After the snow bursts that most of us have seen over the weekend, I’m starting to get into the festive mood.
I’ve seen many Christmas’ come and go throughout my many years in the property business and I always like, as many others do, using this time of year to stop of think about the happenings of the year gone by and to think ahead to the future.
Here are a few of my thoughts about 2017 in the property world and what I think we can expect from the year ahead. Do you agree? Let us know by joining the conversation in the comments.
Q. What do you think the biggest challenge of 2017 has been for My Home Move?
A. It is not possible to plan or budget for a snap election – although I distinctly remember commenting in the budgeting sessions during 2016 that we have probably planned for everything, “although we might anticipate a snap election”.
Q. How do you think My Home Move has overcome this challenge?
A. My Home Move is a determined company, and by working with its recommenders we frequently, if not always overcome such adversity. I have always said that My Home Move is at its best when it is under the greatest pressure.
Q. What do you think the biggest challenge of 2017 has been for the property industry?
A. The outcome of the snap election has left a great deal of uncertainty in the market. Markets rely on confidence, and there has been little confidence in the market this year. The market had long anticipated an increase the Bank of England base rate – but the media will always exaggerate its effect. This makes the general public very conscious of their personal financial exposure and as a consequence even less confident than before.
The impending loss of Tenant Fees is placing many estate agents in a precarious position, with a potential loss of gross income in the range of 5-25% – often equating to their net profit margin. This pressure will lead to more consolidation.
Q. How do you think the industry has overcome/responded to this challenge?
A. It is clear that the market and its participants are contracting – we have seen companies restructure and merge, we have seen owner operators reducing staff loads (mainly through natural wastage).
Q. What lesson have you learnt during 2017
A. Politics can be very unpredictable, and have a disproportionate effect on the market place.
Thinking forward to 2018 –
Q. What do you think the biggest challenge for the business/industry will be in 2018?
A. I refer to my earlier answer regarding the loss of Tenant Fees. This could lead to agents looking for alternate means of generating income that could be to our positive advantage. However, the outcome of the Government’s call for evidence on the home moving process will certainly be one to watch.
Q. What challenges do you envisage for home movers in 2018?
A. Coming to terms with the real effect of increases in the Bank of England base rate. Many are on long-term fixed rate mortgages, so should not be affected, but those with Standard Variable Rates and Tracker mortgages will see an immediate impact. Understanding the effect of that impact on personal budgets, balanced by likely wage increases, will be critical.
Q. If you could change a single aspect of the housing market what would it be?
A. If I could wave a magic wand, it would be to make the market more affordable for the first-time buyer. They have had to compete more recently with Buy-to-Let investors who have distorted the balance of supply and demand. As the Government’s various initiatives on the further taxation landlords take effect, more property should become available for FTBs, but it is rare to see house prices fall in a particular sector. While prices are likely to rise (marginally) next year, they will not fall disproportionately under (say) £200,000.