Too early to celebrate

Nia Williams

December 17, 2009

Too many commentators have got carried away by their own positive rhetoric, cautions Haggerty. He explains why:

”A few positive signals from the housing market and you can almost hear the Champagne corks popping. I’d dearly love to be able to share the euphoria, not least because we’re getting bored by the recession. Sadly, I think we’re going to face some quite torrid times, particularly in the first half of 2010, both in the housing market and the economy.

”I fear the end of year slowdown could drag well into 2010. We could see the UK come out of recession and almost immediately slide back into it – the ‘double dip’.

”From late March we will be in the throes of (a probably dirty) election campaign. This may hold out the prospect of change and new faces in charge – but it will also engender short term uncertainty.

“People are ‘bored’ with recession – they want to spend money, they want to feel more confident, they want to buy a home or move house. But with the spectre of post-election doubts, plus a build-up of negative economic and financial news, they are likely to wait and see. Only once the world cup in South Africa is over on 11th July (and I harbour hopes that Capello’s boys may do well) are we likely to see any real consolidation in either the housing market or the wider economy. Even then, it being summer, the pick-up will be slow.

”Maybe by autumn 2010 we’ll start seeing the foundations of a real recovery and by this time next year the housing market and economy will be looking more positive again. A long haul, I’m afraid.”

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