Rightmove have published their latest asking price index which shows a slight fall in seller expectations just as it always does at this time of year. Here’s my 2’30” summary of prices and some fascinating data from National Association of Estate Agents on the business done by its members.
The Bank of England have cut interest rates to their lowest in 368 years. Base rates are now at 0.25% and a further £60bn of ‘Quantitive Easing’ was also promised with the suggestion that rates could be trimmed yet further by the year end.
Some economists suggest that this is needed and welcome, others are less sure but on Radio 2 I was asked for my views along with Vicky Pryce who was speaking from Athens. I have cut two sections out and added some graphics to illustrate what was going on.
You can hear the whole piece here;-
I’m often asked what I do and why someone might use my services. Perhaps these short films might help;-
I offer a bespoke buying agency service costing 3% (inc VAT);
My ‘Pocket Agent‘ service costs £600 (inc VAT) and provides advice for anyone thinking of buying or selling including negotiating with estate agents;-
My ‘Quick Check‘ service costs just £100 (inc VAT) for which I will evaluate a property you have found and report with my comments and observations;
But just how much difference could my help make?
If, like me you believe that you make money when you buy and not when you sell then I can’t recall a better time to have pulled on your buying boots. In my 32 year career in property there have never been more excuses to drive down the price than there are now. If you wanted to haggle and needed reasons to do it then look around, this is a Perfect Storm!
It wasn’t an exact quote in many of the weekend papers but as Andrea Leadsom found to her cost the press aren’t always fair when it comes to writing headlines. “Other than declaring war I’m not sure what might be more unsettling” than the prospect of a new Prime Minister, an undignified scrap to be leader of the Opposition, President Trump as leader of the Free World and a General Election. Oh, and the small matter of Brexit meaning Brexit! Any one of these would be enough on their own to unbalance the housing market and we face the prospect of all five in the next six months.
Selling agents may publicly rebuff these ‘alarmist fears’ as being part of ‘Project Fear’ but sellers (many of whom are buyers too) understand that they cannot ignore these national issues if they want to sell. Buyers can’t be accused of dramatising the situation – we are in an unholy mess.
But out of uncertainty comes opportunity. Most of my clients who wanted to buy on 23rd June still want to and still have the money to do so. What they and most other buyers need is some confidence to commit. There are better, smarter dealers than me who will no doubt come out with clever incentives but for me the old fashioned ‘price reduction’ works well and a discount often gives me all the courage I need.
How much discount I hear you say. Well 1% obviously isn’t going to do it. 25% would be nice but is perhaps optimistic so I guess 10% might be fairer. If you want my money as the buyer and to move on with your life I think 10% off the price might show you too understood the mad world we now seem to inhabit.
Of course George Osborne warned of 10-18% price falls if we voted to Leave the EU. Maybe he’s a tougher negotiator than me. Perhaps his access to Bank of England data means he’s better informed. Either way as someone who has a £40m+ shopping list my view is that whilst I want something off the price I think that the equivalent of the house price inflation you’ve had over the past year is probably not going to kill anyone and reflects some give and take on both sides.
It may turn out that the fall in prices is much more severe – it may be that in 12 months time prices are down 40% or more. In smarter parts of London they were already down 15% before the Referendum and significant falls have occurred recently elsewhere in Europe. Just ask the Irish!
In the confusion that now follows the UK vote to leave the European Union there is and will remain much mud-slinging. I voted to Remain but a majority (just) voted to leave. That’s democracy – even if it doesn’t suit me. Many of those who voted to leave seem to hanker for a world shot in black and white, a country not just physically detached from mainland europe but still suspicious of what goes on there. Many seem intolerant of other peoples opinions, don’t like having to acknowledge those views or to physically budge up to make space for those that have them. It’s not what I would want or indeed what I would do if I were running my benign dictatorship but luckily for you, I’m not.
But the decision has been made and whilst many on both sides are not, I am moving on. We need to make the best of what we have decided and it will be easier if we could do so together. Other people can continue to have a pop at me if they wish, I can’t promise not to express my disappointment and frustration with those who seem stuck in the past but we may be able to make this work if we can all try – on balance to be positive.
I’m up for doing some business. I’m up for some new politics and I’m up for us all trying to do a it with others. I don’t want to live in isolation – tempting though that is on occasion. I also don’t want to live with folk who expect me to pick up after them!
If you want to buy or sell a property then whilst it may now be more risky you can do it and I’d be delighted to try and help you.
If you want to change the absurd way we seem to govern ourselves – where all the main political parties seemed to be unable to reason with or to understand the majority who disagreed with them, if you would like to help people to look after themselves and their neighbours then please, get in touch and let me know how I can help.
We may be ‘out’ but when it comes to helping to move on, I’m ‘in’.
I waited until the day before the Referendum before making up my mind. It wasn’t an easy decision but on balance I decided that remaining was the slightly less risky option. 49% of Britains agreed but 51% decided that it was better to leave. There will be plenty of time pick over the implications but what does the decision mean for housing?
Both sides warned of the implications for house prices before the Referendum, George Osborne used Bank of England numbers to suggest that they may fall by up to 18%.
Hometrack reacted early to the result on Friday morning suggesting that transactions might fall by 20%. I summarised these in my first Tweet of the morning.
During the day there were many opportunities to comment and I tried to summarise the implications in a radio interview. The bottom line is that we have no idea which means that many deals will freeze until the future is clear. We have some major milestones in the next six months each one of which would be enough usually to unsettle the market;
The Prime Minister has resigned
Jeremy Corbyn faces a vote of no confidence
Donald Trump may get the top US job in November
Talk of a General Election by Christmas
Scotland may get a second referendum
This on top of what might happen to the UK economy as a result of the decision.
Homes will still be required. Estate agents will try hard to maintain confidence and of course we will get through this. The good news may be that the shock result will push those sellers who were refusing to recognise that the market had already changed before the Euro debate. As Anthony Payne at Lonres says “those who don’t really want to sell will clear out. Those who do or indeed have to sell will reset their expectations and buyers may feel confident enough commit”. Confidence is everything.
What the hell happens next? We really don’t know but I suspect that turnover will shrink and prices will fall – by 10% perhaps by Christmas.
Headlines warned of £20k price falls – 10% of the average UK house price but asking prices in London were already falling and the 10% per annum house price inflation was slowing. There will be a correction in prices but there may be a much bigger slow down in transactions.
Here is some of the coverage from Friday 25th June 2015 to which I have contributed;