It is not unknown for house prices to periodically fluctuate. In fact, it is relatively normal – healthy even. Certain estate agents and surveyors are usually able to accurately predict why this occasionally occurs, while others make what a sceptic might describe as unsubstantiated claims.
In 2012, Guardian writer Patrick Collinson detailed a selection of comments made by a variety of surveyors in the United Kingdom in response to a Rics (Royal Institution of Chartered Surveyors) survey about the drop in house prices:
“Media hype is definitely affecting potential purchasers’ expectations regarding prices falling over the next few years, with lower offers being made as a result”
“Doom and gloom in the media is resulting in low valuations. A bit of positive talk and the market would pick up”
“Media prediction of 20%-40% housing slump is not helpful”
“We have noticed over the last 2/3 weeks that the market appears to be quieter. This may well be … a result of the continual media speculation”
At the time, such comments were met with scrutiny and derision. Many people argued that these surveyors were merely trying to find someone or something to blame. Unable to accept that the market was not infallible, they pointed the finger at an easy but not always blameless target. While it is true that the media plays a major part in influencing the general populace at large, completely placing all blame upon it is not only unfair but also insulting to home buyers. Most British citizens are competent enough to know when the right time to buy is, right?
What a difference two years can make. Today, little is been said about the media’s ghastly ways. Why? Well house prices have shot up since then. Recently, the House Price Index (April 2014), showed that UK house prices increased by 9.9% in the year to April 2014, up from 8.0% in the year to March 2014.
So what has really changed? Has there been a reduction in alleged articles and advertisements that dissuade potential home buyers? I for one do not believe these articles or ads even existed. The media and home-buying are not completely independent of each other, but they do not share a symbiotic relationship either. What it all comes down to is whether or not banks are willing to loan money to home buyers. Banks seem to be less stringent now compared to 2012 and this is obviously why the housing market is bubbling with life. However, this may soon change. According to Rics, stricter rules for borrowers, which began in April, were slowing momentum, “particularly in London”.