21
Apr
REASONS TO BELIEVE
I produced a communiqué towards the end of 2008 entitled
‘Hopes for Brighter Future’ The main content of which
reflected on the importance of ‘perspective’ and
‘confidence’. It said, and I quote, ‘the middle
range, in particular our niche market sector, which in real terms
these days relates to properties between £500,000 and
£1.25 million have over the last two or three months seen a
very slight levelling out, a reduction in supply and a gradual
increase in demand’ I then contemplated further the fture
effect on property values and continued.. ‘property values
will be bottoming out as we get into second quarter of
2009…’ One of the concluding comments stated and I
reitereated ‘I am by no means complacent or dismissive of the
fact that much hardship will be felt throughout the UK
paritucularly in retail and manufacturing probably for most of
2009. However, I strongly believe that as for the property market,
which effectively has already been in recession for 9 months, it
may well be drawing to a close.’
I also presented another feature early in January ‘Fortune
favours the Brave’. Whereby I stated, ‘ I am confident
to forecast that the worst is now behind us and whilst there is
still a while to go before we are at the bottom, it is a few months
rather than a few years’ and went on to say ‘a change
this year for residential transactions is on the cards, slowly but
surely the balance between demand and supply will emerge with far
more balance than we have become accustomed to...’. my
concluding comment being…’’Green shoots’
yes I think so, reasons to be cheerful unfortunately not, the
economy has a long way to go. I said in a report recently that this
global economic infrastructure does not need merely correcting but
also a thorough cleansing and so be it, every government have their
brushes out now cleaning up ‘on the morning after the night
before’. But it is a time to be optimistic without doubt.
Does this make it the right time to buy? Well back to the intro,
fortune will favour the brave, it certainly isn’t the wrong
time.’
The BBC news website has been a source of some interesting comment
over the past month and here are a few of the encouraging
headlines;
'‘Surprise bounce’ in house prices' (Thurs 2nd April
2009)
House prices rose in March for the first time since October 2007,
according to the Nationwide.
The figures come shortly after the Bank of England reported that
mortgage approvals for house purchases in Britain rose more than
expected in February.
'Surprise mortgage approvals jump' (Monday 30th March
2009)
Mortgage approvals for house purchases in Britain rose more than
expected in February, according to official figures from the Bank
of England.
There were 38,000 approvals in the month, up from 32,000 in
January.
'Signs for hope for UK businesses' (Sunday 5th April 2009)
Conditions are improving for British businesses, two new reports
suggest.
Companies surveyed for the Access to Finance report from
employers’ group the CBI were less negative in March than
they had been in February. Also, there was a small rise in short
term confidence in March measured by the accountants BDO Stoy
Hayward.
'‘More credit’ for homes and firms' (Thursday 2nd
April 2009)
Britain’s banks and building societies are set to make credit
more easily available to homeowners and businesses, according to a
Bank of England report.
But lenders are now set to boost available credit in the second
quarter. It comes as Nationwide’s survey found house prices
rose 0.9% during March, the first rise in 16 months.
‘Improvements in the cost and availability of funds were
expected to support increased credit availability over the next
three months.’
'Lenders still want high deposits' (Monday 6th April 2009)
Mortgage lenders are still demanding high deposits from buyers as
the number of deals expands.
Some recent figures have suggested that the moribund housing market
may have started to show some signs of life.
'Decline in manufacturing ‘eases’' (Tuesday 7th
April 2009)
UK manufacturing fell for the 12th consecutive month in February,
but the rate of decline appears to be easing, official figures have
shown.
‘Going forward we actually see the manufacturing sector
outperforming the rest of the economy because of the depreciation
in the currency’ Amit Kara, UK economist, UBS’.
'Service sector downturn ‘eases’'
Activity in the UK service sector fell at the slowest rate in six
months in March, according to the latest Purchasing Managers’
Index (PMI.)
Earlier in the week, data showed the rate of contraction in
manufacturing had also eased.
‘Glimmer of hope’
‘This is yet another glimmer of hope that there may be some
slight at the end of the long and twisting tunnel the UK economy
has ended up in,’ said Colin Ellis, European economist at
DAIWA Securities.
If today I had a choice of investing in Gold or confidence I
would choose confidence. That is the key to bringing about stronger
and more sustainable growth.