A famous song once began “Looking back we could have done it differently” and I think that sums up how we all feel in 2009.

At the start of 2008 everyone was happy, investors were cheering at the continuing rise in house prices, availability of mortgages and so many options to invest their money it was unreal. Fast forward four months to April and the wheels began to fall off in a dramatic and rapid downturn that would leave everyone feeling the bitter cold of recession by the end of the year.

Investment companies began to close their doors and declare administration, mortgage companies decided not to lend to the 90% of people they would have done four months earlier and even the credit card companies started to be a bit more wary about who they would issue their plastic money machine to.

By the end of 2008 high street shops were closing, more and more companies were closing their doors for the final time and the threat of redundancy was hanging over many of the country. The banks had to be bailed out by the Government, with one major player only being saved with a few days to spare. The news that we all expected to hear was confirmed that the country was now in recession and how the media told us, every headline, news program and radio debate show was dominated by how the next two or three years would challenge us all.

It is fair to say that how quickly things changed in the space of 12 months came as quite a shock, but, the leading question is, why did things change so quickly?

The bubble had been ready to burst for many years. The banks were over lending, credit was easier to pick up than the flu and you could invest in property in every corner of the globe, it really was that simple. Property prices were rising at a rate that was just unsustainable and the introduction of the 125% mortgage was surely a sign that things were getting out hand, meaning that you owned an extra 25% of nothing!

As we all look around and wonder who is to blame, it is a very leading question. Do we blame the banks for over lending? Is it the mortgage companies who have allowed people to borrow beyond their means? Is it the investor who has caused the price rise of property by over buying? Are we as individuals to blame for overspending and over borrowing? Or should we firmly look at the Government and ask the question – How did this happen and why was it not spotted and brought under control?

2008 was a year in which we started with so much optimism and ended with more doom and gloom than even the most pessimistic person in the world could have predicted.

So, to finish in the words of another famous song, in 2009 “things can only get better”.

The Euro has been the major benefactor overnight as markets await a series of important data from the US and UK this week. The Dollar is broadly weaker in the run up to the Federal Reserve interest rate decision and Sterling remains low against the single currency as markets contend with more economic gloom in the UK.

Pound Sterling - UK Markets

The Pound has climbed back to the 1.5 level against the US Dollar this morning although is still sitting close to record lows against the Euro. This week is laden with important data and Sterling is likely to remain under pressure as the UK outlook remains bleak and budget deficits continue to rise.

This morning the UK government has ruled out intervention to stop the slide of the Pound, which has lost around 25% against the Euro since this time last year. As a higher yielding proxy to Sterling, the Euro is being favoured by investors at present for its perceived stability throughout the global economic crisis. This morning John Varley, the head of Barclay’s bank has admitted house prices could fall by up to 30% and the UK is only ‘halfway’ through the downturn. This is ahead of official unemployment figures on Wednesday which are expected to show a sharp increase. Lack of confidence in the UK economy is extending pressure on the Pound as it appears the recession will not be as short or shallow as initially thought. Today is light for UK data with the Bank of England inflation letter and consumer and retail price inflation figures due tomorrow. A decline in consumer and price inflation is expected as aggressive discounting and VAT reductions make goods cheaper in the run up to Christmas.

US Dollar - US Markets

The US Dollar is broadly weaker this morning ahead of the Federal Reserve interest rate decision and inflation figures due in the US this week.

A 0.5% reduction in the benchmark interest rate of 1% is expected when the FOMC meet tomorrow. The availability of liquidity is still proving a significant barrier to financial recovery and central banks are expected to keep cutting interest rates until we see and upturn in lending and more generous distribution of credit. Global stocks gained this morning as President Bush signalled the financial bail out for auto manufacturers would be swift and decisive. Lengthy or collapsed negotiations at this point could prove a hazard to market confidence and stability. Crude oil has gained, climbing to $46 a barrel ahead of production meeting on Wednesday where cuts are expected. A series of soft data is due in the US today with the consumer price index and FOMC decision likely to be the big market movers tomorrow.

Euro - European Markets

The Euro has become the ‘darling’ of currency markets and continued its ascent this morning, buoyed by market nervousness ahead of important figures from the US and UK this week. The Euro is currently trading at 0.89 versus the Pound and 1.34 versus the Dollar.

ECB President Trichet has called for financial discipline and stability this morning as Ireland has announced a €10 billion package to recapitalize the countries financial institutions. The stability of the 15 nation Euro has provided a significant degree of confidence in the currency in recent weeks and leaders have argued for continued recognition of the fiscal rules that govern the Eurozone. Producer and import prices released this morning from Switzerland show a decline for the fourth consecutive month. Today is light for data in the Eurozone with unemployment figures due tomorrow.

For more than three years now I have often cast a very watchful eye over the property portal industry. Whilst working within it I would always keep tabs on what the competitors were doing and now I have stepped outside the circle I am moreso keeping tabs on new developments.

I started out working for one of the smaller independent portals in the UK side of the market and we were operating out side of the top five yet trying to build market share. We always had a firm belief that through hard work we could achieve a standing close to or even above those situated in second place and below, but the top dog was always perceived as untouchable. Never say never I know, but they were a bridge too far.

So as the economic times continue to constrain the budgets of estate agents all over the country, how do they survive? Cutting costs is the obvious answer. The aforementioned portals aggressive business model of demanding considerable amounts per month is one such reduction that can be done away with virtually immediately, especially if on a rolling contract, so it came as little surprise that of the 22 agents in Hereford an astonishing 70% have chosen to withdraw their subscriptions [Source: Global Edge]. So if Hereford serves as an example, what of the rest of the nation?

Whilst I have yet to research the response of various competitors this has heightened a perspective that I have held for a few months now in that the portal market is set for a radical change. It has always been such a fragmented market, but now, in line with other industries, it will whittle down to the industrious few. I personally believe that smaller sites will unfortunately now cease to exist over the course of 2009 and that the market leader will not be the only one to face reductions in subscriptions. In fact, they’ll all face it. If the best performer faces reductions, any other portal believing there is market share to seize has, quite frankly, delusions of grandeur.

In the oncoming weeks I shall further analyse competitor reactions to this and intend to make a few phone calls to that effect. Watch this space.