By Mark Duffield, director of Aldreds estate agents in Great Yarmouth
If like me you read the national pundits you will know that rarely has there been such a difference of opinion on the track of property prices. The ‘double dip’ advocates predict a minus 20% in values whilst the positives are at 2% growth. In the East after a fall of about 20% from the 2007 peak there has been (in the last half of last year) growth of between 2-6% in property values. Transaction levels are about two thirds of the peak. Despite that there is a shortage of some types of property and the new property stock is getting depleted. I predict a year of two halves- but three phases. (You can say such things if you are from Norfolk) The first half (and two phases) will be from now to the general election. If there is no change in interest rates (and low interest rates are driving the market forward as it clearly can not be mortgage lending which remains at a low base) I think we will be busy selling houses as we have been even up until our Christmas closing date. However, the 6 weeks of the election campaign, (the second phase of the first half) will be a total void with little or no activity.
The second half of the year (which if there is a snap election could be from the end of March) will be more difficult as the new government (of either persuasion) tries to balance the books. I do not think inflation is going to take off this year and therefore interest rates should remain at current levels. However the government is going to contain spending which will effect the economy and our spending power. Link that to the fact the level of mortgage lending is predicted to be at the same level as last year and you might take the view that agents will be less busy in the second half (and I think that is right). So if you are planning to move should you hold on till the second half (or if you are a shrewd investor during the void of the election)? The answers is clearly sell in the first half and buy in the second.
But most of us are mortals who would find that difficult particularly if you have to provide a secure base for your family. If you are moving house for a need reason you should not let the world stop you moving forward. A home is only worth another home and if you are moving up then you are already winning from the 2007 peak (as property values tend to concertina in a falling market and there is mortgage money to be had in the right circumstances-ask your broker-hopefully the Mortgage Advice Bureau).
If you are investing then you will clearly take a look at the opportunities over a range of different types of investment and come to the conclusion of many that property has not done that badly compared to other investment particularly in the long term.
Mark Duffield is on 01493 844891.