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Estate Agents

Planning for post-lockdown – how to hit the ground running

Planning for post-lockdown - how to hit the ground running

Over the last two weeks we’ve seen the country come to a standstill and the property market effectively put on ice until we are out of lockdown.

The next few months are going to be incredibly difficult for everyone, but it is vital that agents take this time to start planning for the future. Taking the right steps over the next few weeks will be key to ensuring that you’re ready to hit the ground running as soon as some of the current restrictions are lifted.

Unlike after the last recession, current predictions are that the market could recover relatively quickly, but what evidence do we have to support that theory?

Following the General Election in December, pent up demand from people who had been holding back due to Brexit uncertainty, flowed into the marketplace. Could that stand us in good stead for a quick recovery?

Let’s look at the figures…

The data – exchanges

Looking at the change in volumes of Exchanged triggers, we can see that the largest increase in exchanged properties came from the £1 million+ price bracket, with property prices from £400,000 to £1 million not far behind.

Planning for post-lockdown - how to hit the ground running

Both top brackets were experiencing unprecedented double digit growth year-on-year.

In addition, the £200,000 to £400,000 price bracket was also seeing a very healthy growth in exchanges year-on-year.

You could, however, make a strong argument to suggest that a large portion of this effect was not as a result of electoral stability, because it takes so long to complete a property purchase.

Looking at the volume of changes in sales agreed (or SSTC) would perhaps provide an even better view of what happened in the first few weeks of 2020 compared with the prior year.

The data – sales agreed

This chart adds the Sales Agreed (or SSTC) trigger changes to the Exchanged triggers and it certainly makes interesting reading.

Planning for post-lockdown - how to hit the ground running

Firstly, we can clearly see that the changes to SSTC volumes were far more dramatic in all price brackets – roughly double the growth in exchanged triggers.

In properties above £400,000, we were seeing north of 23% growth and the £200,000 to £400,000 bracket, a more than healthy 15% growth in sales agreed.

The only slight downside is that the sales agreed growth rate in properties under £200,000 was comparatively very low.

The high street agent effect

Now let’s look at the market share of high street agents versus hybrids (those without a traditional branch network).

Planning for post-lockdown - how to hit the ground running

The market share of new instructions by price bracket for hybrid agents is shown in this chart.

What we see here is that a hybrid agent’s market share was highest in the poorest price bracket where sales agreed volumes were growing much slower year-on-year than they were in the other three price brackets.

This means that the benefit of the increase in sales seen since the election of 2019 will have been disproportionately felt by the more traditional high street estate agent.

Of the growth in sales that has been experienced to date in the £200,000 to £400,000 selling price bracket, nearly 93% of this will have gone to high street agents.

As we move onto the £400,000 to £1 million selling price bracket, just under 95% of the benefit will have gone to high street agents.

And finally, in the specialised £1 million plus selling price bracket, nearly 99% of the benefit will have flowed through to high street agents!

So what does this mean for the future?

Unfortunately, no-one knows how long lockdown will continue or indeed, exactly what the future of the property market looks like. However, looking at the performance of the market up until mid-March 2020 tells us a few things;

– A high volume of people actively wanted to move
– This was most prevalent for properties in the £200k+ price bracket and even more so at £400k+
– The majority of this activity was taking place with high street agents

Although unfortunately some of these agreed sales will recently have fallen through and many properties will now have been withdrawn from the market, the likelihood is that most of these people will still want to move once they are allowed to.

This should create increased demand on available stock, thereby encouraging more new instructions. The best news is that once these vendors do return to the market, sales should continue to be high value and skewed towards high street agents.

What can you do in the meantime?

It is essential that you maintain contact with those vendors either already on the market, or who have recently withdrawn – both your own and those of your competitors.

Now, more than ever, you must look after your pipeline so that you’re not starting from scratch when the market inevitably picks back up.

This is an opportunity to establish a ‘trusted advisor’ relationship with these vendors, offering them help and guidance when their future move now seems uncertain.

At times like these how you treat your customers and potential customers is paramount. They will need far more hand-holding and direct communication. Some agents are not going to do this and, as such, we are likely to see even more agent switching once we are out of lockdown as vendors become frustrated with a lack of support from their existing agent.

It is vital, though, that what you’re sending is sensitive to the current situation and you don’t just continue to send the same message as you would have done a few weeks or even days ago.

Now that you’re not spending your time on the usual day-to-day tasks use it as an opportunity to really work on the content of your communications and make sure the messages you send highlight the changing requirements of the current marketplace.

Talk about the services you offer that can help vendors restart their property sale as quickly as possible once we’re out of lockdown; share your plans on;

– Virtual tours
– Accompanied remote viewings
– Floor plans
– Live streaming of ‘virtual open houses’
– Online auctions
– ‘Little Black Books’ promoting ‘the best kept secrets’ or houses not openly marketed and see if sellers want to be on it

Rightmove on the ropes? 2,500 branches interested in new portal

Rightmove "taking appropriate measures" to shore up company

Some 2,500 estate agency branches have expressed an interest in a new portal, Homesearch, launching next month.

Although the Homesearch website lists the branches as having “joined” the new portal, a statement from the two founders refers to the branches as having “signed up to register their interest and follow the development of the new product.”

Homesearch says it has information on Britain’s entire 29m housing stock and pledges to be not just another portal but “the future of the industry” when it debuts on May 25.

The statement also says that while the portal will not directly charge agents for listings or leads, it will offer an optional – and so far unexplained – service called Network which will cost £155 per bench per month, capped until 2025.

Homesearch has been a supplier to the industry since 2017, until now specialising in data for agents.

Co-founder Giles Ellwood, who is the owner of Homesearch, says: “Homesearch is not a portal in the traditional sense. We won’t charge to list instructions, nor will we ever charge to deliver leads. As we approach the launch we will detail exactly how the Network piece will serve agents to deliver buyers, sellers, landlords and tenants from day one.”

And the other co-founder, Sam Hunter, adds: “Homesearch will always be about giving an agent the information and technology needed to connect with more people. Now we’re just giving the public an opportunity to connect back.”

Agencies registering an interest so far include those from Foxtons, Winkworth and Purplebricks, although the majority appear to be small independents.

The website say that from 2025 the Network cost will be £395 and will rise thereafter in line with the Consumer Price Index “which is circa 1% to 2% per annum.”

It also adds: “We’d be open to discussing how members of the agent community could participate in our board meetings as an added layer of transparency.”

Poorly-treated agents will change firms after the virus – forecast

Poorly-treated agents will change firms after the virus - forecast

A leading human resources expert predicts that agents who are poorly treated by their employers now will wreak revenge and move elsewhere when the virus subsides.

Recruitment guru Anthony Hesse, managing director of Property Personnel, says that when some form of normality returns “Those who have been treated poorly by their current employers won’t forget the experience in a hurry, and will start to look for other jobs – either within the industry or elsewhere.

“I expect to see a seismic shift in people moving around from job to job, and from profession to profession, with some of them making the move to becoming self-employed. Inevitably, a number of experienced and talented staff will leave, who we will be sad to see go and will be hard to replace.”

He says that one of the lasting legacies of this outbreak will be an increased understanding of why a good work/life balance is so important – and he forecasts that those agencies that recognise this will retain and attract the best staff.

“Over the past week or so of lockdown, I’ve been speaking to a number of senior directors in the big estate agency firms … the perspective I’ve been getting is that we are inevitably going to see some massive restructuring taking place in the estate agencies of the future.

“Most obviously, a new awareness of just what technology can do is going to drive decision making going forward. The ease and speed with which people have taken to communication platforms such as Zoom, Skype, and Messenger – and some of these individuals doing so for the first time – mean that virtual viewings and even virtual valuations could become the norm.

“Directors will ask why their agency doesn’t do more of what worked so successfully during time under lockdown. This means that operations are likely to be streamlined, and people previously brought in as temporary staff – such as those carrying out viewings at weekends, for example – might find that their workloads have melted away.

“Similarly, agencies with several branches across a relatively small geographic area will decide that a single office can do the job of three, with significant cost savings as a result.”

Automated Valuation leads to agents staying strong, says supplier

Automated Valuation leads to agents staying strong, says supplier

One of the industry’s leading automated valuation services says it’s running at approaching 1,000 leads a day for agents even during the lockdown.

The ValPal Network – which has some 800 brands and 4,000 agency offices amongst its members – says it recorded over 49,000 leads in March despite the social distancing, self-isolation and lockdown measures which deterred transactions for around half of the month.

Daily figures now, 10 days into the lockdown, are running at just under 1,000 leads for agents: in two days in the second half of March, despite the virus crisis, leads topped 2,250 daily.

“Our figures show that despite much of society coming to a halt, thousands of people continue to request instant online valuations of their homes from estate agents” explains Craig Vile, director of The ValPal Network.

“Although they may not be able to get deals done at the moment, agents need to keep on marketing to capture the contact details of prospective clients” he adds.

“People are at home with not much to do – so the chances of them thinking about moving and wanting to know how much their home could be worth are increased.

“Effectively filling sales funnels over the coming weeks will be absolutely crucial to the prospects of long-term survival for many agencies. Those that continue to engage with consumers now can build up a massive bank of leads to nurture ahead of the market resuming in the future.”

* The ValPal Network is a product of Angels Media, publisher of Estate Agent Today and the other Today industry titles. And a reminder that The  ValPal Network has started daily tips on what furloughing is, how firms are doing it, and what it means when the virus crisis finally ends

Poorly-treated agents will change firms after the virus – forecast

Poorly-treated agents will change firms after the virus - forecast

A leading human resources expert predicts that agents who are poorly treated by their employers now will wreak revenge and move elsewhere when the virus subsides.

Recruitment guru Anthony Hesse, managing director of Property Personnel, says that when some form of normality returns “Those who have been treated poorly by their current employers won’t forget the experience in a hurry, and will start to look for other jobs – either within the industry or elsewhere.

“I expect to see a seismic shift in people moving around from job to job, and from profession to profession, with some of them making the move to becoming self-employed. Inevitably, a number of experienced and talented staff will leave, who we will be sad to see go and will be hard to replace.”

He says that one of the lasting legacies of this outbreak will be an increased understanding of why a good work/life balance is so important – and he forecasts that those agencies that recognise this will retain and attract the best staff.

“Over the past week or so of lockdown, I’ve been speaking to a number of senior directors in the big estate agency firms … the perspective I’ve been getting is that we are inevitably going to see some massive restructuring taking place in the estate agencies of the future.

“Most obviously, a new awareness of just what technology can do is going to drive decision making going forward. The ease and speed with which people have taken to communication platforms such as Zoom, Skype, and Messenger – and some of these individuals doing so for the first time – mean that virtual viewings and even virtual valuations could become the norm.

“Directors will ask why their agency doesn’t do more of what worked so successfully during time under lockdown. This means that operations are likely to be streamlined, and people previously brought in as temporary staff – such as those carrying out viewings at weekends, for example – might find that their workloads have melted away.

“Similarly, agencies with several branches across a relatively small geographic area will decide that a single office can do the job of three, with significant cost savings as a result.”

Furloughing – should it include agents’ commission as well?

Furloughing - should it include agents’ commission as well?

One of the biggest issues for agencies at the moment is furloughing – a safety net being offered by the government to avoid job losses during what is seen as the temporary Coronavirus crisis.

Under the rules outlined by the Treasury, this suggests that furloughed staff – effectively laid off in terms of work but still on an employer’s books – will receive 80 per cent of their basic salary up to £2,500 a month.

This is for full-time and part-time employees, based on their salary before tax as of February 28 this year: employer National Insurance Contributions and minimum automatic enrolment employer pension contributions are included but discretionary fees, bonuses and commissions are not included.

The problem for many agency staff involved in sales in particular is clear – they may be on a low basic which in normal times can be topped up substantially by commission.

Now there is a petition being circulated – started by the Independent Motor Dealers Association but applying to many agents and others in sales-driven employment – which wants sales commission from fees included in furlough arrangements.

So far over 17,000 signatories have backed the petition which says it aims to “help ALL salespeople across ALL industries who rely on their sales Commission and their families many of which are young families just starting out.”

It continues: “We feel that a fair calculation could be based on the last three months wages slips to gain an average and base the 80 per cent Furlough Leave payment on that.”

Corona Latest: New tenant checks, Virtual staging, Global agency impact

coronavirus Archives - So Cheshire

Hello and welcome to our latest update… we’re probably not yet getting used to these unusual times but we hope this daily service helps provide some guidance.

First off today, Right To Rent’s new Coronavirus changes.

Letting Agent Today ran a story earlier this week on how Right To Rent is being relaxed during the current crisis, and now the Association of Residential Letting Agents has published a short guide on how to conduct a check on a prospective tenant.

– Ask the tenant to submit a scanned copy or a photo of their original documents via email or using a mobile app;

– Arrange a video call with the tenant – ask them to hold up the original documents to the camera and check them against the digital copy of the documents;

– Record the date you made the check and mark it as “an adjusted check has been undertaken on [insert date] due to COVID-19”.

If the tenant does not have the right documents you must contact the Landlord’s Checking Service if the tenant cannot provide documents from the prescribed lists.

These measures remain in place until the point when government announce a return to previous arrangements. After that, agents must revert to existing processes.

Within eight weeks of the temporary measures being lifted, agents will also need to carry out full retrospective checks on tenants who:

– Started their tenancy during this period;

– Required a follow-up check during this period.

ARLA says that in these cases, it is essential to keep records of both checks and if the retrospective checks reveal a tenant who should not have entered/continued a tenancy, follow the processes to end the tenancy.

And the association adds: “Please note that because of COVID-19 some individuals may be unable to evidence their Right to Rent and therefore it is vital that agents remember the processes within the code that are in place in order to avoid discrimination.”

Something unusual next – virtual staging.

Many agents, especially in London, ‘stage’ empty properties to enhance their appeal. Expert advice is difficult to get in person during the lockdown but Elaine Penhaul, owner of Lemon and Lime Interiors, is offering two services tailored for the current situation.

The two – virtual home staging and remote staging – will allow vendors and agents to get properties in the right position for a quick sale once the market recovers later in the year.

Elaine, who started staging in 2012 and set up the company in 2015, says: “As an agent you want to help those vendors who have a property they need to sell, to be the first to secure good offers when the market picks up later in the year. This new service allows us to help agents offer vendors the perfect solution whilst we are not able to be out and about.”

The virtual home staging service allows vendors and agents to take a high-resolution picture of an empty room and send it to Lemon and Lime Interiors. The team then virtually fill the room with an interior design scheme and luxury furnishings to make the property looked lived in, which in turn, will help people to visualise themselves living in the property.

All the furniture used is available to purchase so the whole scheme can be bought by whoever buys the house should they wish.

The remote home staging service offers homeowners the chance to have a video call with the Lemon and Lime team of experienced home stagers to learn how to present their home to attract the most interest.

Once any decluttering or rearranging has been done, the homeowner can take photos which can be professionally edited through Lemon and Lime ready to be uploaded to the property portals. Properties already on the market can improve their presentation and appeal in this way and it allows new properties to come to the market with the benefit of professional staging.

Agency cartel scandal – watchdog wants agent directors disqualified

Agency cartel scandal - watchdog wants agent directors disqualified

The Competitions and Markets Authority has started court proceedings seeking the disqualification of two estate agency directors over a price fixing scandal.

The CMA has this afternoon announced that it has issued proceedings in the High Court of Justice, Business and Property Courts seeking the disqualification of:

– Stephen Jones, a director of Richard Worth Holdings Limited and Richard Worth Limited (in administration); and

– Neal Mackenzie, a director of Michael Hardy & Company (Wokingham) Limited, Michael Hardy & Company (Lettings) Limited and Geocharbert UK Limited.

The Richard Worth and Michael Hardy firms, together with two other estate agencies, entered into an anti-competitive agreement to fix a minimum level of commission fees for the provision of residential sales services in the Berkshire area.

Shortly before Christmas the news broke of the CMA’s fines – totalling over £605,000 – on three of the firms involved in the scandal. This followed a year-long investigation.

The CMA also revealed emails sent between people working at Michael Hardy, Prospect, Richard Worth and a branch of Romans; the discussions took place between September 2008 and May 2015 and were part of what the CMA claims were a “concerted effort” to maintain a minimum commission fee for sales in the Wokingham, Winnersh, Crowthorne, Bracknell and Warfield areas of Berkshire.

This afternoon’s announcement says the CMA issued proceedings under section 9A of the Company Directors Disqualification Act 1986 following an investigation into the directors’ conduct in relation to the breach of competition law.

“It is now for the court to decide whether to make a disqualification order against each director” says the authority.

The CMA continues: “Provided they continue to comply with the terms of their leniency agreement, the CMA will not seek the disqualification of the co-operating directors of the two other estate agencies, which qualified for leniency under the CMA’s leniency policy.”

Under the Company Directors Disqualification Act 1986, the CMA may seek the disqualification of an individual from holding a company directorship or performing certain roles in relation to a company for a specified period where that individual was a director of a company which has breached competition law and their conduct makes them unfit to be a director. The CMA may seek disqualification by court order or may accept a legally binding undertaking.

Auction success shows property sector can still thrive – claim

Auction success shows property sector can still thrive - claim

Two auctions held behind closed doors have been deemed a success, and evidence that the property market can still function despite the lockdown.

Savills has held its first ever remote-bidding-only auction, run by a single auctioneer supported by almost 30 staff working remotely connected using technology.

Over the course of the day it raised over £18m and successfully sold 67 per cent of the lots – taking 3,000 remote bids.

The company – which has its next auction on Wednesday May 6 – will supply an increased number of photographs alongside a virtual tour and floorplan for all lots.

Meanwhile SDL Graham Penny’s 100th Derby auction, and the first in its history to be held behind closed doors, was a success according to auctioneer Andrew Parker.

The firm says that for the 500 viewers watching on the internet, very little looked different – and the bids came in as thick and fast.

With over 120 pre-registered remote bidders, buyers placed their bids on the telephone, by proxy and over the internet, and more than £2.6m was raised for sellers.

“It was not the 100th auction celebration we had planned but we were delighted to have such great support from our remote bidders. I missed seeing everyone at the auction but it was wonderful to know they were out there, watching from the safety of their own homes” says Parker.

“We have proved that, despite the current social distancing rules, it is possible to keep the property industry moving – and that buyers are showing just as much interest in our properties as before.”

Big surge in distress sales even before virus – top agent

Big surge in distress sales even before virus - top agent

One of London’s most experienced estate agents says there has been a very significant surge in foreclosure sales in part of the capital’s housing market – even before the Coronavirus outbreak began.

Marc Schneiderman is the director of Arlington Residential, an independent agency that offers sales and lettings at the middle to top end of the market in central and north west London.

He says that clearly during the lockdown period that will be almost no new business, although he notes that predatory buyers are already on the prowl for casualties of the crisis – forced to sell at significant discounts.

However, Schneiderman believes there have been significant weaknesses in the market even before the Covid-19 calamity.

“Notwithstanding this current crisis, never before in my 35 years as an agent can I recall so many sales on behalf of banks and mortgagees in possession” he says.

“The property market has always been a barometer of the business world and reflected how well industry and retail is performing. For some time now bank foreclosures and mortgagee possession sales have been prevalent at the top end of the market.

“At the end of 2019 my firm acted on behalf of receivers on the sale of one of London’s largest flats. This penthouse apartment had an impressive 8,342 square feet of space and a further 4,125 square feet of terraces. It overlooked Regent’s Park, had underground parking for seven cars and an asking price of circa £10m.

“This is one of many receivership sales that have taken place in recent months at the top end of the London property market and it is no longer unusual for us to be contacted by a bank who are foreclosing on a £10m, £20m or even £30m property.

“Sadly it is just indicative of the wider depressed economic environment in which we find ourselves as a country”.

Separately, Savills has issued its routine quarterly figures for Prime London – unusually ending them not at the end of the quarter, but at mid-March to reflect the situation before the Coronavirus outbreak.

Nonetheless, in an introduction to the figures, the agency admits that the virus has impacted the market and Lucian Cook – the agency’s head of residential research – says: “It seems inevitable that there will be a period of low transactional activity over the spring and summer months, so it will probably be autumn before we can understand what this will mean for future price growth.”