Oct 152013
 

Here’s the gist of it.

Assuming that ‘demand’ without the ability to pay now exceeds ‘supply’, the availability of extra finance will bolster prices rather than satisfy that demand. (That’s because sellers will each try and get more of the money being made freshly available.)

The non-availability of extra finance won’t cause such a distortion. (Obviously.) Prices will, instead, have to adjust to suit current purchasing power.

The latter is a far more effective way to distribute scarce resources.

It is simply that of letting markets function on their own - without direct financial intervention.

If any specific non-financial market (like e.g. housing) ever needs intervention, anything which is believed to be appropriate ‘other than’ direct financial intervention might help.

Direct financial intervention in any market (other than the money markets themselves) will however, merely distort the market in question.

QED

Posted by: Property Match (UK)/Asking_Prices: Peter Hendry, Consultant in Housing Valuation, Property Match (UK).

Oct 012013
 

{amended on 23rd Oct}
Recently, Tepilo has become an online estate agent, having registered with the Property Ombudsman scheme.
It appears that its free-to-advertise model didn’t start becoming commercially viable enough to sustain it. Reluctantly so we understand, Sarah Beeny’s private sales site has had to re-structure and go down the online estate agency route as part of the deal.

This leaves a clear road ahead for services like Property Match (UK), the online way to sell or let. We’re a service that offers individuals house advertising on the Internet. We charge very low fees (instead of no fee) but we advertise on Google using Pay-Per-Click to get first page listings for any selected keyword relating to each individual house advertisement. Unlike some sites though, we won’t be taking commission on any completed sales.

The main reason for what we are doing is to offer an alternative for those having to use what is clearly seen as a failed estate agency business model. Few could successfully argue that it hasn’t failed, since it hasn’t coped, at all well, in the aftermath of the recent financial downturn.

That’s why we are offering a special online-only service. Because estate agents need to improve the way houses are marketed and sold, in order to bring things up to modern-day standards. Private (or sale by owner) web sites are something that this government has, in the past, encouraged in the spirit of enterprise, with the aim of helping the housing market to get re-started more swiftly. So far however, there has only been fairly meek or tacit support by the said government for online-only ventures such as ours and the new OFT guidance on the requirements of consumer law, providing more clarity on what constitutes estate agency work, doesn’t exactly appear to make fair competition with this sector easier.

In reply, we would respectfully suggest to our government that instead of trying to pump up housing market activity with cash guarantees for mortgagors, our idea is to propose a better estate agency model by introducing what we call estate agent Moving Contracts or ‘MC agreements’ and that this should be urgently considered. Our idea is basically a simple change in the way in which houses are placed on the market.

I’d be interested in readers’ thoughts and comments.

Proposed by Peter Hendry, Consultant in Housing Valuation at Property Match (UK).

Posted by: Property Match (UK): The modern way to market houses