2015: The Year Of Normality
Published 9 January 2015
Having outlined in my last column before Christmas how accurate my 2014 predictions turned out to be, our esteemed Property Editor has given me a prominent position in the first EDP Property supplement of the new year and challenged me once again to stick my neck out and consult my crystal ball.
‘What is in store for this year?’ she asks. My initial response was to tell her that Norwich City won’t win the FA Cup; but Ms Culot is rather more demanding than that, so at the risk of making myself a hostage to fortune, here goes.
There are two things which will have an effect on the market in 2015, and they are politics and economics – which are inextricably linked. This is a General Election year, and that means the hands on the tiller of the British economy may well have changed by the end of the year.
It is often said that political uncertainty can stall the housing market, but to be honest, I have never yet lost a sale or a listing because of an election, and I can’t see this year’s poll having much effect. Yes, we might end up with a government of a different political complexion, but with the economy in fundamentally good shape, I can’t see a new Chancellor changing tack too drastically, whichever party they come from.
It is now over five years since the official interest rate hit the ‘emergency rate’ of 0.5%; it has been at this level for so long that the market has got used to this as the norm. I don’t agree with commentators who say that the housing market is in for an interest rate shock in 2015; with inflation at around 1%, and continued economic uncertainty in the Eurozone, I don’t expect any movement at all in the first half of the year, and I would be astonished if the base rate was any more than 0.75% by year-end.
So a more or less stable economy, no huge political upheaval despite an election, and the continuation of low mortgage rates – this is the kind of ‘steady as she goes’ outlook that we all need, and it’s good news for the housing market.
So I see 2015 as being more of the same – a gradual continuation in the increase in activity levels, and prices rising in an ordered and sustainable way: I predict that Norfolk prices will be on average between 3 – 5% higher by the end of the year.
Of course, that average figure will hide some variations. Expect to see higher growth in traditional ‘hotspots’ around the county; expect good quality houses in prime locations to sell extremely quickly; and expect less good quality properties in less desirable locations to stick.
All of this is indicative of a market which has returned to a state of normality, and hurrah for that. It does make for predictions that are less than earth-shattering, but after the turmoil of the last few years, the ability to make a set of slightly boring forecasts at the start of 2015 is something worth celebrating.
Happy New Year.
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