City workers' bonuses will be down this year and spending on property may halve - so it might be the time to search for art in your attic, advises Angela Pertusini
FOR THE Tim Nice-But-Dims who left public school over the past few decades with nothing more than a pair of their grandfather's cufflinks and a rugby vice-captaincy with which to launch themselves into the world of work, there have traditionally been two choices in the commercial world: auctioneering or estate agency. For a long while, you had to feel sorry for those poor so-and-sos who had chosen to dribble over flaking canvases and Japanese vases in the great auction houses of the country, smiling sheepishly at the owners and saying that while, yes, it is a very fine example unfortunately the market isn't quite what it was and the price they had in mind might not be entirely realistic.
No such problems for their cousins in offices round the corner selling the same people's homes. So, sir, what do you think it's worth? Oh, surely, sir you're being modest . . . I think we could safely market it for £400,000 more than that - yes, it is ridiculous, isn't it, but it really is a lovely residence and people won't mind in the least the bus stop outside the bathroom window, the smells from the local balti house or the mould over the livingroom - adds character.
But, finally the gavel-wielders have the upper hand. Early whispers from the City suggest that the enemy of homebuyers - and heroes of homesellers - the bonus boys are not planning to spend their booty on property this year. According to research by Savills, last year City workers received £8.8 billion in end-of-year bonuses of which £5.5 billion (62.5 per cent) was spent on property. This year, bonuses will inevitably be lower and only a paltry 30 per cent is expected to go in the same direction with the remainder spent on, among other things, art and objets. Rejoice if you have a small post-Impressionist study lurking in your attic: for those of us with just bedrooms under our eaves, it could be dark days ahead.
IT'S DARK days too for those owning small retail premises. For the past few years, estate agencies have been the one boom industry - along with coffee shops - on London's high streets. Able to afford the enormous rents and with little use for stock space (or the need to negotiate delivery slots with suppliers), they are almost perfectly self-sufficient, their window displays of cunningly enhanced photographs of other people's livingrooms having a mesmerising effect on passing pedestrians.
But, a survey by property website Hot Property claims that 72 per cent of agents questioned said that, given the power of the internet, there will be little need for a high street office for most agencies in the next 20 years. It is almost impossible to imagine London's smarter shopping parades without estate agency presence. At one time Highgate, in north London, had 16 different firms competing (about a third of all its shop premises): one had even opened a bogus knick-knack shop on the ground floor in order to get around lease restrictions and was operating from the basement. Forget the threat to high streets from out-of-town superstores (and this week, the government decided that the country has too few supermarkets and the big four - Asda, Tesco, Sainsbury and Morrison - should be encouraged to build more, making competition for land for homes even more cut-throat): the loss of our nation's estate agencies would leave town centres barren.
THERE ARE actors and writers who routinely claim in interviews that they never read their bad reviews and, in these uncertain times, I think we should do the same with house price surveys so please avert your eyes from all but the Nationwide Building Society's latest report that records a 1.1 per cent rise nationally in October. The figure was so unexpected that several organisations have been involved in fierce back-pedalling and finger-pointing, chiefly the Royal Institution of Chartered Surveyors that now says, without the least embarrassment: "The endless talk of the demise of the property market is, at the very least, a little premature."
AND THERE'S more good news for those of a determinedly Pollyannish outlook. A fortnight after the International Monetary Fund claimed UK house prices were 40 per cent overvalued, analysts at PricewaterhouseCoopers have declared that there is a mere one-in-three chance of property prices being lower in real terms in 2010 than now and only a one-in-five probability of them being lower in cash terms. They conclude that prices are only 10 per cent above what they should be.
This amounts to a ringing endorsement for our cripplingly high house values and, while one suspects that their average earnings indicators may be based on what the directors at PwC take home rather than what the rest of us make, it's yet another hurrah for the soft landing brigade.
Hmmmm, we'll see. I'm mindful that Meredith Whitney, the woman who brought about Citigroup's share nosedive, has been sent death threats by peeved investors so I shall say that, yep, the London house market has never looked so good and, along with the fine people of PwC, I conclude that there is no need to panic.
