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There are some pretty obvious mainstream housing market repercussions of the coalition government’s clampdown on public spending.
If you were a council employee, a quangocrat or civil servant – or even someone in the private sector working on the early stages of a government contract – you might well put off plans for moving for a year or four, given the likelihood of sharp spending cuts, cancelled projects and a public sector wage freeze or even pay cuts.
But lest you think the forthcoming cuts will hit only the volume housing market, look at the figures below. They’re for all of 2009 and the first five months of 2010 and are supplied by Savills. The firm was good enough to pass them to me exclusively for a few articles you will see shortly in national newspapers.
The figures give an interesting insight into Savills’ client profile and the vulnerability of even the top-end market if the much vaunted “savage cuts” in public spending really materialise.
Central Region - 10% 'public sector sales' (highlight: 12% of £1m-£2m homes)
Eastern Region - 13% 'public sector sales' (highlight: 16% of £500k-£1m sales)
Home Counties - 8% 'public sector sales' (highlight: 10% of £2m-£4m sales)
London - 8% 'public sector sales' (highlight: 12% of £500k-£1m sales)
Northern - 24% 'public sector sales' (highlight: 28% under-£500k sales)
Scottish - 20% 'public sector sales' (highlight: 21% under-£500k sales)
Southern - 19% 'public sector sales' (highlight: 19% £500k-£1m sales)
Western - 23% 'public sector sales' (highlight: 35% under-£500k sales)
So in headline terms, 15% of Savills’ British clients are in the public sector. The lower the property price, and just about the further away from London, the greater the share becomes. The north of England and Scotland will be particularly hit, but other areas too will have problems.
Stand by – the coalition’s cuts are going to bite everyone.
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