Double Dip? Another roller coaster of headlines more like!

Another day – another set of confusing headlines. Whilst some papers are full of the joys of spring following the first rise in the consumer confidence index for six months others are clearly looking on the bleak side of life following the National Housing Federation’s (NHF) report that some poor homeowner’s are facing four more years of negative equity.

So what is going on here? Is it double dip or are we on the road to recovery? I have said it before and I will say it again: the nation is emerging from a terrible recession and life isn’t a bed of roses but we are emerging –and that’s what matters.

For now your glass can be half full or half empty – the choice is yours but I know how mine is looking.

You see when you ask the people that matter what they think of the economy (you and I basically) they tell you that outlook is brighter. For that reason the consumer confidence index increased by four points in August to -18 making it seven points higher than this time last year and giving us the first overall increase since February 2009.

Based on 2000 interviews with Britons over 16 the index showed consumers feel more positive about the economy and their personal financial situation over the past and next 12 months.

So why then are some people continuing to predict a housing slump? Answer: they’re not. Read the NHF report a little closer you will see that they are actually predicting a 22% increase in house prices over the coming six years.

They claim that strict mortgage rations and the impending October Spending Review will take its toll in 2011 but after thatthere is a steady climb on the horizon. Those in the south east in particular will see house prices take a rapid climb.

No wonder most of us are feeling positive. House prices aren’t going to double overnight but they still represent a very sound financial investment long term. Phew.

Howeverall this comes as absolutely no surprise to me. If nothing else supply and demand will shape the future of the housing market. We are already staring at a major shortfall in housing supply and this situation is going to get worse not better now that we are without a housing planning policy to speak of.

Added to that we have irrefutable proof that buying is cheaper than renting in 74% of the UK – thanks to Zoopla and their solid research. Interestingly the evidence suggests that the Midlands represents one of the best value areas to buy rather than rent with Birmingham Derby and Coventry all featuring high on the list.

Ok the news isn’t ideal for First Time Buyers but we need to talk about the fantastic strategies in place to help them (like Homebuy Direct and private Shared Equity Schemes such as our own scheme – MiWay) rather than just bemoan the deposit requirements.

And I am not the only person to be feeling positive right now. The UK economy grew by a surprisingly robust 1.2% in the second quarter – and that is fact not speculation. So in conclusion – house prices are set to climb by 22% between 2009 and 2015 British consumers are feeling more optimistic about their financial outlook now than at any other point over the last six months and the economy is growing faster than predicted.

Interest rates are still at record lows and buying is cheaper than renting. Surely that leaves the property market well as safe as houses?

Sue Warwick - National Sales & Marketing Director Miller Homes
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