Market Update

Posted on Thursday, April 18, 2019

The current challenging property market has been well documented with uncertainty over Brexit at the fore. However there remain plenty of signs of positivity that, perhaps, have been allowed to slip “under the radar.”

The current number of people employed in the UK are at their highest levels ever and this makes for greater levels of income and for taxation to pay for our infrastructure and services.

Inflation remains at a low level and interest rates are also at close to historic lows.

The home selling and buying market has always “ebbed and flowed” with volumes and prices rising and falling in line with economic reality and public confidence. It has, however, always been a largely “safe haven” financially and, for most people who own their own property, an investment second and a home first.

With people now moving home, on average, every twenty years, it is the medium to longer term view that needs to be taken and our prognosis is that, despite some increases in housebuilding, the long-term demand and therefore, value of, property is sound.

The lettings market is currently subject to an increasing amount of legislation and change, much of which, is seeking to provide tenants with a fairer and more affordable position. Unfortunately, many of the changes are likely to result in a reduced availability of stock and will ultimately see rents rise if the balance of supply and demand shifts further.

The challenging market conditions are taking their toll on those operating as estate agents or “execution only” service brokers – particularly the so-called “online agents”

Cheap fees, paid for upfront (with no guarantee of success) may look attractive initially but ask those that had instructed Emoov, Tepilo, Hatched or House Network in recent weeks now that these businesses have all failed and closed and left sellers out of pocket as the fees they had paid have been spent and lost. Tepilo also picked up a £70,000 fine from HMRC for failures of regulatory compliance.

The old expression that there is “no such thing as a free lunch” is true and I am again reminded of the Red Adair quote that “If you think its expensive to use a professional, wait until you’ve used an amateur”.

There is no pleasure in seeing others in our industry fail but there has to be a growing sense of realism about the true costs of providing a high quality, professional and compliant service that delivers the result the customer seeks.

For example, a recent report from Zoopla showed the five main concerns that landlords have:

  • 56% said they were concerned about finding suitable tenants
  • 55% said they were concerned about tenants looking after the property
  • 47% said they were concerned about tenants paying on time
  • 39% said they were concerned with keeping up with increased regulations
  • 36% said they were concerned about future changes to legislation

All of these will be proactively handled and managed by a professional and experienced agent such as ourselves who will provide the “peace of mind” to a landlord that there property is being looked after and that their investment is being protected and maximised. For a tenant, they know that the property they are renting will be well maintained, safe and, should any issues arise, they will eb dealt with quickly and effectively.

Benjamin Franklin famously said: “The bitterness of poor quality remains long after the sweetness of low price is forgotten.”

As always the team and ourselves are here to help you with any questions and to assist with making your moving plans come true.

Yours

 

Darren Murphy and Chris Harper

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