Estate Agency Needs Revolutionising Today

 Estate Agents, House Price Valuation  No Responses »
Apr 222014
 

There needs to be more balance, between the advice being provided by modern-day estate agents to vendors, and the advice needed by those wanting to buy in difficult market conditions. With the old maxim, Caveat Emptor (Let the buyer beware) still ruling in UK house buying it’s becoming increasingly vital for ‘buyers’ to get the best possible advice when finding their next house or big mistakes can easily be made. It’s vital to negotiate the most appropriate terms for purchasing any property these days. For this reason we are calling for a completely new breed of agents which we call ‘Finding Agents’ to replace all the existing selling agents right across Britain.

The need for this is demonstrated by considering the following 10 aspects of the present-day housing market, all of which need addressing urgently.

1. The need to BUILD MORE HOMES. Most of us agree that orchestrating the building of more homes would be beneficial in the medium / longer term but doing so must take time. Unfortunately the attempt to stimulate more building using the so-called ‘Help to Buy’ schemes is causing confusion because these schemes are really “Help To Sell”. When you think about it their real aim is to assist ‘sellers’ to obtain the best price, instead of helping buyers to get a fair deal. Those who still think otherwise are naive.

2. BUILDING MORE GARDEN CITIES. Whilst not a bad idea in itself, this is not going to be nearly enough to deal with the problems we’re facing on its own.

3. STAMP DUTY. This should certainly be looked at but with a view to lowering the tax as soon possible, in order to bring more buyers into the market. However, once again, doing this won’t deal with all the problems on its own.

4. LEVYING CGT ON ALL HOUSE SALES. The idea of not levying CGT on owner-occupied homes was originally to encourage more people to become owner occupiers. With the number of buyers actually in decline currently (that is with the uptake in home ownership at its lowest level in 25 years), why suddenly impose CGT on house sales? No useful purpose whatsoever would be served by doing this.

5. TAX FOREIGN INVESTORS? Doing that would probably not be seen as being very European.

6. LEVYING AN ANNUAL PROPERTY TAX. Trying to levy increased taxes on house ownership, in an attempt to curtail price increases is like trying to use a lever to change the orbit of the planet!
All very well in theory but not in practice. The problem with this approach is that it simply doesn’t address the fundamental issue - which is the need to bring the market back to equilibrium and stability, with prices broadly inline with average levels of wealth.

7. TAXING LANDLORDS MORE. This is simply not an option since we desperately need more (good) landlords. Making life more difficult for them to acquire rental property would be a totally unproductive measure as this sector is a vital part of supporting the fragile housing economy.

8. RESTRICT MORTGAGE LENDING. By contrast this is undoubtedly a yes and is so important. Not managing how much individuals can borrow when deciding to buy owner-occupier property is the equivalent to usury gone mad. It simply hands the cosh to the financial institutions - and we all know what damage that can do having witnessed the recent banking collapse. Sensible restrictions are, and always were absolutely paramount in this area. That’s one of the main and ongoing responsibilities of a diligent government . One that is perhaps not being pursued enough at present, certainly in some people’s view.

9. BETTER UTILISE EXISTING EMPTY PROPERTIES. Taxing the owners of empty flats and houses does seem to be a necessary and worthwhile idea in order to maximise the use of our existing housing stock.

10. THE MISSING OVERRIDING SOLUTION. The one measure that is missing from all of the above is concerning the old established maxim: Caveat Emptor - which is where we came in. This maxim has served the UK housing market well for many decades now but it seems to be in need of some attention. Owing to the problems we have recently been facing it’s becoming increasingly vital for all ‘buyers’ to get the fullest advice whilst finding their next house and to negotiate the most appropriate terms for purchasing it too.

That’s why we see the need for ‘Finding Agents‘ to completely replace selling agents. Estate agency desperately needs revolutionising these days and this is the only sensible way this could be achieved.

For more about HOW these changes could swiftly be implemented, please see: -

We want a functional, stable housing market.

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

Apr 172014
 

I blame the agents, for badly misreading housing market dynamics and then gaining easy support by advising the all too hopeful vendors.

The reason for this is that it’s quite a bit more complicated than many agents are currently able (or willing) to appreciate.

The problem is currently being highlighted by the ONS who have just said that the supply of properties for sale nationally is down 12% year on year, and down 48% since March 2008!
There is an explanation for this and it’s not because house-owners don’t want, or need, to move house these days.

The trouble is that estate agents are still desperately trying to annex the whole housing market for their own gains, even though its being increasingly damaged by their own efforts.
By misrepresenting asking prices across the board, and acting only for vendors, they are causing the whole market to contract, just at a time when The Nation needs it to be expanding, from a sales volume point of view.

Unfortunately, no-one in government seems able to take charge or stand up to these agents and their unscrupulous tactics. The housing market has become effectively blackened by the misdeeds of those manipulating it; no-doubt goaded on by eager vendor-clients, who are unaware of the consequences of the tactics being ‘sold’ to them by their agents.

The whole thing is now out of control and right out of phase with the rest of the UK economy. The opportunities for correcting this have been duly missed exactly as the opportunities, which existed before the banking collapse, were available to correct our nation’s financial position.

All that can happen now, is house owners must see an ongoing natural correction in market prices, to bring them more into accord with general economic indicators.
This must happen, irrespective of any tactics employed after the fact by The Treasury.

In a nutshell. the party is over. The restoration of ‘normality’ will soon have to commence happening.

This will begin with many owners, previously hoping to sell for a profit, either giving up on trying to sell, or being forced to sell at very substantially reduced prices.

The naive idea that supply will support such ridiculous price levels simply because it lags behind the rising demand for houses is untenable and cannot withstand any degree of scrutiny. Supply may indeed be short, but without sufficient wealth, there is no economic demand.

A case in point which proved this hypothesis occurred in The Republic of Ireland, where whole estates of newly built houses were left to rot and decay, uninhabited and unloved as a result of the lack of wealth their inhabitants encountered as the Euro crashed. These problems are still working their way through the system over there.

Britain itself is, contrary to the views of some commentators, yet to come out of this unscathed. The fact that money is coming here from a small number of relatively rich investors from abroad is actually confirmation that things are not good. Money from abroad won’t, in itself, be enough to remedy the situation.

There is a solution available, but it’s not something that estate agents up and down the country are likely to support because it means doing more work, it means working harder for their gains.

It’s to do with involving them in negotiating prices at both sides of each property bargain, not just trying to get the best price for the vendor.

The building of more houses is undoubtedly essential to help quell rising prices and it is a silver bullet worth using. However, the above remedy would be the golden bullet, as it can permanently bring house prices back within reasonably affordable levels.

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

We want a functional, stable housing market.

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

Want a functional, stable housing market?

 Estate Agents  Comments Off
Apr 102014
 

Excerp:
When our Chancellor said in his Autumn Statement to Parliament; 5th December, 2013 that he wants a ‘functional’ housing market, to most people this would presuppose that, currently, he doesn’t think the housing market is particularly ‘functional’.

I would wholeheartedly agree. How then can we make it ‘functional’?

There IS a better and quicker way, besides that of building more houses, which by any degree of estimation, must take nearer 10 years than 1 to be implemented.

To read the full article, including a full explanation of how to correct these anomalies permanently, please see:
Earlier article on our blog site: Full details of our current proposals.

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

Apr 102014
 

The fact is, house prices have been running ahead of inflation following the biggest financial crash within most people’s lifetimes.

The house price correction which should have occurred after the crash was extremely short-lived as the BOE quickly dropped interest rates to almost nothing, with the result that house prices were re-inflated almost immediately.

The effect of this is a large headache for anyone contemplating a house move, or even just a sale because now buyers have to deal in pre-crash prices.

The outcome of these factors is that insufficient numbers of owners think its worth going onto the market in an attempt to move house. It’s too difficult for them because of the risk of paying too much whilst not getting enough for their sale, thus ending up with less equity. Only the desperadoes among us are prepared to do this at this time.

The government therefore is reaping a legacy of their own making - a stagnated housing market with unsustainably high prices being quoted.

Trying to tweak it by offering access to more mortgage funds (which is the government response), is simply pouring petrol onto the flames.

Instead, we need a ‘strategic’ solution, some way of calming the housing market and increasing its throughput, i.e. increasing the number of properties available in the market and providing enough confidence to those who would now like to move house.

How? By improving the way houses are marketed by estate agents.

It’s already apparent from the latest TV series about how estate agents currently work, entitled “Under Offer: Estate Agents On The Job” and screened on BBC2, Wednesdays, that change and improvement is overdue.

To me, the only unanswered question is: Will this government (or the next one), do the right thing for housing?
A swift revamp in the rules and selling methods of estate gents, is the particular nettle needing to be grasped right now.
Done correctly, the finances of the market itself will then simply look after themselves.

According to the papers the RICS is apparently now reporting that house prices, for first-time buyers, are such that this sector alone is unlikely to be able to afford to buy much for a good while to come. Searching their web site today however, doesn’t reveal any details about this at all.

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)