Insight 5 – An Honest Forecast

11th January 2015 by Daniella Quaglia

You’ve probably been reading lots of predictions about the property market recently. Let me tell you a secret. No one knows what will actually happen to the price of your home this year. What with the election, the recent shock stamp-duty changes and uncertainty over the timing of the first rise in interest rates, even boffins from the housing market admit they are scratching their heads.

One thing we all do agree on is that price growth we saw in 2014 — 7.2% nationally, according to the Nationwide building society, with London the best performer at 17.8% — is not going to be repeated.

My prediction remains that we will see 30% increases across the UK in the next five years. This year will be slow but London will be slowest. Warwickshire and Birmingham are my hot tips to grow this year.

I have looked at three interesting indicators that have helped me come to my predictions.

Estate agencies’ share prices – Watching what’s happening to stocks can be a useful way to understand the sentiment of the market. Analysis by and Dataloft reveals that the share prices of the big UK estate agencies tend to rise months ahead of an increase in property prices in central London. Last week saw a significant dip in some of the estate agencies value. Just a warning.

Big 4x4s – Next time you drive past a big car showroom on the way out of the capital have a look in the window. If the company think there’s fun on the horizon, there may be a racy sports car on display. If they predict tough times ahead, it may be something more practical. A look at the Mercedes garage on the way to Heathrow last weekend, I couldn’t help but notice the very solid looking estate frowning at me. However Warwickshire is full of gleaming Jaguars and Range Rovers because of the growing success of the company in the area.

Electric Gates – In Warwickshire and North Oxfordshire electric gates have been popping up like meerkats heads since the summer. A sure sign of prosperity and that areas are becoming more desirable. These areas have great transport links to London and talking to locals they have noticed a rise in London families moving out and starting to commute.

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