In awe I watched the waxing moon ride across the zenith of the heavens like an ambered chariot towards the ebony void of infinite space wherein the tethered belts of Jupiter and Mars hang forever festooned in their orbital majesty. And as I looked at all this I thought...... I must put a roof on this lavatory. - Les Dawson |
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Financial Market Bulletin - Jan 4th 2010
An Englishman’s Home
No crystal ball gazing would, though, be complete, of course, without including views on the outlook for the UK housing market.
After tumbling in 2008 and the early part of last year, property prices embarked on a recovery which wrong-footed most analysts and market experts. House prices increased for the sixth month in succession in November, taking the average house price to almost the same level as a year previously. Official Land Registry figures put the monthly increase at 0.9%, making the average house price £161,554. Whilst activity still remains well below peak levels seen in July 2007, the number of transactions has increased 10.6% over the last year. But there has been a huge diversity in both regional prices – London has enjoyed the strongest rise, with some properties exceeding the highs of 2007 – and buyer profile. Whilst the number of mortgages has increased from the nadir seen in February, less than 2% are borrowing 90% or more, compared to 15% in 2007. This reflects the dominance of cash-rich buyers taking advantage of lower interest rates and the market’s decline.
So what should we expect for 2010? Unsurprisingly, predictions vary widely – from sustained growth to a heavy fall, underlining uncertainty over the economic outlook. The most bearish forecast comes from Capital Economics which expects prices to fall 10% and cites rising unemployment and a continued mortgage credit squeeze as likely to inhibit growth. Conversely, the most optimistic comes from the banking sector: Citigroup is forecasting a rise of 10%. Now all we have to do is wait but in the meantime we hope all our readers enjoy a healthy and prosperous 2010.
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Extract from this weeks Financial Marketing Bulletin, issued by RBA Wealth Management Ltd.
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