News

Europe seems to have checked deflation with QE. April figures show that it has not moved last month, let’s hope that continues, a stable Europe is good for the UK and good for our housing markets.
Another move within Europe is the have increased the cap on Emergency Liquidity to Greece, by some 1.4 billion euros. It seems Brussels is prepared to move the goal posts in the direction of Greece to help prevent them defaulting! Something very strange going on over there and the markets don’t like it.
As regards our own markets, both property and equities are doing very little in the face of the General Election, neither like uncertainty and we will have plenty of that up to the 7th May and a couple of weeks beyond I feel. We need a decisive victory for any party, a cocktail of parties will only send our markets tumbling.
Another uncertainty we face is the continuing story of oil. A recent surge of 20% to $57 a barrel may give some comfort, but the likelihood of it getting back to 80 – 90 $ a barrel in the medium term is unlikely. Although it has recently gone up at the pump, long term oil contracts have fallen. For example 2 months ago crude oil contracts for delivery in Jan 2019 sold at $68.32 a barrel. On Monday past the same contracts were traded at $66.35. So the future trend is down.
The USA have now reached storage capacity so their demand is falling fast. Their fracking operations are still on track. The top producing shale fields have more than 3,400 drilled but uncompleted wells. That is an awful lot of cheap untapped oil (decade’s worth).
Saudi Arabia keeps on pumping trying to defend their market share, the Kingdom output was near an all-time high in March with no let-up in sight.
Oil producers and merchants are locking in long term positions, a clear indication they feel the price will fall.
Oil has a huge impact on the Scottish property market, which of late has been picking up due to people having more money in their pocket thanks to the price of oil, but the long term impact is a lack of job security.
In spite of all we feel the middle market will pick up after the election, people need to know their future is safe before they make a large purchase which will tie them to an area for some time. The lower end is continuing to be fuelled by the buy to let markets and first time buyers who return to the market in a much shorter time scale and it is therefore a price range that always has demand. The top end just keeps moving at its own pace regardless of economic conditions. It is there for the middle range we are most concerned about, but I do feel there is light at the end of the tunnel. I just hope no more rabbits come out of the hat! We are punch drunk with elections and changes to property tax. Time for some stability.
Make sure you vote wisely on May the 7th, it will impact on your property sale!  

Bill Reid BEM BA NAEA DipPFS
Reid Estates
01738237337