Increasingly I am being asked by clients about my thoughts on the outlook for house prices in 2012. I think this is primarily down to the increasingly wild disparity between the conjecture in the press.
Obviously there has never been a crystal ball on house prices but never has it felt more like anything can happen.
Broadly speaking House Prices remained unchanged in 2011 with the Nationwide reporting a 1% overall increase tempered by a 0. 2% drop in December.
The BBC described this as stagnation (http://www.bbc.co.uk/news/business-16356568) Of course this isn’t really stagnation still if inflation is running higher than this and we have seen a something in the region of 4% this year.
That said, the economic forecast by the Bank of England predicts inflation at around 1. 5 to 2% until 2014. Pair this off with the Nationwide’s prediction of a similar 1% increase in house prices in 2012 and ‘Stagnation’ would appear to be the correct prediction for 2012.
Most homebuyers I speak to are delighted at the prospect of Stagnation, especially given some of the potential property crash alternatives mooted by some.
But hang on a minute – surely anything can happen? The world is coming to an end isn’t it? National economic crisis, Eurozone collapse, Global economic instability – all have a pronounced impact the UK’s economy that, after all, hardly needs any from outsiders – it seems more than capable of falling apart without external aid.
So spiralling unemployment, wage freezes, increasing tax burden, constipated lending blah, blah, blah. The pessimistic argument for massive house price corrections resulting from double dip recessions sound convincing too.
As Conveyancers, we honestly have no better idea than anyone else. Sure we get to know our clients and hear their theories. But, just like the economic pundits and cognoscenti, nobody can quite agree.
The conveyancing sector always suffers in periods of uncertainty as it is less affected by house price gains and falls and more by lack of turnover, which is common when so much uncertainty looms.
So as a lawyer, home owner or bar stool economist my answer is the same. Homes are for living in and in the long term their value will increase.
2011 has been a fantastic year for Fridaysmove and we have enjoyed month on month growth, helping some 4, 000 + clients move home.
In 2012 we will continue to strive to offer the best value professional services to home movers throughout the UK.