Andrew Stanton asks – Do estate agents help or hinder?
We are now officially in the silly season regarding news cycles, many journalists are on holiday, myself included, leading to a situation where stories about pet rescues or similar take centre stage, rather than real news. But as I recline in my deckchair looking out to sea from the Guernsey shoreline, I contemplate whether in 2023, estate agents in the UK are up to the job of selling property anymore.
Let me explain, in 2023 I looked to purchase a number of different properties in various locations across the country, in different price ranges and from independent agents and corporate agents, and this is experience was pretty close to having my teeth pulled out with a set of pliers.
As recently as last week, I rang an agent at 11.30 am and left an answer phone message as no-one answered my call, this agent is a large corporate, the downside for the vendor whose property I needed further intel on is that I moved on to another property. If this was a one off fair enough, but having trawled through six months of activity with various agents this low level of service is the norm, whether I enquire by phone or email etc, no-one ever comes back to me.
Looking back at data, in 2023 so far agents failed to respond for a request for further information 68% of the time, that is if I requested lease details, or why the floorplan was at odds with the photographs etc, mostly I never had a reply, which meant that I was not going to pursue that property further.
In terms of engaging with me, taking time to even take my details, this was not even on the scale, yet as a true cash buyer, motivated to buy today with very simple requirements, who would bother to look after me, after all if it is on a property portal I will self serve – right? Actually no, wrong.
In a tightening housing market, the role of agent is to promote and sell they inventory that the vendor has entrusted them with. Agents core job in the residential space is to be the advocate and facilitator of a sale that will go to exchange and completion, it is not a process that takes place on auto-pilot. That is why when on the rare occasion I do hit upon an agent who understands this, buying a property can be an experience with rewards to both sides.
There is a lot of nonsense about who estate agents look after, clearly it is the fee paying vendor, who pays for their property to be sold. Yes great customer service to a buyer increases the rate at which sales are agreed, and helps the flow of the sale from sold subject to contract to exchange, if a warm relationship has been engendered from day one. But, it is the vendor who pays for the service.
Now I am a realist, and of course was a frontline agent for thirty years, and I know estate agency is a reactionary environment, there are on a daily basis a lot of moving parts, and humans are complicated little creatures. Fully understanding that time pressed agents may be hard pressed to answer ‘annoying’ questions that would be buyers ask. However, as sales people that is the primary function, more information and contact builds opportunities to close more business.
Looking to the future, in a decade, this ping-pong game of getting extra information on listed property from disinterested estate agents will be a thing of the past, as either the property portals or large enterprise will forensically list all details about any property asset that comes to the market.
Including its value, its construction, carbon footprint, and its legals, etc, a multi-layered oversight piece that will allow the general public to buy and trade homes without the need for agents. Until then I look forward to a bumpy and slow ride when looking to buy further property in 2023.
The recent rise in mortgage rates by the Bank of England has sparked discussions about the impact on the housing market. However, despite the headlines, consumer confidence remains robust, with demand outpacing supply and sensibly priced properties continuing to attract interest and offers.
Nicky Stevenson, Managing Director of Fine & Country, says that recent data from Zoopla and Hometrack, reveals that approximately 47% of owner-occupied households in England and Wales are financed through mortgages. She notes that the increase in mortgage rates has garnered significant attention, particularly for the seven million households affected. While most mortgages are on fixed-rate deals, around 15% are estimated to end this year.
“In May, there were 50,524 mortgage approvals for new home purchases, which is 15% lower than the longer-term average observed between 2010 and 2019. Nevertheless, this represents a significant improvement compared to January, when mortgage approvals were 34% lower. These numbers indicate the growing acceptance of the new interest rate landscape,” Stevenson comments.
Recognising the importance of supporting residential borrowers, the Treasury has collaborated with major lenders to develop a Mortgage Charter. This initiative has garnered support from 85% of the industry and aims to provide assistance and options for customers affected by changing mortgage conditions.
Stevenson notes that under the Mortgage Charter, customers who are up to date with their payments will have the flexibility to switch to interest-only payments for a period of six months or extend their mortgage term, with the option to revert to the original term within six months. Furthermore, customers nearing the end of a fixed-rate deal will have the opportunity to secure a new deal up to six months in advance, allowing them to change to a more favourable arrangement until their new term commences. Except in exceptional circumstances, repossessions will not be pursued within one year of the first missed payment.
“Despite the challenges posed by rising costs, consumer confidence in May, as measured by GfK, improved for the fifth consecutive month, reaching its highest level in 17 months. This suggests that individuals are increasingly optimistic about their personal finances. Demand for property, as reported by Rightmove, remains steady at 6% higher in the four weeks leading up to mid-June compared to 2019. However, it is evident that rising costs are impacting buyers’ purchasing power,” says Stevenson.
She adds that according to a Dataloft poll, 47% of agents indicate that the greatest impact of mortgage market volatility on buyer habits is a reduction in budgets. Research conducted by Zoopla reveals that transitioning from a 4% mortgage rate to a 6% rate, based on an average-priced property, will result in a 19% decrease in buying power.
“Consequently, pricing strategies become crucial in the current market,” comments Stevenson. “Zoopla highlights that the average price reduction on a property is 3.8%, with more than two in five sellers accepting a discount of over 5% in June. Rightmove’s research indicates that price-reduced listings take more than double the time and are more than 10% less likely to sell, subject to contract (SSTC), compared to non-reduced listings.”
Stevenson notes that overall, the property market is experiencing stable month-on-month prices, with annual price growth ranging from 3.5% to -3.5% depending on the indices and their calculations. “Notably, the prime market demonstrates greater resilience, currently boasting an annual price growth of 7.7% across all regions of England and Wales.
The threshold for a prime market property is now set at a minimum of half a million pounds in all regions, except for the North East. The average price for all types of prime market property exceeds £1 million, excluding semi-detached houses,” she adds. “As the housing market continues to adapt to the changing mortgage landscape, it is crucial for industry stakeholders to prioritise the needs of residential borrowers.
The Mortgage Charter, with its industry-wide support, provides a framework to assist customers in navigating these evolving conditions. By fostering consumer confidence and implementing prudent pricing strategies, the housing market can remain resilient in the face of ongoing challenges,” Stevenson concludes
Andrew Stanton is the founder and CEO 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 and editor of Proptech-X Proptech & Property News, where his insights, connections and detailed analysis and commentary on proptech and real estate are second to none.