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What can past property trends teach us?

Written by on Thursday, 22 December 2016 11:15 am
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Looking back at the how the property market has behaved it is all too easy to see how money could be made. The seasons cause the market to behave in a certain way while elections also cause an element of doubt before the results are announced while the interest rate certainly has an influence on the market.

The seasons

During the month of November, there was an increase in the number of listings and sales in the UK property market. While this is great news, it is only one month of the year but does it show that past seasonal trends are disappearing?

It is a little risky to say that they are disappearing completely but housing shortage across the UK is not easing and that could mean that the seasonal changes in the market could balance out. While there are good times to sell and buy it is always worth carrying out research when the opportunity arises to make a long-term investment in property.

Political Instability

A large portion of the UK would state that the Conservative Party is the party that is likely to benefit the UK property market. In the past, the Conservatives have promoted and encouraged homeownership, whereas the labour party are often more concerned about social housing.

Over the years, the influence that certain political parties have had on the property market has faded away. While they make small changes to policies, the majority of political parties are all for homeownership and investing in new build property. When these policies will be implemented is another matter because through the years, political policies have promised the earth and, in many cases, have failed to deliver.

The economy

The way in which the economy behaves is often a sign of how the property market is going to perform and the economy certainly has a huge impact on its movement. There is a link between the performance of the economy and base rates and this in turn links in with investment in the property market. These property market trends that are directed by the economy often repeat themselves.

Looking at how the property market has performed during the periods when the economy is healthy and when the economy is struggling is a good way of identifying trends. So, when it comes to trends, the one that really carries the most weight is the way in which the economy behaves.

Despite trends repeating themselves, it is difficult to predict them and they often happen when they are not expected. It is also worth noting that the severity of these trends can vary considerably.

 

Conclusion

Hindsight is a wonderful thing, especially when looking back at the property market spotting potential opportunities for investment. In reality, trends do happen over and over again, but they come with differing levels of severity. The economy, along with base rates really influences the property market, but these are some of the most difficult to identify and forecast.

Therefore, it is always worth investors taking notice of past trends to see how the market reacts but it is vital to remember that assuming that trends will behave in the same way as they have in the past is not the most efficient way to work.


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