Firstly how did I get on with my predictions for 2011? The first six months went as predicted with Quarter 1 being depressed and Quarter 2 showing an upturn in activity levels. The sovereign debt crisis, which continues, led to an increase in uncertainty and trepidation and while Quarter 3 was a strong quarter for property sales there was a noticeable slowdown for listings. Quarter 4 did not end on the upbeat note that I anticipated. Prices remained level for 2011 – the most recent Nationwide report actually shows a small increase (!!) – this is in line with my predictions. I score myself 7 out of 10.
On to 2012 – My feeling is that with the sovereign debt crisis rumbling on, further public sector cuts and Banks continuing to tighten up on lending criteria, Quarter 1 and Quarter 2 of 2012 will be very subdued. I anticipate Quarter 1 activity levels coming close to the low point of 2009. I hope that there will be renewed vigour and energy in terms of dealing with the sovereign debt crisis with a corner being turned sometime in Quarter 2. I am also anticipating that the faltering recovery in America will start gaining more traction during Quarter 2 of 2012 (with the feel-good factor of the Presidential Election in November impacting on the year-end). By Quarter 3 we will start seeing a steady increase in property market activity levels with Quarter 4 ending on a high point. Overall I predict activity levels finishing at the same levels of 2011 but with a much slower start. As with 2011 my feeling is that property prices will remain stable.
Issues to look out for – the sovereign debt crisis, the state of the American economy and the wariness of banks with regards to mortgage lending. I do believe that 2012 will be the turning point not only for the Scottish housing market but also the UK economy in general. While the East/West divide will continue for the Scottish housing market I think that it will show its resilience and when activity levels do turn for the better there will be a sharp and prolonged increase. This increase in activity will start in quarter 3.
Wish list for 2012 – many of these items were also on the 2011 wish list but I make no apologies for repeating them.
My wishes for 2012: –
- More assistance for first time buyers – government guarantee funded by the compulsory introduction of mortgage indemnity premiums. It is imperative for the health of the Scottish housing market that we get the number of first time buyers back up to that magical 40% level.
- Tax breaks for property investment – rents continue to surge and homelessness is a blight upon society. The government needs to take steps to deal with both these issues. By encouraging people to invest funds in property this will stabilise the property market in terms of activity levels increasing the confidence of Banks to lend more.
- Increase in funding provision for housing associations for the provision of social housing. Not only would this assist the construction industry but would also be another means of tackling homelessness.
- Home Reports being abolished or at least temporarily suspended. Alternatively remove the valuation element of Home Reports and leave them simply as a report on the condition of a property. Perhaps even removing the need for Home Reports to be compulsory would be a useful exercise in ascertaining how helpful they are to the property market.
I will continue to campaign on behalf of the Scottish property market as I am of the view that a stable and strong housing market is essential to the general economy. I take this opportunity to wish all the readers of this blog a happy and prosperous new year and look forward to communicating with you further during the course of 2012