Viewpoint: Negative presentation of current property market could become self- fulfilling prophecy

May 7 2008 by Paul Davies, property partner, Mace & Jones, Liverpool Daily Post

THERE is a danger that the negative presentation of the current property market can become a self- fulfilling prophecy.

Money and confidence are becoming more and more illusive and the property industry is facing challenging times.

However, those with ingenuity of thinking, speed of reaction and courage of convictions will be able to ride out the current difficulties.

Those gripped by inertia risk the very real prospect of veering off the track into a heap.

We see a number of firms fine-tuning their engines to suit the market conditions.

In the last month, we have received instructions from clients on sites which will see the construction of more than 500 houses and apartments.

Interestingly, the instructions are coming from local small developers as well as the wealthier PLCs. This underlines that funding is definitely still available for the right product in the right area at the right price.

And here’s the rub – choosing the right venture.

The fact that the market has dried up for 100%-plus mortgages has flat- footed some.

Developers appear to be looking nine to 12 months ahead when they see the current difficulties will be over and the markets will be improved.

But the fact remains that, in order to fall within those timescales, the legal work has to start now. And that means developers must be astute to the opportunities and pitfalls being wrought by the current market.