Historically, the stockmarket has always shown a good spurt of growth between 6 and 24 months before the majority of the economy moves forward once again. The financial markets have been moving generally upwards since January 2009.
Industrial output growth rose at 0.4% in November rather than the 0.3% that was expected, according to the Office for National Statistics.
This is seen by some as proof that the economy has now hit rock bottom and is starting to grow. Therefore it could be argued that the recession is over.
Manufacturing output figures (which are a component of the Industrial Output figure) showed no change, which has tempered any optimism generated by these statistics. Rates of unemployment are also still on the increase and the government has taken on huge debt to ease the short term problems (creating a bigger long term problem). Having regard to the pain that the economy has suffered since the Autumn of 2007 and the shrinking economy since, the general indicators are, however, reasonably positive for the economy as a whole in 2010.
We have low interests rates which can no longer be set for immediate political needs either side of an election. There is also plenty of money in the system, but are the banks prepared to lend the money to persons in the economy (rather than share it out amongst themselves as bonuses!) ? Most economies in Europe have now stopped shrinking and some have started growing.
In relation to the UK property market specifically, the general opinion of the majority of the Independent Chartered Surveyors of the Propertysurveying.co.uk network, suggests that the number of transactions has generally been increasing throughout 2009 and early indicators suggest that, despite the weather over the first two weeks of 2010, this growth is increasing.
The omens, therefore, are generally very positive for the property market in 2010 compared to the previous two years. Whilst growth from the existing level is highly probable and expected, we should not forget that the money lent on mortgages in 2009 was approximately one sixth of that three years ago, reflecting the lower volume of transactions and, to a lesser extent, the lower prices.
Still, it was 50% more than in 2008 and a similar proportionate growth rate this year compared to the 2009 figures may even generate a feel good factor within a wider market.
Cautious optimism seems to be the consensus of opinion for the economy as a whole, as well as the UK property market in 2010.
Editor 14th January, 2010