Why the Philae comet lander should be the UK property market’s crystal ball for 2015
Highly respected property professional, Partner at Barton Wyatt, the multi award-winning estate agency in Virginia Water and Surrey NAEA Chair, James Wyatt, reflects on the UK property market in 2014 and shares his predictions for the next 12 months:
“I’ve been fascinated by the exploits of the little Philae lander in recent weeks as it headed towards Comet 67P ten years after leaving Earth. The news that the spacecraft, which is the size of a washing machine, had landed was truly stratospheric. We then discovered that it bounced around a few times before settling on Comet 67P and ended up in a rather awkward position with a very uncertain future.
There is some hope that with the Rosetta spacecraft keeping a watchful eye over Philae as it circles overhead there may be good news to come. And when a ray of sunlight falls on the lander the future will start to look brighter.
The UK property market has had a rather similar experience this year with a few tremulous bounces along the way, a rather uncertain landing in many parts of the country, an uncomfortable, nervous government and then, with their ever watchful eye, the Bank of England observing the situation from above.
Never before have I seen a market which has twisted and changed through the year – a year that has seen so many significant world changes including Ebola, ISIS and a rapidly falling oil price. In the UK, we have the unusual situation of decreasing inflation with a very fragile economic situation, despite the government’s pronouncements that our economy is the strongest in Europe. This is factually true but with a weak economic outlook compared with the rest of Europe’s poor economic outlook that isn’t saying much.
Interest rates will remain at the historically low level of 0.5% throughout 2015 and the money markets are awash with cash to lend to property buyers. Unfortunately, the mortgage market review earlier on this year overstepped the mark and whilst initially there was much back slapping that the MMR had cooled the market, it is now clear that the measures are actually choking the market.
On the horizon, we have a general election and this will be key to the property market in 2015. A straightforward Conservative government will lead to a housing boom. The prospect of five years of Tory policies would be a mouth-watering prospect to homeowners and property investors alike.
A Conservative / Lib Dem coalition would lead to more of the same as we have now whereas a dominant Labour government or a Labour / Lib Dem coalition would lead to rapidly declining house prices throughout the country and economic gloom.
The proposed mansion tax by the Lib Dems & Labour is largely a South East of England issue, where those parties have little to lose in terms of parliamentary seats and can therefore be taken simply to be a political gesture.
Would it happen? I very much doubt it – the cost of a full revaluation would be horrendous and perhaps unthinkable in these times of tightening belts. Nevertheless, the talk of this tax is enough to create severe disquiet in this part of the country.
Agents throughout the Home Counties are seeing huge levels of enquiries, with numbers of people looking to buy double what they were a year ago or even six months ago and levels of stock are reasonably healthy too. Many agents in the Home Counties are reporting good levels of business, unusual at this time of year and in many instances this is due to pent up demand and otherwise down to those wanting to lock into excellent mortgage deals to tide them through the next three to five years.
2015 is simply too hard to call – it ALL depends on the election, but given a Conservative government, it is not difficult to see double digit price growth in the Home Counties which might even continue on the same level into 2016, whereas London will continue its slowdown in price acceleration.
If there is a Labour government, all bets are off and price growth might in fact be negative.
So, who knows what will happen? Keep an eye on little Philae – it may be a better indicator of the property market than any of us property professionals!”
For more details contact Barton Wyatt on 01344 843 000 or visit www.bartonwyatt.co.uk. James can be found tweeting at @James_Wyatt.