by his previous policy that re-ignited the housing bubble. The boom and subsequent bust in BTL purchases is very evident in the CML data on mortgages – a very sharp spike after the measure was announced before it took effect, and a dramatic fall to lower levels afterwards (latest data are for May, and show the big fall – well ahead of the referendum).

      Of course, the sudden lack of BTL buyers is pushing prices lower. In my own family, a large home has just been sold in semi rural Sussex on behalf of an elderly relative at slightly below the asking price: the transaction is still going ahead despite the referendum with no further price adjustment.

    4. Lifelogic
      July 9, 2016

      Odds of 7/2 still on Andrea Leadsom. They look quite appealing to me. Surely she will be more popular with Tory members that Mrs May? Mrs May may be a little ahead now in polls but then by the time of voting, far more will have heard of Andrea Leadsom, her rather more sensible agenda, her principled stance and her far, far preferable backers. Voters want a real change, not a new John Major type (but in a dress and with lots fancy women’s shoes).

      Mind you I did nearly lose a little of my Brexit winnings by backing Boris, thanks to Gove’s pointless and rather foolish knifing of him. A bit hard to see that was coming, I thought Gove would have had more sense.

      1. getahead
        July 9, 2016


    5. Lifelogic
      July 9, 2016

      I just listened to Any Questions and Any answers I think the gist of it all, from the remain hyenas and “BBC think” dopes was:

      They want another referendum or to stay in and anyway or just ignore the voters. The leave side lied, but the remain side clearly did not. All the people who did not vote were clearly for remain, so we should count them for remain and call it a huge vote for remain. The leave voters now felt guilty for what they had done! Andrea Leadsom was clearly guilty for her CV and the fact that Mrs May could not have children and probably for her diabetes type I too and was cruel with it. This as she made the perfectly sensible comment that “having children meant she had “a very real stake” in Britain’s future”. Mrs May was brilliant and wonderful Mrs Leadsom was dire and should step down immediately in disgrace.

      Have I got that about right?

      The presenter even seemed to suggest that saying such a thing about having children translated into – you thought childless people were lesser people.

      Do these people not realise that had Cameron and the Tories had the common sense to go for leave (or indeed had Corbyn) and had all the tentacles of the state not distorted the debate so appallingly with their tax payer paid leaflet of lies, and had remain not tried to pin the blame for Jo Cox’s murder onto “leave” it would have been nearer 2:1 for leave?

      1. graham1946
        July 10, 2016

        Strange logic in your last paragraph. You might just as well say that if all the Leavers had voted remain, the Remainers would have won 2:1

  6. Jerry
    July 9, 2016

    “There are some who want to talk the property market down. “

    On the other hand there are some who want to talk property up, rather than allow the market to do what the market should be allowed to do…

    There will of course be people continuing to buy and sell property post the Brexit vote, why wouldn’t they be, most people do not use property as investments, they buy and sell because they need or have to, a tiny percentage of such translations are solely for investment – although it must be said that much of what is wrong with our property market is either caused by or made worse by that tiny percentage.

    “The UK has just received a major liquidity stimulus, and a stimulus from a lower level of sterling.”

    Best tell that to those companies who have to buy in USD, EUR etc, their costs have risen, some are having the bare those costs due to pre-Brexit contracts, others will pass the costs on ultimately to the end-user/consumer which adds inflationary pressures. You seem obsessed with Bond yields, to long in the Westminster bubble perhaps, there are more and better measures of the real state of the UK economy.

    1. Narrow Shoulders
      July 9, 2016

      Any company reliant upon currency purchases whose present requirements have been affected by recent currency swings did not plan adequately and deserves what they get. Taking out currency contracts for future purchases is where the dilemma lies but the effects of those decisions will not hit for a while.

      As with all the potential consequences of leaving the EU there should be little immediate impact on real people other than holiday money ( I did not buy in advance and so will suffer myself in this regard. Small price to pay.)

    2. Edward2
      July 9, 2016

      So if you think the market should be allowed to what the markets wants to do then you also should not be talking about it.
      Let’s all keep very quiet and not say a thing.

      1. Jerry
        July 9, 2016

        @Narrow Shoulders; What utter nonsense, some things can not be hedged completely, companies can only do so much to protect themselves.

        @Edward2; I guess sarcasm is lost on you…

        1. Edward2
          July 10, 2016

          It’s not sarcasm Jerry it’s irony
          You criticise our host for talking about the negative comments of others affecting the markets and then cannot resist making lengthy comments of your own.

          1. Jerry
            July 11, 2016

            @Edwards2; As I said, sarcasm is lost on you, probably because you can’t even see it, although you seem to have no problem in trying to dish out personal abuse – only one person here can tell me to stop commenting and it is not you.

            Funny though how you never complain about the lengthy comments made by Mr Cooper, or the often way off topic comments made by Mr Lifelogic, only comments that do not agree with your own politics, you also used to be abusive towards @Bazman in the same way as you still are to me.

  7. Ian Wragg
    July 9, 2016

    Our 4 bed detached has risen by about 8k annually since we bought it in 1996.
    Wages have risen by nothing like this and our modest house is now marketed as an Executive Detached which it most certainly isn’t.
    With endless government intervention and uncontrolled immigration the price is set to rise for the foreseeable future.
    If we are to have a correction in house prices I welcome it for the younger generation.

    1. Lifelogic
      July 9, 2016

      The only way there will be a price correction is if there are fewer people or more houses built (or a large economic crash).

      It is supply and demand in the end. Building new houses in the UK is rather expensive too. This due to restrictive planning laws (and back door LEA “taxes” as part of this process), costs of utility connections, a shortage of suitable land, OTT green crap building regulations, OTT employment laws, dysfunctional banking, high stamp duty ……

    2. stred
      July 9, 2016

      My house is in the same road that I moved to in 1980- a 2 bed terraced value £24k. An identical house with a room in the roof -cost £30k- just sold for half a million. Another went to Chinese owners and is now let. I would like to sell and move but can’t because of CGT of £120k as it used to not be my main home before divorce. Governments love house price inflation. Young people and investors pay for it when they buy or sell.

    3. forthurst
      July 9, 2016

      In a South London suburb, a friend’s parental home resides in a street of terraced houses built for lower middle class occupation in the thirties; now those houses are purchased by professional people who are able to benefit, in their high street, from as great range of cullinary offerings, religious observances, not to mention, costumery imaginable: a big thankyou to Bliar and May whose first priority as Home Secretary is to create a London soup devoid of no one from anywhere other than the English lower orders.

  8. Lifelogic
    July 9, 2016

    Meanwhile the banks are treating customers with total contempt yet again I see.

    And payday loans can be up to 1500% APR with base rates at 0.5%.

    Get some real competition in banking in the UK. Many countries have interest rate caps at circa 25-50%. In normal circumstance (for most people) a loan above those rates is far worse than no loan at all.

  9. turboterrier
    July 9, 2016

    @Ian Wragg

    Our 4 bed detached has risen by about 8k annually since we bought it in 1996.

    How lucky you are. Here in dictatorship Scotland especially in areas devastated by Industrial Wind Turbines, property increases virtually cease at the erection of the first turbine. Nobody wants to be surrounded by a ring of steel.

    All bought about by easy money for the land owners and the massive payments they get for having their land turned into a power station. The saddest bit this is all being paid for by the population of energy payers in the UK of which 56 million reside in the rest of the UK.

  10. petermartin2001
    July 9, 2016

    There is a large disparity between property prices in even the successful EZ countries like Germany and Holland and the UK.

    We’d have to think that cannot last indefinitely. They’ll have to converge in the coming years. Either they are too cheap there or too expensive here. Both Holland and Germany have migrant pressures too so that cannot be the only explanation for high UK house prices.

    An alternative explanation is that whereas Germany has relied on its export industry to bring in euros to stimulate its economy, the UK has been happy to run a large trade deficit which has largely been financed by encouraging the private sector to borrow increasing amounts. That extra spending money does stimulate the economy for a time but also the lending leads to increased property prices and higher levels of debt which act as depressants to a healthy economy.

    And when the economy needs a boost, what happens? Interest rates are reduced and lending is deregulated even more.

    It can’t go on and sooner or later something will have to give. Brexit, of course, isn’t the fundamental problem but the Leave vote has probably meant that the reckoning will be sooner rather than later. It could be the sharp edge to prick the confidence bubble.

    1. The Prangwizard
      July 10, 2016

      I’m at my daughter’s in the Netherlands north of the Hague. She and her friends say house prices are rising here after a slack time three years ago. Germany too I gather. Couldn’t put rate on either but it’s on its wsy back.

    2. Edward2
      July 10, 2016

      Germany and Holland and other EU countries have greater land areas with much less population density
      They are not seen as investment markets by world investors like the UK and London in particular
      These are just two of a number of reasons their property is somewhat cheaper than the UK

  11. oldtimer
    July 9, 2016

    One quick way to check this out is via the Right Move web site. I have applied a last 14 day filter to select recent additions and reduced prices on properties – months rather than weeks.

    1. oldtimer
      July 9, 2016

      I pressed the post button too soon! I should have added it does not look much different from the pre Brexi experience. Some of the properties with reduced prices have been on the market for months rather than weeks.

  12. Roy Grainger
    July 9, 2016

    I have a large investment (>100k) in commercial property funds and I’d like to thank all the Guardian readers for their concern but I’m not at all bothered by the recent volatility in their value – their NAV goes up and down but holding for the long term they are a good source of dividends and value, I will just sit out this recent turbulence as I have done in the past. It is quite amusing for the left-wingers to be moaning about property prices going down !

    One reason for the recent value write downs is that about 50% of the money going into London commercial property in the last year has been from overseas and this has now been impacted by the scaremongering of the Reaminers, so if I’m going to blame anyone I’d blame them.

    1. sjb
      July 9, 2016

      p16 of today’s FT gives the overseas figure as 42% (2015) and reports a UK bank executive stating that “UK banks can’t make up the capacity. There will be a credit shortage.”

      One of the commercial property funds will allow investors to withdraw money if they agree to take a 17% haircut on the fund’s latest valuations.

      A (named) London-based lender said he was not lending against homes > £5m.

    2. StevenL
      July 9, 2016

      I just bought some British Land Group shares for my 2nd pension. My back of a fag packet calculation made it I could ignore intangible assets, write down property assets by a third and still buy at 1:1 book value.

      Like you say, hot money being repatriated. Good riddance, I want cheaper shares so I can buy more of them!

  13. Denis Cooper
    July 9, 2016

    In their reports on the new post-Brexit world supposedly born on June 23rd the media will find that all kind of things, almost entirely bad, can be attributed to that vote. Even if a previously long running trend just continues to run as it was running for months or years before polling day that trend will now be newly identified and highlighted as a consequence of our vote to leave the EU. This is despite the fact that we are still in the EU and it will be some years before we actually leave, that is if we ever do leave.

    Here’s an update from one of those bad losers who hope to get the referendum result neutralised in one way or another:

    “Update on “Should Parliament Decide” from Jolyon Maugham QC”

    “Last week I promised that if you provided the money I’d “take advice from leading public lawyers” and “write to the Government to discover its position” on whether Parliamentary approval was needed for us to leave the EU. You provided the funding – and so it’s now up to me to show you how your money was spent … ”

    Not spent very well, so far, is what I’d say; but then lawyers don’t lose out even when their clients are wasting their money. As we on the other side of the argument have seen in the past with successive futile attempts to stop the EEC/EC/EU/USE project by legal rather than political means; I can think of one case which achieved something hugely positive and important even though the case itself was lost, namely the Metric Martyrs case, but that is the only one which comes to mind.

    Anyway, at least ostensibly we have the government with all its resources on our side rather than opposing us, that is a novelty, so I just hope that its lawyers will genuinely set out to win rather than lose.

  14. a-tracy
    July 9, 2016

    You can still buy a five bed new build mews in my area for £210,000, the most expensive 5 bed detaches with double garages are about £300,000, and you can buy a nice 2 bed semi with gardens front and back for £95,000 when I checked on Zoopla this morning , so it’s difficult to get as excited as you Southerners get over investment homes that your family can only realise the value of when you’re dead and gone! The homes generally have doubled in value over 25 years. Our public transport infrastructure, schools and local facilities are poor and to get a decent paying job you have to commute by car but otherwise it is a nice area.

    I don’t agree with buy to let’s buying up the first run of the housing ladder from the next generation. I don’t support low value sales of council and housing association homes which I know puts me out of step with a lot of you but I know too many people hurt by these actions and stuck in ridiculously high rent tiny properties now because of it.

    1. fedupsoutherner
      July 9, 2016

      a-tracy. Give us a clue please as to where you live. Is it in England? Just say North, South etc. or a county.

      1. a-tracy
        July 10, 2016

        NW England
        Similar prices in Staffordshire (a bit lower in some areas) and the Midlands.

  15. A different Simon
    July 9, 2016

    “Foreign investors in UK property are reported to be more interested. For them UK property is suddenly 10% cheaper, following the fall in the pound.”

    Yet another example of Britain being flogged off to overseas buyers , piece by piece .

    Exclusive use of land is fine but the whole concept of private ownership of land is as absurd as saying you own part of the moon .

    Society does not benefit from the increases in land value which are due to societal spending on schools , stations , other infrastructure and policing .

    Time to move some of the burden of taxation off industry and labour onto land via a land/location value tax (LVT) as Lloyd George and Winston Churchill wanted .

    The UK’s house prices and mortgage debt amount to a colossal misallocation of capital .

    Imagine what could have been achieved if it has been invested instead in productive assets like real businesses .

  16. Richard1
    July 9, 2016

    From what I hear there downturn in commercial property started well before the referendum due to the oil price and China slowdown (fewer overseas buyers) and the top end at least of the residential market was killed by Osbornes stamp duty changes and much of the rest by the buy to let tax change. People in the property market in London who I’ve spoken to paint a mixed picture – some uncertainty but the sterling fall has made everything 10% cheaper.

    I don’t share the euphoria at sterling’s fall and I can’t understand why people like John Mills go on about how the £ is too high. Service exports Arnt very currency sensitive. So far we are poorer as a result of the referendum. The FTSE100 may be up – but large UK companies in our pensions and portfolios, most of who’s earnings are in foreign currencies, are less valuable except when measured in devalued £. So we don’t need more cuts in interest rates and QE, we need robust supply side measures to restore confidence.

    It’s a poor choice for the next PM – is it too late to bring back Gove or maybe even Boris?!

    1. A different Simon
      July 10, 2016

      “Service exports Arnt very currency sensitive.”

      Wages are surely the major cost to service industries .

      A lot of industries which are categorised as services are in reality manufacturing ; e.g. software development .

      Like traditional manufacturing , these industries can be done anywhere in the world , as most services can too .

      UK software developers compare very favourably on quality with those in the rest of the world .

      However wages , which are now by UK standards mediocre , are 3-5X those in India , China , Malaysia and more than 5X Vietnam .

      Whilst the fall in sterling cannot close that gap , it should keep more U.K. workers in jobs and improve the chances of anyone looking to get a job in software development .

  17. A different Simon
    July 9, 2016

    There is another threat to the economy coming over the horizon .

    Oil prices will recover and likely overshoot .

    No oil producing country can cover their costs at current oil prices – and many are trying to make up the lower price they are receiving by increasing volume !

    Unless prices recover soon , countries including Venezuela , Nigeria and Angola are in danger of failing which will create yet more migrant crisis .

    However , given that demand for oil is still increasing at 1 million barrels per day per year , fields are depleting and exploration budgets have been slashed , the current over-supply cannot go on for ever for geological reasons .

    Oil prices are likely to bounce to a point which creates demand destruction at a time when the global economy is very weak .

    This looks like a perfect storm .

    July 9, 2016

    A not so much satirical visualisation/analogy of the housing dilemma in the UK can be seen in the movie “The Italian Job.” starring Michael Cane. The bus carrying the gold hanging precariously over the cliff.

    Yes I know many if not most people wish to think they own their own home or have a chance to think they own their own home. The dictatorial attitudes, no doubt for practical reasons, of Local Authority Housing Departments… various forms of socially owned housing… encourages people to escape from the mind-bogglingly (or mind-boggingly ) wasteful self-elected bosses.

    The idea you can have a continually upward price movement of homes thus preserving personal wealth and simultaneously have those self-same homes or tiers of multi-priced homes on-goingly affordable for young new buyers would be a too wild and extravagant daftness even for Alice in Wonderland rabbit hole mortgage holders.

    Renting is the only way forward on this small island. Local Authorities and housing Associations can be seen burning money. Their “repair” vans are almost a permanent feature on every stretch of road in housing estates. No real profit or breaking-even can possibly be taking place unless the books are treated with creative accounting techniques with the government involved.

    Private landlords? No. We’ve all had enough of private landlords thank you.

    So what is the answer? I don’t require anyone’s vote, so I don’t have to come up with an answer which sounds plausible but isn’t. The answer, as far as I’m aware, does not exist at the moment. Some bright spark will formulate what has to be a new idea/economic philosophy/politic on the subject eventually or at worst something which sounds a tad more believable.

    1. A diffferent Simon
      July 13, 2016

      Christopher Houston ,

      The Alice in Wonderland fantasy continues when the young disenfranchised are expected to fund their elders pay as you go pensions .

      Going to be difficult when the landlords are getting all their money .

      At the moment labour is taxed to death and location/land is hardly taxed at all .

      Thus British workers are disadvantaged when it comes to buying U.K. land/property compared to foreign buyers .

      The solution is to move part of the burden of taxation from labour onto land/location .

      A proportion of the economic rent from the land all houses are built on (and vacant lots which they could be built on) needs to accrue to society on a continual basis rather than all of it going to the landlord class .

      This is only fair as the value of land is generally related to accumulated public spending on infrastructure like schools and railways .

      Mr Churchill was a proponent .

      Google Mark Wadsworth , a current proponent .

  19. Chris
    July 9, 2016

    Slightly O/T:
    IMF says EU on brink of collapse, while euro currency may have to be scrapped
    THE FUTURE of euro currency and the entire EU project looks unsustainable without major change, according to a damning review by the International Monetary Fund and renowned economists.

  20. fedupsoutherner
    July 9, 2016

    The main problem in our area and the prime reason property prices are falling is due to the fact that the SNP have this love affair with wind and we have been lumbered with wind farms as far as the eye can see in all directions. Our prices are going down and show no signs of stopping. I suggest anyone wanting a cheap property should come to vast areas of Scotland. Nothing to do with Brexit or any other thing.

    The Telegraph today is saying that our emergency levels of power are at an all time low and the risk of power cuts this winter is looming. That should help the economy! Not!

    July 9, 2016

    Off topic;
    Just listening LIVE to Mr Cameron’s Press Conference after the NATO Conference in Warsaw.
    He says we pay, unlike other nations… 2%… of our GDP for defence. That our defence spending amounts to… 25%… of the total defence spending of Europe. That we spend, unlike other nations… 0.7% …of our GDP on overseas aid.
    He says our massive spending allows us “influence” in the world at large.
    We’ve heard about this before but no politician has thus far explained in detail “influence” nor why other countries both in and out of the EU in Europe are quite content NOT having this “influence” and instead smilingly pocketing the difference.

    I noticed the President of Ukraine in the NATO leader mugshots. It does not say much to the positive or the decent for anyone to stand alongside or even speak publicly to this man. If ?……presidents a country by his illegal and brutal overturning of a very bad but legal government and subsequently has bits of his country invaded, it still does not change the nature of (him ed) and, etc ed

    Good we spend a lot on defence. No excuse then for inadequate border defences. Who is responsible? Ah yes Ms May…

    July 9, 2016

    Off Topic but then always ON Topic like chips as being an ingredient in every dish in a cheapo cafe:
    We have to tolerate the likes of Boris remarking as if positive and refreshingly good: “Another, the second, woman, a female, is going to be the leader of our Party.”

    The general feminist narrative we have stuffed regularly down our throats whether we consent or not, is that “You are a man… ( #well spotted ),… you cannot know what it is to be a mother, obviously; therefore, because of the very nature of a woman’s particular experience we need more women in politics and other leadership roles to not just reflect that particular unique life and worldly experience but to use that experience as no other can. Women are nurturers by nature, carers, are statistically far less liable to vote for armed conflicts and by nature in the family they are the peace-makers, the nest-builders etc etc ad nauseam”

    Well you can see where this narrative leads. It is not my narrative. I do not necessarily accept it one jot. But one cannot go from promoting Man-As-Not-A-Mother being a negative to: Woman-As-Not-A-Mother” as being a neutral. Unless, as a male chauvinist might say “You talk like a woman!”

    1. rose
      July 9, 2016

      What about the people on the front bench who are only there for reasons of positive discrimination? Chief of these – and they are of both sexes – is Mrs May.

      There are many gifted men on the back benches whose careers have been ended because they are “male and pale” (and, of course, educated.) Ugh, horrid little phrase, like WASP in the seventies. We are all the poorer for that destructive transatlantic bigotry.

        July 10, 2016

        You’ll not find too many instances where I quote the late PM The Rt Hon Margaret Thatcher. I recall her saying on TV around the subject of what may be called now… gender balance in politics:-
        “It is not about gender, on whether you are male or female .It is about psychology.” ” You do not gain respect by being…assertive…but by being …right.”
        In the sense of the above, in my opinion, she was perfectly balanced.

  23. Elsey
    July 9, 2016

    “Major liquidity stimulus” or as it used to be known “money printing”. Something every bankrupt state gets round to doing. Our problems have nothing to do with Brexit. They are much more deep seated and structural than minor market fluctuations.

  24. lojolondon
    July 9, 2016

    John, the MSM, and specifically the Biased BB,C has been totally dishonest by blaming Brexit on this particular subject!! All the (intentional) damage to the UK property market and shares in the building industry was entirely down to the actions of our Chancellor – with his extremely Labour-like budget and outrageous increases in tax on property sales.

  25. CdB
    July 9, 2016

    Following the situation from afar but there have been some major property investments approved in Manchester over the last 2 weeks.

    To those who like rising house prices (does it really make you better off unless you cash the asset it and don’t replace it?) then do you wish to ensure that situation remains by restricting housebuilding to ensure supply > demand?

  26. Bert Young
    July 9, 2016

    South Oxfordshire is an expensive property area ; where I live prices have been going through the roof with little sign of them abating . A property developer friend of mine has recently put a house – one which he had completely renovated , restored and exquisitely landscaped in a desirable location , up for sale via a well known agent , the price tag is in excess of £2.5 million ; in the first week it has already had 3 viewings .

    Land available for building is also extremely difficult to find hence adding to the high price conundrum . Targets for new developments have been set with little likelihood of them being achieved ; another complication is the water supply with the area in desperate need of new reservoirs . First time buyers face an enormous problem .

    1. The Prangwizard
      July 10, 2016

      There are six garden plots being developed in my small west Oxfordshire/Wiltshire border village, £200k plus each. The higher the retail price goes with building costs less iflationary the higher the plot prices go.

  27. TrT
    July 9, 2016

    I have a few contacts at house builders,
    Enquiries, steady
    Reservations, steady
    Exchanges, steady
    Completions, steady

    Nothing official, I’d expect end of July “official” updates, but banks want to lend about the same amount of money, at about the same rates.

  28. hefner
    July 9, 2016

    “There are some who want to talk” up whatever is not following their biased and at times ridiculous views.

    Poor Britain. A mainly dishonest campaign on both sides, the top Leavers (Johnson, Gove, Farage) and (average) Remainers (Cameron, Corbyn) jousting to be more Shakespearean than Thou and disappearing (or about to disappear) in a puff of smoke.
    Now some talking motherhood or the lack of it as an electoral argument to the 0.2% of the population who will decide a future PM, with yet no real road map as to how Britain will be leaving the EU, Brexiters becoming Brexcusers by the day (not our fault, there was no plan prepared by Cameron).

    Therefore it is not surprising that in France, Spain and Italy (recently visited in the last two weeks), the Brexit convulsions keep being top of the TV and radio comics programs. Most people in those countries were up to now looking at the UK (even if not agreeing with UK policies) as an examplar of reason, democracy, good governance. Now the UK politics are thought to be just “n’importe quoi”, and it is clear: UK politicians do not need the EU for being so vacuous and stupid.

    1. rose
      July 9, 2016

      This all flowed from the resignation of the PM.

      His £9million pound leaflet said the government would implement the decision, whatever it was. Yet he had instructed the civil service not to prepare for Brexit. He just didn’t see it coming. That is presumably why he resigned though we can’t know for sure.

      If he had campaigned on the right side of the question, he wouldn’t have had to resort to bullying, threats, and lies, and the result might have been much higher for Brexit. Fully prepared, he could then have had a reshuffle, putting into the relevant offices people who were suited to driving Brexit through. He could have taken in people from across the political spectrum and had a government of all the talents from all the parties – except the Liberals – and carried the country with him. The Comissioner should not have resigned either as that sent the wrong signals. We would be well on our way to Brexit by now and the continentals would be green with envy.

  29. Rods
    July 9, 2016

    One thing that has clearly changed over the last 25 years for a couple / family has been the career status of both working and both salaries taken at x3.5 or more when calculating the maximum amount they can borrow. This has clearly led to bigger mortgages being affordable and available and with the current shortfall in supply against demand for houses, this inevitably leading to price rises.

    IMF cuts Eurozone growth as a result of Brexit and warns that long term Eurozone growth will be “mediocre” at best (Source BBC). While in the UK provisional results for 2nd quarter growth is 0.6% and 3 month manufacturing growth to the end of May up 1.6% which is the best result since May 2010 (Source Daily Mail).

    I expect the UK to do well financially post Brexit and the EU is going to have to confront their shortcomings and reform or will continue to fail to product conditions for decent economic growth. IMO the Delors-Mitterrand driven transformation from the EEC to the EU has been nothing less than a disaster.

  30. MikeP
    July 9, 2016

    John I’ve always understood that these property funds – and certainly those where trading has been suspended – are based on the commercial property market not domestic houses, so “Estate Agents’ windows” less relevant?

    Reply I want to know about the residential market which is Nothing to do with fated funds

    July 9, 2016

    The Psychological Impact of Brexit.

    It was reported on Sky News in the last few days that “UK High Street Retailers say they have seen a fall in sales in the last quarter due to the uncertainty surrounding Brexit”

    Actually this highlights a startling psychological phenomenon. Because online sales have increased in the same period of “uncertainty” surrounding Brexit.

    We are left with the strange conclusion that the Uncertainty surrounding Brexit apart from causing infinite and eternal economic downturns also is a prime cause of agoraphobia hence people buy at home via their computers maybe with curtains shut tight. Amazing.

    1. graham1946
      July 9, 2016

      Brexit causes all kinds of things from flat feet to excess rain we’ve had in the south this year.

      Of course it could also be that online agents are charging about ten percent of what high street agents charge and that traditional estate agents are in terminal decline. Online agents sales have been growing exponentially so it would be interesting to know when the last survey was done and what it actually said.

    2. Ian George
      July 10, 2016

      Maybe it’s just that at times like this lots of people spend more time sat at home glued to their computers… with a big bowl of popcorn by their side?

      Methinks “UK High Street Retailers” just want to pin the blame for more and more people switching to online shopping on Brexit. I can’t think why whether we were going to stay in the EU or leave would have any impact on someone’s decision to go for a walk down their local high street, what’s left of theirs.

  32. Ian Waddell
    July 9, 2016


    Having been subscribed to local property alerts, having recently been looking to buy in Wokingham, I have seen around 10 properties come through with “Price Reduced” between £25k and £50k on c.£700k properties. Most of these have come through in the past week, so I suspect there is some downward pressure.

    I agree this is anecdotal evidence, but it goes against some of the same in your post.


    1. getahead
      July 9, 2016

      Which means my sister’s property in Froghall Drive is vastly overpriced.

    2. JJE
      July 9, 2016

      I’m seeing the same in Wokingham. Asking prices are down 5% to 8% from the peak a couple of months ago.

      I know of four developments of flats ( each about 100 units) that have been put on indefinite hold by two different developers since the referendum in London and the South.

    3. The Prangwizard
      July 10, 2016

      This time of the year often tends to be bit flat for house sales.

  33. Bob
    July 9, 2016

    Telegraph cartoonist Matt published a cartoon with a news reader saying

    “In an effort to calm the markets, the Governor of the Bank of England will be issuing a blood curdling scream”

    Many a true word.

  34. Newmania
    July 9, 2016

    The many advantages of having a falling pound yeah maybe we should have an even weaker economy . Blimey this is so weak , you can always tell when a politician is facing facts they simply cannot explain when the old” …yes but this is not what people tell me on the streets ..” stuff starts to appear.
    As I have tried to explain the bond price is to do with safe haven behaviour. The fears of experts / /paid stooges are the same precisely as those they expressed two weeks ago . God knows what Mr Redwood expect?
    Consumer confidence is disappearing as is investment and construction is already in panic , the pounds drop is even faster than we thought it would be and it canjmot be said too often ,
    Nothing has happened . Not yet.

    Just imagine the terror of that lurch into the irreversible unknown that will accompany the article 50 button being pressed
    Paid stooges like the IMF ( parft of the same international cabal no doubt ) reckon we are looking at a 5% loss of growth outside the single market. The calamity such figures would represent is terrifying and it would take decades to recover
    During these decades most of the over 65s whose disproportionate Brexit vote and turnout condemned us all would slip away leaving the mess to all those who are watching precisely what they predicted would happen

  35. Mecklenburgh2
    July 9, 2016

    As with this entire debate conclusions are being drawn more swiftly than reality. It may well be there is a commercial property price decline. It may cause financial distress. It is simply too soon to tell either way as John Redwood well knows. For now the trend of evidence is against his view all will be alright on the night but if buyers emerge then all is well. Meanwhile Mrs Leadsom is proving to be a spectacularly appalling candidate to judge by her interview in The Times today and the gratuitous mis truths in her cv. The Brexiteers should take care in their judgements.

  36. John Robertson
    July 9, 2016

    Yes I would agree and no I haven’t seen any change in my local paper on residential valuations, no bargains to be had!

    Gilts and commercial property are a hedge against equities, with low long gilt returns and well capitalised banks,commercial property is unlikely to devalue a lot. A low pound will help foreign investment but think it may take the full steam out of the City of London commercial property and not a bad thing either.

    Unlike commercial property elsewhere in the UK it is oversubscribed in the ‘City’. I don’t know whether this check will forestall a crash but will certainly lessen the impact of the bear when it does happen.

    From what I read from the experts, predictions are that this is short term. We could also end up with new but different investors. The Trans Pacific Partnership is an interesting ponder.

  37. a-tracy
    July 9, 2016

    Theresa May’s side is ‘nasty’ indeed, the latest article just popped up in The Telegraph by Pritti who I’ve always admired has turned my stomach.

    If your party carry on like this you will be making a terrible mistake, just as the Labour Party are.

  38. Mark
    July 10, 2016

    I checked up on what the Bank of England were saying six months ago in the light of their recent effort at trying to blame everything on the referendum result. They pointed out that the commercial and BTL property sectors seemed overheated (which they now blame on Brexit). They pointed out that in “the context of elevated geopolitical risks, the FPC emphasises the importance of market participants having robust contingency planning arrangements in place.” They point out the problems with the UK’s ballooning current account deficit – which they now blame on Brexit. They considered debts of emerging market economies to be a high risk. They considered bond and equity markets to be at risk of falls.

    They noted “The latest NMG survey suggests that around 15% of buy-to-let investors would consider selling their properties if their interest payments were no longer covered by rental income. A further 45% would be inclined to sell if property prices were expected to fall by more than 10%.”

    They seemed to miss the risks inside the Eurozone.

  39. Adrian
    July 10, 2016

    Too soon to tell. I follow my area near London closely. In the weeks before Brexit there was a noticeable stop in the market, which had been shooting up in previous 18 months. Property came back on the market and prices held back. Also landlords struggled to increase rents. Pent up demand will get the market moving again but it is underpinned in many areas by the idea of rapid population growth so if that is removed then buyers will become cautious. I’d be much more concerned in the north where any sign of a slowdown will affect an already struggling market.

    On a side point, speak to any tech recruitment consultant and they will tell you about a slow down since the spring.

  40. Rhys Jaggar
    July 11, 2016

    ‘The Property Market’ in Britain is something that large numbers of Britons would like to be talked down. They are the ones who want the dreams the Conservatives espoused in the 1950s to continue, rather than pandering to global investors solely interested in maximising profits.

    This dogma about globalising profits really needs to be addressed if you want Conservatism to believe in ‘communities’ you know. It means that you put the aspirations and desires of the people of the UK before the dogma of neoliberal elites.

    The only reason property prices are so ridiculous is because ‘asset surges’ have been induced by global investing gone amok.

    Traditional closed markets in property ensure that you have a sensible 3 – 5 X multiple for house prices vs local salaries.

    If you don’t believe in that being healthy, stop calling yourselves conservatives.

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