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The sun may be shining now, however have your umbrella ready!

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colourful umbrellas open with a blue sky

The Centre of Economics and Business Research has recently predicted a 13.8% drop in average house prices next year.

Long range forecasting of the weather or the economy are generally doomed to failure due to too many variables at play. During the coming weeks and months there will no doubt be several forecasts for the housing market – what should we make of them?

If we take weather forecasting as an example – short term forecasts prove to be more accurate purely because there is less opportunity for variables and less time for those variables to take effect. The same is generally true of economic or housing market forecasts. The CEBR research I would suggest could be seen as a short to medium range forecast and therefore under normal circumstances could prove to be reasonably accurate.

There is one big caveat though!

Most of the variables are still very variable! Currently, we are not in ‘normal circumstance’ territory. The report has taken into account ‘fixed’ elements such as mortgage repossessions are due to recommence at the end of October, the wind-down of the Coronavirus Retention scheme and the Stamp Duty Reduction deadline of April next year.

But, with the Government we have at the moment any one of those could be subject to change. A second outbreak of the virus may yet force the Government to bring about a second lockdown and amend what measures they have already have in place. Added into the mix is that an agreement with the EU is not a done deal. Even if the deal is concluded successfully, will it be seen as a good deal for the UK! This is before we even think about how many jobs have currently been lost in the economy. The knock on effects are yet to filter through into fall-throughs of house sales, collapse of sales chains, withdrawals of marketed properties for sale. The economic downturn is unlikely to see major lenders fill the market with high loan to value mortgages and no one has yet contemplated the psychological effect a lockdown Christmas could unleash.

My advice may seem relatively simple given the complexities mentioned, however I will take my key from mother nature. Autumn is usually the season of retreat in readiness for the approach of winter. I may not know exactly how hard the winds will blow, how much the rain will fall, or the temperature will drop. But I do know they will all happen, grab your umbrella now and make sure a warm coat is to hand as winter is likely to feel long and cold.

Check out Mutual Pre-Portal Property Platform and grab our ‘umbrella’ today.

Max Fuller is Founder and Creator of Mutual Pre-Portal Property Platform