I just read a great article on the Zungalow blog. Liam Bailey a prolific commentator on the UK housing market gave his prediction on exactly when the market will bottom.
According to Bailey, of all the obstacles to a housing market recovery, namely: economic recession and unemployment, restrictive mortgage lending, and unrealistic vendors, a recovery in the global economy holds the key to a UK housing market recovery.
Bailey said that: once the banks start making money from the increased consumer spending, deposits, profitable stock markets and investment in a global recovery, this will in turn lead to derestricted mortgage lending, and that in turn will generate enough buyer activity for sellers to realise that their price the key to their sale.
It makes a lot of sense if you think about it. Bailey said that the global recovery should be well under way, with UK unemployment falling again by Q3 of 2010, and that this will filter through to increased lending and demand for housing by Q2 of 2011. Thus, Bailey says the UK housing market will bottom between Q2 and Q3 of 2011, and house prices will grow briskly in the coming years.
I think it is all a little too simple. I mean I know it is just a forecast and Bailey is as entitled to his opinion as anyone, and to be honest my own prediction wouldn't be too far away from that if you put me on the spot.
The trouble is, with the world's economies all so inter-linked and dependent on each other, there are far too many variables involved for anyone to predict the path of this recession and housing market crash with any certainty. Hats off to Bailey for being brave enough to put it out there I suppose.
This is true that the recession is getting more troubled as there is no money flow in the market. However, we cannot expect people who are scared of losing jobs or homes are going to spend more money.
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