There's been no shortage of good news stories surrounding the
property market in the last week.
The National Association of Estate Agents (NAEA) says that house sales jumped to their highest level for 18 months in April, while the Council of Mortgage Lenders believes repossessions will be far lower than predicted this year.
There is similarly positive news on house prices, with property website Rightmove claiming the average asking price actually increased by 2.4% in the last four weeks.
The influential Royal Institution of Chartered Surveyors has also joined the chorus, reporting that house prices are on the rise again for the first time in 18 months.
So where are all the doom-mongers?
These “green shoots” stories are all a million miles from the media reports we've become accustomed to in the last two years.
Has the market suddenly turned on its head, and we're now at the start of another boom? Well, no. You see, all of these good news stories don't sound quite so positive when you scratch beneath the surface.
For starters, look at the latest figures from the NAEA: yes,
house sales are higher than they've been for some time, but they're still well below what they would be in a healthy market.
As for Rightmove's claims that asking prices are rising, at the end of the day it's the actual sale prices that matter – and these are still falling across the nation.
Cautious optimism is returning
What this means is that things are certainly taking a turn for the better, but there's still some pain to come this year.
What has really surprised me in this recession has been the number of people taking pleasure from falling
house prices.
Take a look online at any housing article that dares mention the word 'recovery', and you will find dozens of bile-filled comments pointing out that we are, in fact, doomed and that prices are nowhere near the bottom.
The sentiment appears to be that, following the remarkable rise in prices, we must now see a similar plummet, and every month of falling prices brings us closer to normality.
It's a cycle, and we will reach new highs
There's no denying that the bull run on property up to 2007 was a crazy period – I remember writing an article about how the value of an average London home increased £7,500 in a single month – so it's understandable that people will feel more comfortable as prices return to familiar levels.
But this doesn't change the fact that, as salaries and demand rebound, we will once again see
house prices reach 2007 levels – and beyond. It's an inevitable part of the housing market cycle.
So it may take five years, or 25 years, but eventually there will come a time when homeowners reminisce about the days when they could purchase a maisonette in London for “just” £300,000.
