BLOG: Clive Bleasdale assesses the property market

By Clive Bleasdale on Jun 17, 09 12:51 PM

Clive Bleasdale.jpg

THERE is constant discussion as to whether we can call "the bottom of the property market" and with significant uncertainty still in the market it's a very difficult call to make.

But we have seen increasing signs of clients willing again to invest which suggests there may be profit to be made which is some change from the trend over past months.

A very significant and successful London based operator in the national property market said recently history has shown that residential property has, on average, risen between 6% and 7% per annum for the past 50 years, despite big ups and horrible downs. My experience over the last 25 years reflects that and it is a statement of fact.

While speculative schemes still prove difficult if not impossible to progress there is a continuing demand which will become "pent up" if it cannot be satisfied but which will be realised when market conditions are right for it to be released and further recovery will take place.

Certain sectors remain relatively buoyant but buoyancy is still to a large degree capable of being maintained only by adequate funding and in that respect funding is still difficult to obtain without significant cash reserves to commit an equity stake.

The market that we will see emerge from the recent and current difficulties will be in my view a more sustainable and solid one. Gone perhaps forever in my opinion will be the ridiculously optimistic and unsound schemes we have from time to time seen some undertake making way for better balanced, more solidly founded and more socially beneficial schemes.

It is easy to comment with the benefit of hindsight and it is fair to say few if any saw the scale and significance of the current downturn.

That said soundly run property businesses (and to that extent businesses generally) will continue to prosper in the "new" market.

Clive is Head of Property at Weightmans