The UK Property Market and Haiku
Posted by markharrison on January 25, 2008
You probably know some of the rules of the Haiku art form, as taught in infant school:
- Three lines
- Syllables per line: 7 in the first, 5 in the second, 7 in the last
What most people don’t realise is that in Japanese culture there are two additional rules:
- Some reference to the season, normally through weather or trees (“Plum Blossom” is actually a hint that we’re in Spring)
- The first two lines should appear to contradict each other, but the third line should resolve the contradiction
So, here is my Haiku for today’s UK property market:
Mortgage Approvals Slow Down
Nothing is for sale
Sun shines, No UK Market
Let’s take those one by one
- Mortgage Approvals Slow Down. Yesterday, the FT reported that mortgage approvals declined last month to the lowest level in 10 years.
- Nothing is for sale. My local estate agent reports, as of this morning, that he has ZERO 2-bedroomed properties for sale. (Around here, 2-beds are the staple of the investor market).
- Sun shines. OK, it really is sunny down here in West Sussex, to the extent that I actually washed the car yesterday.
- No UK Market. See below 🙂
No UK Market – the FT report was about the UK as a whole, but that’s completely meaningless from the perspective of the typical buyer. The typical buyer, let’s call her Susan, wants to buy, say, a 2-bed flat in Croydon… she’s not worried about whether there are 4-bed houses for sale in Cardiff… because she has friends and a job in Croydon, and frankly a five hour commute each way isn’t going to feel a good trade-off for two extra bedrooms and garden.
In parts of the UK in 2007, we saw big rises. In other parts we saw small falls. The same (though possibly with everything a bit lower, so small rises and big falls) is likely to happen in 2008.
As an investor, that means that I’m (to a certain extent) not fussed about “average house prices” – all that matters to me is what I can buy THAT property for, and what I could rent THAT property for.
2008 is going to be a GREAT year for contrarian property investors. The more people scared about a property crash, the more motivated sellers 🙂
As an aside, I _do_ realise that part of the contradiction between the first two lines of the poem was timing – the mortgage advances were for December, the lack of 2-bedroom houses near here is for January, but the main point still stands.