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December 2008 / January 2009

'CUT INTEREST RATES, SUSPEND STAMP DUTY'

NAEA’s recipe to boost ailing market

A MAJORITY of members of the National Association of Estate Agents feel more must be done to boost the flagging housing market.

More than half of agents surveyed by the Association said they did not have confidence in current Government policies and that more must be done, including a suspension of Stamp Duty.

In addition, they called on the Bank of England to further cut interest rates, even following the 1.5 per cent reduction taking the base rate to its lowest level since 1955.

The NAEA’s latest survey also revealed that consumers are responding to the recession by lowering their asking prices on property – a difficult decision that is already helping the market.

NAEA president Chris Brown, speaking in advance of the Bank of England’s December interest rate announcement, said: “Sellers are beginning to face up to the reality that their houses are not worth as much now as they were 12 months ago. They are ripping up last year’s price tags and beginning to come to terms with the new economic reality.

“Prices are becoming realistic, and we hope this encourages those families who so desperately want to buy to get onto the market.

“However, as sellers have bravely accepted the truth of the situation and responded accordingly, so now must the Government and the major lenders.

“That is why we are calling for a further cut in interest rates, coupled with a clear commitment from the major lenders to pass any cut on to consumers and a suspension of Stamp Duty. If hardworking men and women across the country are making sacrifices, the least that they deserve is the banks and Government to stand shoulder to shoulder with them.”

The NAEA poll found that in October the average number of houses sold per estate agent rose from six to seven. The percentage of first time buyers also increased, but agents reported a seven per cent fall in the number of homehunters on their books.

The survey results coincided with a host of gloomy news reports for the industry, the most alarming of which was a prediction by economists that “as many as 50,000” estate agents could lose their jobs by next autumn because of the worsening economic crisis.

Ben Read, managing economist at the Centre for Economics and Business Research, told the London Standard that the toll of job losses would be shocking.

He said: “The housing market has dropped significantly more since May and the outlook for the next nine months is pretty ropey.”

Square A Midlands estate agency chain has been bought back by its management after going into administration — but have cut back their complement of 20 or so offices.

The business and assets of Cornerstone The Midlands Limited, trading as Burchell Edwards, have been sold for an undisclosed sum.

It means that more than 100 jobs have been safeguarded.

Managing director Michael Bruce said: “I regret that this has, due to the slowdown in the property market and global economic instability, been necessary but it was important we safeguarded jobs, continued to give our customers outstanding uninterrupted service and made the business and the brand much more able to drive forward in any market.”

Square A sign of the times is that leading agency boards supplier Kremer Signs have recently laid off 26 of their 64-strong workforce, with monthly production down by almost 20,000 boards. The company, founded 25 years ago by Richard Kremer and Steve Gosney, produced 80,000 a month at their peak. However, it could be worse, says Mr Gosney, as the company are currently updating designs for agents, in his words. “looking to be noticed” in the New Year.

OPINION By MIKE GOODMAN, CITY CORRESPONDENT >>