If you’ve read much of my material you know that I often have a lot to say about the media in their reporting of buy to let in particular, and the property market in general.
This is certainly not because I think the media is a useful source of unbiased, objective information which I can use in making my buying and investment decisions.
But media comment is interesting because it gives a guide to market sentiment, and because it can help shape market sentiment. I realise that this is a bit of a ‘chicken and egg’ statement but it’s undoubtedly true.
Just think of this. If there are enough newspaper headlines telling us that one economic think tank or another is predicting a 20% fall in prices next year, then a proportion of the property buying public will believe that and the headlines will have an impact on their buying, selling and investment decisions. For others the influence may be more subtle but is still present.
I’d say that since the beginning of the credit crunch the general tone from the media, as far as property in general, and buy to let specifically, is concerned, has been negative. Sometimes it almost seems deliberately so.
So, as an example, the Halifax may report that house prices rose last month by 0.2% but often media coverage will try to neutralise the ‘good news’ by quoting some expert or other who is predicting prices will fall over the next 12 months.
But since the beginning of this year I’ve noticed a subtle change and media comment about the property market in general seems to be much more positive.
For example, the Daily Express recently ran a headline which read ‘House Prices Set To Soar; average values will rise by £45,000 over the next five years’.
We all know that headlines are written to sell papers and this one certainly did its job. I spotted this while shopping at Morrisons and couldn’t resist an impulse buy. When I came to pay I noticed that the checkout lady lingered while scanning it, reading the headline with an amused smile. It then occurred to me that it was April 1st and maybe I was an April Fool whilst the checkout lady had seen right through the Daily Express’ little joke.
The article itself is serious enough and quotes a recent report from the Centre for Economics and Business Research who forecast that average property prices in the UK will increase by 20% by 2018.
The main premise of their argument is that the Help to Buy scheme, as announced in the latest budget, will push up prices before the supply of property increases.
Whether they are right or not, it was nice to see some ‘good’ property news in the media for a change.
It’s generally accepted as true that the property market runs on confidence, although since 2007 we can see that it runs on confidence plus the availability of credit.
However, as confidence and credit often go hand-in-hand, and as there is an indication that confidence may be returning, there is every hope that over the next year credit may also become more easily available.
If this is true then there will be implications for us as buy to let property investors which we’ll look at in the next few posts.
By the way, I’ve just finished and updating The Successful Property Investor’s Strategy Workshop, the account of how I put together my multi-property portfolio and how you can do the same. If you’d like more details please go to www.ThePropertyTeacher.co.uk/successworkshop
Here’s to successful property investing.
Peter Jones
Chartered Surveyor, author and property investor
