Theres more than meets the eye with the recent recovery in property prices

House prices are being reported as increasing month by month.  In particular, the south-east is reporting some increases but this is normal as property inflation tends to ripple out from the south-east....

House prices are being reported as increasing month by month. In particular, the south-east is reporting some increases but this is normal as property inflation tends to ripple out from the south-east. But I am less sanguine about a property recovery. It will take longer for the market to return to its bullish days. There are a lot of observations that support this point of view but the main point I would like to communicate is that the revival in prices to date (three months to date) is supply led and not demand driven. The underlying drivers of credit, employment, yields and salary growth are not there at all. And repossessions are lower than expected at this point in the cycle. This is due to both interest rates dropping and political pressure on the banks to be as helpful as possible in the run up to the 2010 election. This is why it is crucial for you to focus on buying in at under the market value (and that must be a professionally produced written RICS valuation) and not to be lured into the market at anything other than very competitive prices.

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