Friday, August 27, 2010

Autumn is Just Around the Corner

As I write this it is nearly the end of August and the rain, which hasn't stopped all night, is still pouring down on a bedraggled Market Place. Stallholders are regularly pushing up their canvas roofs to send a cascade of water over the ground. Depressing? Just a bit, maybe, but look on the bright side. We will soon be in September with the throngs of bored children heading back into the arms of their welcoming teachers to continue their studies towards the next crop of A* GCSE's and A levels.

What of the property market, which is now looking towards early Autumn? The coalition government announced mid Summer that they would be making their main 'Cuts' in the Autumn and I feel that the usual holiday season lull has been intensified by the prospect of this happening. If you tell a population that there is pain to come then they batten down the hatches and wait and see. The recent retail figures and mortgage approval figures may bear this out to a degree.

Once people know where they stand and the children are back at school we may see a market shake itself off and begin to move forward. I'm not talking price rises – just activity! There are parts of northern England where 45% of the working population are employed in some way by government. Similarly large numbers of people in Cambridge are employed by the NHS at the Addenbrookes hospital complex and in teaching although they have reassured us that the NHS will not be as savagely attacked as some departments.

So we fight our way to the end of the year with the prospect of a VAT rise to 20% in January 2011. That debt has to be repaid you know! If the impact of this rise is as great as the previous governments tinkering by reducing to 15% then I doubt we have too much to concern ourselves with. Lets take an average (for this area) estate agency fee of £2,000. VAT at at 17.5% adds £350 and at 20% £400. Looking at it realistically would £50 stop this transaction?

Summing up I think VAT hikes are the least of our worries. Dismantling too much government employment and projects too quickly could cause us all some problems, not just those directly employed by the public sector.

Thursday, August 12, 2010

Definitely a Work of Fiction!

John Phelps, a former property correspondent for the Cambridge Evening News and a property journalist for more than 30 years, has just published his first novel: Agent From Hell. He reassures me when he aserts " I have never met an estate agent like Theo Salter and, in any case, the book is not an agent's manual... it is meant to entertain!"
Priced at £8.99 it can be ordered from bookshops or from Matador Publishing. Follow this link for review and details

Tuesday, August 10, 2010

Why do we do it?

Oh my God, we’re at it again!

Todays Times headline has sent shivers through the property owning classes as they think that the economy is ‘stuttering’ and house prices are stalling/falling again.

It’s August - this country’s main school holiday month - and whilst large numbers of us are not jumping on airplanes to Spain or sunny places as (not being heavily bonused bankers)our budget won’t stretch to it, we are in the majority ‘on holiday’.

Since I became an estate agent in 1979 the late summer has always been slow in terms of sales and new instructions. I have never had a best ever sales month in August. Now, add into this the Cameron/Osborne/Clegg effect and you have the perfect recipe for a seriously depressed property market.

Forgive me but I have to say politicians never learn from past mistakes.

Whilst waiting in a queue outside a Pork butchers the other Saturday morning I made the mistake of passing the time of day with the gentleman in front of me. He asked what I did for a living, as I had commented that I would like a queue like the butcher’s outside my premises, and when I replied “estate agent” he said “You lot deserve all you get!”

So,of course I agreed with him 100%.

Getting to the point, our politicians do things like announcing the end of dual tax relief then waiting 6 months before implementing it. They announce reducing and cutting the public sector, then leave it until the autumn before actually doing it. So therefore we deserve what we get - a market where everyone employed by government or who gets any proportion of their work from government, decides not to spend anything they don’t have to until they know where they stand. I believe this is the root cause of the mixed messages about house prices and the state of the market we are currently hearing.

Never underestimate the power of the media - print it often enough, repeat it often enough on TV and radio and you’ll find it will come to pass.

Wednesday, August 4, 2010

Market Update from Hometrack

Monthly National Housing Survey

Results at a glance:

Prices fell 0.1% in July - the last month on month price fall was in April 2009 when prices fell by -0.3%
The decline in demand is in part seasonal but the underlying trend for the last 5 months has been downwards
Concerns over the economy and talk of impending spending cuts have taken their toll on market confidence and levels of demand
The change in market conditions has seen the average time on the market rise to 8.7 weeks - up from 8.4 weeks in June. The average time on the market has returned to August 2009 levels
The proportion of the asking price being achieved has dropped to 94% from 94.3% in June and looks set to decline further as pricing comes under pressure
The one positive from the survey is that the volume of sales agreed increased by 3.7%. Despite this agents are marking prices lower as they see rising supply and faltering demand putting prices under downward pressure over the remainder of 2010