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Are we building dams in the property market?

Posted on Thursday, August 13, 2015

The natural ebb and flow of rivers and oceans allow them to run their natural courses and are mostly predictable. However, when you build a dam or sea wall to hold them back, pressure can build up behind them and when they finally burst through, all Hell breaks loose and chaos ensues. Floods and choppy water cause untold damage and destruction.

The property market experiences similar ebbs and flows but we also create our own dam effect and block the natural tides. The water may seem quiet and still but pressure continues to build so when it's finally released, the market becomes an uncontrollable white water rapid where people either drown or make it through to calmer waters.

This is a dangerous state for the market as it creates huge bubbles and equally massive waterfalls and whirpools.

So why do we allow this to happen?

There are many reasons. One is that we are a nation of curtain twitchers. Some of us have been through recessions and negative equity so we're overly cautious. We want to watch the market intently before we take the plunge again. We're waiting for that perfect time, which may never come. So instead, we are stuck in the same place forever and can never move on.

We're also a nation of sheep. The press and social media continually tell us that there are no properties and we believe them. A quick look out of my window tells me that they are wrong.

We are afraid to put our property on the market before we find a new one, in case we sell and can't find a new one in time. So we sit and wait until the press tells us there are more houses for sale.

Is it time we stopped sitting on the dam wall and climbed over it? Most definitely YES! Nobody ever won a prize for doing nothing.

Of course there is a shortage of new stock and first time buyers are having a hard time getting on to the property ladder but new buyers are in the minority. We can live to 100 these days so the percentage of us already in the market far outweighs those that are trying to get on to it.

In fact, our hesitancy is perpetuating the problem for first time buyers. As we deaden the market and fail to release property down the ladder, we block them from taking their first steps.

Interest rates are currently low so now is a really good time for mortgages and taking the plunge. Don't wait for the deluge as you may flounder. Plus if the situation continues, prices will rise and you may find that a property that's just perfect for you is then out of reach, therefore stopping you from being able to move and preventing buyers below you progressing.

People move in every direction in the property market, not just up. Sometimes we want to downsize. Sometimes we want to sidestep to another location. However, until we start feeding the market, none of us can move anywhere.

Why not make your own decision about moving and not let the flock or press decide for you?

Call your estate agent today.

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