Roundup of 2012: Vivian's view of the year just gone

Compared with the snow, volcanic ash and general election during 2010, 2011 started with a much smoother and quieter ride. Consumer confidence seemed to be on the increase, with the hot weather and the Royal Wedding attributing to the second sharpest rise in May since the survey began in 1974.

But this was short-lived, and we had a very rocky summer. In fact, the FTSE 100 dropped over 900 points in just over two weeks between 26th July and 10th August, due to fears that the world economy was sliding back into recession. It was not only the financial markets that were suffering at this time. The riots in London and other areas had also begun, and it seemed as though everything was out of control.

Though the riots now seem like a thing of the past, the markets have still been volatile. With the ongoing problems in Europe, I’m sure I’m not the only one who believes that we could have a rocky ride in the foreseeable future.

With regard to the property market, the base rate is still at an all-time low of 0.5% (December 2011), and has been at that level for nearly three years (since March 2009). In their December 2011 meeting, the Monetary Policy Committee voted unanimously to keep the rate at 0.5%. Many predict that it will remain this low for some time, despite the Consumer Price Index standing at 4.8% in November. Although this has fallen from 5% in the previous month, it is still way above the Bank of England target of 2%. Only time will tell when interest rates will rise.

The Council of Mortgage Lenders (CML) figures have shown that gross mortgage lending increased in November. This is the fourth consecutive year-on-year rise for November and represents a figure 13% higher than the same four weeks of 2010, as well as 5% higher than October 2011. Figures from the HM Revenue and Customs showed that home sales hit an all-time high and were at the highest level since July 2010. As it also was also reported in October that fixed rates have been at their lowest level since January 2008. Hopefully, this means we will see further movement within the property sector.

You will probably agree that the past couple of years have been trying at the very least! It will be interesting to see what effect the 2012 Olympic Games will have on consumer confidence. But whatever happens, it is always important that you understand finances and review your own. That’s where we can help, with a free, no-obligation consultation.