Prepare for the worst, hope for the best

Tags: 2012 Prospects

At the start of a new year, economic forecasts are normally full of promises and high expectations for the year ahead. We are all refreshed after the Christmas and new year break and it is natural usually to look ahead with optimism at what the next year might bring.

2012 will be a memorable year for the UK with the combination of the Queen’s Diamond Jubilee in June followed by the Olympic Games beginning in July, and both are events that will only happen once in our lifetimes. What price a Wimbledon Men’s singles winner from the UK to enhance the feel-good factor ?

However the economic forecasts for 2012 are painting a pessimistic picture for the year ahead with a combination of a short double dip recession, rising unemployment and lower inflation. It is agreed that the key issue will be the resolution of the Euro-zone debt issues, as Europe is our main trading partner.

Perhaps the outcome will be somewhere in the middle with a mix of good and not so good data, or maybe after a difficult first half, the economy will improve in the latter half, only time will tell. Maybe the old adage of prepare for the worst and hope for the best is the sensible advice.

Local Housing Market Prospects

So where does this leave the local housing market and what are the prospects for those individuals wishing to enter the market, move within it or buy for investment in 2012.

• There are a number of key factors that will remain in place from 2011.  Base rates are likely to stay unchanged throughout the year, this strong level of affordability will help all borrowers with mortgage rates at record low levels.
• There is an excellent range of mortgage products available on the market, with some only requiring a 10% deposit.
• House prices have been relatively flat in 2011 and have not fallen as anticipated reflecting the view that housing remains an excellent long term investment.
• Buy to let opportunities remain strong with rents and yields having risen in 2011 and a competitive range of mortgage products now available.
• Crucially the property market lacks volatility. Buying or selling is always safer in a market where prices are stable rather than erratic, allowing the individual to make a balanced judgement without the pressure of having to act quickly.

Great opportunities for Loughborough in 2012

My attention was attracted to a positive news report on local television, outlining the 2012 prospects for the town last week. The story was that there is much to feel positive about in 2012 as the Olympics will give great publicity for Loughborough with international athletes using the town as their base. In addition, the Olympic torch visit will be a historic day for all local residents and school children.

When combined with an enhancement of the towns’ railway station and additional hotel accommodation now being built, these positive steps should all benefit the local economy and business in 2012.

Let’s hope that all these factors combine to give us all a better year than all the economists are predicting.

Colin Bradley