To provide a bit of balance to my last post criticising a certain elements of the property press, I would like to commend Daniel Thomas’ editorial in the FT this morning(http://www.ft.com/cms/s/0/5f48b60c-2856-11de-8dbf-00144feabdc0.html).  If you can’t be bothered to read it, the title is “Cash Buyer’s Won’t Sustain Commercial Market Forever” which pretty concisely  sums up the following 973 words.

Morgan and I have shared this slightly sceptical view of the current market for a little while, but I am particularly impressed that Daniel did not have to resort to the stock in trade cliches of “green shoots” or “dead cat bounce” or my own favourite “bear market bull trap”.

When this is considered alongside the current availability of new debt and, more interestingly, what happened to net lending in the last property downturn of the early 90’s then anyone pinning there hopes on a sustained bounce back in the next 12 months is likely to see them dashed.

As you can see in the link to this graph, net-real-estate-lending, stayed stubbornly around zero from 1991 to 1997.  Given the massive deleveraging that must occur to allow the global economy, never mind the bloated balance sheets of our banks, stuffed full of real estate loans, to balance, it is practically impossble to forsee a return to any form of credit driven recovery over the short to medium term, for all but the best of assets.

That’s not to say that secondary property won’t perform or there will not be very good money to be made, only that initial yields have much further to fall to allow investors to make equity type (>15% IRR) returns on very lowly geared purchases.

I’ve been more than a little remiss in posting recently, but I’m happy to say that it’s a reflection of how hard we have been working; I’m quite confident that the volume of opportunities we’re now working on will lead to some very exciting business towards the end of the year.

Thankfully I was shaken out of my blogging torpor by Julia Cahill’s “Leader” in this weeks Estates Gazette.

It must come as some relief to workers in the most reviled of jobs, estate agents, traffic wardens, MPs and even journalists, that they can now hold their heads high at dinner parties and say “well at least I’m not a banker.”

However it takes some chutzpah to use your weekly opining to firstly “dis” Gerald Ronson’s views and then go on to brand most of her readership as infantile.

Using the lazy metaphor of “kids in candy stores” not only displays woolly thinking and a profound lack of understanding of how property finance works, but is pretty patronising to most of the industry.

Heaping further aprobrium on banks is yesterday’s story, perhaps the property press should speand more time trying to understand the dynamics of what drives the issues that they print and move beyond “top and tailing” corporate press releases and regurgitating them as “news”?