The past couple of years have been turbulent to say the least. Well-run businesses took bold steps to cut costs as soon as the property market started to fall.
Meanwhile, those that waited to see how the market would pan out paid the price of procrastination.
Of course, one of the benefits of having connections in the estate agency sector is access to in-depth expertise and analysis which means we were able to react faster than many to change.
But that’s all in the past – what half of 2009 we saw a steady and sustained growth in the number of housing transactions compared with the same period the previous year. This trend continued in the first few weeks of January.
We’ve also seen a rise in the number of would-be buyers taking a look at the market and almost 20% more instructions to sell. This should help address supply issues in the residential sector. On the back of these figures, mortgage lending has improved.
So I am positive about the coming year. Although economists told us house prices would be flat in 2010 we have already seen double-digit annualised rises.
We have seen a rise in the number of would-be buyers and almost 20% more instructions to sell
Of course, prices may stabilise as more stock comes onto the market as the year progresses so the number of transactions is perhaps a more significant measure.
Pessimists point to stumbling blocks such as high unemployment, tax rises and lack of housing supply affecting recovery. While I recognise these factors, along with any disruption caused by the upcoming election, I believe we will also see more 90% LTV mortgage deals coming to the market.
Fundamentally, interest rates are likely to remain low and the population will continue to favour home ownership so there is considerable pent-up demand that will translate into more activity.
And what about the Financial Services Authority’s Mortgage Market Review? Some commentators think this will disrupt the market. I disagree.
The MMR is a sensible response to the irresponsible lending seen in recent years, particularly in the self-cert and impaired credit sectors.
Everyone in the industry should embrace the tenor of the MMR.
For example, I am particularly supportive of full income verification provided newly self-employed clients are not excluded. Of course, some of us have been doing this for some time, irrespective of fast-track arrangements.
So we will see stutters in the market this year, with interest rates starting to rise towards the end. We will also see significant cost-cutting in the public sector and the pace of property price increases slowing as new stock comes onto the market.
But the underlying trend is towards a steady improvement in housing transaction numbers, a continuing increase in mortgage availability and a boost to consumer and business confidence following the election.
GROUP MORTGAGE SERVICES DIRECTOR