In among all the doom and gloom that is being thrown around at the moment there are a few people stating that they see the very early indicators of a recovery. This is such cheerful news that I thought I would give you my potted understanding of how that recovery is going to look. According to the experts it comes in four stages.
Stage One: At this point the mortgage sector is still constrained but investment is beginning to be encouraged. You usually start to see some people investing, the cash rich because there are bargains out there and foreign investors attracted by a drop in the value of the pound.
Stage Two: This is likely to be the longest stage and can be mistaken for stagnation. Anybody who is heavily reliant on credit is still excluded from the market and prices are likely to be static. Those who are equity rich though will be starting to become quite active.
Stage Three: A lot of experts are predicting that we will not see this stage until 2012. The market will ease. Sellers will return to the market and there will be a medium mortgage demand. The economy is restored to growth.
Stage Four: First time buyers and buy to let buyers reappear. The most depressed sectors show signs of recovery.
I guess stage five is we all breathe a sigh of relief and try to work out ways to avoid it happening all over again.
