House Prices are Rising. House Prices are Falling!

If we are to believe the press, house prices in London are both falling and rising (well so says the Tehran Times!). There isn't a consensus. Have prices bottomed out? Is now the right time to buy?

The evidence on the ground is more straightforward. More sales transactions are being agreed. There has been a sense among investors, most notably buy-to-let landlords, that now is a great time to expand a rental portfolio - in London at least. After all, mortgage tracker rates on their existing portfolios give many of them very healthy cash flows. Sales prices have dropped some 20-40% yet rents on carefully chosen properties haven't suffered anywhere near as badly. On many well located, smaller flats rents have proven remarkably resilient in fact. Yields are looking pretty attractive right now, especially compared with other investment vehicles for those lucky enough to have cash to invest.

The pound has looked very cheap too. Overseas investors have piled money in to London property; many of them buying to let with Euros.

Yet what we believe we are seeing now is more simply the effect of a "Spring/Summer bounce". This is always the most popular time of year to move and many owner occupiers had held back waiting for the world to end. Which it didn't. Invstors have provided a safety net for the market. Once it dropped to below a certain level, rental yields made it an attractive place to keep money - as witnessed by the number of properties now on the rental market and the record numbers of properties being let in London, by Chard's offices at least!