By Claer Barrett, 08 September 2010
I'm feeling strangely excited. I have just written out a cheque for £4,000. This happens to be the biggest cheque I've ever written. But the true source of my excitement is that by Easter, I am going to have a brand new bathroom, fitted by a team of three fully qualified English workmen.
The sudden availability of quality tradesmen in London is one of the happier side-effects of the thin property market. Recent surveys show mortgage approvals and new sales instructions have both slumped.
Statistics tell us that people tend to take on big DIY projects when they've moved home, or before they sell up. So the slowdown in house sales, which is affecting all markets including London and new-build homes, means bye-bye to DIY.
This trend can be evidenced in many places. Aside from the rapid availability of London plumbers, companies connected to the home improvement trade are clearly suffering. Big-box out-of-town DIY stores are discounting like mad in advance of the Easter holidays (you only have to open a newspaper to see that).
Analysts are hoping that results from B&Q owner this Thursday will show the group has turned the corner after suffering a 3.5 per cent dip in sales due to a very snowy January. B&Q is encouraging its customers to improve, not move, and taking a leaf out of its own book by investing in .
Builders' merchant , which owns the Wickes DIY chain, has also reported a drop in post-Christmas trading, and doesn't expect any meaningful improvement in demand this year. And , the owner of Homebase, blames "volatile trading patterns" for the recent decline in like-to-like sales. Even posh oven maker blames the housing slump for poor trading conditions.
Furniture is another 'new home, new stuff' kind of purchase, so it's hardly surprising that retailers were hit early on (Land of Leather, Courts and Ilva have all gone to the great furniture warehouse in the sky). Rivals are toughing it out - I have had two pieces of direct mail from sofa retailer DFS in as many weeks. has benefited from the demise of rivals, but this week's profits warning shows how closely its sales are correlated to mortgage approvals - and the slump seems to have caught up with the company. There are also problems for commercial property landlords, left with empty units and falling rental prospects.
For consumers, discounts and special offers mean it's a great time to invest in improving your home. Personally, one of the reasons I'm improving is because we're not planning on moving. Like many Londoners, my partner and I could do with an extra bedroom, and a garden would be great. But the mortgage deal on our humble abode is too good to give up, so we are happily overpaying as much as we can every month to take advantage of low interest rates and bolster our equity. We're not the only couple in our circle of friends to be doing this - and there are others who can't move because of negative equity, or fear they won't get a big enough mortgage to trade up.
For those who can get a home loan, the interest rates are extortionate. Financial Services Authority data last week showed that only 12 per cent of new loans are struck at an interest rate within 2 per cent of the Base Rate (down from 45 per cent a year previously). So is it any wonder that London estate agent complains that nobody's moving, and the market is "disappearing up its own backside"?
There are also psychological reasons why property owners are reluctant to put their homes on the market. An RICS report on the issue at the end of last year claims that the lack of new stock in estate agent's windows can be explained by a psychological reluctance to realise a loss when the market value of a home falls below the price its owners paid for it.
Thin levels of stock mean the housing market cannot function properly. The more undesirable properties stay on the market for an eternity, the good ones go within hours. And to secure one of those, you will have to offer over the asking price. So rising average property prices, in my view, do not signal a recovery - they are merely a symptom of the slump.
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