Our house repossession piece, published on 24th September, suggested that although the problems in the property market appear to be over, we may be in for a rude awakening, in the form of a ‘dead-cat bounce.’ This gruesomely illustrative term is the one used in financial circles to describe the ‘false dawn’ that appears before the cumulative effects of the recession cause a further deepening of the crisis.
In this week’s Independent on Sunday, Julian Knight likens the apparently improving financial climate to Black Adder Goes Forth: Final Episode. For a moment, the guns stop firing and it seems like the war might, at last be over. Captain Darling announces “Thank God. We lived through it, the Great War, 1914 to 1917.” Knight goes on to explain:
The truth is what we are seeing now is a phoney housing market, a false hope…. Government action and lender fears about driving prices lower have led to a surprisingly successful stemming of repossessions. But many homeowners who would normally be looking to move aren’t, perhaps because they fear moving up the ladder and taking on more debt, or perhaps they feel that they may not be able to get a decent mortgage rate if they do move. …First timers are still desperately thin on the ground. And who can blame them? They don’t know if they’ll keep their jobs, and lending criteria are still tight. Make no mistake, without first-time buyers there can be no sustainable recovery.
So don’t be too quick to ask, “How was it for you, Darling, the Great British Housing Crash, 2007 to 2009?” It may not yet be over.
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