The Housing Market. Indestructible

You can punch it, smash it with a baseball bat and try to grapple it to the floor but the UK housing market is hard as nails. Gi Joe and Captain Scarlet all rolled into one.

As we near the last days of the year it is apparent, some say surprising, that house prices overall have maintained an undoubted resilience and will finish rather higher than at the end of 2015.

And all despite an overheated Prime Central London market dragging the average down which, as we predicted back in 2015, simply had to reverse its 20%+ annual increases of recent years.

A stamp duty penalty fest too, by the now de-throned Chancellor who seemed to delight in extracting more and more plain from the buyers of expensive properties and then buy-to-let investors. Plus anyone having the audacity to buy a second home.

Of course, buy-to-letters didn't escape a high rate tax relief kicking either.

Then Brexit. Oh Brexit, that apparent extinction event, as it was portrayed, and that would leave us with no friends in Europe, no exports, no imports, no jobs, no money, ravaged by war and crashing house prices. That Chancellor (again) told us that our stupidity would trigger a fall in property values by a very specific '18%' if we dared to snub our continental partners by 'taking back control'.

If all of the above combined were not quite enough to strangle the prosperity within bricks and mortar, most recently the US elections came along to have a go too...

The prospect of a Trump presidency would serve to end humanity by causing financial meltdown, a cessation of free trade, civil unrest, a $5bn wall bill and international aggression leading to a rush for the nuclear bunkers. The world waited as the reality of a wig plonked atop a gaping, uncontrollable mouth became only the second TV star in history to occupy the White House. Commentators said that the first such win, by another cowboy type, would also be a disaster. It wasn't and, ironically, Reagan's tenure saw the ending of the Soviet Union and the Cold War. Go figure.

The onslaught from all of these influences, we were told, would send UK property prices into a tail spin. But that simply hasn't happened.

In fact, prices of properties sold have increased since the EU vote six months ago by every credible measure. The Halifax House Price Index records that prices are up 1.8% since June. The Nationwide informs us that their index is up 1.7% and the Office for National Statistics, the authority that Government itself turns to for stats, reports a 3% hike in that same period.

House prices in 2016 are up 6% compared to this time last year, says the Halifax. In the past 40 years house prices have only dipped twice and by not that much. A drop between 1990 and 1993 in the depths of a hideous recession and then a drop in 2008/2009 whilst gripped by an equally devastating global downturn. Both blips then quickly reversed and normal service soon resumed.

The British housing market is rather like the T1000 in Terminator 2, a shape shifting liquid metal type of thing that keeps going and going no matter what is thrown at it. Even if it melts every now and again, it re-forms and comes back at you.

You see, this country's housing market is made of super stern stuff. And that's because supply continues to be (too) low and money is cheap via the lowest mortgage rates in banking history. But above all because of our in-built, cultural determination, an obsession even, to own property. And there isn't enough of it to go around.

At the risk of milking the analogies some more, I once caught a small scorpion on the first day of a holiday and trapped it in an airtight tin for the remainder of my seven night stay. I was convinced that starving it of oxygen for several days would ensure it would expire and it's enthusiasm to scare and sting would otherwise be curtailed.

Imagine my surprise when, bags packed and ready to leave, I peered smugly inside the receptacle in which I thought I had laid the fiend to rest only to be surprised by it crawling around as enthusiastically as when I had first confined it.

You get the gist....

What does 2017 hold for house prices? You'll be unsurprised to learn that they'll continue their march upwards albeit perhaps at a lower rate of incline than this year. No matter what happens.