Estate agents face 'make or break' year

Sunday, 28 December 2008 6:49 PM

Estate agents admit 2009 could bring more job losses in the industry, but they maintain house price falls will stop and property values could bounce. 

Peter Bolton King, chief executive of the National Association of Estate Agents (NAEA), said: "For many estate agents, 2009 will be make or break. 

"If things do not improve, then the market could stagnate - and that will have dire implications not only for the thousands of people employed in the profession, but for the economy as a whole." 

He added that while official figures point to a 13 per cent fall in house prices since the peak of the market, but in some areas 20 per cent house price falls have been recorded. 

"We haven't seen that kind of fall, in such a short period of time, ever before," Mr Bolton-King. 

"However it is also clear that parts of the market are perhaps beginning to bottom out, and it seems possible to me that once the recovery begins, we could see a bounce as pronounced as the fall.  

"Some people are beginning to cotton on to this - which is why our members are starting to see enquiries increase again, as people begin to believe they can find a bargain."  

However, he explained a number of changes must take place for the property market to see any gains, most importantly for banks to start lending again and to pass on interest rate cuts to be passed on to borrowers. 

"The outlook for the housing market remains bleak," said Howard Archer, chief UK economist at Global Insight. 

"It is still very difficult for many people to get a mortgage or find the required larger deposit. Even if the government measures to tackle the financial crisis work on a sustained basis, it will clearly take time for confidence to improve and mortgage lending to pick up significantly." 

Meanwhile the Royal Institution of Chartered Surveyors (Rics) predicts house prices will fall ten per cent in 2009 - meaning the market will have fallen 25 per cent from the peak in 2007. 

Both Nationwide and Halifax both declined to put out house price estimates for 2009, citing the high number of variables and uncertainties that are to biting the property market. 

John Varley, the head of Barclays, has warned house prices could eventually fall 30 per cent from their peak. 

Global Insight predicts a further 15 per cent fall in house prices in 2009, after an 18 per cent drop in 2008. 

As a result, house prices are seen falling 31 per cent in nominal terms from their August 2007 peak of £199,612 on the Halifax measure to stand at £137, 423 at the end of 2009.  

A further five per cent fall in 2010 is forecast to take average prices down to £130,551. 
 

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