Who will blink first in the property investment showdown?

photo credit: Wesley Fryer

Perhaps I’ve been watching too many westerns, but the UK property investment market does somewhat resemble a dry, dusty saloon in the 19th century American mid-west at the moment. Bear with me on this.

As prices continue to slump and jobs in firms specialising in building new homes start to go, it would appear we are approaching high noon. Or dawn. Or whenever it was back then that the shooting started.

In one corner of the bar you’ve got the local prospector, or Mr Bank Manager. Usually, he makes a lot of money out of everybody, but lately things are getting tough and someone is going to have to pay for that.

Sitting around a table is the local posse, or the sellers. They know something bad has happened, but they’re not sure who to blame or what to do next.

In another corner, flipping grubby playing cards onto the top of a crate, is a group of gamblers. Is it reasonable to label them the buyers and property investors? We’ll run with it anyway. They’re as surprised by the situation as everyone else, but at the moment they are just waiting to see what happens next.

For the estate agents, ‘town is dead’

At the back of the room, busily watering down the bourbon, are two bartenders, or the estate agents. They’re used to getting plenty of business, but at the moment town is dead.

Finally, loitering outside, unsure whether or not to wade into the atmosphere within, are the local sheriffs. Mr Bank of England and Mr Labour Government. Both are not sure what to do to calm things down and fear getting too involved will kick it all off.

Sellers cut house prices – now what?

Of course, at some point, someone is going to have to blink and go for their guns. Which group ends up in the strongest position at the end of it all is anyone’s guess.

According to figures from Right Move, the sellers have cut their asking prices by an average of £4,345 in the last month. Is this a sign that their fingers are waggling over their holsters? - ‘Your move punk’.

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