Category: News

A right wing magazine once edited by Boris Johnson has called estate agents “spivs with tape measures” who conceal information from buyers.

In an article about leasehold properties the veteran Spectator contributor Ross Clark accuses agents of not wanting to tell buyers the remaining duration of leases on leasehold properties.

“So often when I see details of flats on Rightmove, there is no word whatsoever on any of these matters. It will just say ‘leasehold’. Even when I have rung up the estate agent he or she often doesn’t have a clue as to these details — or they don’t want to part with them” says Clark, who in the past has contributed on property matters to the Daily Mail and the Daily Telegraph.

He claims in The Spectator that in the 2000s the much-criticised Home Information Packs would have required agents to disclose leasehold lengths –  but that part of the pack’s provisions was abandoned because of wider opposition to other elements of HIPs.

“Estate agents should be bound to provide all the crucial details. They should have to tell you the length of the lease, who owns the freehold, how much the ground rent is and whether it rises with inflation or by doubling, and who manages the common parts of the building. They should be able to email you the full lease on request” insists Clark.

He says agents are more interested in telling prospective buyers about the brand of dishwasher in homes, and he laces his article with heavy sarcasm about agents.

In addition to the “spivs with tape measures” jibe, Clark calls agents “Kevin Whitesocks” and “the sharp-suited middleman in the Vauxhall Astra.”

His only praise for the profession appears to be because of the technology used in recent times.

He concedes: “Many have indeed become very good at offering good floor plans, fly-through videos and the like. The ability to get a good idea of the layout and the state of a property before you commit to viewing it saves everyone’s time.”

The total Sales Agreed in 2020 so far has overtaken Sales Agreed up to this point in 2019, despite the Coronavirus crisis.

Property consultancy Twenty EA also says New instructions this year is 92 per cent of those reached at this point in 2019, despite the market lockdown.

On top of that Twenty EA says the market should prepare for a surge in exchanges, although these are currently running 25 per cent behind last year’s rate.

The consultancy says although there was a form of ‘Boris Bounce’ early in the year, the growth in Sales Agreed numbers really started as soon as the English housing market reopened.

That was sustained when the stamp duty holiday was announced, but the holiday itself does not appear to have led to a major spurt in Sales Agreed – at least so far.

“The stamp duty holiday did not make a massive difference to the volume of sales agreed on a weekly basis – certainly not enough to show clearly in the overall numbers. What we don’t know is what the graph would have looked like had the stamp duty holiday never been announced” says the consultancy.

It goes on to say: “In usual times, we would expect sales agreed will revert to normal demand levels when buyers believe that they cannot complete on a property purchase prior to the end of the stamp duty holiday on March 31 2021. It appears this realisation may dawn on many purchasers about the same time as the furlough scheme ends.  Could this be a double blow to consumer confidence in early November?”

Twenty EA says there are two other key triggers that important to examine – New Instructions and Exchanges.

“We would expect 2020 to have more New Instructions than 2019 by the end of the year. Presently, 2020 is 92 per cent of 2019” it says.

“2020 has only currently seen 75 per cent of the Exchanges seen in 2019 year to date. But … it will start to rise rapidly as these sales were agreed just after the reopening of the English market. Essentially there is a simple lag effect on Exchanges.”

A security company says it is “disappointing” the estate agency industry is only around 55 per cent through preparations to cope with Anti-Money Laundering regulations – even though the new rules came into force at the start of the year.

LexisNexis Risk Solutions claims a majority of major players in the agency industry – as well as those in banking, lending and wealth management – have only completed 55 per cent of their plans to implement processes to cope with the Fifth Money Laundering Directive which became law on January 10.

The firm claims those agencies unprepared risk fines from the regulator, the Financial Conduct Authority, for not fully complying with the directive.

Yet it is apparently not the fault of the pandemic that agents are so poorly prepared – LexisNexis’ survey of 500 companies threw up the response that the majority had actually accelerated their plans because of Coronavirus, rather than giving them lower priority.

“Therefore, it’s reasonable to ask whether firms would be even a third of the way through the process by now if the crisis had not occurred?” says a statement from the security company.

It also accuses agents and other professionals subject to the AML rules of suffering “widespread confusion” about the new legislation, with fewer than half of respondents able to correctly identify that the directive was introduced to prevent the financial system being used for the funding of criminals and to strengthen transparency rules.

Michael Harris – director of financial crime compliance at the company – says it’s “disappointing” that so many agencies and other players are so far behind and that “firms appear not to be prioritising this important legislation, given the positive impact it can have on the prevention of the use of the financial system for the purposes of money laundering and terrorist financing.”

He concludes: “Firms really need to get on with implementing it as quickly as possible, especially as further regulatory changes are likely to follow later this year” he warns, painting a picture of allowing money laundering to produce “a flood of dirty money that is so deep we simply drown.”

A former healthcare executive is the latest convert to become an online agent with easyProperty, the company has announced.

Richard Ayres has purchased the licence for Grantham, Sleaford and Lincoln – he’s lived in the area for five years and has owned property there for over 13 years.

Ayres most recently worked in procurement for BUPA Healthcare but over the past three decades has worked in various positions in different sectors for companies including Morgan Stanley, Virgin Atlantic and British Gas.

“I want to bring my procurement experience to the forefront, help to change the way property is brought and sold, seek to cut out complexity and help buyers and sellers to save money on selling and buying property without compromising on high quality customer service” he says.

“I feel the cost of estate agent fees, mortgage deals and conveyancing can be the areas where we can keep it simple and really help our customers be them buying or selling, to get better lower cost deals without compromising on quality of service, so they end their transactions feeling positive and ready to re-engage with easyProperty the very next time they want to buy, sell or rent a property” Ayres adds.

The agency last week announced that it had added Glasgow, Edinburgh, Paisley and Hamilton in Scotland to its portfolio where agents operate, in addition to existing operations in Liverpool, Cheshire, Manchester, Portsmouth, Plymouth, North West London, Surrey, Lincoln, West Yorkshire, North and South Wales.

David Brierley, easyProperty chief executive officer, says: “The pandemic has seen a huge shift in consumer behaviour and our online presence is the new and only way forward.”

easyProperty has three packages which it describes as providing “a full-service experience that will benefit customers” including an upfront charge of £795, a split fee of £395 then £895 on completion, and a no sale/no fee option of one per cent including VAT.

Stamp duty specialist consultancy Cornerstone Tax claims some 120,000 buyers in the UK may be owed SDLT refunds.

It says that in 2017/18, over £12.9 billion in stamp duty was paid by homebuyers in the UK, while in 2016/17 alone over 6,800 additional property refunds totalling £80m were paid.

Cornerstone says it has been estimated that over £3 billion has been overpaid in stamp duty in 2015/16 mostly because of confusion by legal advisers unable to master the complexity of the tax.

The company says a new survey shows 61 per cent of homebuyers have never considered whether there was a mistake in the stamp duty they paid but 13 per cent feel they were forced to pay too much stamp duty in error due to their solicitor.

David Hannah, principle consultant and founder of Cornerstone Tax, explains: “While the percentage payment bands at higher property values is fairly straightforward, the number of exemptions and surcharges on different kinds of homes becomes incredibly confusing for even the solicitors and conveyancers advising on these transactions.

“The law around SDLT is incredibly complex and many advisors who help consumers evaluate how much they should pay are trained only to differentiate between residential and commercial property.

“They simply aren’t familiar with the intricacies of the law’s evaluation criteria, which has led to many consumers being mis-advised unintentionally. There are a number of other reasons why people have overpaid; it’s not always a misinterpretation of the three per cent surcharge.”

A survey says many people under-estimate the costs of moving with conveyancing and mortgage fees often higher than expected.

Some 54 per cent of those questioned in the Comparethemarket study found the process of moving home more expensive than they initially thought.

The survey found that in total moving costs can now add up to £9,500 – although it’s currently less thanks to the temporary stamp duty holiday.

Excluding SDLT, the deposit and estate agency fees, the top five biggest costs for homemovers were conveyancing fees, buying new furniture, mortgage fees, professional removals and decorating or improving the previous property before moving.

Forty two per cent of homeowners also stumble upon unexpected costs and charges when moving home, with the average amount spent totalling nearly £1,500.

Mortgage product fees, conveyancing charges and moving home supplies – materials and food covering the move – are the top three factors that homemovers had not fully accounted for.

To cover these surprise costs, over half had to dip into their own savings and an additional one quarter relied on a credit card.

Meanwhile the same survey has revealed the average distance moved by homemovers is over 20 kilometres..

But a fifth only move between one to five kilometres away from their old home, and another fifth move between six and 10 kilometres away.

The so-called ‘trade up gap’ for people buying for the second time has grown to a record £67,761 according to Rightmove.

The study is based on the average asking prices of almost three million properties, and operates on the basis of second home buyers already owning a two bedroom home and now wanting a three bedroom unit.

Over the past five years, the price growth of three bedroom houses has outstripped the price growth of two bedroom flats every year.

Outside London, asking prices for three bedroom homes are up 20 per cent nationally compared to 2015, compared to a 15% jump for two bedroom flats. Over the past year, two bedroom flats are up just three per cent to £171,751 and three bedroom homes are up four per cent to £239,512 on average.

Analysis for London – excluding prime London to remove luxury flats from the statistics – shows a trade up gap of £79,112, from an average of £486,464 for a two bed flat, to £565,576 for a three bed house.

Asking prices in the capital are up 15 per cent for three bedroom homes compared to 2015, compared to an uplift of only five per cent for two bedroom flats. Over the past year, two bedroom flats are up two per cent and three bedroom homes are up four per cent in London.

Those trying to move from a three to a four bed home, potentially for extra rooms to work from home, will need to contend with an even bigger jump of £183,093 outside London, with asking prices growing 15 per cent over the past five years.

In London, average asking price growth for four bed homes has grown by 10 per cent over the last five years, as this property type actually dropped in value between 2016 and 2018.

The trade up gap varies dramatically at a local level. In Swansea, a move from a two bedroom flat to a three bedroom home has a difference of only £11,000, whereas in Esher in Surrey there is a massive £300,000 difference.

Rightmove’s director of property data Tim Bannister, explains: “People who bought a smaller home five years ago and are now hoping to trade up will find it’s harder to afford the next rung of the ladder because of the different pace of the sectors.

“Those who really need the space and are struggling to trade up could widen their search area to find alternative places where they can get more for their money, or they may need to compromise on the type of home and opt for a terraced rather than detached.

“The cash jump is even bigger from three to four beds, likely due to four bed homes often having additional bathrooms, bigger gardens, garages or outbuildings, as well as an extra bedroom, but traditionally homeowners stay in their second home longer and so more people may have built up enough equity to make the jump to their forever home.”

“Accidental savers” who put money aside during the lockdowns are piling into the housing market and will drive up UK asking prices by four per cent in 2021.

As many as 650,000 properties are due to change hands in the first quarter of next year while fresh buyers will try to find, buy and complete on a new home before the end of the stamp duty holiday window on March 31, according to Rightmove.

“The new year is typically a time for resolutions and many will see it as an opportunity to draw a line under 2020, which may well include a fresh start in a new home for those who have not already acted,” says Tim Bannister of Rightmove.

“Interest rates remain at near-record lows and we expect greater availability of low-deposit mortgages next year. These two factors will help to oil the wheels for home purchases by the accidental savers who have collectively saved £100 billion during the pandemic restrictions.”

The surge of demand to move house following the first national lockdown, stoked by the Chancellor’s tax break, has pumped prices up 6.6 per cent over the last 12 months to December taking the average UK asking price to £319,945.

The first leading agency to make a 2021 forecast says the market should be stable next year – so long as there’s a trade deal with the EU and a speedy end to the pandemic.

“Assuming a trade deal is agreed with the EU and a vaccine becomes available in the first half of next year, with no major second lockdown, we expect prices in Great Britain to remain flat in 2021” predicts Hamptons International.

The agency say 2021 will be challenging thanks to health and economic uncertainties.

“Although the wind down of government support measures means that unemployment is likely to peak in H1 2021, the economy should have made up some lost ground.  We also assume that a trade deal is agreed with the EU at the turn of the year and a vaccine becomes available in the first half of 2021” the agency continues.

It says there may be small price falls in the second quarter but as 2021 progresses there should be more stability.

“Providing the availability of mortgage finance returns to near pre-Covid levels, we expect house prices to remain flat in Great Britain in 2021, with small price falls in those regions likely to see the biggest job losses and where affordability barriers are already tight” according to Hamptons.

The West Midlands, the region that had the highest furlough take-up rate at the peak, is set to see the biggest price falls next year – down 1.5 per cent. London and the East Midlands will also see falls of 1.0 per cent or less.

Most other regions will have small rises.

Meanwhile transactions in Great Britain will reach one million this year, 1.1m in 2021 and then a higher level in 2022.

“The real challenges won’t be felt until 2021.  The economic consequences from the Covid-19- induced recession will pull the housing market from its long-term growth trajectory. While some economic recovery should have taken place to cushion the withdrawal of government support, we still expect the housing market to slow next year” anticipates Aneisha Beveridge, head of research at Hamptons International

“In line with a gradual economic recovery, we forecast house prices to rise again in 2022 and 2023.  The housing market will fall back in line with its historical cycle, with Northern regions expected to see the greatest price growth, further closing the gap with those in the South.”

A new PropTech product claims to help agents generate and nurture leads – even while they sleep.

MovePal generates leads through Facebook ads, agents’ databases, portals and other sources, and then nurtures those leads to keep an agent and its brand at the front of the prospect’s mind.

The new product – which joins ValPal, PortalPal and ChatPal in the Network’s suite of services for agents – aims to zone in on ‘hot’ leads for agents so they do not have to expend time and effort chasing after leads that come to nothing.

At the same time, a streamlined, all-in-one package is provided to enable agents not only to generate leads, but to nurture and convert them as well.

The software is designed to target and engage with prospects when they are ready to talk, increasing an agent’s chances of converting into a market appraisal or instruction.

The creators say that with Coronavirus stretching agents’ resources, this product means they have to spend less time spent chasing leads and business, freeing up more time to carry out market appraisals, valuations and viewings.

“MovePal, by combining lead generation with automated lead nurturing, offers an ideal solution for agencies wishing to automate the responsibility of lead generation, nurturing and conversion, leaving your agents to deal with hot prospects when they are ready to speak to you” according to Nat Daniels, founder and CEO of Angels Media, the company behind the product, and the company which publishes Estate Agent Today.

“Even better, MovePal identifies these for you, so cold-calls and hopeful pitches are not required. It’s more targeted, tailored, specific, which all saves time.”

Daniels says MovePal can best be described as a “personalised but automated two-way communication platform” using email, SMS and voice drops to keep an agent’s brand in front of all of its data.

Included alongside this is a range of long- and short-term nurture campaigns.

Research by The ValPal Network – another Angels Media product – suggests that 18 per cent of all those using instant online valuations go on to sell their property, accounting for nearly one in every five leads.

MovePal triggers digital marketing for new leads using Facebook Ads, Google Adwords, the agent’s own database, and inbound leads from the major portals.