Rise or fall - whichever way you look at it the opportunities are out there

Mark Posniak - 11 October 2010

A really quite eventful end to last week. House price mayhem and histrionic headlines on Thursday morning, as the Halifax announced property prices had fallen by 3.6% during September alone.

Before you reach for the bottle, the Halifax emphasised that its quarterly figure of -0.9% was a far more accurate reflection of what's happening in the UK property market. Still, the double dippers and doomsters and property market scaremongers had a field day.

Kind of ironic then that an Acadametrics report came out just after the Halifax index saying prices had in fact risen by 0.2% in September and property market activity had actually shot up by 3.4%. The reason for the divergence in the two sets of numbers is quite simple: Acadametrics includes cash purchases in its research, the Halifax does not.

We're inclined to go with Acadametrics on this one, as there's a whole lot of cash buyers out there at the moment - professional investors and portfolio landlords who are snapping up properties because they know it's a buyer's market and that there are bargains to be had. In the market we're in, UK bridging loans, you see these individuals each and every day and they are really quite active right now.

Whatever you believe about the direction of the property market, it's no wonder the Government has asked someone very clever to look into the value of these various house price indices. All this psychological toing and froing every month can't be good for the sanity of the British public. But I suppose it sells papers and that's more important after all.

A bit later on Thursday morning, we had the latest interest rate decision. No surprises again on that front with the Monetary Policy Committee keeping Bank Rate on hold for something like the 19th month in a row. In our view, the monthly interest rate meeting is likely to remain a non-event for the foreseeable future. The economy is still febrile and consumer confidence low so we do not expect any rise in the base rate until spring at the earliest.

Of course, the Spending Review on the 21st October is the Big One and we will be reporting back with our views on that next week. Hold on tight because we could be in for a rough ride over the next week or two.