2009 Review

Yep, it’s that time of year when grown up media-type outfits look back earnestly over their half glasses at the old year to draw lessons before sagely prophesying fo rthe next. So with you, this blog and my credibility in mind, dear reader, I thought it appropriate to see what the statistics for house prices around the UK illustrate at the end of this extraordinary year during which residential property has never been far from the headlines on the financial pages and news media.

That sounds all rather worthy and benevolent on my part but when I considered where to start such a fragmented process, I admit that I took the easy option by using the various locations around England where I have invested during the last eighteen months. These are locations that I know well because I keep a close eye on each of the towns and cities and regularly speak to local agents. In effect, I set off expecting Land Registry’s stats for 2009 to confirm what I already know. Well it’s nearly Christmas and I fancied an easy ride.

I started in the East Midlands where I cut my teeth on my investment system when I bought two houses - one terraced and one semi. In Module Two I show you all the numbers for a third house that I was trying to buy on the same estate as the previous two, so I know the postcode well enough to tell you that the house prices were dropping until early summer when they bottomed out and have stayed flat since – just as the Land Registry average prices stats would confirm…wouldn’t they?

Really? That’s not what I expected.

Let’s try Brighton where the market has been buoyant all year. I know that for sure. I bought a flat for £100K last November which I know categorically is now worth at least £125K with no more spent on improvements than the cost of some paint and a carpet. So Land Registry’s average price stats will surely confirm the uplift in values for the BN2 postcode.

Mmmm. Bit of a pattern emerging here.

On to the outskirts of Manchester where I have bought a handful of newly built 2-bed flats at bargain prices during the last three months because that market is saturated with flats so developers needing to release cash have had to slash prices all year. That will have the effect of dragging average prices down. And the stats show….?

Enough, enough.

What does this really indicate? Firstly that stats (especially those showing averages and medians) can make or break any scenario according to how you research them and how you choose to read them. You should know my attitude to making blanket statements about the UK property market by now, but even when you reduce the search areas to a small footprint as I have here, the limited data can lie because the number of sales (especially this year) is very sparse. So the stats can be influenced upwards by just a few high-achieving sales and vice versa.

The most important lesson that this exercise demonstrates is how important it is to do your research in depth. That means talking to the people on the spot. Sales and rental agents will give you the real story. You have to develop the art of interrogation to draw that info from them just as I teach in Module Three. And to know how to interpret that information for your purposes. Yes, I know that I am repeating my training mantra ‘there is no substitute for knowledge’ but I make no apology for that, providing you are using real knowledge to make your calculations and decisions.

Now a change of direction back to the subject of my blog-but-one ago.

Just when you thought it was safe to go back into the bathroom where the corpses of Andy Shaw and Greg Ballard are lying drowned under water, this happened …
(Cue loud, screechy, dramatic music)

Hi John,

Andy Shaw here. This [new Internet product] is very inspirational, and I am certain it will change many lives, bringing much more than powerful hope of prosperity in the face of economic crises, job losses, and diminishing incomes…

…and he should know.

I received this email last week. Andy Shaw is still marketing for affiliates and selling Internet services on the strength of his reputation. You know that I admire self-confidence but perhaps this is verging on insensitive.

All that remains today is for me to wish you a very Merry Christmas and a peaceful break.

John