With 2009 upon us, Debbie Walsh, head of public policy and communications for RICS West Midlands, talks about her new year’s resolutions for the property market.
The implications of the credit crunch are not going to go away in the new year. The effects will still be felt with the mortgage and lending markets feeling the pinch more so than other areas of the property industry.
To counter this, I would like to see further stimulus of the market by central banks worldwide and the introduction of accelerated fiscal packages. However, this might see a return to higher inflation once the worst of the current slowdown has passed, with property acting again as a good investment.
Home Information Packs (HIPs) have been a constant talking point throughout 2008 and will no doubt continue to be into the next year.
While it is good to hear the recent changes that will allow homeowners to get information on the first day a home is put on the market – not after 28 days as was previously stated – the challenge now is to ensure that by April a HIP does what the government claims and brings genuine benefit to home buyers and sellers.
The right structure and available products need to be in place for when the market improves so the introduction and benefits can be felt by homeowners immediately.
With the rise of redundancies in the latter part of 2008 and continuing into 2009, repossessions are likely to increase significantly over the next year making government guarantees for mortgage interest payments more and more important.
Guaranteeing interest payments will help prevent the serious distress caused when people are put in a position where they have to sell their homes and will also provide some comfort for people in financial difficulty.
Restricting the level of enforced distress selling will reduce the amount of additional property flooding the market and should provide some measure of support to prices.
As the financial market continues to suffer, the importance of the private rented sector will increase dramatically as more and more people opt for renting rather than selling.
However, with this comes the need for the sector to be seen as tenure of choice rather than where people end up if they have no other option.
To support this, there needs to be a more business-like approach within the sector from landlords, letting agents and managing agents, something that RICS is eager to push forward.
Key considerations need to include protecting both landlords and tenants against rogue letting agents and introducing a more proactive, and therefore effective, enforcement of tenancy deposit protection.
We need to reach agreement on the new homes figures for the West Midlands to be included in the Regional Spatial Strategy and start the process of delivering these, together with supporting infrastructure.
The change to the rules on rates for empty business properties, introduced in April, continues to put added pressure on both tenants and landlords in an increasingly difficult marketplace. The increase in the rate from 50 per cent to 100 per cent of the basic occupied business rate means that in times of commercial challenge businesses are no longer able to maximise financial strength by selling or sub-letting surplus space.
Reversing this rate would ensure that local businesses continue to trade and will encourage further start-ups in the high street.
With the ever-changing demands on land, the planning system needs to have the capacity to deal with new responsibilities such as government targets to increase levels of house building and the delivery of low and zero carbon new homes.
Following on from a recent RICS round table discussion on planning, one of the key issues raised is the staff and skills shortages within local departments.
In order to honour the government’s optimistic objectives during 2009, additional investment in talent and training is essential in order to deliver mixed, sustainable communities – a key government policy.
Tackling mortgage liquidity is a crucial first step towards rescuing the current housing situation and incentivising the issuance of new mortgage-backed securities and covered bonds are vital to give investors the confidence to return to the market.
Such a move should include a proportion of funds dedicated to first time buyers and would be specifically aimed at improving the flow of funding for new mortgage lending.
To support this injection of lending funds, I would also like to see the government establish a tax free savings account supported by government contributions to help first time buyers save for a deposit.
Finally, I would like to see a West Midlands construction project win the RICS ‘Project of the Year’ at the International Awards. There are so many innovative, sustainable and well built projects taking place in the region that we should be pushing the talent and knowledge of the area on an international scale.