The New Normal - How Things Are Progressing

18/Jul/2013
Hilary Grayson

If you read my last blog here then you’ll know that somewhat rashly I got out my crystal ball and gave a prediction of what the future might look like.

Well it’s too soon to be giving myself a pat on the back just yet – but only two months on and it might be worth a little revisit – just to see how things are progressing.

One of my predictions was that we would have a more buoyant mortgage market and it seems that this predication may already coming to pass.  Last week the Council of Mortgage Lenders reported that the number of first-time buyers taking out mortgages has hit its highest total for five and a half years.  The number of mortgages to first-time buyers in May reached 25,100 - 29% higher than in April, and 42% higher than in May 2012. First-time buyers accounted for 45% of all loans for house purchase, similar to the levels of the past few months but considerably higher than the 38% seen on average since 2007.

Now this is very good news for the housing market and for the volume of transactions because it indicates  ‘new blood’ coming into the market and that consequently it is more than just a merry go round of those already owning property. 

What I did not predict back in May, was any change to the property taxation system.  Perhaps I should have done.  In future, it seems that governments may have the option to use both local taxation, by way of the council tax, and national taxation, by way of Stamp Duty, to gently encourage us to take up energy efficiency measures if we seem reluctant to take out Green Deal loans.  Time will tell if they go down this route, but already there is a bit of a ripple to change Stamp Duty, with a group of 40 Tory MPs, representing the party’s most marginal seats, calling for the burden of Stamp Duty to be changed from buyer to seller.   According to The Forty Group’s paper, which was written by MPs James Morris and David Mowat, there should be a principle that first-time buyers do not pay Stamp Duty as sellers are in a better financial position to pay the tax than purchasers.  Estate Agent Today reported that David Cameron welcomed the report, which was written as a ‘moderate manifesto’ to woo swing voters.

All of this suggests moves towards part of my prediction of ‘New Normal’, but there may be a little fly in the ointment because at the same time that we were hearing the good news about the return of the elusive First Time Buyer, we began to see headlines telling of valuer shortages and how mortgage transactions were being held up because there simply weren’t enough qualified valuers to go out and do the lender valuations.  Indeed, so serious is this potential threat that the RICS is launching an independent inquiry to consider the challenges facing the UK property valuation profession and look at solutions. I confess, in my predictions for the future back in May I didn’t see that one coming exactly (though as I am sure many can vouch, in private - and indeed sometimes in public - I have alluded to a demographic time bomb within the ranks of the RICS as there are not enough young surveyors entering the market to replace those who are retiring). 

I am off to Great George Street (the beating heart of RICS) again tomorrow (or by the time you read this, last week) to chat about new training options that NES is leading the way on.  Great for the housing market, great for lenders and great for our members.

So perhaps I can give myself a pat on the back after all; perhaps we will see the first DEA’s to do the new Diploma in Residential Surveying become members of RICS and I will have been correct in at least two of my predictions.

Now where’s my crystal ball?

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