Author: Antony Antoniou

The experiment was very small – it involved just three participants viewing four properties each – but the exercise has produced eight areas of interest.

1. Contrasting colours: Little flashes of colour caught people’s attention and were received positively. Strike says: “If looking to make your own listing stand out, you don’t necessarily need to go for something large, like a feature wall – buyers are drawn to even small bits of contrast, such as colourful flowers or fruit. A few little touches could get you a lot more attention.”

2. People and faces: Despite the general advice to avoid personalising a property being viewed, Strike says the study participants often lingered on images where these family or personal elements were present.

3. Furnishings: “People immediately look at how rooms are furnished and, perhaps most interestingly, the furniture has a large impact on their overall impression of the home — whether it’s included in the property or not. The study found that buyers are often unable to separate a room from the furniture and decorations in it, so if they don’t like them, they will quickly move on.”

4. Floor plans: “Participants  checked to see if the listing had a floor plan, then would  view the images, and then return to look at the layout.”

5. Main image: The study found that people form an opinion about properties within the opening two or three seconds — and quickly clicked off a page if their first impression was not positive. “If the first image didn’t make an impression many participants simply skimmed over the property and clicked away quickly.”

6. Clutter: “The testing found that buyers’ eyes are instantly drawn to clutter and that they can form a negative impression instantly, often leading to them leaving the listing.”

7. Image quality: Participants quickly clicked off poor images and the negative impression formed could easily influence how they viewed the property.

8. Local information: While the majority of attention was focused on the properties themselves, participants often also looked for information about the local areas. They regularly scrolled to find maps in order to visualise where the property sits compared to nearby amenities — so giving a sense of the area and why it’s a great place to live can make a big difference.

The proposed tax would apply only to developers’ profits over £25m – an idea first mooted in February as part of a £5 billion package to pay for the remediation of unsafe cladding on high-rise residential buildings.

A statement issued by the Ministry of Housing, Communities and Local Government says that the government believes it is right that residential property developers – “who will benefit from the restoration of confidence to the housing market” – should help fund the significant costs associated with the removal of unsafe cladding.

The tax will raise a predicted £2 billion for the remediation and will serve two purposes – as a general tax on housebuilder profits and also a ‘gateway’ tax for those applying for consent to develop high-rise buildings.

Housing Secretary Robert Jenrick says: “We’re making the biggest improvements to building safety standards in a generation, investing over £5 billion helping to protect leaseholders from the cost of replacing unsafe cladding on their homes and ensuring industry is held to account for the wrongs of the past.

“This tax will strike the right balance between developers making a contribution and ensuring fairness for the taxpayer.”

And the Financial Secretary to the Treasury, Jesse Norman, adds: “Ending the use of unsafe cladding is a priority for the government, as it builds back better from the pandemic.

“Given the significant costs associated with the removal of unsafe cladding, it is right to seek a fair contribution from the largest developers in the residential property development sector to help fund it.”

The consultation wants views on the tax including proposals that it would apply to a measure of developers’ profit from UK residential development, would be levied only on profits over £25m and would apply to conversion of existing buildings as well as new construction.

Ministers intend to set out the rate of the tax at a future Budget, but it is time-limited in that it will apply from 2022 and is intended to raise at least £2 billion over a decade.

Insolvency specialist Business Rescue Expert claims the UK real estate sector – dominated by estate and lettings agents, consultants and suppliers, but not including the construction industry – is the sector of the economy with the third largest debt in the shape of the Bounce Back Loan Scheme. Companies in the real estate sector borrowed an average of £35,080 per loan.

BBLS is the business support funding launched by HM Treasury to help companies hit by the Coronavirus crisis, multiple lockdowns and continuing resrictions on some activities.

The British Business Bank, which manages the BBLS loans, there are some 1.53m loans with over £46.5 billion in total – most of these have been to small and micros businesses.

These loans provided lenders with a 100 per cent government-backed guarantee and would last for up to six years.

Business Rescue Expert predicts three possible scenarios for how the BBLS as a whole will fare: it says its best case scenario is a 15 per cent default rate, a median case scenario is a 40 per cent default rate and a worst case scenario is of a shocking 60 per cent defaulting.

Chris Horner, insolvency director with Business Rescue Expert, says: “In the first quarter of this year alone, over 42 per cent of the liquidation cases we’ve handled had taken out a BBLS, and the average amount borrowed averaged £37,500 per company.

“As the first loan payments for the BBLS come due, businesses will have to seriously look at their ability to pay and their calculations might have been affected by not being able to reopen earlier than this month at best.

“Businesses that have topped-up their initial BBLS loan will also find out that not only are they unable to defer these payments, but they’ll come out at the same time as their original loan repayments – an unwelcome and expensive surprise.”

This is the second insolvency warning to the real estate sector in the UK.

Last week Begbies Traynor’s latest Red Flag report said:  “Despite the booming residential property market, the whole real estate and property sector – a key indicator of the economy’s performance – has seen another 11,000 businesses enter significant distress in the last quarter … with a leap of 51 per cent since the same period last year.”

Begbies Traynor’s latest Red Flag report says:  “Despite the booming residential property market, the whole real estate and property sector – a key indicator of the economy’s performance – has seen another 11,000 businesses enter significant distress in the last quarter and rise by 15 per cent (73,952 – Q4 2020, 85,165 – Q1 2021) with a leap of 51 per cent since the same period last year.”

The specialist says construction businesses have also been impacted, despite building activity continuing even during lockdowns. There are now 96,557 construction businesses in significant distress, a year-on-year increase of 48 per cent and a quarterly increase of 21 per cent.

Begbies Traynor measures financial distress by the frequency of County Court Judgments served on companies within sectors.

It warns that with lockdowns and Covid restrictions preventing the usual CCJ process, “the dam of zombie businesses could be about to break.”

The number of CCJs and winding up petitions are both substantially below pre-Covid levels, Begbies states, partly due to a ban on winding up petitions with regard to Coronavirus related debts.

Data shows there were 23,325 CCJs lodged against companies during January, February and March in 2020, with only 9,377 lodged during the same period in 2021, a fall of 60 per cent. The situation is even more acute with regard to more serious winding up petitions. During January, February and March 2020, 715 were lodged compared to just 15 during the same period in 2021, a fall of 98 per cent.

Begbies insists that this fall is not a cause for celebration, but a sign that the situation is likely to be much worse than figures show.

The insolvency firm’s partner, Julie Palmer, says: “The dam of zombie businesses could be about to break. The last 12 months have undoubtedly been some of the hardest that many businesses have ever encountered. We must remember that this is no ordinary recession and while businesses have had significant assistance from central government, large parts of the economy have been put on hold with substantially reduced revenues.”

She continues: “Our experience shows that unmanageable levels of debts and subsequent overtrading are likely to be the hidden icebergs waiting to sink even the highest profile businesses.

“However, businesses that were profitable before the pandemic, have manageable debt and are still relevant in the post pandemic world could flourish and be the real winners in this climate. They need guidance and need to act quickly. In a market that is moving fast dithering companies will be swept away in the sheer force of distress that is forcing its way across the UK.”

She also warns that London’s reliance on financial services – as well as leisure and hospitality – makes the capital particularly vulnerable to business failures if they emerge once Covid restrictions and support both fall back.

From April 26 Nationwide’s Helping Hand product allows first timers the option of borrowing up to 5.5 times their income when taking a five or 10-year fixed rate mortgage up to 90 per cent Loan To Value – the most currently offered by any major high street lender.

Nationwide is explicitly targeting disenchanted private renters, saying: “Many renters still aspire to own their own home, but affordability remains one of the key issues stopping many from getting on the housing ladder. In the last 10 years the average price of a first time buyer property has increased by 41 per cent, while the average income has risen by just 18 per cent.”

There will be £1 billion of lending available via Helping Hand and the society will apply a lower ‘stress rate’ and higher maximum loan-to-income ratio where applicants opt for a standard five or 10-year fixed rate product.

The change means a first-time buyer couple with a joint income of £50,000 can now borrow up to £275,000 with Helping Hand, rather than the £225,000 they could borrow previously, assuming a 10 per cent deposit and no other costs impacting affordability.

The average first-time buyer property price in the UK is £196,2233. However, this varies widely across the country with the average first-time buyer property in London standing at £416,682, compared to just £110,556 in the North of England.

Nationwide insists that all applications will be subject to “robust underwriting checks, including full assessment of credit score and additional credit commitments.”

Henry Jordan, mortgages director at the society, says: “In the UK there are nearly five million private rented households, but many of these renters have dreams and aspirations of buying a home of their own. However, with household incomes rising at a slower rate than house prices, many first-time buyers are finding it increasingly hard to get onto the property ladder.”

But NTSELAT has now revealed a new document called The Case for Change: Improving Provision of Material Information In Property Sales and Lettings.

In addition it has produced the results of a survey of people who have moved in the last three years or are looking to move in the next three years. The survey shows that:

– 90 per cent of respondents who use portals would prefer to find detailed or key information about a property when they’re searching on a portal;

– 87 per cent of respondents agree that portals should include all key information about a home in their listing;

– More than half said that they would be less likely to buy or rent where information was missing on the property listing;

– 40 per cent of respondents assume that missing information means something wrong with the property.

The pressure for ‘more info sooner’ appears to be building on portals, which in turn will be expecting agents to do the heavy lifting.

Rightmove’s Legal & Compliance Director David Cox says: “The information that agents need to find out before marketing a property varies so much depending on the type of home, and so we support the drive to provide clear industry-wide guidance on basic material information.

“Unlike price and number of bedrooms which is already available on all listings, there are some features that aren’t displayed in every case, such as tenure, and so we’d like to hear from agents about what challenges they face in collecting this type of information.

“Once a list is finalised we can help by explaining to prospective sellers and landlords what information they should already be starting to gather when they are thinking of coming to market, and help buyers and tenants understand what’s in the list and why.”

Nicky Stevenson, managing director of Fine & Country, says: “Demand is outstripping supply which is creating a frenzy around properties as soon as they hit the market. It is not uncommon for an agent to have multiple offers on a property within days of it listing, which has result in many properties currently selling over asking price.”

She continues: “As expected, the Spring market is living up to the hype, with the extension of the stamp duty holiday continuing to have a positive impact on the market, along with that fact that consumer confidence is at a record high and people eager to move during the warmer months.”

Stevenson says a report from property consultancy Twenty CI shows that since the stamp duty holiday was introduced in July last year, only two months are missing from the top 10 all-time list in terms of sales agreed.

Twenty CI says 162,000 property sales were agreed last month – March – which is the highest level recorded by the consultancy.

“Although December and January are traditionally slower months within the property market with people taking seasonal holidays and getting into the swing of a new year, December 2020 and January this year had the highest volumes of sales agreed when compared to any previous December or January on record” says Stevenson.

She says demand within higher price brackets has risen significantly, particularly above £750,000.

Stevenson comments: “What is clear from the data is that the mid to upper priced properties are the driving force behind the current high levels of demand in the housing market. This stands to reason, as homes priced above the £500,000 stamp duty threshold would have to most if benefit from the tax relief, that is provided they are able to make the deadline at the end of June.

“While the length of time taken for a property transaction to complete continues to widen, consumers are still confident and eager to move, which is reflected in the number of sales agreed. It also shows that at the higher end of the market, Stamp Duty is not the only driver and that desire for lifestyle change is also having an impact. We anticipate that this desire will continue far beyond the SDLT deadline.”

It set an all-time new record last Wednesday, April 7, when there were over 9.3 million visits.

The day before, Tuesday April 6, was a new record set for the number of people sending enquiries to agents about properties up for sale, beating the previous record last month.

The portal says that across Great Britain almost two out of every three properties are currently SSTC, and available stock is down 26 per cent on this time last year – although Rightmove notes this comparison is with a time when the housing market was closed in April 2020.

New properties coming up for sale greatly improved last month and were 51 per cent  higher than in February, but demand is still outstripping supply in a number of areas.

Rightmove’s director of property data Tim Bannister says: “Areas around the North and South West are the stand-out seller’s markets right now, and places in Cornwall and Devon are continuing the trend of a desire to move to the seaside and countryside.

“Suburbs are also faring well as some people move further out from the centre of cities.”

“Both sale and rental properties in city centres have been suffering over the past year as the usual appeal to live there has temporarily been taken away, leading to more stock than usual being available, but we may see these start to shift more quickly over the next few months as lockdown restrictions continue to be removed.

“In a traditional year there would be a couple of record days for visits or enquiries being sent by home-hunters, but the pace of the current market caused by a combination of restrictions easing, a desire for more space and people considering different locations, has led to records tumbling week after week.”

Bradley Start, a partner at Start & Co in the Cornish town of Newquay, says he’s getting requests for viewings within minutes of a property being listed on Rightmove, with many homes going to best and final offers – something he would normally see only rarely.

“The stock shortage is the worst I’ve seen in thirty years and there’s just seemingly endless demand” says Start.

“It’s a mix of locals moving, people buying holiday homes and those relocating completely, which is leading to more out-of-town buyers than we would normally see.

“Those who are choosing to relocate are, understandably, looking for a home right by the sea, which is pushing up demand even more for those homes with the all-coveted sea view.

“The lack of stock I think is mostly down to the fact that sellers are unsure that they will be able to find a replacement property to buy, but if more sellers decided to come to market this would help across the whole chain.”

It’s a similar story in some other parts of the country.

Simon Shepherd, branch manager of Ashtons in Newton-Le-Willows says: “The past year has just been crazy. First-time buyers are queuing up for starter homes, and many of those moving from starter homes are looking for four bed detached homes which are few and far between. When one comes up for sale it’s snapped up immediately, especially those that are within walking distance to the high street.

“Some people are selling up their smaller houses closer into Liverpool and moving out here as well, which has pushed up prices to an all-time high.

“Right now I’ve had to rip up the rule book because the demand means it’s hard to predict what a home is going to sell for, as in many cases we’re achieving over the asking price.”

Well over another third, 38 per cent, say they visit an office only “once or twice” during the transaction. Only nine per cent say they visit quite often during the process of purchasing.

There is only limited engagement with window displays too, according to this survey of 1,081 people who bought a home in the past six months.

Just six per cent say they discovered the home they eventually bought via the window of an estate agency branch, and only five per cent discovered it via a For Sale board.

A full 70 per cent say they found their eventual home online.

When asked by the survey – conducted for the PropTech platform WiggyWam – some 75 per cent of respondents claimed they would happily see the end of physical High Street branch offices if it meant agents had fewer overheads to cover and could, therefore, reduce fees to sellers.

The survey was conducted earlier this month and WiggyWam chief executive Silas J Lees says thanks to lockdown, recent buyers may have made unusually limited use of branches for in-person visits to agents.

“However, we also know that the entire high street retail sector was struggling before Covid and has been truly battered since. Even the biggest names in retail are retreating from physical operations” he adds.

“Yet, at the same time, some retailers are enjoying great high street success and, more often than not, they are those who have changed the strategic value of their physical retail units. It’s about time agents started doing the same, finding a way to create an in-branch experience that cannot be replicated online.

“To this end, multi-disciplinary branches are where the smart money is; agents, lawyers, surveyors, etc, all under one roof, all working together to create an efficient buying and selling process. Given how many law firms, for example, are likely to fold as a result of the pandemic, this kind of consolidation provides a genuine option for the future.”