Monday, December 26, 2011
I’m writing this on 26th December which some might say is a bad time for predictions as the stomach is still churning and digesting yesterday’s Turkey dinner and copious mounts of alcoholic beverages. On the other hand it may focus my mind on whether the next 12 months are going to give any of us that ‘full’ feeling.
The danger with property market predictions is that they are generalisations. When the Halifax or Nationwide make their comments they are talking about the UK as a whole. When I make a prediction I’m talking about our particular little area of the country - incidentally East Cambridgeshire made it to No.4 in the ten best places to live in the UK http://bit.ly/vf0C4v (according to Simon Ward of www.lovemoney.com using Halifax Quality of Life survey data, and who am I to doubt him!)
The London market is buoyant with foreign investors buying and some reports will say that prices moved up even in the closing months of 2011. The north of the country has over the years lost many traditional industries and now the government cutbacks are going to hit those areas again where devolved departments have been relocated. So, the north is down, London is up and we, in the East of the country where we are not as reliant on Public Sector employment, are in a sort of Goldilocks kind of way ‘not too bad’.
The recent Eurozone bust up could cause us some property market grief because of its implications for our mortgage lenders borrowing funds to lend to us. The EU problem is not resolved yet so it is impossible for me to tell where this is all going to lead.
So, where are we headed? My gut-feel is that 2012 will be a very similar year for Ely and district as 2011. Sales levels will be reasonably good at realistic asking prices with over-priced, poorly located and badly presented properties losing out. But these factors have always been an issue, even in more robust times. It’s just even more important to balance and deal with them now.
The lack of reasonable loan-to-value mortgage funding (90-95%) will continue to hold back the volume of first time buyers and push many of them into renting. In a perverse way this is good news for buy-to-let investors and is one area of the market that I can see continuing to grow.
The volume of houses for sale will continue to be an issue and generally helps hold up prices. The table below shows data for July - September 2011 from the BBC:
The price fall for the year appears to be -4.9% . This should make our area an even more affordable place to live and coupled with all the excellent factors detailed in the Halifax survey who wouldn’t want to live around here?
Enough of predictions - let’s start the year as positively as possible, deal with whatever it throws at us as skillfully and effectively as possible and do what we do best - carry on!