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Reasons why 2009 will be a better year for estate agents
publication date: Jan 1, 2009
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author/source: Jonathan Harvie
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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.
President Obama 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. Case-Shiller index 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. Interest rate 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. 2009 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 jh@hazlewoods.co.uk |
