Reasons for optimism in land and property
Aug 21 2009 By Karen Overbury, The Journal
THE property trade, although not the world’s oldest profession, has been central to the success of our society for centuries – even if, in days of yore, there was more storming and stealing than exchanging of contracts.
The industry has always had its ups and downs. And no one could deny that the past 18 months have seen the market in the doldrums, after years of phenomenal, and clearly unsustainable, growth.
Prices had soared – good news, it seemed, for those on the ladder. But it was becoming increasingly difficult to take the traditional step up from, say, starter home to three-beds or to that large detached on a good plot. The downsizers did well, but many wanting to take that first step simply abandoned their hopes and dreams.
A period of stabilisation and readjustment was crucial.
If you’re stuck with a property that won’t sell, you might not agree. You may also be anxious that the value of your home has gone down by – depending on that old property chestnut, location – 5%-20%. But the value of the home you want to buy has probably gone down by that same percentage, meaning a saving.
There are, sadly, many buyers now in negative equity – but that’s only a major problem if they need to move.
Money availability is still one of the biggest problems facing the market. From being recklessly profligate with funds, the lenders have become crazily cautious. But things are improving, with the number of mortgages approved for house purchase up in June, for the fifth month running.
The latest report on prices also brings a little cheer – the average cost of a property in England and Wales increased by 0.1% in June, according to the Land Registry.
More cheer comes from the increased interest in property from investors, still concerned that other investments simply aren’t as safe or profitable, in the long term, as old-fashioned bricks and mortar.
And perhaps the biggest good news has come for the many thousands who, thanks to interest rates falling to a record low, have seen their mortgage payments fall by even hundreds of pounds a month. Interest in the property market is everywhere – even in these times of depression. It remains a key sector of the North East economy, with many major house builders still having a significant stake in the region. Many of those key players feature in the pages that follow – and, perhaps surprisingly, this sector has seen some of the fewest changes in terms of the key personalities since our 2008 edition.
One of the big challenges for the region remains a shortage of affordable housing and the leaders of some of the biggest social housing groups feature heavily among our Most Influential 2009.
Then there are the region’s major landowners – often choosing to stay out of the limelight, but so very influential in many ways. This year, for example, has seen brothers Bruce and Freddie Shepherd begin to realise their ambition to bring industry back to the Tyne through their influential Shepherd Offshore business.
In particular, the plans for the former Neptune yard, where a factory is to be built to construct wind turbines, is tipped to create 6,000 jobs.
