The Footsie 100 still flatters to deceive with strong growth but very little to back it up. The estate agents and some of our high street lenders would have us believe that the residential market has been positive for some months despite surveyors still wearing their brown trousers when valuing property.
If you believe the rating agency Fitch we still have another 13% or there abouts for the property markets to fall before it bottoms out. As it was Fitch who blew the whistle on the sub prime packaged mortgages in the USA which started the property down turn their opinion must be respected even if we do not agree with it.
With Standard Life stating this week that they would be relaxing some of their redemption penalties on withdrawals from their property fund it must demonstrate that they feel fairly confident about the future of the commercial property market. When a major player like Standard Life who have a massive interest in commercial property give a clear sign that they feel the market may be a little more positive we have to listen.
There will not be a morning when we wake up the birds are singing, the sun is shining and we have just won the lottery and the commercial property market has suddenly gone positive. History tells us that the market will bounce along the bottom for a while until it bottoms out and then we start to see that little miracle as we get a very small positive growth.
With the pent up demand that we have, as soon as lenders decide to lend again when we are into a positive area the market will take off for 12 months and then settle down again for what we hope is another twenty years of growth before we are back in this mess again, but next time around we will be that might wiser and we will not get caught, will we?
Our economy needs a vibrant residential and commercial property market, and how we have wished that it would come back a lot sooner than we anticipate, which is next spring, please god.
Michael Alexander acommercialmortgage4you.co.uk
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