Son of ex-Savills boss slams traditional buying agents as “outdated”
A buying agency targeting what it calls the “prime and super-prime” London market is offering clients not only a sourcing service, but also options to redesign and remodel their chosen new homes as well.
Capital Place Properties – led by the son of a former Savills chief executive – says it offers a complete in-house service from the initial stages of search and acquisition through to “architectural transformation, interior design, furnishing and lighting.”
“For affluent individuals without the luxury of time or those with limited knowledge of the London market, the company’s ‘seamless service’ means buyers are able to source, view, buy, reconfigure, design and fit out their new properties without needing to employ third parties or approve the property in person” says a statement from the firm.
“This all in-house solution is especially critical for prospective overseas clients looking to invest in the UK’s prime market where transparency, trust and dependability are paramount” it adds.
The firm is critical of traditional buying agencies, using a press statement to describe their methods as “outdated, unnecessarily cumbersome” and says that its own integrated offering has proven valuable during the Coronavirus period.
“Our track-record speaks for itself, we do it all and we do it well. We know that our clients value consistency through the buying process and prefer to deal with one person for all their needs rather than multiple third-parties” according to Harry Helsby, the 30 year old son of former Savills chief executive Jeremy Helsby.
“The traditional process where clients have had to manage multiple third parties for acquisition, architectural transformation and interior design work inevitably puts additional cost and stress on the buyer. By offering an all-in-one solution, we handle the entire process” he continues.
“Our clients depend on our insight and market experience to not only identify and source the best properties on the market, but to go the extra step and bring their vision to life through our bespoke interior design service, whether as a personal residence, a buy-to-let or to improve and sell” Helsby adds.
“This client dependency means we need to be completely aware of market changes and the specific requirements of our current and future clients. For example, we know that the aspirations of buyers have changed dramatically due to the lockdown experience – extra room to work from home as well as outside space are now top of the priority list while traditional requirements, such as luxury bathrooms and kitchens, are less important. Location, of course, remains as critical as ever” says his co-founder colleague, Alexis Stellakis.
New warning to estate agents over illegal price-fixing
The estate agency industry is still under the spotlight for possible illegal price fixing cartels according to the Competition and Markets Authority.
In recent years the CMA has taken action against three examples of anti-competitive practice in the property sector and the latest warning, issued yesterday, was contained in a document outlining how companies can break the law even through ‘apparently innocent’ conversations.
The CMA highlights the case of five Somerset estate agencies which in 2017 were fined over £370,000 and saw four of their directors being subsequently disqualified.
The rival agents all fixed their minimum commission rates at 1.5 per cent and according to the CMA their rationale was contained in an email between some of the conspiring firms which said ‘…with a bit of talking and co-operation between us, we all win.’
Email evidence also explained how ‘the aim of the meeting…will be to drive the fee level up to 1.5%’ and ‘…it’s really important we all give it the priority it deserves (making as much profit as possible)’.
Each business took it in turn to ‘police’ the illegal agreement. According to additional email evidence obtained in the CMA probe, agents were to report any issues ‘to the policeman immediately and get the matter resolved rather than let it fester and risk the agreement falling apart!”
The CMA says the lessons which the agency industry should learn from this case include:
– being careful when talking business with competitors and being especially wary of any conversations about pricing, or about a shared approach to pricing. “Rival businesses must decide and set prices independently of each other” says the authority;
– being aware that competition law applies to small businesses as well as large ones – the agencies in this case were small local or regional businesses.
The authority also issues a warning to the industry in the document when it says: “The CMA has now taken three enforcement cases in the property sector and remains committed to tackling anti-competitive conduct in this sector.”
Agency undergoes management buyout after 25 years
An estate agency founded in 1995 has undergone a management buyout from two existing director.
Westcoast Properties is a north Somerset firm, now owned by existing director Nicholas Webber and associate finance director Lindsay Pickles.
Previous owners Martin and Kay Crees are to remain a part of the business, with Martin Crees taking a position as non-executive chairman.
Westcoast is an independent estate agency offering residential sales, lettings and property management services.
“Having both worked with Martin and Kay for the past 10 and 15 years respectively we were delighted to be offered this amazing opportunity to continue growing such a highly-regarded company. We’re both immensely looking forward to the future” says Pickles.
New portal reveals charges to agents plus extra for multi-listing service
The new portal OpenBrix, which is powered by Blockchain, has revealed its fee structure ahead of its formal launch on September 1.
It’s going to charge £75 per branch per month, plus £1 per property upload fee. If agents then want to join a multi-listing system it will operate, they will be expected to pay another £55 per month on top.
“We think this is fair and transparent. Our pricing is sensible and affordable and provides justifiable value and, importantly, agent pricing won’t be hiked as we grow because the agent community controls that – not shareholders” claims chief executive Adam Pigott.
He continues: ”We are pioneering the UK’s first multi-listing service … This feature will be a significant hook to gain client instructions and will open up agents’ inventories to other agents as they so choose, and theirs to others, resulting in revenue opportunities that otherwise do not exist for smaller independent agents.”
Pigott – who boasts over 30 years in property and was the founder of CHK Mountford Letting Agents back in 1989 – goes on to say this makes OpenBrix “a great value platform that agents and consumers alike will love.”
It utilises blockchain to create a linked network of agents to upload listings, and to create a voting and decision-making structure so that all agents have a say in pricing and the direction of the portal.
Pigott believes this taps in to the current apparent dissatisfaction with ‘big’ portals.
OpenBrix has been operating a Beta version of its service since February and has now revealed that its services include “big tenant benefits” and access to tenant information including payment history and maintenance history, partnership commissions to give agents additional revenue, and branded property listings.
Some months ago it was announced that former Countrywide lettings veteran John Hards was joining the new portal’s board.
Here we go again – Help To Buy looks likely to be extended
Government leaks to mainstream and building trade media suggest the controversial Help To Buy scheme will be extended beyond its end-of-2020 deadline.
An announcement is expected shortly.
Some suggestions say the extension could be just three months, to allow the clearance of as many as 18,000 H2B purchases delayed by Coronavirus, while other suggestions put the extension as considerably longer because of wider concerns about the economy and unemployment in the construction sector.
Either size extension would probably be controversial.
On the one hand, some agents and almost all housebuilders see the scheme as a means of improving their sales figures, especially to younger or first time buyers. Between its introduction in early 2013 and March this year – before the housing market was frozen – some 272,000 purchases had taken place via Help To Buy.
On the other hand, a slew of reports and analyses suggest that H2B does little to improve the quantity of housing stock and possibly increases prices – ironically making homes less affordable rather than more.
Last year a National Audit Office analysis revealed that 63 per cent of people buying a home under the scheme could have afforded to do so anyway; more households with incomes for £80,000 and above purchased via H2B than households with less than £30,000.
Bruce Burkitt, founder of the Property Experts consultancy, wrote last year in Estate Agent Today: “Developers are aware that Help to Buy is a closed market, and many properties are sold for premiums of 15 to 20 per cent, a surprising statistic that may come to harm first time buyers perhaps more than it is helping them.”
Recent figures suggest that the average price paid for a H2B property across the UK is some £307,000.
Faster conveyancing? Land Registry accepts electronic signatures
HM Land Registry is now accepting witnessed electronic signatures on documents for the transfer of ownership of property, the creation of leases, and on securing mortgages.
It says this should allow a substantial simplification and faster execution of conveyancing – although it warns that some electronic signature providers may need to make some minor changes to meet its security requirements.
It will work like this: a conveyancer must upload the deed to an online platform which sends a link to the signatories.
Once they have completed the necessary authentication checks, they would then ‘sign’ the document electronically in the physical presence of the witness who then also signs.
The conveyancer is then notified that the signing process has been concluded and, once they have effected completion of the deed, can submit the completed deed to HM Land Registry with their application for registration.
In every case the online platform would need to include two-factor authentication to authenticate the signatories and witness accessing the deed and provide assurance that unique individuals have signed.
A link to the document is emailed and then an authentication code sent to the individual’s mobile phone.
“What we have done today is remove the last strict requirement to print and sign a paper document in a home buying or other property transaction. This should help right now while lots of us are working at home, but it is also a keystone of a truly digital, secure and more efficient conveyancing process that we believe is well within reach” explains Simon Hayes, the Registry’s chief executive and chief land registrar.
“The more sophisticated qualified electronic signatures are a part of that vision and encouraging those is where our attention will be directed next” he adds.
Is the housing market really storming ahead as some say?
Agents have almost unanimously been reporting a big surge in business since the reopening of the housing market, but new figures from HM Revenue & Customs suggest there is still some way to go before normal volumes are seen.
A total of 68,670 residential properties were sold in June according to HMRC data.
While this was predictably a huge 50 per cent up on May, it was still 31.5 per cent down on the same month a year ago.
The figures obviously pre-date the stamp duty holiday and other purchase tax changes in different parts of the UK, introduced only this month.
“Transactions, not more volatile house prices, are always a better indicator of market strength. These figures show activity is moving in the right direction but will clearly take time to be reflected in the figures as we emerge from lockdown and associated restrictions” notes former RICS residential chairman Jeremy Leaf, who also runs his own London estate agency.
“Nevertheless, we have noticed at street level that many buyers and sellers are bringing forward moving decisions to take advantage of the stamp duty holiday and continuing lower interest rates. There is still concern that improved conditions will be relatively short-lived as economic news deteriorates and furlough support falls away” he adds.
The chief analyst at online agency Yopa, Mike Scott, says it’s possible that these HMRC figures may be worse than reality.
“Note that these are provisional figures. Transaction data may be being processed more slowly than usual due to the effects of the pandemic, which means that there may still be more June sales to be reported and the true year-on-year fall may not be as bad as it is in this report” he suggests.
And Tomer Aboody, director of property lender MT Finance, says: “We are still below last year’s numbers, which in turn were down on the previous year, but confidence is creeping back up.
“If the government increases capital gains tax on principal home sales, it will push us back again so any progress made by the stamp duty reduction will be swiftly lost. We need more stimulus via reduced stamp duty to the upper end of the market and hope for this in the autumn Budget.”
RICS figures confirm short-term bounce but supply is very low
There’s more confirmation this morning that the housing market is enjoying a short-term bounce – and that’s before the effect of yesterday’s stamp duty initiatives.
The latest market snapshot from the Royal Institution of Chartered Surveyors, out today, shows a net balance of 61 per cent of its monthly survey respondents seeing a rise in new buyer enquiries over the past four weeks.
The number of new properties being listed for sale also rose over the month, with a net balance of 42 per cent of survey participants noting an increase rather than decrease.
As agents continue to deal with a backlog of sales held up by lockdown, the number of newly agreed sales moved into positive territory for the first time since February, with a net balance of 43 per cent citing an increase in completed transactions.
However, the average number of properties on agents’ books remain close to all-time lows – just 39 on average per branch, says RICS. And on prices, for the third successive report respondents have reported a decline in house prices.
“Key activity indicators in the RICS survey suggest that the market is enjoying a short term bounce following ending of the lockdown, with sharp spikes in the metrics tracking both buyer enquiries and new instructions” explains Simon Rubinsohn, RICS chief economist.
“However, there are worrying signs that this rebound may quickly run out of steam against the backdrop of a tightening in lending criteria by mortgage providers, and the uncertain macro environment particularly with regard to the employment picture. Respondents to the survey highlight both of these issues in explaining the broadly flat picture regarding sales expectation beyond the immediate uplift.
“Meanwhile, the issues around the sales market appear to be shifting sentiment in the lettings market with, somewhat ominously given the prevailing economic climate, rent expectations beginning to edge upwards once again.”
Stamp Duty dithering could kill the market, warn angry agents
Agents have spoken out angrily against any uncertainty in the market caused by government leaks about future stamp duty changes.
In recent days many national newspapers have reported that Chancellor Rishi Sunak will tomorrow reveal the principles of a stamp duty change – either a six month holiday, or selected short-term changes at the mid and lower end of the market.
But most of the government leaks say this change will merely be discussed in Sunak’s announcement tomorrow, but not actually introduced until the Budget in the autumn.
This has led to widespread concern that the uncertainty will damage the market’s recovery over the summer as buyers wait to see if they have to pay less duty – or none at all – later.
“Please either announce that you are changing it one way or another. Please don’t say you are thinking about it or it may be introduced in a few months. Otherwise, you will stop the market in its tracks as buyers and sellers wait to see what will happen before making decisions and you will kill off any or much of the growing increase in activity we have seen since lockdown restrictions were eased” explains Jeremy Leaf, former chair of the residential faculty off the RICS and the owner of his own London estate agency.
Stacks Property Search, a buying agency, tweeted yesterday: “More uncertainty and a brake on the market as buyers wait for the autumn?”
And a statement from Tom Bill – head of UK residential research at Knight Frank – said: “The government understands that moving house has far-reaching benefits for the UK economy and this may form part of a wider re-think of property taxation that recognises this strategically important role. However, it would need to be introduced immediately to prevent buyers from putting plans on hold and losing the momentum that has built since the market re-opened.”
Other industry figures are concerned that the suggested changes – which, if they come to pass, would apply almost wholly at the middle and lower end of the market – do not go far enough.
Tomer Aboody, director of property lender MT Finance, says: “The [stamp duty] threshold for higher-end properties – £1m plus – is still at extraordinarily high levels, which prevent many from selling or buying. While giving a stamp duty holiday at entry level, why not also reduce the higher-end stamp duty to previous levels where it was a set amount? This would allow, even for a short period, for the market to evolve, and for buyers to move up and down the ladder more easily.”
Aboody also calls for downsizers to have a stamp duty perk to encourage greater mobility in the market.
Last summer Johnson himself said during his Tory leadership campaign that he would consider raising the stamp duty threshold from £125,000 to £500,000 and cutting the top SDLT rate from 12 to seven per cent.
At around the same time the new Chancellor, Sajid Javid, made clear in media interviews that he too wanted a reform of the tax – although his initial suggestion that the burden could be shifted from buyer to seller was later denied.
By the time of December’s General Election the only firm commitment regarding stamp duty in the Conservative manifesto was to create a three per cent stamp duty surcharge on non-UK resident buyers.
Code of Practice for Estate Agents set to change industry forever
A new estate agency Code of Practice is to be written by a group set up by the Royal Institution of Chartered Surveyors and The Property Ombudsman.
It will be led by a Labour peer and should produce the code by the end of this year.
The steering group – which also includes representatives from ARLA and NAEA Propertymark, Trading Standards and sales and lettings industry trade bodies – is charged with developing what RICS and TPO call “an overarching code of conduct for residential property agents”.
It will be independent under the chair, Baroness Dianne Hayter, and is the first attempt to enact one of the many recommendations put forward a year ago by the Regulation of Property Agents Working Group.
That group called for an independent regulator, licensing for all agents, a new code of conduct, mandatory qualifications and a new form of redress more powerful than existing operators: until now, none of these recommendations had been acted on, and even this morning’s new announcement addresses only one of the proposals.
The new Code of Practice is likely to be a single, high-level set of principles to be applied to all residential property agents; there will also be a number of other more detailed sections developed that are specific to various aspects of the residential property agent sector, such as sales, lettings and management.
A statement from RICS and TPO says the code is being prepared so that it can be “handed over” to the new regulator once that role is established.
The Code of Practice Steering Group will consist of consumer and sector representatives who “will work collaboratively and in the public interest, and those participating in the group do so voluntarily, in good faith.”
No names or organisations have been named so far as being involved.
A draft on the new code will go out for consultation this month, July, when according to the TPO and RICS “feedback from users, professionals, buyers, sellers, lenders, tenants and landlords will be sought.”
Baroness Hayter is a Labour peer whose CV includes being Chair of the Legal Services Consumer Panel, Vice Chair of the Financial Services Consumer Panel and a member of the National Consumer Council. She also chaired the Property Standards Board.
“The forthcoming combined code will ensure that consumers are clear what standards they should expect from property professionals, and it will enable them to be confident that all residential property agents will be held to account in meeting them” she says.
“The independent Steering Group is undertaking this work to prepare an over-arching Code of Practice for the new regulator, very much within the public interest. With both consumer representatives and cross-sector support and commitment to achieving this goal of a combined code, as proposed in the Regulation of Property Agents Report, it will raise standards and trust in the industry” she continues
The launch statement of the new body includes a quote from Housing Minister Chris Pincher who says: “Baroness Hayter’s appointment is an important development for property agents as they further raise standards in their industry and protect their customers. I look forward to continuing to work with all to ensure customers are treated fairly and that all agents work to the same high standards.”