Should young working adults be able to afford to set up home in the UK?

 Estate Agents, House Price Valuation  No Responses »
Jan 252014

Setting up a home of their own is a rite of passage for young working adults wishing to be independent, yet figures show they are struggling.

More than one in four young adults in their 20s and early 30s still live with their parents. The ONS says house price levels delay them from getting onto the property ladder.

The immediate solution to this is to increase the efficiency of the housing market by changing the way houses are bought and sold through estate agency practices.

Make this more efficient, and prices will stabilise within reach of their markets and, by definition, within the affordability of those wanting to participate in the market for buying houses (without having to incur excessive borrowing).

However, the government of the day would need to act to implement such a change. The question is, does it wish to? Or more particularly, do we, the electorate, want it to?

For full details of how our proposals could be put into effect, please go to an article on our blog entitled:

Earlier article on our blog site: Full details of our current proposals.

Posted by: Peter Hendry, Consultant in Housing Valuation at Property Match (UK)

Demand for houses soars as agents sales stock diminishes

 Estate Agents  No Responses »
Jan 232014

The papers seem to be saying that spring has sprung as far as house prices are concerned! But has it, really?
Can estate agents really sell everything they can get hold of at whatever price is asked?

Until we all accept that it’s over reliance on available credit that is causing asking price spikes, nothing can be done to resolve the issue!

The best way to begin resolving the issue might be to make the estate agents do the deal-making at BOTH ends of the sales chain - and before they get paid any commission!

All house agents ought to be prepared to be remunerated for buying AND selling clients’ houses; depending upon how well they perform?

The ones that can show they have done the best job, are the ones that should be remunerated for their efforts.

To make this work, several agents should be selected by each selling client, both to help in the search for their next property and in progressing the sale of their existing property.
The agent that delivers the client the best service by finding the most suitable property at the most suitable price (in competition with their fellow agents), whilst also concluding the sale of the property simultaneously being disposed of, should be the agent that wins their commission on completion.

It could be done in very much the same way as how politicians are voted into parliament. In other words, estate agents should depend for their livelihoods on whether ‘their client’ thinks they are doing a good job; - or not. If the agent is THAT confident, they should be very happy to work using this principle.

Instead of any old contracted/or locked-in estate agent that may not be totally committed and may not be doing a particularly good job, the one that can genuinely show they have done the best job should be the one that gets remunerated for their efforts.

The way to achieve this is for several agents to be selected by each client, right from the beginning, both to help in the search for the clients next property and in progressing the sale of their existing property. This is a simple change from what is now an old idea. That of the client first needing to choose just one estate agent whom that they feel they prefer!!

“Doing this would help to counteract the build up of excessive asking prices, beyond the capacity of the actual market place, and which damage the housing economy by causing both volume stagnation AND general misinformation, primarily driven by the hidden agenda of boosting mortgage SALES!”

Without such a vital change to the way houses are marketed in England and Wales, house price spikes followed by confusion and volume stagnation to follow, will continue to be the norm to the chagrin of most of us hoping to move house when we consider this necessary. Ironically, the losers are also the estate agents in a subdued and low volume market, even though they are the main cause of it’s occurrence.

“We all deserve far better than this.”, says Peter Hendry, a retired surveyor with over 30 years wide-ranging experience working within the property industry.

For more, including a full explanation of how to correct these anomalies, once and for all, please see:
Want a functional, stable housing market?: Full explanation given.

Why we shouldn’t feel sorry for estate agents anymore!

Jan 102014

House prices rose about a third too much in the eight years prior to the 2007 price crash.  Had that not happened the downturn in house prices would have been far less acute (fairly obviously). It happened because the way the housing market is played, primarily by estate agents, is misleading. If we are to avoid another house price debacle house marketing practices need a complete revamp.

As estate agents themselves appear to have no wish or desire to change the way they operate (and I know, I’ve tried to consult with them often enough), our government ought to act to enforce the changes which the housing market itself desperately needs if it is to become ‘efficient’. Here is a superb opportunity for any political party to do the right thing and win votes for having done so, as the house-owning public will like these fundamental changes.

Here’s the link: House price rises leading up to the next election will overheat the housing market

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

Allowing house price rises in the run up to the next general election will cause the housing market to overheat

 Estate Agents, House Price Valuation  No Responses »
Jan 032014

It’s obviously happening even though buying power is generally stretched and house sales are generally subdued.
The idea that house price rises are an indicator of improving health in the wider economy is seriously flawed.

Here’s our take:
The housing market itself tends to behave very like a hot air balloon, so let’s use that as our analogy. Why not if it’s a good one!

Injecting heat, using the propane burner: is the same as providing more bank or building society lending.
The more lending (or injected heat) that is put in, the higher the balloon will rise. Rising altitude is like rising house price levels.

The first thing to bear in mind is, there is a significant delay between the time you fire up the burner and the moment the balloon begins to rise or ascend into the sky.
The second is that deft skill is needed so as not to put too much heat (or currency) into the balloon or it will go up, too high too quickly!

The converse is, that if not enough heat is applied, the balloon (representing the housing market) will gradually descend.
Again, deft skill is needed in order to avoid a continual and irreversible descent, leading to a collision with the ground - or a house price crash!

For the housing market to attract buyers with confidence to commit, a balloon (or housing market) that is controllable and safe and can cope with the types of weather (or employment prospects) experienced in our part of the world would be needed. In this scenario flyers (or buyers) would be unlikely to wish to embark on a voyage without sufficient confidence.

Importantly, in order to ensure a successful balloon voyage, people need a well-trained and experienced pilot to control the propane burner or amount of mortgage lending going in. The pilot in this analogy is represented by the B.o.E.’s divested powers which have been granted to them by our elected government.

The quantity of lending clearly needs to be ‘measured’ as well as being increased at precisely the correct time if those in the housing market are to see the advantages in embarking on house ownership, sufficient to attract them in. It’s exactly similar to those wising to experience a lasting and pleasurable balloon voyage. They need to have sufficient confidence in the pilot, a.k.a. the government (and the balloon of course) to know there won’t be excessive highs or dangerous lows in altitude whilst they, the house-owning public are on board!

So what are the controls of the housing market and how should they best be operated?

In this analogy:

The balloon: is the housing market itself.

The pilot: is the government including those regulating agencies which they appoint.

The propane burner: is the machinery that injects ‘money’ (as opposed to heat) into the housing market.

Altitude: is synonymous with rising prices.

The Top Release Valve: is what The B.o.E. can use to calm an overheated market.

The weather: is the employment prospects in the locality, which are always variable.

The basket slung below the balloon contains the house-owning public for the time being. These are the people buying or causing the demand that gives rise to sale-prices in the first place.

Just as with the top release valve in an air balloon, if it is not actuated when it should be, too much ‘heat’ is allowed to carry the balloon too high, i.e. higher then is required for a smooth and safe journey. Adverse weather conditions may, of course, be encountered if this is allowed to occur.

In a similar way, The B.o.E. can (and should) restrict mortgage lending, to quickly cool an over-heated housing economy irrespective of the wishes of those with divergent interests or agendas.

In addition, it needs to be understood that first applying too much heat and then letting it escape from the Top Release Valve later, is extremely wasteful of energy (or mortgage resources). It is likely to exacerbate price rises followed by lower prices later on.

So you will see, there is far more to presiding over the housing market than simply pumping more money in, when you think you might like prices to go higher!

Having given this analogy after careful thought, we’d like to leave it to others to add to it or comment at will!

So, with this in mind, here is our explanation of where house prices sit, as an indicator of the level of the health and vitality of the housing market as a whole marketplace:

House price levels are NOT a true indicator of the state of the housing market.

That indicator is instead the percentage of successful house moves, per million of population.

There is an optimum price-level which can bring about the highest percentage of moves, and thus provide the healthiest economy, by allowing optimum work-force mobility.
It is the latter that is the primary object of house ‘ownership’. Increasing house values are really only a by-product of the amount of health there is in the nation’s economy and in the housing market. Just forcing prices up does not, in itself, produce a healthy economy so be warned:

House prices which are rising owing to people’s desperation and worry about their dwindling level of private wealth are a misleading indicator. It’s really only a ‘fear’ indicator and not a measure of how healthy the housing market is, or indeed how healthy the whole nation’s economy is.

The true indicator of the state of the housing market is the percentage of actual house moves per million of population - NOT house prices:

For more, including a full explanation of how to correct these anomalies, once and for all, please see:
Want a functional, stable housing market?: Full explanation given.

Wishing a Happy New Year to all whom read this

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