Forgive me dear reader, but I thought that a little revisitation of recent history would be in order as we set our sights on the Spring Market…
When the first lockdown ended last year, we saw a massive surge in demand for Wandsworth property. A veritable tsunami of activity overwhelmed the SW London market.
In the six months from when we were let out of the asylum on the 13th of May, until mid-November, as many properties changed hands as had done so in the previous twelve.
This was, I believe, for a number of reasons,
From 2016 – Dec 2020 we had had four years of endless Euro-vacillation. People sat tight, as they waited to see what would happen re-Brexit. This created a massive pent-up demand in Wandsworth, as life went on for its good burghers – people still got married, bred, divorced, died and down-sized, and so they still needed to move, but they weren’t inclined to do so due to the ongoing political uncertainty (oh if only we’d known what true uncertainty feels like!). The Brexit Effect.
Then Bozo won in Dec 2020 with a good majority and vowed to take us out of Europe come what may.
End of uncertainty.
Result, the floodgates burst, and the wave was released; we had sealed bids on all sorts of stuff over the Christmas recess. And as ever during the Christmas recess we had the Boxing Day Effect – this day purportedly being Rightmove’s busiest day of the year, when bored families decide that their home/partner (delete as appropriate) or both, are not fit for purpose and so it’s time to move.
So New Year was positive.
And then just as the Spring Market of 2020 was really getting underway, the gorgon Covid reared her ugly head.
Lockdown, and a dramatic combination encompassing the twin frustrations of an extreme Brexit Effect – the powerlessness to do anything due to factors outside one’s control – and a massively exhausting six-week version of Boxing Day (albeit it with lovely weather).
So, in mid-May, when the Government released us there was this tsunami of activity that crashed through Spring and Summer and rolled on through to Autumn, leaving us all washed-up, battered and bedraggled on The Yuletide beach.
Then over the Winter, irritating mini-lockdowns, miserable solitary Christmases, a maxi-lockdown in the New Year, and this time combined not with the sunniest weather for two hundred years, but with the bastard child of The Beast from the East, which came rolling in off the Eurasian Steppe with all the sound and fury of the very hordes of Genghis himself…ghastly stuff!
And so, where are we now?
Well, still somewhat, battered, and bedraggled, at least psychologically, but the market has doggedly ploughed on through the winter months. Normal service has been resumed – viewings, offers, deals and instruction levels are all at, or above, the levels of Feb 2020 and 2019.
However, I sense a change in the air…and not just because of The Bungling Buffoon’s announcement this week.
I sense that the generalised, national anxiety is easing.
Spring is in the air, indeed in sunnier parts of Tooting it has very, very nearly sprung. Daffodils, and the Welsh, will soon be upon us. And although I am not a behavioural economist, I do know that their arrival (the daffodils, not the Welsh) greatly affects the market – especially after such a dark and torrid Winter.
And remember The Clown’s words; we are heading out of lockdown, IRREVERSIBLY.
The vaccination program continues its fabulous progress, in a diametric inversion of all previous Covid-related Government initiatives – it won’t be so scary viewing houses or having viewings.
The kids WILL be back at school soon, out from under the home-owners’ feet.
Yes, stamp duty relief is good news nationally (average sale price £256,000), but it’s not big news round here (average sale price Rampton Baseley £1.5m), although it does stoke the flat fires at the bottom that heat the house market above. I believe that it is a component fiscal driver of the market round here.
The major fiscal drivers of our market, that I would place above stamp duty relief are,
– very low interest rates,
– massive growth in money supply
– personal lockdown savings of £150bn
– the human’s love of spending said savings
– the new-found need for space
– the new-found capability of WFH
– the belief that property is a great inflation hedge (and free of capital gains tax)
As Andy Haldane Chief Economist at the B of E said, “the economy is a coiled spring, ready to bounce back strongly” (not quite “greyhounds in the slips, straining upon the start….” but he makes the same point).
From one economist to not another, me.
I am an estate agent. And a person. And this is my view of things, so it’s probably massively wrong, BUT, as we all know, and despite what a Deutsche Bank Investment Analyst might tell you, markets are largely driven by sentiment, not intellect. They are often irrational – ie not motivated by rational thought but by emotional feeling – qv Elon’s recent self-fulfilling and self-interested comments and dabbles in Bitcoin (driven by greed?) and also the hilarious hoo-hah with GameStop (motivated by anti-banker sentiment).
And so, with the Daffodils sprouting and the Welsh massing, we have to chuck in the immeasurable, fundamental, national exhalation of breath as the days lengthen and the pub gardens open.
An enormous country-wide sigh of relief will be expressed psychologically, emotionally, socially, alcoholically, and financially this Spring – smiles will return to weary careworn faces.
So, of course it’s great to have the fiscal drivers in place, but the biggie, right here, right now, will be the sentimental driver. Relief. Happiness.
Because when people are happy, they spend money, they eat, drink and become merry (and buy houses?).
Sociologists and the media talk of a return to the spirit of The Roaring Twenties – a post-war explosion of euphoria ignited by the cessation of societal privation caused by conflict with a deadly national foe (sound familiar?).
And I for one agree.
So batten down the hatches, the second tsunami is on its way…