SUNDAY TIMES SLAGS OFF ESTATE AGENTS

An offensive and ill-judged piece in the Sunday Times by a journalist who seems to be keen to move away from the property section….

Rosie Millard asks “What is it that is so irritating about estate agents?” and goes on to rail at some length about those involved in the business. “The too neatly pressed suits, belying an innate reluctance to leave their overheated offices and plod around a dusty house? Or perhaps their chavvish cars, badged up beyond sense with silly catch phrases?”

If the Sunday Times have just contacted you about next years advertising rates, you may want to show them the full article and ask if they feel that journalistic independence isn’t perhaps being stretched here just a little too much. Better still, leave a comment for her.

Home Information Packs made no difference to the market

The latest figures from The Land Registry published this morning explodes the myth that the introduction of the controversial Home Information Pack was responsible for the housing market slow down. According to the Government agency, in August the number of properties sold under £250,000 was down by 14.5% and by 10% across all prices on the same month in 2006 but this was a trend that had started in May, four months before HiPs were introduced.

The number of cheaper properties sold in May was down 15% on May 2006, June was down 22% and July 33%. HiPS for larger homes were introduced on 1st August. “The RICS who had proposed a judicial review to delay HiPs as well as some mortgage companies had suggested that people were put off marketing their home because they had to pay £300 to have a Pack prepared” said Henry Pryor, housing expert and founder of The HiP Exchange. “But many agents are offering free Packs and every single provider can offer deferred payment via HiP Payment Service so that the Pack can be paid for up to ten months after it has been prepared.

“The latest figures from Land Registry suggests that six successive interest rate rises on top of house price inflation of up to 20% per annum put house prices beyond the reach of most sensible buyers. Purchasers were already reluctant to commit months before HiPs were introduced, lenders in turn have since pulled back from offering insane mortgage products that would condemn the borrow to 25 years of mortgage slavery and the market was ready for a readjustment.

“The supply of new property to the market has dropped by nearly 50% which perversely is what is supporting house prices at present” he said. “It remains to be seen by how much forced sellers will have to discount the property they have to sell in order to get interest. Buyers are already offering between 5 and 10% below asking price and many are concerned that whatever they offer today could be cheaper tomorrow”.

Pryor continued. “For political reasons, some people suggested that the introduction of Home Information Packs has been the cause of the slow down in the housing market but the buying public are actually more savvy than they are given credit and most have realised that the market got too hot and has seized up. Sentiment is now swinging the other way allowing for a correction to the bull run of the last seven years.”

“COME ON AGENTS, LETS BE HAVING YOU?”

As you ought to know, the RICS and NAEA have jointly sponsored a review of the estate agency profession and asked the ex-director-general of OFT Sir Bryan Carsberg to undertake this review. You can learn more by going to http://www.rics.org/MyRICS/Regulation/carsberg_residential_review240907.htm. In particular, Sir Bryan has been asked to focus on regulation and redress in both sales and lettings, efficiency of transactions and development in technology and opportunities for innovation.

In addition to inviting comments from the profession, from interested parties and from the public, a team from RICS and NAEA will attend a series of regional consultation meetings that have been arranged. The first was held in Newcastle, the second in Manchester was cancelled but there are four more planned – in Birmingham, Cardiff, Bristol and finally back in Manchester. 

Contributions are invited before mid-January and Sir Bryan hopes to report next spring.

I went along to the London meeting in St James’s last night where I expected the Great and the Good to be assembled to provide Sir Bryan with an insight into what is really wanted. Members of the National Association would join grandees of RICS I had thought and share their vision for the next generation. Consumer groups would plead for some kind of licensing, the Law Society as well as individual lawyers would explain the benefits of e-conveyencing (or more likely explain why they didn’t like the idea of e-conveyencing) and familiar faces from the heady world of London agency flush with record fees and big bonuses would be there to contribute experience and wisdom from the real world. In the event, I was one of just seventeen people who turned up, five of whom were from red-faced RICS acting as our hosts. Thank goodness that Sir Bryan hadn’t felt it necessary to attend. He might have got the wrong impression.

Although we were told that Sir Bryan is to meet with over 120 ‘interest groups’ over the next few weeks, a review of the UK private residential property market had managed to bring together just a dozen people in the Capital. If it hadn’t been quite so tragic, it would have been funny. RICS and NAEA have grasped the baton and invited everyone to contribute to a debate about the future of their industry and full marks to them for doing so. We discussed the merits of a Notary style system, of bringing in Home Condition Reports and of some form of licensing. We had a lawyer, an NAEA member from 300 miles away in the North, a trainee surveyor as well a sprinkling of ‘older’ hands. But, as we have seen with the Housing Act (and other Government legislation like smoking and hunting) it is only when the writing is on the wall that people bother to look up and take notice. It is only when we are forced to confront something like Home Information Packs that martyrs like Nick Salmon appear to lead but frankly, we shouldn’t need brave people like Nick who give up their time and income to help dig us out of a mess we have sleep-walked into. We have the opportunity to describe our idea of a perfect world before more Panorama-inspired legislation is forced upon us and we wake up complaining that no one consulted us. Well they did – they’re doing it now!

I’m afraid that ours is an idle profession where most people don’t care and expect others to sort things out for them. They are quick enough to whinge when they find that their old branch line has been ripped up or that they can’t hunt or smoke in their office but they do chuff-all about it. If I’m wrong, then Birmingham and Cardiff, Bristol and Manchester will be packed out but in the meantime, as you celebrate Christmas this year with another round of drinks, raise a glass please to James Scott-Lee, to Peter Bolton-King, to Nick Salmon and all the others before them who stood up to do your dirty work for you. You should appologise that you are too busy getting pissed to support their efforts to improve your industry but you should warn them that if they muck it up, you will unreasonably hold them responsible and will be joining the hoards calling for their resignation. It’s the sort of thing that happens to the national football team – but it shouldn’t happen to an industry like ours.

PACKS FOR ALL HOMES FROM 14TH DECEMBER

Home Information Packs for all.

The Government will announced today the roll out of Home Information Packs to all houses from 14th December. The contentious Pack which was originally designed to help speed up the home buying process and bring an end to gazumping was initially launched in August for all larger properties and in September was extended to include all homes with three or more bedrooms.

The project has not been without its critics. Almost everyone involved in property has argued against HiPs including the RICS, the Law Society, The Council of Mortgage Lenders, the National Association of Estate Agents and the Governments own ‘Better Regulation Committee’. Despite the howls of protest, the Communities and Local Government under Hazel Blears has pushed ahead having come under intense pressure from those who have come together to implement the departments edict.

Domestic Energy Assessors and Pack providers have lobbied hard for the role out to all properties. Many have spent their own money getting trained up only to find that they have little of no work. It was estimated that around 100,000 HiPs would be required each month and with each HiP an Energy Performance Certificate but industry experts suggest that less than 50,000 have been done since 1st August. Many Energy Assessors face financial ruin despite training companies continuing to advertise that there is a shortage.

Pack providers have reported problems with obtaining searches from local authorities and some have struggled to turn the Packs around within a month. It seems unlikely that the Governments next plan to require all properties that are marketed  – even those already being advertised to have a HiP after the 1st January will be implemented and of course the long term outlook for HiPS is far from certain as the Tories under David Cameron have pledged to scrap them if they win the next election.

Packs rolled out to whole market.

The Government will announced today the roll out of Home Information Packs to all houses from 14th December. The contentious Pack which was originally designed to help speed up the home buying process and bring an end to gazumping was initially launched in August for all larger properties and in September was extended to include all homes with three or more bedrooms.

The project has not been without its critics. Almost everyone involved in property has argued against HiPs including the RICS, the Law Society, The Council of Mortgage Lenders, the National Association of Estate Agents and the Governments own ‘Better Regulation Committee’. Despite the howls of protest, the Communities and Local Government under Hazel Blears has pushed ahead having come under intense pressure from those who have come together to implement the departments edict.

Domestic Energy Assessors and Pack providers have lobbied hard for the role out to all properties. Many have spent their own money getting trained up only to find that they have little of no work. It was estimated that around 100,000 HiPs would be required each month and with each HiP an Energy Performance Certificate but industry experts suggest that less than 50,000 have been done since 1st August. Many Energy Assessors face financial ruin despite training companies continuing to advertise that there is a shortage.

Pack providers have reported problems with obtaining searches from local authorities and some have struggled to turn the Packs around within a month. In a final u-turn the Governments’ next plan to require all properties that are marketed – even those already being advertised to have a HiP after the 1st January will not now be implemented with an extension of so called ‘first day marketing’ to 1st June next year and of course the long term outlook for HiPS is far from certain as the Tories under David Cameron have pledged to scrap them if they win the next election.

CLASSIC HIPS AVOIDANCE!

Full marks to R House in Cornwall who are marketing an unusual 3 bed property in Torpoint.

They clearly understand the value of PR and have successfully got mentions in most of the national press as well as umpteen blogs and websites. A call to the office handling the sale however has produced the usual ‘HiP’s avoidance’ response that AHIP complain about and that will end come January 1st when the drop dead date comes into effect. “The property was first marketed on 7th September” according to Charlie Elworthy the office manager “and so does not require a HiP. We’re also pretty confident that a 3 bedroomed dolls house was not what the Government had in mind when they framed the legislation.” I shouldn’t bet on it!

COMEDY-DRAMA BASED ON ESTATE AGENTS

Expect the same sensation as watching a road accident this Thursday when ITv1 brings you ‘Sold’. It’s ITV’s brand new drama set in the dog-eat-dog world of estate agency. Get a little taster with our preview now. Warning: you may never want to move house again.

An exciting looking cast but toe-curling for anyone who cares about the image of the industry. I understand it is not based on Foxtons apparently.

HOUSE PRICES WILL FALL IN 2008 – AND MAYBE FOR THE NEXT THREE YEARS TOO!

Predictions for the new year are usually not made until December but with many people asking “what is going to happen to the market” it’s worth taking a peek now at the tea leaves of the housing market and perhaps looking ahead to 2010. Who knows, we may find that in six weeks time things have changed – for the better, I hope!

I said in January that I though that we would look back at the last quarter of 2006 and Q1 of 2007 as being the peak of the market and I expect the market to fall through 2008 – by up to 20% in some places. Estate agents are already reporting buyers offering 5-10% less than asking prices – even so called ‘realistic guide prices’ and my own experiences of the last two property recessions is that for at least the next six months, any deal that is agreed today immediately results in either someone thinking they have over paid or someone else, that they have under sold. The result can be ‘gazundering’ (where a buyer drops their offer just before exchange of contracts).

But what of the market in three years time? People say that “property is a long term game”. It is impossible to say with any degree of certainty of course but one of those who are prepared to put their money where their mouth is are be the Spread Betting companies who are suggesting a fall – from a UK average of £198,500 last month to £179,100 in December 2010. 

Having seen prices in parts of London rise by over 20% so far this year, for some a 20-25% fall wouldn’t be as painful as it sounds but for anyone who has bought recently or for those who will see values fall by more than the average, the next three years could be very painful. However, remember that if you are buying and selling in the same market it is all relative. As many people have seen in the past ten years, if you make a lot on your own house, the house you want to buy becomes that much more expensive too. Conversely, if your have to take a hit on your own house, the chances are that the house you want to move to will be that much cheaper too. But at least you can move if you want to. In a stagnant market, it’s hard to even move since no one wants to offer for fear of paying too much.