With the latest UK economic figures now out Mark Posniak, Head of Marketing & Operations at Dragonfly Property Finance, explained to B&C what the statistics say and also what it means for property investors...
And there you have it. After a drumroll lasting the best part of a month, the number we were all waiting for was announced yesterday.
In the fourth quarter of 2011, according to the preliminary estimate anyway, the UK economy shrank by 0.2%.
For some, this was far worse than expected, for others it was far better than expected. The reality is that it came in more or less as the markets had expected. Down but not out. Flailing and flat.
The talk, of course, is already of the dreaded double dip recession. It will certainly be a surprise if we manage to dodge it given the weakness of the economy. We're nearly a third of the way through Q1 and looking around it doesn't feel like it's been a great January.
Manufacturing is depressed, the services sector is on its knees as people rein in their spending, construction is under the cosh, more and more people are losing their jobs and our biggest export partner, Europe – well, it's like a horror flick across the channel.
It's so grisly over there that I hear they're not letting anyone under the age of 18 onto the Eurostar or the ferries for fear of giving them a fright.
And even though most observers don't expect an economic crash of the kind we experienced in 2008/09, the consensus is that the slump we're in could carry on for some time — for at least another year.
After all, we're all out of ammunition when it comes to stimulating the economy: interest rates are rock bottom already, our economy is creaking with debt so there's no scope to invest, and as for the tonic that is QE, well nobody knows whether that does anything anyway. It's alchemy at best.
As ever, some people are doing better in these bad times than others. The professional property investors we lend to have never been happier, and are positively thriving in the apocalypse.
For these people, falling house prices (and they are likely to fall further with yesterday's data) are uncovering no end of gems while people's refusal to buy in such an uncertain climate means rents remain high.
For many property investors, the perfect storm we're in is the perfect opportunity to build their portfolios.
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