I was a member of the panel at an investors' seminar hosted by PFP Group in Harrogate last week. Two investors came up to me at separate times and said they were trying to buy properties but the market had got very tight and the estate agents they were talking to had never been busier. Did I think we'd already seen the bottom?
I had to disappoint them. I don't think we've seen the bottom – in fact, I don't think we're anywhere close. Here's why...
Affordability is the problem in the UK housing market...
The problem in the UK housing market is affordability – or the lack of it. We are nowhere near the levels where the market can start to resuscitate. The Nationwide Building Society's first-time buyer affordability index (black line on the chart below), which measures initial home loan payments as a percentage of take-home pay (so the higher the index, the worse affordability is), is still five years away from a market trough if the last housing downturn is anything to go by.Source
