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Stick to bricks and mortar for solid foundations

Ron Kennor is general manager of Robinson Jackson Estate Agencies
Ron Kennor is general manager of Robinson Jackson Estate Agencies

The number of UK surveyors reporting falls in house prices has risen for the ninth month in a row. However, Ron Kennor of Robinson Jackson explains why you are still better off paying a mortgage than renting.

Its very difficult to have a positive attitude to the housing market without appearing to be way out of step with the media, the market and the estate agency industry.

I can’t hear many sobs of sympathy from the public but after a few years of estate agency you have to grow a thick skin.

House prices have not crashed, but the number of people buying and selling has, so estate agents sales figures and income levels have dropped to unprofitable levels for all but the most lean, fit and effective operations.

The market has faltered several times in my career but the economic fundamentals of a permanent housing shortage always have, and always will, see it recover with a surprising vengeance.

Prices in the past have risen sharply even during real, rather than perceived, mortgage shortages. The question we are all asking is how long will it take? The experts all claim to have predicted a slowdown based mainly on our high price levels but most were proved almost right for the wrong reasons as no-one expected the far off American sub-prime market to affect our banks and mortgage companies.

This means few predicted a tightening in the mortgage market which, with the accompanying press hype, has given so many the jitters and discouraged them from moving home.

The accompanying slowdown in supply has ironically largely supported prices, at least for the traditional family houses in our local suburban areas. As many buy-to-let investors have stopped buying there are fewer homes available to rent and rents are now rising fast – forced up by those who have delayed the decision to buy but still have lots of money to spend, and need somewhere to live.

Unwise first-time householders are, in my opinion, wasting their money and paying the landlord’s mortgage by choosing to rent rather than buy.

Even now monthly rents of £600 to £700 or more would be better spent saving for a deposit or paying a mortgage. Those that choose to rent now may never become homeowner.

A recent poll has surprisingly shown that most of us don’t want to see house prices rising, which suggests to me that behind all the hype and negative publicity there is nation out there that want to, and eventually will, be buying their home.

l Ron Kennor is general manager of Robinson Jackson Estate Agencies. He can be contacted on 020 8316 6200

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