July 8, 2010
Nick Churton of Mayfair International Realty, based in London, comments on the property market after a busy spring.
For a few weeks this summer the English turned their attention from one national obsession and concentrated on another. During the soccer World Cup most eyes were on the English national side. Until that is they failed dismally and didn’t even make the quarter finals.
In the US, soccer does not generate the fervour that it does in England. But it might do soon. If the forecasts are correct every state in the union will have a population with a Latino majority by about 2045. If the English are considered football crazy then those from the Latin countries are even crazier. They have all that same enthusiasm but without any of the British reserve. This time England managed a draw with the US team. In World Cups to follow they may not be so fortunate.
So, with England out of the World Cup, attention, once again, was focused back to another national obsession – real estate.
Like soccer, the English invented the game of real estate. Unlike soccer they remain rather good at it. But there are parallels. Real estate features endlessly in the UK press; it is a major talking point in bars and pubs and most people don’t think they can lose – until they do.
Before the World Cup there was a general election so one of the new UK government’s first tests has been to steady a real estate market rocked by the global credit crisis. They could easily have made things worse but resisted imposing high tax rises despite a massive fiscal deficit. As a result inventory has risen. Sadly, sales have not mirrored these numbers. Frustratingly the banks have kept the drawbridge firmly shut and are dispensing mortgage money in measures that would make Scrooge proud.
But all is not so bad. The market is still active and certain places are actually humming. London is once again an international magnet for real estate investors. In the uber-luxury market most buyers are from overseas as itinerant high net worth investors seek a safe haven for their cash by converting it into a tangible assets. This group includes the French, the Italians and more recently the Greeks, Spanish and Portuguese. All these have sought to profit also from the weak sterling exchange against the Euro, although this is not so attractive as it once was.
A strengthening pound has meant that more people in the UK are looking for real estate abroad and the numbers of those enquiring about homes in North America and the Caribbean has risen dramatically. So a new real estate game has started. Let’s hope everyone plays to their full potential unlike another team most English people could mention!