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2012 – what a year it has been! says Trevor Abrahmsohn, Glentree Estates

publication date: Dec 31, 2012
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Trevor Abrahmsohn, Glentree EstatesWhat a year it’s been. We have had the trials of the knock on effects of the credit crunch; the problems in Europe have not help (since 42 per cent of our exports go there) but, it looks as if we have seen the worst of it. There are green shoots. The US economy is getting better – good news as our economy is tied closer to America’s than to Europe. Europe will still take a long time to recover but by all accounts we could be slowly on the mend.
One of the daft vestigial bits of the last government’s legislation, The EPC, is still going nicely. What a waste of time.

The Budget left the left wing zealots disappointed as they did not get their Mansion Tax; but Vince Cable still thinks he has succeeded through the new service charge on off-shore companies. The truth is although the Stamp Duty Tax went up from 5 to 7 per cent it had such a bad effect on the market that fewer transactions took place and the Treasury received less tax.

The legislation, as it applies to offshore companies, will raise little money since there was a 90 per cent drop in transactions in this category so the tax raised probably won’t even pay the administrative costs. This is the price you pay for having a left wing inspired influence on the coalition preventing sensible decisions making.

The first time buyers’ scheme has helped a few people but it’s a headline seeking scheme rather than a game changer. If you are lucky enough to be a beneficiary you are definitely better off – one of the fortunate few.
The changes to planning procedure, whilst extremely welcome, are resisted by local councils who prefer to propagate the ‘can’t do’ environment.

One local boroughsis striking because of the contracting out of the functions of planning… yet the same people will be re-employed by the contractors. Nobody COMMENTcan tell the difference in the speed of processing applications whether they are striking or not – this is a worry!

My advice to Mr. Cameron is to extend the Department of the Environment so that when the boroughs reject applications, more to appeal. The DOE inspector adjudicates the decision much more efficiently. This will set up a parallel planning process cutting the left wing inspired planning officers adrift to stew in their own juice.
I’m worried about domestic extensions to property without planning consent. This may negatively affect a conservation area but, on the positive side, it does give more COMMENTpower to the applicant who goes through the procedure; a better balance of power between planning officers and consumers. Will it get Britain building? I doubt it.

The planning process needs grass root reform since this and the lack of funding conspire to produce just 5 per cent of the stock of new homes that the UK requires.

The government is wise to try to get lending to the developers and this is long overdue. Its all fine for the government to participate in Quantitative Easing but unless this gets to the lowest common denominator it’s academic. If the government is really serious about getting Britain moving, they need bold decisions that will create some moans and groans but, as Thatcher showed us, you haveto be bold.

It should concern all UK residents when one party advocates for a policy that will do great harm to the country and its wealth, on the basis that they don’t get political support from this sector and therefore don’t care about the ramifications – Mansion Tax.

The Lib Dems have been banging on about this tax since time immemorial; they don’t care about its negative effects. But they should since it could be the death knell of the property market particularly in London. Theoretically it will only affect the upper middle class who, in the main, don’t vote for Lib Dems. This should worry any sensible person; we can’t afford to have people in power who don’t care.

The Olympics were a mixed blessing. They certainly showed the world that we can put on the greatest show on earth but scare mongering amongst foreign visitors meant that while London should have been over-booked, it was not, which didn’t help commerce. The Jubilee with all its pageantry made us proud but with the extra holiday and too much TV viewing, it didn’t help our growth figures. On balance whatever the price we pay for staging these incredible events it was worth paying since it made us all feel good – which is never a bad thing.

As long as the coalition limps along for another couple of years (the Lib Dems would be terrified of going to the Country early) there will be a relatively stable environment that is good for continuity and medium term projections. With the private sector bringing down the jobless figures people could be pleasantly surprised that this austerity phase could be shorter lived than we fear. Next year is poised for a stable property market that in London may even go up a little by 3-4 per cent but I don’t think there will be shocks in the system that will worry us.
What are your thoughts for 2013?

Write to Sheila@propertydrum.com