• +44 207 193 1599
  • hclp@me.com

Monthly Archives:January 2012

Sky News

Lloyds Banking Group suggested that the cost of moving home has leapt by 69% over the past decade.

Howver, inflation accounts for much of this rise and of course house prices have risen by 64% over that time. Here’s my summary on Sky News with the lovely Sam Washington, their business presenter.

Do you need PR?

My good friend Michael Millar has produced a great website that helps you understand the value of PR. He has teamed up with Robbie Knox to produce a kind of ‘PR for Dummies’ guide. It’s a mine of information and well worth looking visiting.

I should warn you that there are some less credible bits – such as the following video….

Ask your agent to make you an offer you can’t refuse.

There are roughly half the number of homes for sale than there were four years ago when  prices peaked in January 2008. Although there is still no official register of estate agents there were thought to be about 14,000 firms. Since then many have diversified into lettings but there hasn’t been the body count that some predicted and most High Streets still have an alarming number of agency offices.

40% of all the homes currently for sale have had their original guide price reduced. Some will have been genuine mistakes – agents mis-read the market, greedy sellers who wouldn’t listen to advice or the odd vendor who is genuinely only interested in selling if they can get their price. Many simply fell for the sales patter and the flattering idea that they had a home that the agent liked too!

Estate agents only earn a fee when they sell (or let) a property. As a consequence they must have instructions to stand a chance of earning a fee and some will go to extraordinary lengths to get them. As I learned as a very ‘green’ negotiator when I started out there were no prizes and certainly no fees for being right. Giving professional advice was all very well but the potential client wants to know just two things when he invites an estate agent into his house. “How much and how little”?

How much does the agent think he can get for the house and how little will he charge to do the job? Despite being one of the last truly open and transparent markets with some agents happy to compete for work by charging next to nothing the fee is just as important as how much the agent thinks he can sell the property for. Some agents will ‘value for instruction’ and give an optimistic price that understandably the seller or landlord really wants to believe. Having secured the instruction the agent then has a period of time to appologise for getting it wrong but make up for it by getting a half decent offer that almost certainly mirrors the advice given by another (unrewarded) agent who was more objective at the outset.

By and large agents are spivs. Some are better spivs than others but at the end of the day they want your business and many will do whatever they can to get the business. One question you could ask them is to make you an offer for your house. Respecting that they will have costs, that they are brokers and not re-sellers ask them what they would pay for your house? Don’t be surprised if some still try it on but you may well find that one will actually be able to explain why they have come up with the figure they have by producing some comparable evidence perhaps?

It’s unlikely that you will find that the buyer for your home is an estate agent but its worth remembering that when it comes to giving marketing advice (it’s no longer called a ‘valuation’) it costs them very little to over-club the price and it’s you who suffers if you are foolish enough to accept it.

BBC News

Can you summarise the outlook for the sales & lettings markets in 3 minutes? No, I’m not sure I can either but here’s my crack at doing so.

How was 2011 for you?

With the results for November published by HM Land Registry last Friday and having kept records of sales, asking prices, sold prices and other data all year we can now begin to assess just how 2011 was for the housing market.
Asking prices start to fall.
Asking prices took a dramatic fall in the last two months of the year falling 5% in the last two months – a good thing since vendors and their agents had stubbornly refused to acknowledge that sale prices had been trending significantly lower for some time. The attached graph shows the gap between average asking prices as reported by Rightmove.co.uk and average selling prices published by the Halifax. Whilst not exactly the same data sets the trends tell the important story – that those selling are still asking just about the same that they were when the market peaked in 2008 yet those actually selling are taking roughly 12% less than they did in that same year.
Sale volumes back to long term norm.
Volumes remained thin with half the number of homes sold in September in England & Wales than in August 2007. 61,031 was admittedly a 17% rise on the previous year but over the the UK only 850,000 properties sold during the whole year – a slight fall on 2010. In 2006 and 2007 more than 1.6m were sold each year.
London is alright Jack.
London has avoided the pain being experienced in many other areas of the country. Prices in Hartlepool are 19.8% lower than they were 12 months ago. International buyers have helped maintain prices and volumes in the Capital although the proportion of £1m homes sold in London has fallen from 67% of all £1m+ sales in England & Wales in January two years ago to just 36% in September – the long term average as it happens. In fact sale volumes are back to their long term averages across the country which suggests that the market should survive the current apparent drought. One exception is the number of £1m+ sales which at 7,779 was slightly more in 2011 than the previous best year back in 2007.
Stamp Duty take falls by £9billion.
In August 2007 over £22.7b worth of homes were sold generating more than £4.5b in Stamp Duty Land Tax for the Government. In September just £9.8b was sold producing a much more modest £196m of tax revenue.
No particular shortage of homes for sale.
The number of homes typically on the market during 2011 remained at around 879,000 much as it was the previous year although the number was maintained by slightly slower numbers of new homes coming onto the market and fewer homes selling. Average asking prices as I have said tumbled eventually but still ended the year up 1% on the year before whilst the Halifax and land Registry recorded average sale prices in 2011 2% lower.
Chances of selling rising but remains less than 50%.
By checking the rate at which properties are selling, monitoring the number coming onto the market and those being withdrawn it is possible to see what percentage actually sell. With around 850,000 homes on the market selling at the rate of 70,000 a month I calculate that in December 2006 you had a 14% chance of selling in the first month of marketing your home. Across 2011 it had fallen to just 7% but things have improved slightly towards the end of the year. Today you have a 9% chance of your home selling in month one but still only about a 50:50 chance if you leave it on the market for a year.
2012 will produce more losers than winners in the real life game of Monopoly.
Predictions for prices in the coming year vary from ‘no change’ to my own admittedly bearish -10%. Importantly, the market remains hugely varied with some doing much better than others. It is important to remember though that as with any competitive market for the to be winners there must be losers. Like the residents of much of Northern Ireland (down 8% over 2011 and half what they were in 2007) as well as Hartlepool (-19.8% in just one year) there will be those who will suffer massive devaluation but elsewhere there will be others who actually make money in property.
Here’s the summary of 2011 against previous years. Figures taken from Rightmove.co.uk, HMRC, HM Land Registry and Halifax. These are the numbers, you draw your own conclusions.