Phil Spencer to advise agents how to meet public expectations
The hugely-respected Phil Spencer is to write a regular column for the industry on Estate Agent Today under the auspices of his MoveIQ service.
Throughout his 30 year career Phil has worked as a buying agent, housing market commentator TV property expert and as an awards ambassador; throughout this time he has always championed the best estate and letting agents, emphasising their importance in helping buyers, sellers, landlords and renters.
Phil Launched MoveIQ in 2018 to share his experience with the public, providing them with unbiased professional expertise to allow them to make well-informed decisions.
Now he is keen to share that experience across the industry, explaining the areas where buyers and renters feel they need more assistance from agents, and how sales and lettings experts can improve their offer to the public – whether in communications, explanation about properties, and working to help clients understand how agents work. This is becoming all the more important as government reforms of the house moving process become more urgent.
Phil – already well known to many agents through the ESTAS awards – will write a column for EAT on the first Monday of each month, beginning on February 3.
He has plenty of ideas on how agents and the public can work better together, especially in the revitalised housing market of 2020; if you have ideas, he’d love to hear them too.
Prices up! Transactions up! Agent forecasts a boom in 2020
Some buying agents have batted away the many signs of an improving housing market but one says the Boris Bounce is likely to create a huge boost for prime London.
Fraser Slater, chief executive of buying agency Ludgrove, says: “With a vastly improved political backdrop, the threat of a hard-left government removed and Britain’s transition out of the EU settled, we expect 2020 will be the year the prime London property finally regains its mojo.
“Strong pent-up demand, limited stock availability and the backdrop of a record five year-long property bear market is likely to provide upward momentum and we forecast prime London prices and volumes to grow around 10 per cent and 20 per cent respectively in 2020.”
He says there are nine key factors behind the predicted boom.
1: adjusting for inflation, prime central London prices have fallen -28% from 2014 to 2019. Historically very similar real-terms declines were recorded at the point of previous troughs in the market in 1992 and 2008, says the agency;
2: the 2014-2019 Prime London property recession at five years in duration has been the longest in 30 years, making a bounce well overdue;
3: relative to the mainstream London property market, prime London prices are near a 10-year low, making ‘trading up’ more affordable;
4: there are “extreme levels” of pent-up demand and a limited availability of stock;
5: rental values are rising as supply diminishes in response to government tax changes – a trend Ludgrove expects rents to harden further in 2020 as the full impact of mortgage interest tax relief changes take effect from April;
6: future housing supply in London’s central Zone 1 is set to decline significantly on the basis of recent ‘construction starts’ data;
7: Sterling still trades near a 40-year low against the Dollar making UK properties appear cheap;
8: finance is cheap with mortgage costs having fallen 39 per cent since the peak of the market in 2014; and
9: there remains a possibility of a stamp duty cut in the upcoming March Budget.
“The last five years has seen an almost perfect storm of negative news flow affecting prime London property, and we are now confident a sunnier climate is on its way” insists Slater.
“Having studied past bear markets as a former fund manager, market bottoms are characterised by extreme negative sentiment, despondency and despair with the recovery in price typically being a function of an amelioration of negative news flow and fundamentals … And it is in this context we are confident we will look back on the dark days of 2014-2019 as a time when a bull market was ‘born in pessimism’.”
Home ownership amongst young people up after a decade of decline
The proportion of 25 to 34 year olds who own their own home in England has risen for the first time in over a decade.
There are now as many owner occupiers in this age range as there are private renters according to the government’s annual English Housing Survey.
It shows that in 2018-19, some 41 per cent of 25-34 year olds lived in the private rented sector and a further 41 per cent were owner occupiers.
The reverses the trend recorded each year between 2003-04 and 2013-14 during which the proportion of 25 to 34 year olds in owner occupation plummeted from 59 per cent to 36 per cent.
Housing Secretary Robert Jenrick says of the figures: “We’re doing everything we can to make the dream of home ownership a reality for more people, and it’s great to see this is happening for more young people who have taken that first step onto the housing ladder. We’re continuing to work to improve standards in the private rented sector, making buying a home more affordable and building homes fit for the future.”
Meanwhile, the proportion of 25 to 34 year olds in the private rented sector has dropped from its 2013-14 high of 48 per cent to 41 per cent in 2018-19. However, overcrowding has doubled over the last 20 years in the private rental sector and has hit a record high in the social housing sector.
Better news is that the average length that a private sector tenant lived in their current rental property was 4.4 years, up from 4.1 years in 2017-18. This is the highest average length of time tenants were staying in their current homes over the last decade.
The policy manager of the Residential Landlords’ Association, John Stewart, says: “The vast majority of landlords who do a good job welcome good tenants staying in their properties long-term and today’s figures bear this out. They clearly refute the picture some create that landlords spend all their time looking for ways to evict their tenants and it is time to end this scaremongering.
“The market is meeting the ever changing demands on it without the need for legislation. It is vital that the government continues to support and encourage this with pro-growth policies that support good landlords to provide the long-term homes to rent to meet ever growing demand.”
Watchdog issues “strong signal” to rogue agents who price-fix
The Competition and Markets Authority says it wants to send “a strong signal” to the estate agency industry that price-fixing will not be tolerated.
The CMA has in recent times probed three cases of price-fixing amongst agents in different areas. These were:
2019: agencies Michael Hardy, Prospect, Richard Worth, and a fourth company, Romans, broke competition law by running a cartel which set minimum commission rates for sales in Berkshire. They fined more than £605,000 and have only four weeks to pay;
2017: In Somerset the agencies Abbott and Frost, Gary Berryman Estate Agents, Greenslade Taylor Hunt and West Coast Property Services (UK) Ltd all admitted breaking competition law and were fined over £370,000;
2014: Waterfords (Estate Agents) Limited, Castles Property Services Limited and Hamptons International, which were members of the Three Counties Estate Agents Association, entered into an agreement which prevented other members of the association from advertising fees or discounts in a local newspaper. The long-running case ended with a fine of £735,000;
Now the authority says that in setting its penalties for the most recent case – the cartel in Berkshire – it “considers that the need for general deterrence means that the CMA should send a strong signal that anti-competitive behaviour in this sector will not be tolerated.”
In addition, the public are being asked to inform the authorities if they know of agents operating fee-fixing cartels.
The CMA says anyone who has information about any other cartel is encouraged to call the so-called cartels hotline on 020 3738 6888 or email cartelshotline@cma.gov.uk.
The investigation by the authority into the Berkshire price-fixing included damning evidence of telephone calls, emails and occasional meetings between the agents, including a monitoring system and penalties to try to deter any individual company from breaking the anti-competitive deal.
In its report on the case, issued yesterday, the CMA sets out why it found the agencies guilty:
“The commission fee charged by residential estate agents is an important factor considered by consumers (home sellers) when choosing between estate agents. Consumers who sought quotes from one or more of these estate agents will have been deceived as to the competitiveness of those quotes and may well have approached alternative estate agents had they been aware of the cartel conduct.
“The [agents’] conduct would have had a direct impact on home sellers given the significant cost of selling a home. Depending on the price of the property, the CMA estimates that the conduct could have increased commission fees paid by individual home sellers by hundreds of pounds.
“The conduct involved the setting of minimum commission fee levels to be charged for the provision of residential estate agency services in the Relevant Areas. The commercial objective of the agreement was to ensure that the Parties’ turnover levels and fees were maintained.
“The Parties agreed to the use of penalty payments for breaches of the Minimum Fee Arrangement, and at least two of the Parties developed internal monitoring mechanisms to check compliance. These penalty payments, however, were only enforced on potentially three occasions and the Parties did not always adhere to the Minimum Fee Arrangement.”
Conveyancing call for Knotweed info shows need for treatment – claim
The increasing demand for information on Japanese Knotweed during the house buying process is emphasising the need for householders to pay more attention to the problem, it is claimed.
Mortgage lenders now require the sellers of properties affected by knotweed to provide evidence of a professional treatment plan along with an insurance-backed guarantee for remedial work, before they will offer a loan.
Sellers are now also required by law to tell buyers if a property is or has been affected by Japanese knotweed, as a specific question now forms part of the TA6 conveyancing form.
Specialist knotweed removal firm Environet UK says it costs the average homeowner £2,500 to treat Japanese knotweed with herbicide and £5,000 or more to excavate it.
Householders who attempt to deal with the problem themselves by cutting it down repeatedly, pouring diesel on it, covering it in salt, burning it, burying it and saturating it in over-the-counter weed killers, will find those methods categorically don’t work the firm insists.
The recent wet weather – thought to have made recent months England’s fifth wettest autumn on record – has apparently prompted the spread of invasive plants such as Japanese knotweed, Giant Hogweed and Himalayan Balsam, which can hitch a ride in floodwater to spread and take hold in new locations.
Environet UK says homeowners who live near watercourses – particularly those in areas hit by severe flooding in recent months such as Yorkshire, the East and West Midlands and parts of South East and South West England – are particularly at risk and should be vigilant for new infestations appearing this spring.
Stamp duty receipts down again – agency demands government action
Data from HM Revenue & Customs shows tax receipts from stamp duty fell a further 5.2 per cent between 2018 and 2019, part of a broad decline in income since late 2016.
The figures have prompted a demand by Jackson-Stops’ chairman Nick Leeming that the government wake up to the fact that the duty is unpopular.
“In order for the UK property market to thrive again and provide the economy with the extra boost it requires, we need the stamp duty pledges Boris Johnson made in his original campaign to be Prime Minister to come to fruition” explains Leeming.
“We’ve already started to see some initial green shoots of recovery in the London market as demand among buyers increases, however ensuring this confidence follows through to sellers to unlock supply of homes is vital.
“Recent research of ours shows that 41 per cent of consumers believe there should be a wholesale reduction in stamp duty across all price brackets, while more than a quarter think government should abolish stamp duty on all homes under £500,000.”
There is growing concern that broad pledges on stamp duty made in the second half of 2019 by politicians – ranging from a wide-ranging call for its reduction to more specific proposals about shifting emphasis from buyer to seller – appear to have fallen away since the General Election.
The only specific manifesto pledge on stamp duty from the victorious Conservatives in last month’s General Election was to introduce a three per cent surcharge for non-residents buying UK residential property for investment purposes.
“It all currently rests on the changes Chancellor Sajid Javid decides to implement in the upcoming Budget” explains Nick Leeming.
Revealed – the agent posting Instagram pictures of clients’ houses
The high-end estate agent who has quit his post after being found to have posted pictures of clients’ houses on Instagram has been named.
Last week The Times made reference to speculation that an agency was being sued by clients upset at seeing images of their properties on an individual agent’s Instagram; but now the Financial Times has identified him as Knight Frank’s Daniel Daggers.
The FT, and other national papers quoting the FT, say that Daggers was nicknamed Mr Super Prime on his social media hashtag, and had claimed to have successfully sold £3.85 billion of properties, including a £95m mansion at London’s St James’s Park, bought by a US billionaire, and an unmodernised off-market house sale in central London worth £45m.
As of last evening, Daggers’ Instagram profile referred to himself as “The Luxury Real Estate Advisor”; amongst the images posted is an eight-page presentation of his 2018 and 2019 performance which includes £241.67m in sales deals.
Estate Agent Today contacted Knight Frank after emails to Dagger’s Knight Frank address received an out of office message saying: “This mailbox is no longer monitored” and giving enquirers the email address of a Knight Frank negotiator.
A statement to EAT from Knight Frank itself says: “Knight Frank can confirm Daniel Daggers resigned in November 2019 and will leave the firm in February 2020.”
Agents can capture automated valuation leads even if they quit process
The ValPal Network claims its new product allows agents to gather the maximum amount of information from customers using its automated valuation tool – even if they fail to complete the valuation exercise.
‘Before You Go’ sliders are triggered if a user of the valuation process close a valuation page before completing it.
An ’In a hurry?’ tab appears, encouraging them to fill in their details to be contacted later.
“As with any marketing campaign, you’re going to have some people bounce from the online valuation page, whether they get distracted or don’t want to part with their personal details at that point of the process,” explains Craig Vile, director of The ValPal Network.
“We now have a solution for both reducing the bounce rate with the ‘Before You Go’ sliders while allowing agents to make the most of every opportunity with our incomplete valuation data leads.”
The ValPal Network says it now provides instant online valuation services and a range of additional products to over 800 brands and over 4,000 agency offices across the UK.
The network’s creators say the sliders complement a separate product – the incomplete valuation leads initiative, which was launched in late last year.
Additional leads are generated by consumers who fill in the first page of the online valuation but abandon the process before completing page two.
Members of The ValPal Network are then provided with the prospect’s address – which they would have entered on the first page – providing them with several prospecting opportunities to target the consumer.
“We see the ‘Before You Go’ sliders as the first step, encouraging consumers who try to leave the process to fill in their details before leaving. If we can’t capture the contact details, we still have their address which we can pass on to the agent to target by cross-referencing and canvassing” says Vile.
The ValPal Network says estate and letting agents should be looking to capitalise on the opportunities presented by a resurgent property market over recent weeks
“It’s clear that the market has bounced thanks to the traditional new year surge, combined with the election result and more certainty over the outcome of Brexit” says Vile.
“That’s why now is the perfect time for agents to boost their marketing activity in order to reap the benefits of renewed market confidence.
“We know more prospective sellers and landlords will be browsing agents’ websites and looking for instant online valuations over the next few weeks. Therefore, using all the additional tools we provide can help our members to maintain and build a healthy database while also generating more hot leads” he adds.
The ValPal Network is owned by Angels Media, which publishing Estate Agent Today, Letting Agent Today and the other ‘Today’ online industry trade news websites.
Agents warned they will be accused of mis-selling
A leasehold reform campaigner claims estate agents face “growing calls to be held accountable for mis-selling leasehold properties.”
Louie Burns, managing director of the Leasehold Solutions Group, says: “Estate agents are facing mounting pressure to ensure they are listing leasehold properties correctly by providing prospective buyers with the information they need to make an informed decision. There is a high chance that failure to disclose these details could lead to accusations of mis-selling in the future.
“It is right that estate agents and online property portals should be transparent and provide home buyers with key details about the lease, including the number of years remaining, and the cost of any service charges and ground rent. However, we recognise that leasehold is a very complex area and estate agents are facing a steep learning curve to get up to speed with the ever-changing face of the leasehold system.”
Last year National Trading Standards published guidance for consumers seeking redress for leasehold matters, which states that estate agents must provide information consumers need to make an informed decision about a property and ensure that they treat the buyer and the seller honestly, fairly and promptly.
Burns continues: “Estate Agents should protect themselves and their firm’s reputation by adopting a policy of full disclosure. Any estate agent that does not disclose information relevant to the sale may find themselves in breach of the Consumer Protection from Unfair Trading Regulations (2008).”
Burns makes his claims in a statement promoting a half day course he is to hold, alongside Mark Chick, an enfranchisement lawyer and partner of central London law firm, Bishop & Sewell LLP.
The event takes place in London on February 4.
“Our training is intended to ensure estate agents fully understand the imminent changes in legislation to enable them to market and advise on leasehold properties most effectively and avoid any accusations of mis-selling” says Burns.
More market optimism as transactions enjoy end-of-year boost
The number of residential transactions rose by 6.2 per cent in December – an unseasonal increase – according to data from HM Revenue & Customs.
There were 104,670 residential property transactions last month, when traditionally deals drop because of Christmas.
The industry is happy with the unexpected boom.
“These figures are encouraging because they show an increase in transactions in December, up on November and the previous year. While HMRC advises caution and not to get too carried away, it’s certainly a positive, particularly as the impact of the general election is yet to be felt on transaction numbers” according to Jeremy Leaf, north London estate agent and a former RICS residential chairman.
Meanwhile Neil Knight, business development director at Spicerhaart Part-Exchange and Assisted Move, says: “It’s normal that people don’t look to move house around Christmas so we’d have expected to see a bit of a fall-off in December’s figures, but that hasn’t happened. Taken together with the figures for the two months before Christmas, this is a huge shot in the arm and paints a picture of a real recovery starting to take hold.”
Ben Johnston, director of website House, adds: “Transactional volume is what the UK housing market desperately needs, rather than rising property prices, so these figures are encouraging … December’s transaction numbers are perhaps not as telling as those of Q1 2020. These will be the true indicator of whether we are experiencing a ‘Boris bounce’.”