As the New Year begins, I am drowning in the usual flood of experts giving their two cents on the property market in the year ahead. The truth is they don’t know what they are talking about. I have worked in property my whole life and wouldn’t bet anyone inside or outside of property to accurately predict the market at this time. Rather than add to the experts telling you how the market is going to look this time next year, let me tell you why I believe no one knows.
The big talking point of last year will be the big talking point of this year and a huge reason why I think the market cannot be predicted. Hard Brexit would upset the market the most because of the knock-on effects of the cost of building materials due to inflation, a supply of labour and an exodus of the financial services from London with a huge knock on effect to the rest of the UK. Soft Brexit would give us a more of an easy ride but at this point who knows what will happen.
The reality surrounding President Trump could have a knock-on effect for the UK housing market. A stronger dollar is good for us as it makes our assets cheaper for the Americans. The weak pound makes our assets cheaper for other people but it also causes inflation and as we all know inflation is lousy for property. We don’t know what President Trump will do whilst in power. It will be fascinating but we do not know which way it will go.
The Housing White Paper
At the moment, the country seems to lack a definitive plan on housing at the moment. We know the Government’s housing white paper is trying to resolve this. We know the planning process is in a terrible mess but when it comes down to it, will anything they do make a difference? Who knows?
Unfortunately, reading about terrorism is a daily factor in our lives and sadly we are all waiting to see when this will hit the UK. One cannot underestimate the effect of a bad terrorist attack in the UK and the knock-on effect it would have on the economy
Inflation – Interest rates
If inflation is bad, interest rates will increase. As we all know this will have a significant impact on the property market. Especially for those who have bought a property expecting years of cheap money. With the strong dollar, the weak pound, the Trump Factor and the Brexit factor it is impossible to know what will happen with inflation and where interest rates will go. Hopefully they will stay low.