Countrywide, the UK’s largest estate agent, has called on the Government to act now to boost the property market, saying that the current low level of house sales is ‘unsustainable’.
The NAEA has also made representations to Chancellor George Osborne, asking for there to be no further property taxes but for Stamp Duty to be reformed.
Countrywide is calling on Osborne to introduce mortgage relief for first-time buyers, set tough mortgage lending targets for banks, provide tax breaks for the private rented sector, and introduce incentives for development projects.
Grenville Turner, group chief executive of Countrywide, said: “A recovery of the housing market is fundamental to economic recovery.”
He went on: “Current transaction volumes are simply not sustainable. Based on current levels of activity, the average home owner moves house once every 25 years as opposed to [the historic norm of] once in every 12 years.
“This has wider implications for society, the labour market and the UK economy. The valuable economic contribution that the property market makes is being overlooked and there is a risk that current Government policy will be ineffective or, even worse, cause unnecessary volatility.
“Some of the critical factors hindering the UK housing market are mortgage accessibility, availability of quality housing stock and lack of investment in the buy-to-let sector to meet the needs of the growing private rental sector.
“Whilst the Government has introduced some measures to increase activity in the housing market, they must have a clear strategy to achieve a balance of demand and supply through tax relief and incentives with the aim being to reduce volatility in the house market.”
Countrywide is calling for tax relief for first-time buyers for mortgages up to the average house price of £169,707.
Among its other suggestions are a cap of 25% affordable housing units per development, to help builders achieve viability and produce more marketable schemes.
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Comments
Imho... those agents who are good, and by this I mean, those who know how to sell themselves and market their instructions well, are filling their boots right now.
The others are not. Same in most industries.
@on 2012-03-16 23:18:18
Your example could be a one trick pony. Cars. (not lorries, earth movers or rentals etc?)
But they do everything to do with cars.
The two property businesses, sales and rentals, can be seperate departments within the same business but with specialist staff and procedures for each.
The problem has been the many firms that use sales trained staff (with little lettings knowledge to do both.
This is a bit off message but thought I would just post it. ;>)
@Jack C on 2012-03-16 16:09:57
"their stock"? "discount"?
It is not the agents, except in the loosest of terms, it is the owners stock and their asset. The agent can only suggest..
@rant
Right, I'll answer that as concisely as I can and do my best not to blither on as I normally do.
...........and I'll kick off by blithering on a bit. The lower volumes of sales were a bit of a shock in 2008, we had all got a bit fat as far as overheads go and many EAs went pop or closed offices and shrunk a bit / lot - we all became very unpopular with our bank managers and it was all a bit of a struggle but he fact that the actual number of EA branches dropped off a bit and the cake was cut into slightly bigger bits was helpful.
Lots of us were also able to increase the % we charged which was also helpful and essential
so, fees up, competition down and overheads slashed to the bone meant by about he middle of 2009 those of us still stood up stayed stood up
on top of that lettings went bonkers, we began charging upfront broker fees on mortgages and don't forget HIPs were an upfront income source that helped get the bank manager back to buying us lunch once in a while
Now here we are 4 years after the big old kick in the nuts we all had with very different businesses and many of us running profitable little companies and some running big profitable companies
To answer the questions - I'm not sure how many but as none of us have been able to rely on the bank to support our businesses through this I will (without permission) speak on behalf of the industry and say anyone still trading today is managing on lower volumes so the answer is all of us are getting by on the small volumes, rentals is thriving (I've called it the hidden property boom before), and definatley taking up the slack and some,our tea bags are used once and our bog roll is from sainsburys not from home
think of it this way, an old school friend of mine runs a big car dealership, if they only sold new cars they wouldn't have a business but they service them, finance them, mend crashed ones, sell parts, trade part exchanges and second hand ones, even sell jackets with the manufacturers name on
You can't be a one trick pony in any business - EA's are no different
Jonnie
As one of the more reasoned and reasonable posters here Jonnie, can you answer an issue that's been raging on HPC for a while, namely how so many EAs are getting by on the current low volumes. Is income from the rental side really enough to pick up the slack, or do you all have to re-use teabags and bring your own loo paper to work?
High house prices help wreck the economy.
We moan at fuel being expensive and going up all the time, yet it's OK for house prices to do the same. Pure bonkers.
The 0.5% BoE rate is so low and unrealistic, savings and mortgage rates have become detached, and mortgage rates are on the rise. We need mortgage rates to increase to significantly reduce house prices, and that will go part way to economic recovery (for the people, I don't care a about bankers). We need the government to stop fiddling with the economy and allow the free market to sort things out, as it will eventually anyway.
Look,
As much as I find the sensation of defending CW a bit odd this chap is the boss of the biggest UK estate agency, put aside the rights and wrongs and the opposing views etc he is a big figure in the industry and we should expect him to encourage the government to use any changes to tax that he thinks will suit his customers.
Could you imagine how odd it would have been if the head of Ford Motors in the UK said he wanted the scrappage scheme to end?
@Rant – I do get your point on government incentives distorting house prices and without them prices might drop but its like saying if I drank less beer, ate less and exercised more id be slimmer, but I don’t, potentially if you took away beer and food etc and id be thinner but they are here so im not.
………..I think ive got lost in this my self.
@BRIT1234 – Don’t worry about it mate, you have been convincing us that prices will go your way for ages, don’t change your mind over this, keep the faith fella, it makes you who you are. We want the old BRIT back that predicts massive falls on every post – you should be telling us this proves you are right, something about the boss of CW being scared of the inevitable or something and how it proves your prediction is true
Jonnie
HELP!
pretty please?
I'll be your friend?
Come on Grenville you are whinging like and HPCer! If the market can no longer sustain your business, tough! Collapse and make some room for the little independant agent who is known for who they are and what they do.
They (want to) own land! Give them money!
In all other forms of business they generally discount the stock to get items moving off the shop floor and to create turnover - what's wrong with applying the same principle to the residential property market?
No sales = no money = no business
I'm sure Mr. Grenville Turner is so concerned about young people getting on the housing ladder that he has personally gone through all the FTB properties on Countrywide's books to make sure none are overvalued...
Countrywide is calling on Osborne to introduce mortgage relief for first-time buyers, set tough mortgage lending targets for banks, provide tax breaks for the private rented sector, and introduce incentives for development projects.
That is a big wish list - did they forget to ask the government to pay the salary bill for the next 18 months so as to stay afloat?
As a First time buyer I don't want this. What is needed to help first time buyers is an end to initiatives at helping first time buyers.
Here's an idea. When Countrywide sell a properdee to a FTB then their fee is automatically deducted from the sale price of the properdee but only if the buyer is a FTB. This will make properdee cheaper for FTB and Countrywide will unblock the market, generate green shoots and ensure the recovery is on track and locked-in.
Countrywide - the caring estate agent, the FTB best friend.
Alternatively, I'd be quite happy if the government stopped all its current interference in the housing market. As Ray says, let the market find its own level. If that's lower prices, then it will help FTBs and EAs' turnover more than any govt intervention will...
Worth trying, especially as the builders GET EVERYTHING THEY ASK FOR FROM THE GOVERNMENT TO HELP THEIR BUSINESSES.
My view. Smacks of vested interest and panic by Countrywide! Any business that wants serious government intervention to increase their turnover would seem to be in trouble? The market will find its own level.
Agreed "on our own". A lot of indys are thriving at the moment.
I can't help but read hidden message in the statement though. Are CW activdely admitting that their FTB target market typically can't afford their suitable stock?
FTBs are still getting stuck in, in our area. On a percentage level, its not a bad turn out, but I assume the corps only expect numbers, numbers, numbers!
That'll work.
Top boy from a large company that is engaged in a business that most people think is a gnats wing better than being a banker asks for a tax break to save them.
Hmmm.... That'll happen ;-)
It may be hard times for Countrywide and other Corporates! But for us and most otherquality Independent Estate Agents business is Fine!!!