30 July 2019
With Boris oozing confidence, now’s your chance to join the Property party and ride the investment wave.
The departure of Theresa May couldn’t have come at a more crucial time, but despite the current suppressed state of the property market, the new leadership promises a fresh chapter which will see a marked change in attitudes and ultimately a rallying of the markets.
With Boris at the helm, supported by Cummings and Sedwill, there has been a sudden and swift upsurge in optimism which in my view will result in increased levels of trading in the final quarter of the year, regardless of whether it’s a no deal Brexit (which granted, is better than a bad deal), or the preferred option which is negotiating a free trade deal and building a future relationship with the EU, America and the rest of the world.
Unlike May, in his first few days in office Boris has already set the tone. Departmental aides will now need to report to Cummings, the top adviser to Boris. This will mean that ministers can’t promote their own interests over the PM’s and centralises authority. In other words, Boris is in charge and each has been left in no doubt that they will be required to commit to the Government’s principle objective of leaving the EU by 31st October, do or die.
As Boris gave his first speech outside No.10 last week, the tone was clear, decisive and ultimately positive that with the help of his key advisers, the three most powerful people in the country can set a course to bring wealth and prosperity back to this great nation.
This confidence is important to the property market as it encourages to the masses a state of being certain that the course chosen by Johnson is the best and most effective for ensuring wealth and prosperity.
Astute property investors have known this throughout May’s reign, but like all wealth creators, they’ve dared to go where others fear to tread. So even in apparent times of depression, there is always an element who will continue regardless and prosper whilst the rest of us tread water in a resurgent tide of self-doubt.
‘even in apparent times of depression, there is always an element who will continue regardless and prosper whilst the rest of us tread water in a resurgent tide of self-doubt’
Strong leaders encourage, support and drive the masses to start investing, building and trading property in the knowledge that the wider markets are gaining momentum. That, combined with a come what may attitude to the October 31st deadline and the hope of a well negotiated free trade deal, ensures the prospects are as good as they’ve ever been.
As an auction house, our sales are attended by mainly astute investors, going against the tide of the masses who see it as the coal face of the industry, an opportunity to grasp well priced property quickly and with certainty that the sale is exchanged on the fall of the hammer, unlike Private Treaty which has been prone to repeated failure as Mays cabinet wiped confidence from every sector and resulted in the current suppressed state of the property market.
We saw this back in December 2018, when Brexit dominated the news and the markets at their weakest point with most auction houses seeing an unprecedented decline in sales down from an average 75% success rate to lowly 50-60% sales as even the astute buyers had nobody to bid against and unmet reserves resulting in high levels of unsold stock, forcing prices down.
In contrast to that, and with Brexit out of the headlines our February and April sales saw full rooms and confident trading by all sectors of buyers with results of 92% and 93% respectively. Come June though and the inevitable fall of Theresa and uncertainties over the new Leadership, we saw a tumble from the previous high to 80%, a premature blip in a stop start market.
With our next auction on 15th August and it’s culmination with the new leadership we have been pleasantly surprised by the relative high levels of stock for the time of year, mainly from regular traders who can sense that the markets are on the up-swing. Buyers equally are fuelled by the boost to market sentiment and with the continued low cost of borrowing and rental growth, there is a strong chance of capital appreciation for those wanting to ride the property wave. Put simply, we anticipate more bidding paddles in the air and stronger prices being achieved in the room. Fortune will favour the bold, that’s for sure.
We are already seeing strong commitment from traders wanting to enter stock into our 3rd October auction, which combined with our experiences of increased bidding levels and surging market confidence is a sign that people need to get to the party before the champagne corks start popping.
So now is time to take that leap of faith. Have faith in the new leadership and regardless of whether it’s a hard or soft exit, no deal or free trade deal, the world will keep spinning. Be astute, ooze confidence and ride the crest of this new wave wearing a bright orange t-shirt donning your new mantra in life: ‘Positive Vibes Only’.
Let’s get to work people and make some money. Cheers to Boris, we’re back in the market.
Paul Giles, Director and Head Auctioneer
29th July 2019