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Reasons why 2009 will be a better year for estate agents
publication date: Jan 1, 2009
author/source: Jonathan Harvie
No one can deny that you have all had a miserable 2008. There are too many pundits in the market all speculating which way the housing market will go. I won’t add my two pennies’ worth! As it’s Christmas I will set out some of the things that I think will help you in the coming year.
The US economy remains the engine of the world. Americans are also optimistic by nature. With a new President and a “can do” mentality, I fully expect them to confront the challenges and make change happen.
After months of falling the latest Case- Shiller index, which covers a basket of US property prices, showed that the rate of decline was decreasing in some areas. This could be encouraging. If the US property market stabilises it will have worldwide benefits.
These really are on the way down. Some commentators see rates at 1% as a real possibility next year. Others see rates falling even lower. Although the banks and lenders have been slow to pass on the benefits to customers, they will come under severe pressure from the Government and society as a whole. I think they will be seen to moderate their resistance.
Tax cuts / falling oil prices
Without doubt the political will is there to cut the tax burden. Could it be that there is a general election impending? Tax cuts will help “hard working families”. Falling oil prices will mean that the pound at the pump drives further. That will help with disposable incomes.
Even more Government help?
This article was written before the Pre Budget Report but I would like to think that the stamp duty thresholds could be raised, or that stamp duty is temporarily suspended. A Government under pressure could go further and temporarily suspend HIPs.
A reality check
Reality is now creeping in with a vengeance! Vendors really cannot expect to receive top dollar for their properties. Reality will be one of the keys to a market with rising transaction numbers. The sooner we bottom the sooner a recovery can begin.
The perfect eye of the storm?
The appetite for property as an investment class remains largely undiminished. I have several clients who can see the perfect situation arising. What could be better from an investor’s point of view than a combination of forced sellers and low interest rates? For investors 2009 could turn out to be the perfect year.
An essential service
Estate agents provide an essential service. There will always be a core level of transactions. Death, divorce, household size changes and employment based relocation. Less is more For some this will be a bitter pill! More agents will leave the profession. That should mean more business for those who remain. That can only be good news for some.
I can’t pretend that 2009 won’t be another tricky year but I do think that there is now a glimmer of hope and some grounds for optimism.
Jonathan Harvie is a Chartered Accountant, an Affiliate Member of the NAEA and partner
with Hazlewoods LLP, he heads a team of tax and business advisers, specialising in advice
to Estate Agents. This article has been prepared as a guide to topics of current financial
and business interest. We strongly recommend you take professional advice before making
decisions on matters discussed here. No responsibility for any loss to any person acting as
a result of this material can be accepted by us.
For more details contact Jonathan Harvie 01452 634800 or email firstname.lastname@example.org