A double dip recovery (or "W" as it is largely being referred to by the industry), is unlikely according to Assetz this morning. The investment company has said that predictions of a second drop in house prices are largely based on the possibility of forced sales, when (and when indeed) interest rates start to rise. The RICS said last month that the increases in house prices were being underpinned by a lack of supply, suggesting that as more are properties brought to the market, demand will be met and prices will collapse again.
Although the sector is poised for this wave of distressed asset sales, Assetz is dismissive of this theory, and says that the base rate will remain low for the forseeable future, and the fundamentals of supply and demand remain the same, and so any flooding of the residential market looks unlikely.
Chief Exec, Stuart Law predicts a much more steady, modest recovery, neither a drought nor floods of distressed properties on the market, saying: "There is an expectation that recent house price strength will bring a flood of sellers to the market, almost overnight, but any increase is likely to be balanced out by the large number of buyers now looking to make their move.
"Overall I expect it to be a steady and well balanced process, with the net supply of re-sale property increasing only in-line with gradual improvements in house building."
Any dramatic increases in unemployment will of course temper this prediction, but it is a welcome addition to hear some calm optimism amid the debate of a "corregated iron" recovery.
