Yet another year has come and gone and we are “venturing eagerly” into 2016 and what it may bring us all! Already – and as usual – politicians, economists, journalists and bloggers are all in complete disagreement as to the true health of the economy in the UK, which given the complex and momentous issues worldwide comes as no particular surprise.
The phrase “housing crisis” has made the headlines for several years now, not only looming large in the business and property sections but now featuring regularly in the national news. What does this mean to us all in reality? Well, according to the housing charity SHELTER, home ownership as an aspiration is slipping well out of reach, with house prices in the south-east of England “now almost seven times people’s incomes”. This view is certainly not very tasty food for thought for our children or for the generations to come.
This fairly glum assessment begs the question, where does this leave the UK’s high street estate agents? Not surprisingly it is a very mixed picture that, on balance, certainly favours the larger chain operators, who have been able to achieve economies of scale that the smaller independent agents can only dream of. This creates an almost perfect storm of:
- Increased competition; both on the Internet and on the high street
- Increased costs; given their limited negotiating muscle
- A shortage of willing sellers; putting pressure on fees
These combined factors have, naturally, made trading conditions and profits far less predictable to say the least.
To some extent you could deduce that what is occurring in the UK estate agency sector has only been echoing similar general trends in high street retailing, i.e. the David v Goliath scenario of the supermarket v the corner shop. Of course, both have their place and – to a great extent – the British public have shown an appetite for both discount/variety and convenience/personal service over the past few years.
So, to go back and address the headline question of is it a good year to be selling your business, the clear answer is the signs are positive for the following reasons:
At the moment business sellers can claim entrepreneur’s relief when selling all or part of their business; paying just 10% capital gains tax.
Low interest rates
Mean that a buyer’s access to affordable finance is at an all-time low.
Basic economics means that low interest rates = more buyers = increased sale prices.
Shortage of prime premises
Larger firms wishing to expand require prime high street offices, which are in short supply and this trend shows no sign of abating.
Rental portfolio values
Prices have never been higher, as the top firms compete to acquire the established portfolios of smaller independent agents.
Are you thinking of selling your business?
For clear information and expert advice please call Peter Nicholls on
0333 939 8010 or simply go to www.ideologyconsulting.co.uk