Chancellor George Osborne seems determined to stoke a pre-election house price boom.
The coalition has launched two separate schemes that are both designed to push up mortgage lending in the UK.
Potential homebuyers with a small deposit are now much more likely to get a mortgage. That in turn is already driving house prices higher.
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I think the chancellor is making a mistake. Another property boom won't help the UK in the long-term. But that shouldn't stop you and I making money while the party lasts.
The fact is, Osborne will do whatever he can to keep house prices moving up for the next two years. He's got to get and keep the feel-good' factor going until the election.
That means there's plenty of time for investors to buy now and sell later at a good price.
And that means that believe it or not it might be worth buying into London's most aggressive estate agency
Why this year could be good for Foxtons
Foxtons
Land Registry figures show that London property prices rose by 6.9% in the year to June, whereas prices across England and Wales only rose by 0.8%. What's more, London prices are 6% above their pre-crash peak, while in the rest of the country they are still 10% below that peak.
You could argue that prices outside London will have to catch up, which means that London won't be where the biggest gains will be made in future. But I suspect that London will continue to outperform the rest of the country.
London's market is very different from the rest of the UK. It's supported by plenty of overseas buyers, not to mention City salaries (bankers still get bonuses, after all).
The biggest threat to the London market may be a strengthening pound, which would reduce overseas buying power. But given that Mark Carney is determined to keep interest rates as low as he can for as long as he can, we doubt the pound can get a lot stronger from here.
It's also worth remembering that what really matters to estate agents is transaction numbers. It's the number of sales going through the books that generates the commission house prices themselves are secondary.
And Foxtons is making good money now. Last year, it generated £33m of operating profit on revenue of £119m. In the first half of this year, profits jumped by 20%. There's also plenty of scope for future growth as the chain plans to open up to 40 new branches by 2018.
On the downside, Foxtons isn't universally loved by Londoners. The chain has a reputation for employing staff who are more aggressive or pushier' than some of its rivals. Then again, for some people (vendors who believe that this is the way to get the best price, for example) this can be a selling point.
The valuation does look a little rich at first glance. The offer price for last week's float was 230p, and the price has risen since then to 265p. That puts the chain on a multiple of 21 times forecast earnings.
However, I've been keeping a close eye on both the sales and rentals market in London for the last year or so, and it's very plain that the market is hot' - prices are moving up quickly.
Another plus point for Foxtons is that 52% of its revenues come from the rentals side of the market. This has been much more stable over the last decade than the sales market. There was no massive crash in rents in 2008. Indeed the number of rental properties in London has risen by 6% a year since 2000.
Other ways to play the pre-election rebound
Countrywide
(LSE: CWD)
Countrywide is not a pure London business, so if you disagree with me, and think the London market has already seen its best days, Countrywide may be the one to go for.
Then there's Rightmove, the UK's leading online property portal. Rightmove has a lot going for it, but its valuation is even richer than Foxtons.
Housebuilders such as Barratt are another option. They've come a good way already, but my colleague Phil Oakley reckons they could have even further to go. (If you're not already a subscriber, subscribe to MoneyWeek magazine.)
But for me, Foxtons is the most attractive bet. It's a company with plenty of room to grow in a market that is on the up. Just make sure you sell up before summer 2015. Then you shouldn't be hit by any post-election property crash.
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