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PROPTECH-X ‘Proptech & Property News’: Guy Gittins swaps Chestertons for Foxtons | Average house price now £250k

BREAKING NEWS: Guy Gittins returns to Foxtons as CEO after surprise Chestertons exit  

In a move that has taken the property industry by surprise, Guy Gittins, CEO of Chestertons, has suddenly quit. According to Reuters, it would seem that he left that role this weekend to return to his old company Foxtons as its new CEO. This strategic move may well strengthen Foxtons brand, though they have made no formal announcement yet. 

If Gittins does fill the shoes of the previous Foxtons CEO Nic Budden, who had been in post since 2014, it will buy the brand some time as it looks to steady the boat after at least one investor vocally requested that Foxtons should look to sell. Gittins’s move will complement the recent arrival of a new CFO. 

It will be interesting to see who will take the mantle up at Chestertons, at a time when all agencies are looking to gain a material advantage in a difficult market, where housing inventory is scarce, and the prime residential sector is being hit with the same problems. 

There may well be a huge amount of high net-worth individuals looking to move, but if there is nothing to sell to them or enough lettings stock to offer them, then the huge overheads of running an expensive estate agency empire becomes a difficult equation.

On the positive, there will be some high-end recruitment services looking to fill the hole left behind at Chestertons as soon as possible, though that field may be a small one, as there are few candidates with the knowledge and expertise of the marketplaces that Chestertons deals in.

Will it be an internal hire? This seems unlikely, but who out there would be up for leaving an established position to secure the forward fortunes of Chestertons? 

What is certain is that with nearly a decade under his belt at Chestertons, looking after 32 offices across the UK, Gittins’s departure will leave a considerable hole in their operations in the near term.

PRESS RELEASE: Average house price hits new record high of £250,000 for the first time but signs of market slowdown emerging

  • The average price of a UK home has risen to a new high in April, exceeding £250,000 for the first time ever (£250,200)
  • House prices are up an average of 8.4% on the year, down from 9% in March, however the rate of house price growth is starting to slow and expected to hit +3% by the year end
  • Price reductions are increasing with 1 in 20 (5.1%) properties listed having had price reductions of 5% or more this month* compared with 1 in 22 (4.7%) in March
  • Where prices are being cut, the average reduction is 9%  – applied to the average home value, this equals a price reduction of around £22,500

Monday 30th May, 2022, London: Housing market demand sees the average property price hit a quarter of a million pounds (£250,200) for the first time according to Zoopla’s latest House Price Index. However, signs of a slowdown are emerging as homeowners face increasing pressure on their finances thanks to the surge in cost of living. 

Rising house prices paired with increased interest rates mean the cost of repayments for a new mortgage for an average UK home has risen by £71 a month – equating to £852 a year since the start of the pandemic (April 2020) and is further squeezing households already impacted by the cost of living crisis**

Properties in Wales remain popular with buyers showing the strongest rates of house price growth for the 15th consecutive month at 11.6%, growth in London is lagging with the slowest rate of growth at 3.6%

Signs of a market slowdown ahead with increased time to sell and house price reductions

The housing market is still much busier than pre-pandemic norms, but signs are emerging that a slowdown is coming. House prices may be up an average of 8.4% YoY for April – down from 9% in March, however the rate of house price growth is set to fall to  +3% by the end of 2022.

Furthermore, sales are taking longer with nearly  all types of property taking a few days more to achieve a sale agreed compared to the month prior. Outside of London, the average time between listing and sale agreed for a three-bed house is up from 16 days in March to 18 days in April.  In London, this figure is up from 17 days in March to 21 days in April.

Price reductions are also rising  with an increased number of properties listed where sellers have cut the asking price by 5%. Since the second half of April,  1 in 20 (5.1%)  of properties listed for sale had a price reduction compared with 1 in 22 (4.7%) in the previous 28 days   – a pattern seen in every region in Britain.

The average reduction seen is 9% and when applied to the average home value, this equals a price reduction of around £22,500. Regionally, one in 16 properties (6.2%) in the North East have been reduced in price by 5% or more in the 4 weeks to May 15th , while in the West Midlands, around 4.5% of listings have registered price cuts of 5%+. 

Demand continues to outweigh supply 

The market continues to see an imbalance in supply and demand with limited numbers of  properties still coming to market. Current demand sits at  +61% based on the 5-year average compared with the total supply of homes for sale  -37% and driving market competition.

London has the smallest shortfall in stock, at -19% below the 5-year average, while demand still remains strong at +55% above the long-term average. In contrast, buyer demand is strongest in the East Midlands, with the market hugely competitive at +81% above the 5-year average, while stock levels remain -32% down.  

Gráinne Gilmore, Head of Research, Zoopla, comments: 

“High levels of buyer demand mean that the market is still moving quickly, but the time to sell – the time taken between listing a property and agreeing a sale – is starting to rise across most property types in most locations. We expect that this measure will continue to rise during the rest of the year as buyer demand levels start to fall, punctured by changing sentiment around the cost of living and personal finances.

Another signal that the market is starting to soften is the number of properties where asking prices are being cut by more than 5%. Some one in twenty properties has been re-priced this month, with the average new asking prices some 9% below the original. The annual rate of price growth will ease this year, on a monthly basis, price growth has already moderated. A continuation of this trend, even with some small monthly declines,  means price growth will reach +3% by the end of the year. “

Vincent Dennington, Director at John D Wood & Co. comments: 

“We are starting to see more and more price reductions on property portals, which is perhaps an early indication that the market is slowing down. However, this may also be a sign that properties have been initially overpriced and are not achieving any interest from potential buyers; therefore needing to be adjusted correctly to ensure a reduction generates new interest and ultimately offers. Typically, reductions should move to at least 5% lower than that of the current marketing price.

“Currently, the market remains buoyant enough that should a property come to market competitively priced, it is likely to create a multi-bid scenario, resulting in final offers going over the guide price. Despite the recent hikes in mortgage rates, they are still cheaper than back in 2015 and the demand remains strong for accurately priced family homes throughout most areas of the UK – now is the right time for vendors to secure their best price.” 

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Andrew Stanton Founder & Editor of 'PROPTECH-X' where his insights, connections, analysis and commentary on proptech and real estate are based on writing 1.3M words annually. Plus meeting 1,000 Proptech founders, critiquing 400 decks and having had 130 clients as CEO of 'PROPTECH-PR', a consultancy for Proptech founders seeking growth and exit strategies. He also acts as an advisory for major global real estate companies on sales, acquisitions, market positioning & operations. With 100K followers & readers, he is the 'Proptech Realestate Influencer.'