The research conducted amongst professional property firms focused in on economic, financial and planning issues, highlighting several key trends in the property sector.
These included a dramatic fall in confidence in the residential property sector since 2006, slumping from 86 per cent indicating they were reasonably confident about the next 12 months to just 48 per cent plumping for this in 2008 - largely due to the impact of relentless interest rate hikes and the credit crunch.
Commercial property did not emerge unscathed though, with confidence tumbling from 91 per cent in 2006 to just 58 per cent, however it supports recent indications that this particular market will thrive going into 2008.
“The ripple effect of problems in the US sub-prime lending market has been felt in the UK as is obvious from recent events, so after over a decade of growth, the property market has finally peaked and the golden years seem to be over,” said John Voyez, head of Smith & Williamson’s Property Group.
Just over a third (37 per cent) feel that Stamp Duty has affected their business, while 32 per cent of respondents reported that it had not been an issue.
“Since the introduction of new tax laws last year, we now effectively have a general anti-avoidance rule for SDLT. As a result, the level of planning in this area has significantly reduced," continued Voyez.
"Exchanging a 4 per cent charge for a 0.5 per cent duty on the sale of shares in a special purpose vehicle is undoubtedly the simplest, safest and most straightforward planning structure left available, subject to certain constraints.”
Key issues
The survey also asked people to identify the key business issues facing the property industry as a whole over the next year, and the performance of the UK economy as a whole is firmly at the top of the agenda. In second position, are planning regulations whilst raising finance is considered the third most important. Legislative changes and tax were also cited as being very influential.
When asked about the business issues affecting their own particular organisation, respondents answered that the ability to achieve company growth is the single most important issue, underlining concerns over economic performance. Managing the strategic direction of a company takes second position.
Voyex continued: “There have been a number of high-profile mergers of property service businesses in recent months, and the trend for large businesses to absorb smaller niche competitors, or to merge from a position of strength, may well continue over the next year fuelled by concerns over the ability to achieve organic growth in times of economic uncertainty."
