The 2018 HAMISH_MCTAVISH Predictions Thread

HAMISH_MCTAVISH

Sorry this one is a bit late, but still in January!

Once again the big issue for this year, and the next few years, will be Brexit, nothing else of any real importance will get done.

As for the predictions...

1. House prices will stagnate. Indices will range from -1 to +3%.

2. FTB numbers will stagnate or fall due to Brexit induced job market uncertainty and disposable income being squeezed by inflation.

3. Inflation will temper but remain above target, because of the ongoing effects caused by Brexitary GBP devaluation - I expect a range between 2% and 3% for most of the year.

4. The picture for real terms wage growth remains gloomy thanks to inflation, and unemployment is already at record lows so can't fall much further. Best guess is a slight rise in unemployment and slight falls in real terms wages.

5. Interest rates will end the year at or below 1%.

6. House building will not increase at anywhere near the rates the government has promised or the country needs to alleviate the housing crisis. You could make this prediction safely every year (and I do) but nothing will change until we have radical changes to planning regulations, developer funding, and mortgage regulations.

7. Rents will continue to increase and reach another new record high.

8. The gap between London/SE and the rest of the UK will continue to close as it did in 2016 and 2017.

9. Aberdeen house prices have broadly bottomed out, last year fall was under 2% (Halifax) rents will continue to soften a bit as they have done over the last year but also appear to be bottoming out now.

10. Economic growth in the UK will remain dismal, despite the EU and most of the World showing booming growth by comparison, with GDP under 2.0% for the year

Brexit:

11. Brexit is a mess, and will continue to be a mess this year.

12. Govt will continue to fudge decisions and kick the really hard choices into the long grass, while trying to appease the Tory Brexiteers with spin and bluster, but keeping the UK as close to the EU as possible so as not to cause a bust right before the next election.

13. It is impossible to square the circle of conflicting priorities and contradictions, open Ireland border/closed other borders, regulatory convergence in NI but divergence for UK, friction free trade but leaving the very mechanism that makes such trade possible. And it's certainly impossible to do it in 18 months. So it won't be done this year.

14. The likely outcome is a transition deal with no long term deal agreed, this will be spun as an agreed 'framework' for a long term deal.

Outliers:

Take your pick but any of the following could blow up at any time...

15. Korea - Little Rocket Man and Tiny Hands Trump are as mad as each other - Hopefully they both have a nanny in place to prevent accidental button pushing.

16. South China Sea - this hasn't hit the news as much lately but Chinese territorial aggression will not be tolerated indefinitely - there's a lot of military aircraft and vessels in a tense part of the world with a high potential for accidents....

17. Russia - Russia continues to flex it's muscles and the democracy tampering/sanctions issues aren't going away - when cornered Putin tends to act militarily with an illegal land grab and proxy war somewhere... (see Ukraine for details)

And finally....

18. Trumpeachment. Well, we can live in hope anyway, but probably won't get that lucky. Besides, I'm not sure Pence is much of an improvement....;)

Anyway, it's all just a bit of fun, list your predictions below....

michaels

HAMISH_MCTAVISH wrote: »

Sorry this one is a bit late, but still in January!

Once again the big issue for this year, and the next few years, will be Brexit, nothing else of any real importance will get done.

As for the predictions...

1. House prices will stagnate. Indices will range from -1 to +3%.
I went a little too pessimistic last year and at the moment I am seeing falls rippling out from London but I think that (finally) the rest of the UK economy may actually do better or as well as London for a change so perhaps outside London and the SE rises can be sustained so I will go for -2 : +2

2. FTB numbers will stagnate or fall due to Brexit induced job market uncertainty and disposable income being squeezed by inflation.
Again I think London will be hit by Brexit but if sterling remains weak the rest of the country may do OK jobs wise, what this means overall for FTB I am not too sure, I would say stable to up slightly as the pressure on landlords continues to mount.

3. Inflation will temper but remain above target, because of the ongoing effects caused by Brexitary GBP devaluation - I expect a range between 2% and 3% for most of the year.
I think inflation may fall fairly sharply, as the devaluation effect falls out or even reverses (we are already above pre vote USD levels and international prices are often in dollars). Against this may be the tighter labour market with reduced EU migration and stronger commodity prices with strong international growth. Average 2.2% over the year which means some of the year will be under 2%.

4. The picture for real terms wage growth remains gloomy thanks to inflation, and unemployment is already at record lows so can't fall much further. Best guess is a slight rise in unemployment and slight falls in real terms wages.
This one I disagree with, I think employment numbers will hold up with possibly a slight blip up in unemployed percent but nothing huge and this will lead to a noticeable pickup in wage growth - I can see t being 3% wage growth and 1.8% inflation by the end of the year.

5. Interest rates will end the year at or below 1%.
Yes but the next rise will be this summer rather than 2019 as seemed likely just two months ago and 50/50 chance of a second increase this year so 1% by year end my central estimate.

6. House building will not increase at anywhere near the rates the government has promised or the country needs to alleviate the housing crisis. You could make this prediction safely every year (and I do) but nothing will change until we have radical changes to planning regulations, developer funding, and mortgage regulations.
Yes in the short term but interestingly we are having a local plan foisted on us that requires 15k homes in the next 10 years, double what was previously envisaged and that this will require considerable swathes of green belt land to be given up. Presuming this is the same everywhere then I can see within the next 5 yeas that there may actually be a meaningful increase in housing starts. Politically it would be a great boost to a (brexit induced) struggling economy) to allow house building to ramp up in time to give a feel good before the next election.

7. Rents will continue to increase and reach another new record high.
I think probably stagnate as incremental demand drops off so possibly flat in nominal terms.

8. The gap between London/SE and the rest of the UK will continue to close as it did in 2016 and 2017.
House price gap? If so then I agree this year as economic relative strength shifts.

9. Aberdeen house prices have broadly bottomed out, last year fall was under 2% (Halifax) rents will continue to soften a bit as they have done over the last year but also appear to be bottoming out now.
Looks like Oil has broken through 65/barrel - is this enough to revive N sea production?

10. Economic growth in the UK will remain dismal, despite the EU and most of the World showing booming growth by comparison, with GDP under 2.0% for the year
1.8% looks about right - not sure if this is dismal - unlike previous years it will be below g20 average rather than above.

Brexit:

11. Brexit is a mess, and will continue to be a mess this year.
Already correct and we are only 4 weeks in.

12. Govt will continue to fudge decisions and kick the really hard choices into the long grass, while trying to appease the Tory Brexiteers with spin and bluster, but keeping the UK as close to the EU as possible so as not to cause a bust right before the next election.
Freedom of movement seems to be the elephant in the room - I can see the brexiteers accepting almost anything else as long as they can demonstrate that we control our own borders but will there be a form of words that both they and the EU can live with - something that they define as FOM and we define as secure borders?!

13. It is impossible to square the circle of conflicting priorities and contradictions, open Ireland border/closed other borders, regulatory convergence in NI but divergence for UK, friction free trade but leaving the very mechanism that makes such trade possible. And it's certainly impossible to do it in 18 months. So it won't be done this year.

14. The likely outcome is a transition deal with no long term deal agreed, this will be spun as an agreed 'framework' for a long term deal.
Will there be a second 'transition' into EFTA or similar from Jan 2021 until a 'final deal' is reached....

Outliers:

Take your pick but any of the following could blow up at any time...

15. Korea - Little Rocket Man and Tiny Hands Trump are as mad as each other - Hopefully they both have a nanny in place to prevent accidental button pushing.
It looks like brinkmanship is just how Trump negotiates. North Korea being an ICBM nuclear power seems inevitable but doesn't make me sleep more securely at night.

16. South China Sea - this hasn't hit the news as much lately but Chinese territorial aggression will not be tolerated indefinitely - there's a lot of military aircraft and vessels in a tense part of the world with a high potential for accidents....
Does anyone actually have the appetite to stand up to China, those for whom this is of strategic importance are much to weak to do anything. I have to admit I don't understand China enough to know if they want to dominate the world or are happy to see mutual global growth - in 20 years they will be by far the strongest country economically and militarily anyway so why would they rock the boat in the short term?

17. Russia - Russia continues to flex it's muscles and the democracy tampering/sanctions issues aren't going away - when cornered Putin tends to act militarily with an illegal land grab and proxy war somewhere... (see Ukraine for details)
Indeed - if Putin does need a distraction then the Baltics look like an ideal candidate - problem is they are in Nato but perhaps if Kapersky turned of the national grid and the NHS unless NATO agreed not to respond to an invasion then it would be over pretty quickly.

And finally....

18. Trumpeachment. Well, we can live in hope anyway, but probably won't get that lucky. Besides, I'm not sure Pence is much of an improvement....;)
I think you may be right and it would not be pretty, at the end of the day Trump is a businessman whereas Pence is a zealot....

Anyway, it's all just a bit of fun, list your predictions below....

19. GBP will continue to appreciate slowly unless the tory party breaks. The EUR will strengthen as EU QE stops fairly quickly.

20. This will limit the upside for the FTSE; global stock markets - not sure, in theory the 'fundamentals look strong' but then markets are already overbought in anticipation of strong global growth so if anything triggers a less buoyant outlook there could be a correction.

21. Oil will trade between 60 and 80 which is 25% higher than last year.

22. It will be the 2nd warmest year on record- hopefully not the warmest again.

23. They may well be a Tory leadership election as Boris thinks his odds are better in the short term than the longer term but he might not be the winner. For other Tory contenders there is the question of do they want it now and potentially end up quickly being defeated in a GE or do they hang fire and see if the electoral cycle turns again.

24. A general election is much less likely as the tories will fight tooth and nail to prevent it so it would need some disaster for them to lose a vote of no confidence.

westernpromise

22. It will be the 2nd warmest year on record- hopefully not the warmest again.
Either that or the past will have to get colder.

HAMISH_MCTAVISH

michaels wrote: »

19. GBP will continue to appreciate

Continue?

Against the weakening dollar recently, maybe, but against a trade weighted basket it's still languishing in the doldrums.

21. Oil will trade between 60 and 80 which is 25% higher than last year.

Agreed.

They may well be a Tory leadership election

Maybe...

But I doubt it this close to Brexit unless it's a blatant act of sabotage by the Extremist Brexiteers - and that would backfire spectacularly.

triathlon

I would like to think in 2018 and after over 15 years HPC.com will finally close down and those poor deluded people can live normal lives.

But I know that they will take this misguided hope of moving into a alpha male/womens home on the cheap to their sad graves.

michaels

HAMISH_MCTAVISH wrote: »

Continue?

Against the weakening dollar recently, maybe, but against a trade weighted basket it's still languishing in the doldrums.




Agreed.



Maybe...

But I doubt it this close to Brexit unless it's a blatant act of sabotage by the Extremist Brexiteers - and that would backfire spectacularly.

Even against the mighty eur it is 5% off its lows.
Youi might well ask why anyone would want the Tory leadership now? Perhaps if they thought this was their only chance to be prime minister and that was their ambition....

Filo25

HAMISH_MCTAVISH wrote: »

Sorry this one is a bit late, but still in January!

Once again the big issue for this year, and the next few years, will be Brexit, nothing else of any real importance will get done.

As for the predictions...

1. House prices will stagnate. Indices will range from -1 to +3%.

I will maybe go slightly more bearish on this one and go -3 to +1%

2. FTB numbers will stagnate or fall due to Brexit induced job market uncertainty and disposable income being squeezed by inflation.

No strong feelings on FTB numbers, as government incentives run up against a declining outlook for prices and ultimately rising rates, but BTL will continue to struggle

3. Inflation will temper but remain above target, because of the ongoing effects caused by Brexitary GBP devaluation - I expect a range between 2% and 3% for most of the year.

I'm not expecting inflation to fall as much as I was, firstly because global growth is starting to pick up now so we are likely to see commodity/energy prices rising, and secondly if I judge the Labour market now by headline unemployment numbers it is tight (although I do think that overstates how tight it is), so it is reasonable to expect the current inflation numbers to be reflected in quicker growth in nominal wages this year. Both of these being partially offset by the worst of the devaluation impacts dropping out. I will go for inflation between 2.5 - 3.5%

4. The picture for real terms wage growth remains gloomy thanks to inflation, and unemployment is already at record lows so can't fall much further. Best guess is a slight rise in unemployment and slight falls in real terms wages.

As mentioned above I think we will see faster nominal wage growth so expect the gap to close.

5. Interest rates will end the year at or below 1%.

With global growth now a lot stronger than it has been for a while, and the inflation outlook looking less benign as a result, I do expect faster rises than I previously did, its just hard to predict if we will see that this year or the impact will more be in 2018-9, I do expect a rise this year so will go for year end rates in the 0.75-1.25% range

6. House building will not increase at anywhere near the rates the government has promised or the country needs to alleviate the housing crisis. You could make this prediction safely every year (and I do) but nothing will change until we have radical changes to planning regulations, developer funding, and mortgage regulations.

Always a pretty safe prediction! I have to believe the slowness of the market and large number of unsold luxury developments in London is going to have some kind of impact on the level of development going forwards as well.

7. Rents will continue to increase and reach another new record high.

Agreed!

8. The gap between London/SE and the rest of the UK will continue to close as it did in 2016 and 2017.

Expect the same as affordability continues to bite and BTLs aren't active buyers.

9. Aberdeen house prices have broadly bottomed out, last year fall was under 2% (Halifax) rents will continue to soften a bit as they have done over the last year but also appear to be bottoming out now.

Oil's recent rise may help that particular market

10. Economic growth in the UK will remain dismal, despite the EU and most of the World showing booming growth by comparison, with GDP under 2.0% for the year

I'm expecting growth at 2-2.5% this year, primarily driven by strengthening global growth, I think that is reflected in stronger UK growth towards the end of 2017, although I expect the UK to lag many of the major western Economies again.

Brexit:

11. Brexit is a mess, and will continue to be a mess this year.

Safe enough prediction! We will continue to get the same nonsense posturing for domestic consumption, but I expect transition terms to be agreed, we may be on them for longer than people expect, although that probably won't become clear this year.

12. Govt will continue to fudge decisions and kick the really hard choices into the long grass, while trying to appease the Tory Brexiteers with spin and bluster, but keeping the UK as close to the EU as possible so as not to cause a bust right before the next election.

Yep! The transition deal will be the important thing, in terms of fudging and kicking decisions into the long grass, I expect that to apply to pretty much all areas of government policy, the parliamentary arithmetic at present isn't likely to deliver any particularly contentious decisions.

13. It is impossible to square the circle of conflicting priorities and contradictions, open Ireland border/closed other borders, regulatory convergence in NI but divergence for UK, friction free trade but leaving the very mechanism that makes such trade possible. And it's certainly impossible to do it in 18 months. So it won't be done this year.

Agreed, the NI border issue is a mess with no clear answers beyond ones that seem anathema to a lot of the Tory party at present, so the transition deal is a good way to kick things down the road.

14. The likely outcome is a transition deal with no long term deal agreed, this will be spun as an agreed 'framework' for a long term deal.

Agreed

Outliers:

Take your pick but any of the following could blow up at any time...

15. Korea - Little Rocket Man and Tiny Hands Trump are as mad as each other - Hopefully they both have a nanny in place to prevent accidental button pushing.

I expect continuing posturing from N Korea but not much beyond that, like most dictators I don't think there is much enthusiasm for suicide there unless he sees no alternative, so assuming the US just talks tough and does nothing too rash then it will probably bubble on as before.

16. South China Sea - this hasn't hit the news as much lately but Chinese territorial aggression will not be tolerated indefinitely - there's a lot of military aircraft and vessels in a tense part of the world with a high potential for accidents....

Could be particularly "interesting" if the Chinese debt bubble bursts and the regime finds itself in search of a distraction from economic problems at home.

17. Russia - Russia continues to flex it's muscles and the democracy tampering/sanctions issues aren't going away - when cornered Putin tends to act militarily with an illegal land grab and proxy war somewhere... (see Ukraine for details)

Rising oil prices will probably leave Russia in more relaxed mood than previously, although no doubt the interference and posturing will continue.

And finally....

18. Trumpeachment. Well, we can live in hope anyway, but probably won't get that lucky. Besides, I'm not sure Pence is much of an improvement....;)

I think he survives this year, may face a more challenging 2019 though if the mid-terms go badly

Anyway, it's all just a bit of fun, list your predictions below....

Will also agree with Michael that Oil will remain strong this year, how strong depends on how much production can be ramped by the shale oil producers with rising prices making that activity more viable.

Also expect commodity prices to rise over the course of the year.

My outsider is that this year marks the top in the equity markets and that the next bear market begins, that could well slip into 2019 though but when expectations of inflation start to rise and we see more serious expectations of rising rates then I think that long party is over for this cycle, the same applies to housing as well although that is likely to be a slower process.

Crashy_Time

Aberdeen house prices and rents will continue their slow canter down the U-Bend.

triathlon

Crashy_Time wrote: »

Aberdeen house prices and rents will continue their slow canter down the U-Bend.

And then you will wake up and rush off to discuss on houseprice"hope".com for the inevitable property crash in 2018 that is without going to happen in the 16th year

When are you going to except that in real life people on low wages such as yourself living in bedsits cannot just jump bed with the elite and alpha males. Keep dreaming crashy that's fine, that's as long as you make sure you pay our rent on time

buggy_boy

triathlon wrote: »

And then you will wake up and rush off to discuss on houseprice"hope".com for the inevitable property crash in 2018 that is without going to happen in the 16th year

When are you going to except that in real life people on low wages such as yourself living in bedsits cannot just jump bed with the elite and alpha males. Keep dreaming crashy that's fine, that's as long as you make sure you pay our rent on time

Glad its not just me that is fed up of this idiot with his copy and paste of irrelevant news articles and constant blinkered view that prices are now crashing... I do occasionally visit housepricecrash, it is funny how an index says house prices are going up and they all say its a rubbish index and its been tampered with etc, next month that same index says prices have gone down slightly and its the only reliable index.

Aberdeen has seen a bit of a rough time, although if you look over the last five years its actually relatively stagnant.. I would expect to see much of the same over the next year or two, with house prices sliding slowly or staying around the same price.

Thrugelmir

Originally Posted by HAMISH_MCTAVISH View Post
Sorry this one is a bit late, but still in January!

Once again the big issue for this year, and the next few years, will be Brexit, nothing else of any real importance will get done.

As for the predictions...

1. House prices will stagnate. Indices will range from -1 to +3%.

Annual increase of 1.0%. Demand continues to outstrip supply. Rising interest rates and low payrises will cap peoples willingness/ability to borrow.

2. FTB numbers will stagnate or fall due to Brexit induced job market uncertainty and disposable income being squeezed by inflation.

Help to buy (in it's various guises) will continue to underpin the market. As the realisation of the changes to BTL, i.e. tax etc, kick in. Then many LLs will either exit the market or trim their portfolios accordingly. There'll be no fall in FTB numbers compared to 2017.

3. Inflation will temper but remain above target, because of the ongoing effects caused by Brexitary GBP devaluation - I expect a range between 2% and 3% for most of the year.

Inflation is difficult to predict. As the main drivers are outside the direct control of the BOE. If the BOE raises base rate in line with expectations then inflation may well fall back. Expect the year to end around 2.5% (CPI measure).

4. The picture for real terms wage growth remains gloomy thanks to inflation, and unemployment is already at record lows so can't fall much further. Best guess is a slight rise in unemployment and slight falls in real terms wages.

The economy appears to be on the turn. Minimum wage is increasing. Likewise minimum employer pension contributions. Some public sector employees may be treated differently.
Growth of 2% excluding bonuses.

5. Interest rates will end the year at or below 1%.

BOE is likely to raise base 2 or 3 times by 0.25%. End of year base rate will be either 1.% or 1.25%.

6. House building will not increase at anywhere near the rates the government has promised or the country needs to alleviate the housing crisis. You could make this prediction safely every year (and I do) but nothing will change until we have radical changes to planning regulations, developer funding, and mortgage regulations.

Can only repeat Governments don't build houses. People do. Of which there's a skills shortage. 2018 will however be a good year for residential house construction.

7. Rents will continue to increase and reach another new record high.

Rents will rise though at a slower rate than inflation.
2% in line with average wages.

8. The gap between London/SE and the rest of the UK will continue to close as it did in 2016 and 2017.

London will fall. That's the only reason the gap will cllose considerably. Always has been a gap and will continue to be so.
Simply because there are more higher paid jobs. Doesn't mean the houses are ay better thoughthan elsewhere in the country.

9. Aberdeen house prices have broadly bottomed out, last year fall was under 2% (Halifax) rents will continue to soften a bit as they have done over the last year but also appear to be bottoming out now.

No view.

10. Economic growth in the UK will remain dismal, despite the EU and most of the World showing booming growth by comparison, with GDP under 2.0% for the year

Steady progress in rebalancing the UK economy, i.e. 1.5% growth. The UK can only focus on it's own issues not compare to others. Balance of trade deficit will fall in 2018.

Brexit:

11. Brexit is a mess, and will continue to be a mess this year.

The EU's position will unravel as the divisions surface.

12. Govt will continue to fudge decisions and kick the really hard choices into the long grass, while trying to appease the Tory Brexiteers with spin and bluster, but keeping the UK as close to the EU as possible so as not to cause a bust right before the next election.

There'll be an agreement. Both the UK and the EU need one.

13. It is impossible to square the circle of conflicting priorities and contradictions, open Ireland border/closed other borders, regulatory convergence in NI but divergence for UK, friction free trade but leaving the very mechanism that makes such trade possible. And it's certainly impossible to do it in 18 months. So it won't be done this year.

Was never an issue before the EU existed. There'll be an agreement. The Irish need one.

14. The likely outcome is a transition deal with no long term deal agreed, this will be spun as an agreed 'framework' for a long term deal.

Divorce isn't an overnight process in any facet of life.
However the UK will be free to move on.

Outliers:

Take your pick but any of the following could blow up at any time...

15. Korea - Little Rocket Man and Tiny Hands Trump are as mad as each other - Hopefully they both have a nanny in place to prevent accidental button pushing.

China will bring Little Rocket Man down. Not neccessarily this year though.

16. South China Sea - this hasn't hit the news as much lately but Chinese territorial aggression will not be tolerated indefinitely - there's a lot of military aircraft and vessels in a tense part of the world with a high potential for accidents....
Does anyone actually have the appetite to stand up to China, those for whom this is of strategic importance are much to weak to do anything. I have to admit I don't understand China enough to know if they want to dominate the world or are happy to see mutual global growth - in 20 years they will be by far the strongest country economically and militarily anyway so why would they rock the boat in the short term?

Oil and gas. that's the issue.

17. Russia - Russia continues to flex it's muscles and the democracy tampering/sanctions issues aren't going away - when cornered Putin tends to act militarily with an illegal land grab and proxy war somewhere... (see Ukraine for details)
Indeed - if Putin does need a distraction then the Baltics look like an ideal candidate - problem is they are in Nato but perhaps if Kapersky turned of the national grid and the NHS unless NATO agreed not to respond to an invasion then it would be over pretty quickly.

And finally....

18. Trumpeachment. Well, we can live in hope anyway, but probably won't get that lucky. Besides, I'm not sure Pence is much of an improvement....

To understand Trumps popularity. You need to understand much of the USA. The divisions were already their.
Trump has simply opened them up.

Anyway, it's all just a bit of fun, list your predictions below....

Labour party will go into meltdown through infighting.

Oil will drop in price.

May will remain PM