How much inventory do estate agents actually have to sell?
Last Friday on my travels, I stopped off at Storrington in West Sussex, your typical sized town. As I walked around the centre with my co-directors Ann and Zara, we peered in all the estate agents’ windows.
It was apparent, once you scanned the dozens of properties in the windows with the word ‘Sold’ on them, that new instructions were very scarce and what was listed seemed to be listed by a number of agents, a sign perhaps of a very optimistic vendor.
Having been an agent, I know new instructions fall of a cliff in December, which is only half a month of trading. Also, with lockdown-lite and working from home back on the menu, January was always going to be a hard month for agents, as you can not sell what you do not have.
But it did feel to me that perhaps the market is actually catching its breath. Yes, for sure there will be a huge amount of market appraisals taking place by agents across the UK, but by the end of January how many new instructions will be in those agents windows and on the portals?
I know that Rightmove, with its monthly report, is bullish about things, but as it is a digital window for all of the UK’s property for sale and to let, it is hardly surprising. I wonder though what the real trend will be by Q3.
Will it be a case of ‘list it’ or ‘live in it’? Worryingly part of my mind feels that the silence around new instructions is very similar to the tail end of 1988, where after two million movers had moved in just one year up to September of that year, the property market cooled for the following three-years. Interest rates rose and other factors collided to turn the housing market tap off.
For a more analytical look at what may be happening in 2022, see below for Rightmove’s view, taken from here.
The number of homes available for sale per estate agency branch has hit another record low of 12 properties, down by two from last month. The few homes that are on the market continue to be snapped up at speed by determined buyers, with the average time to find a buyer in December 2021 being more than two weeks quicker than in the same period the previous year.
Early-bird sellers benefit from busiest ever start to a New Year. The average price of property coming to market jumps by 0.3% this month (+£852) to £341,019, which is 7.6% higher than in January 2021, the highest annual rate of price growth recorded by Rightmove since May 2016
Strong demand and continuing low numbers of available homes for sale set up the housing market frenzy to continue into the start of 2022, with early-bird sellers benefitting from increased buyer competition:
The number of buyers enquiring about homes is 15% higher than the same time last year.
The number of home valuation requests in the first working week of 2022 is 44% up on the same period last year, and 48% up on the same period in 2020.
Tim Bannister, Rightmove’s Director of Property Data comments:
All of the signs suggest that prices are likely to continue to rise until more choice is available. Three regions are in most urgent need of new supply, the East Midlands, South West and South East of England, as they are now at unsustainable rates of annual price growth above 10%.
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iamsold’s modern method of auction thrives during 2021
Jamie Cooke, CEO of iamsold, has had a very good year. Whilst he is probably the first to admit that the pandemic was a factor, the fact that the selling price of property transacted through his auction solution increased by over 50%. This means that agents and vendors have grasped the value proposition of the company.
Figures show that property totalling over £800 million in capital value went under the hammer with iamsold last year, generating in excess of £17 million of fees for agents, and of course, those fees came to agents in a quicker timeframe than the usual sale by private treaty route that can often take five or six months for a sale to get to completion.
Last year by chance I had an hour-long call with Jamie, and what struck me was that he was not looking to take over the world, which is often the case when talking to CEOs. Instead, Cooke said that the point of difference was that he just wanted to give agents and vendors a clear, fast and efficient alternative to other routes of selling property.
As we drilled down into the business model, and with both my estate agency head and my property technology hats on, it made complete sense that the “we’re tech savvy and we want it now” generation of vendors would be up for the iamsold solution, as well as property asset companies looking to transparently achieve the best price.
More recently Jamie Cooke put it another way. He said: “Consumers are being offered more options to match their circumstances and to help sellers maximise the value of their home through competitive bidding in a clear and transparent way. This goes a long way in cementing the fact that auction in the residential sector has a key role to play in all market conditions.”
Andrew Stanton is the founder of Proptech-PR, a consultancy for Founders of Proptechs looking to grow and exit, using his influence from decades of industry experience. Separately he is a consultant to some of the biggest names in global real estate, advising on sales and acquisitions, market positioning, and operations. He is also the founder of Proptech-X Proptech & Property News, where his insights, connections and detailed analysis and commentary on proptech and real estate are second to none.