The Richmond Property Magazine - February 2009
Susan Fitz-Gibbon partner at Fitz-Gibbon discusses the prospects for the property market in 2009
Temperatures have plummeted, interest rates have dropped to 1.5%, stores are desperate for consumers to spend whatever they have and many 'institutions' are closing their doors for the last time. So where does that leave us with the housing market?
I am asked daily how this recession is affecting the residential lettings industry, and when I believe the sales market will return. Unfortunately, I don't have a crystal ball to supply an answer to the latter question. However, I am old enough to have been here before - I founded the business in the last recession - and, if history repeats itself, time will be of the essence.
Many forecasters insist that we are not facing a depression like that of the 1930s, but it is clear that the recession of the 1990s did not affect the City in the same way as this latest downturn. Personally, I feel that the talk of economic Armageddon is a little over the top, although many will feel that it is true for them. And, indeed, difficult situations with repossessions are occurring, and all the indications are that this will build over 2009.
We have entered the year with a buoyant lettings market, but many landlords feel cautious and are reluctant to commit to corporate tenants who wish to secure long-term tenancies. Some companies want to take a tenancy for three years straight. Meanwhile, at the other end of the spectrum, we are coming across individuals who do not want to sign up for the long term and are requesting shorter tenancies whilst they watch the market.
As I predicted at the end of 2008, the short let market is coming to the fore. There is demand from people who have resolved not to sell, but who wish to invest in their home and take a tenancy for two months or so whilst the builders are in. Others have sold their property and want to rent in the short term so that, as cash buyers, they can pounce when their dream home comes to the market. Then there are those who are uncertain as to where they will be based, and thus wish to remain flexible in case they are required to relocate.
All this means that it's essential to be with a letting agent who really understands the market. These are interesting times, so both seasoned investors and those entering the lettings market must be confident that they are with a solid agent who appreciates the current climate, and who fully understand how to deal with the thaw when the market heats up.
Fitz-Gibbon, 127 St Margarets Road, St Margarets, Twickenham, Middx TW1 1RG. Call: (020) 8892 8921.