Is now the perfect time to sell UK property

With the average price of a house in the UK having risen 10 percent over the last 12 months to GBP 168k, and mortgage lenders seemingly engaged in a rate-cutting frenzy, you might think it churlish of me to suggest that now might be a perfect time to exit the market. For a while at least.

For despite the shaky recovery figures the UK economy has been spluttering out both before and since the General Election, all these improvements owe a huge debt of thanks to government cash. Like for example, the 300 billion pound loan guarantee scheme the Bank of England and the Treasury have been suckling the mortgage industry with to encourage cash into the system and ensure that demand grows, and therefore prices too. Which would be great all round if they weren’t planning to withdraw that scheme at the end of this year.

If that happens, expect to see a fairly immediate response from sickly lenders: higher rates, larger deposit requirements, brokers’ fees and costs generally. Potential first-time buyers will resign themselves to their rented apartments and prices will begin to tumble. Many experts, including Capital Economics and the Council for Mortgage Lenders, are predicting a 20 percent fall in prices as a direct result.

Call me Mr Grumpy if you like, but isn’t that enough of a ‘cliff approaching’ type warning to sell up? Or should we all rejoice at last year’s gains, stick our heads in the sand and hope sunny days will come again? I for one will be checking out the strength of the current revival to see if it hasn’t got enough legs to provide me with a quick getaway on a tumble-down flat on the south coast I’ve been hanging on to for far too long. Watch this space.