The fate of the UK property market has surely never been so closely tied to developments outside the UK.
It does feel, at present, as though we’re getting immersed in a global maelstrom, which will decide our fate for many years to come.
Just look at our two main export markets, Europe and the US, which will play an important role in any growth trajectory moving forward.
Growth across the pond has pretty much ground to a halt while the eurozone, well, just where do you start?
Last week’s announcement that Germany, the engine room of Europe, grew by just 0.1% in Q2, is as good a place as any although this week’s claim by the Bundesbank that euro bail-outs are illegal is the icing on the cake.
After all, without bail-outs, in whatever form they come, you’re bust.
Meanwhile, back in Greece, it was announced yesterday by finance minister, Evangelos Venizelos, that the Greek economy will undershoot its already negative growth target by over a full per cent.
And let’s not forget Italy, which has a phenomenal debt mountain of its own and is, in the words of one analyst, ’too big to bail’.
Is this really happening? Sometimes you have to pinch yourself to believe it is.
It’s tempting to think that we’re somehow protected from everything that’s taking place. Unfortunately this isn’t true.
While Osborne, with his unwavering commitment to deficit reduction, has at least prevented the ’repellent harpies’ that are the markets and ratings agencies making their nest on our shores, we are by no means immune from their ’lamentations in the eerie trees’.
The economic and market disarray in Europe and the US will shape the course of our own economy for many years to come.
And because it will shape our economy, it will also affect our property market.
With the headwinds buffeting the global economy, it’s hard to see how the Centre for Economics and Business Research believes house prices will rise by 14% over the next four years.
OK, there will continue to be a shortage of housing, and Bank Rate is likely to remain low for some time yet, but you have to frame this within a broader economic context, which the CEBR doesn’t seem to have done.
As for the CEBR’s claim that mortgage availability will continue to increase over time, let’s not forget that many of the UK’s banks have potentially critical exposure to bad European debt, which could send them back into their shells — rapido — if problems escalate.
All in all, it’s impossible to look at the UK property market in isolation. For any kind of accurate view these days, you have to look overseas, too.