In fact, for some investors, I’m pretty sure it would have been like going on all the big rides at Thorpe Park in the throes of a painful hangover. I’ve not done that myself but I know someone who has, and he reckons it wasn’t great.
The contrast with bricks and mortar couldn’t be more stark and, once again, I’m relieved to be in property not paper. While the property market is, of course, itself vulnerable to ups-and-downs, the fact that it’s still there to see (and, in most cases live in) does provide some comfort.
A week or so ago, the latest Halifax House Price Index showed that house prices in January really kicked on. They were up 1.7% compared to December and 2.2% on the quarter. Over the past year prices, according to the Halifax, have risen by an average of 9.7%. So much for the usual, deep, winter quiet.
As we all know, rising prices is a result of supply, or rather the lack of it. Or as Martin Ellis of Halifax put it in the January report: “The imbalance between supply and demand continues to exert significant upward pressure on house prices.”
But, the supply issue is being addressed, albeit gradually. While criticism of land banking may surround the biggest property developers, the smaller ones have never been more active - in my experience anyway.
Our development division is working around the clock on deals for small and medium-sized developers around the UK. In fact, it’s been a record start to the year for this area of the Dragonfly business. The extent of the supply/demand imbalance is clearly being seen by investors as a major market opportunity and it’s one that we’re more than happy to help them realise.
Investors have the added benefit that any ultimate exit strategy is reinforced by the exceptional strength of demand. All in all, not a bad position to be in.
Attributed to Mark Posniak, Managing Director of Dragonfly Property Finance
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