PropertyInvesting.net: Property Investment Special Reports

177: 2008 Predictions - UK

PropertyInvesting.net team                       Dec 17th 2007

PropertyInvestment.net predict property prices will drop (in order of decrease):

• North -8%
• West Midlands -7%
• East Midlands -5%
• South West -5%
• North-West -4%
• Yorkshire -4%
• East Anglia -4%
• South -4%
• London-peripheral -3%
• Greater London -2%
• London-City/West -1%
• Northern Ireland +1%
• Wales +2%
• Scotland +3%

Other criteria

• US Dollar to the UK£    $1.9 / £1  by Q4 2008
• UK£ to the Euro    £1 / 0.72 Euro
• Oil price  $125/bbl by end 2008  
• UK Gas price 55p/therm 
• UK Interest Rates  5.5% until Feb, then 5.25% for remaining 2007
• FT by end 2008   6200  (similar to 2007, slight drop)
• UK Inflation  2.5% Jan 2008 staying around 2.5% until end 2008
• UK GDP  2.5% early 2008 dropping to 1.6% by end 2008
• Security outlook - improving - tensions in Middle East continue to subside
• Euro interest rate  4.25% through 2008
• US Interest rate 5% early 2008 dropping to 4.25% by end 2008 (as GDP growth slows from 2.0% to 1.3% by end 2008 before strengthening again)
• Unemployment - slowly rising, Employment staying level
• Wage inflation  3.8% (4.0% including bonuses)
• GDP growth London 2.5%,  GDP growth North 1.0%, Scotland 1.5%
• GDP China 11%, GDP India 8.5%, GDP Africa 4.5%, Global GDP 3.5%

Look-Back on 2007 Predictions

Enclosed for a look-back are our predictions from 12th Dec 2006 for the year 2007. As you can see, the predictions were generally quite correct. The FT is also currently 6300 (as of 17^th Dec). Inflation, growth and employment prediction were almost spot on. We underestimated the interest rates which rose to 5.75% before dropping to 5.5%. Inflation, growth and wage rises were all pretty accurate. 

PropertyInvestment.net predicted property prices would rise (in order of increase):

• Northern Ireland 12%
• London-City/West 10%
• London-peripheral 8%
• Greater London 7%
• South 6%
• East Anglia 5%
• South West 5%
• Scotland 5%
• Wales 4%
• Yorkshire 3.5%
• North-West 3.5%
• East Midlands 3%
• West Midlands 2%
• North 2%

Note that the UK rates were 5% end 2006 and Euro rates were only 3.25% - this differential was predicted to possible reduce over time as the UK manufacturing-economic trade with the European mainland proportionately increased.

• US Dollar to the UK£    $2 / £1                                                 Generally correct (trend)
• UK£ to the Euro    £1 / 0.69 Euro                                              Euro was stronger
• Oil price  $65/bbl (range $55 to $75/bbl)                                    Oil was higher - average $85/bbl
• UK Gas price 35-45p/therm                                                       Gas was higher - ca. 48p
• UK Interest Rates  5% until Feb, then 5.25% for remaining 2007      Interest rates rose to 5.75% 
• FT by end 2007   6300                                                             Spot on
• Gas price mid 2007 35p/therm, end 2007 45p/therm 
• UK Inflation  2.7% Jan 2007 dropping to 2.4% by end 2007                   Accurate
• UK GDP  2.8% early 2007 dropping to 2.3% by end 2007                      Accurate
• Security outlook - improving - tensions in Middle East tend to subside    Accurate
• Euro interest rate  3.5% early 2007 rising to 3.75% by end 2007           Rose to 4.25%
• US Interest rate 5% early 2007 dropping to 4.25% by end 2007 (as GDP growth slows from 3.0% to 1.8%)     Accurate
• Unemployment - slowly rising, Employment slowly rising                      Accurate
• Wage inflation  4.0% (4.3% including bonuses)                                Spot on
• GDP growth London 4.4%,  GDP growth North 1.8%, Scotland 2.1%     Spot on

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