Just over ten and a half years ago I was working as a land agent specialising complex tax valuations, when I received a call from one of Savills’ head honchos asking me if I would like to go to his house on a Sunday morning for a cup of coffee and a chat.
I was made an offer I couldn’t refuse, a move across to the intoxicating world of residential property research. And so I began my conversion from humble chartered surveyor to supposed housing market guru.
Fast forward to 2017 and it would appear that not everyone approves of my elevated status. I recently received an email from a property investor who, it would seem, lost his first marriage worrying about the market and was almost wiped out by the last market correction.
Without wishing to dwell too much on the detail of the correspondence, he not only questioned the accuracy of my forecasting record and understanding of property cycles (it’s simply a case of seven years of feast and seven years of famine apparently) but also the general validity of my place in society.
This email happened to coincide with the inception of our forecasting process.
What, then, has been taxing our minds as we seek to maintain our enviable reputation for market insight?
First up we have been looking at lead indicators of sentiment in each of the main regional markets, to capture what current political and economic uncertainty mean for different parts of the market. We’ve then overlaid that against analysis of where underlying affordability sits and the capacity for house price growth as interest rates rise gradually. From there we’ve been looking at historic cycles, the extent of the potential for markets further from London to play catch up and whether there are the economic catalysts to unlock that potential.
In all of this London presents perhaps the biggest challenge. It appears to be coming to the back end of a prolonged bull run, leaving it more exposed to the effect of political and economic uncertainty on sentiment and more restricted by the constraints of mortgage regulation.
In looking at this we have been mindful of the fact that the oft commented upon prime central London market is very different from the mainstream markets in the capital.