An article by Andrew van Sickle that I recently read in Money Week starts “Every December, stock market analysts and economists produce their forecasts for the year ahead. Pay no attention. ‘Professional market forecasters are often called dart-throwing chimps’, says Morgan Housel of “This might be an insult to chimps.”

Whereas I have no intention of insulting chimps, or have any idea of how their talents at predicting the future rate, I’m nevertheless going to have a go.  If I am upbeat, it’s probably because the members of the ASTL recently responded to a sentiment survey by giving an 80%+ rating to how they expected business to be in the next six months.

I would like to call myself a realist, but many regard me as a pessimistic.  I suppose the best thing about expecting the worst is that, even if things turn out only slightly better, one is pleasantly surprised.

Changes to the rate of tax relief on interest paid in respect of buy-to-let property; as well as the dropping of the automatic 10% wear and tear allowance, the changes to stamp duty and the requirement for capital gains tax to be paid within 30 days, all seem to be designed to discourage private investment in buy-to-let property and thus reduce purchase pressure.  In theory, this should reduce prices.  In practice, who knows?

On the other hand, the increased inheritance tax thresholds for owner-occupied property seem to serve as an encouragement for older people to hold on to their homes, rather than downsize.  This reduces the supply of homes to the market, with a knock-on effect being increased prices.

So, what’s my prediction for house prices in 2016?  On balance, I think that prices in London and the South East will increase only slightly, if at all, with a weakening in the £2m+ market.  I would expect prices elsewhere to continue to rise, other than in areas with poor economic prospects.  There will be an increase in supply, but not enough in the “affordable” price range.  More people will be renting and there will be pressure on rental prices.

What about bridging finance? This will continue to flourish as professional investors find this a convenient and efficient way to fund their short-term cash flow requirements.   The level of regulated first charge business will grow at a slower rate as the criteria of mainstream lenders become less restrictive.  

All the investment warnings say that the past is no sure indicator of the future, but the steady growth of bridging is, in my opinion, not going to suddenly reverse.

As far as the ASTL is concerned, we will expect to continue to attract new members and associate members.  The achievements of 2015 set a high bar, especially with self-regulation, the profile of the association and the success of the annual conference.  It’s going to be tough to better this in 2016, but we’ll try.

Of course, even between writing this and the publication of this article, unforeseen disasters may happen and things may change with alarming speed, but I haven’t got a crystal ball and my tarot cards don’t seem to be able to decide where the future lies.

All that remains is to wish each every one of you a prosperous, positive and exciting 2016 and beyond.   May we all have a great year!

Benson Hersch CEO of the ASTL
A version of this article appeared in Bridging Introducer in January 2016