Property Natter: The swings and roundabouts of the predictions business

The predictions game can be tricky. Sometimes you just don’t know whether to stick or twist.

As reported in Estate Agent Today earlier this week, Knight Frank has found itself in just such a quandary.

In May, the giant brand revised its average house price growth forecast upwards to 3% because of falling inflation and an improving economic outlook.

But now they’ve given themselves some wriggle room by announcing they might revise that because of warnings of tax rises and spending cuts to come in Rachel Reeves’ October 30th Budget.

In a keynote speech at Downing Street, PM Sir Keir Starmer went so far as to say it will be ‘painful’ and that the government would have some ‘Big Asks’ of the public.

August saw the first Base Rate cut since March 2020 to 5% - with a further cut forecast for November which, according to Knight Frank, will see higher demand and sales volumes than 2023.

But their Head of Residential Research, Tom Bill, reckons Labour’s Budget plans and their decision to charge private schools VAT from January next year, could mean that the prospects for prime markets face more risk.

Tom says the VAT measure alone wouldn’t do too much damage but taken in conjunction with possible rises in CGT, inheritance tax and pension tax relief might put the brakes on demand.

That said, one effect of the private school VAT measure may well result in property values rising significantly in areas near the top-performing state schools as hard-pressed parents frantically look for alternatives rather than fork out for higher fees.

Winkworth CEO Dominic Agace says we will begin to see people investing what they would have paid in school fees into homes near good state schools which could result in a 20% premium for properties near the top performers.

A rise in The Fall

Despite the swings and roundabouts, most forecasters have said that Autumn is going to be unseasonably busy this year, with Chestertons being the latest agency to report strong signs of growth in the property market.

The agency reported it had seen a 15% increase in the number of homeowners getting their property valued during August.

Emboldened by the increase in the number of lenders introducing sub 4% products, sellers are more likely to list their properties over the next few months, they say.

Billions in

The latest research by  London lettings and estate agent, Benham and Reeves, has revealed that should Labour honour its commitments to deliver 370,000 new homes a year, it would not only boost housing delivery by 22%, but it could bring a £161.6bn boost in value to the housing market across England.

Over the last five years, the average new-build home has increased by an average of 3.5% per year in value and Benham and Reeves estimates that over the next five years, £161.6bn worth of property could reach the market should Labour deliver on its promise.

Billions out

Congratulations to our friends at Reapit | PayProp on their excellent EPC report which calculated the cost of government proposals to upgrade all rented properties to an EPC grade ‘C’ by 2030.

According to their research, the cost of retrofitting all PRS properties in England, Wales and Scotland to a ‘C’ rating is estimated at a staggering £24.03bn.

This averages out to £10,442 per landlord. The government has yet to announce what help will be made available to protect the PRS from such a massive cost shock.

Twenty per cent up

Property auctioneer, Bond Wolfe, has reported sales up almost 20% on last year, breaking through the £100m barrier for sales to date in 2024.

The Midlands-based agency is expanding its reach, reporting sales from Cornwall to Scotland, London to Wales.

Its £101.6m sales tally is 19.4% higher than the £85.1m it achieved last year.

Twenty per cent down

The number of self-employed property professionals fell by 20% in the last year, according to new research by Dolan Accountancy.

Analysing the latest data from the Office for National Statistics, the firm found that the real estate sector had seen the third largest decline in numbers of self-employed, while those working on a fully employed basis rose by 16%.

US agents going soft

And finally, communication is listed as the top soft skill for real estate agents in every US state, according to new data from the Essential Soft Skills for US Real Estate Agents in 2024.

The study conducted by Agent Advice, analysed over 9,000 US real estate job descriptions to identify the industry’s most important soft skills.

The research also shows motivation and organisation rank second and third most valued soft skills for agents, appearing in 40% of all job descriptions.  

Negotiation skills come in fourth place, listed in 39% of job descriptions, and will arguably become the most important skill they possess as this becomes a necessity for agreeing agent compensation.

If you’ve got a story you’d like me to Natter about, drop me a line at press@estateagenttoday.co.uk