Christmas is fast approaching and the UK property market is moving again so I thought that I would update you on what’s been happening both within the UK property market and with Distressed Assets.

As we all know the UK economy is still in recession. There was a widely anticipated belief that October’s figures would indicate that the UK economy had begun recovery but instead the economy shrank a further 0.4% between July and September which makes the current recession the longest since records began.

Meanwhile the Bank of England has kept the base rate unchanged at 0.5% and has decided to pump a further £25 billion into the economy on top of the £50 billion already committed by the Bank over the last 3 months.

Last Tuesday it was announced that RBS and Lloyds Banking Group are to sell off more than 900 branches over the next five years as well as some famous banking brand names. The idea is to encourage competition and the flow of credit around the economy which can only be a good thing for the consumer.

So where does all of this leave the UK housing market? With no sign of inflationary pressure in the wider economy and interest rates thus likely to remain low for some time to come the UK housing market is likely to enter a period of stability. Meanwhile the limited supply in London will continue to drive up prices into the New Year.

Official figures appear to support this: according to the latest Nationwide index annual house price inflation has turned positive for the first time since March 2008 while Halifax recorded a 2.8% rise in the third quarter of this year.

On a more anecdotal level several of my London-based friends have recently sold their properties for prices in excess of asking and are finding it increasingly difficult to find a suitable property to buy.

There should be some caution however as next year’s general election will be the crucial event that will set the conditions for the property market in the years to come. If the Tories do gain power they will be forced to take tough decisions on taxation and public spending which may negatively impact the property market. I suspect, however, that they realise the delicate balancing act that is required to restore confidence and that a further dip in the property market would be disastrous for the wider economy as it is, in many ways, the barometer of Britain’s economic confidence.

While many continue to sit on the fence the window for UK distressed property is closing, particularly in London. The market has followed a very clear pattern this year of increasing enquiries, increasing mortgage applications and increasing transactions while competition is also on the increase.

As a company we have enjoyed several recent successes both in London and the North of England which have come about through relationship building and persistence. We have built excellent relationships with several administrators through whom we are sourcing fantastic value property. Several of our investors have now refinanced properties purchased through us earlier in the year and some have made as much as £80,000 on a single transaction.

If you would like to find out more we are holding our latest Distressed Assets Seminar in central London on Wednesday the 25th November from 6.30 to 8.30pm. Please telephone Greg for more details on 0151 244 5450 or email him at greg@distressed-assets.co.uk


Henry Powell-Jones