How was 2009 for the estate agency sector?
Last year was a significant improvement on 2008. We also saw property sales increase by 8% in January this year compared with the same time in 2008. By taking sensible cost control measures early in the downturn we made significant profits. Overall, according to Land Registry data for England and Wales monthly sales in the second half of 2009 were higher than the previous year.
A big part of our proposition is to provide mortgages and while volumes were below their 2007 peak we still submitted nearly £3bn of applications to our lender partners. So it was a good year for us and there were plenty of signs of the market recovering.
What are your predictions for 2010?
The market will continue to get better and for us, it’s more about the number of transactions than price inflation. January’s data for sales and mortgages was distorted by the push from customers in December to complete before Stamp Duty and VAT went up. We are confident that a sustained recovery is underway. While there may be uncertainty around the election, when we look back on 2010 we’ll see improved confidence resulting in more buyers and sellers.
Is the mortgage market in recovery or are we being too optimistic?
The mortgage market is getting better. Last year saw a market low of £143.5bn of lending and I think that will rise this year by at least 10%. There are more competitive deals around at 90% LTV and a few lenders are starting to lend again. Meanwhile, interest rates are likely to remain low for some time.
Why was the house price fall not as bad as expected?
House prices would have fallen further had the limited buying activity been met with increasing stock. That did not happen as buyers and sellers generally sat on their hands while repossessions were lower than expected – 46,000 instead of 73,000. House prices also bounced back quicker than anticipated due to factors including better than expected unemployment figures and low interest rates.
Will first-time buyers be able to get into the market soon?
There will be a slow improvement. We need to see more help in the form of 90%-plus LTV lending and lenders innovating with products that allow parents to help. Some lenders are looking at parents opening accounts to help out but others are pulling back from the guarantor market. The bank of mum and dad is likely to be open for some time.
Interview by Christine toner