Category: News

An agency has repaid a £6,000 reservation fee to someone who thought they had purchased a property for £83,000 but was later told they must pay £100,000.

The Sunday Times reports a case where a reader made what they believed to be a successful bid of £83,000 for a property in Newport, south Wales, in an online auction held by Pattinson.

At the time of the auction they paid a £4,150 deposit and the £6,000 reservation fee.

But when they later tried to visit the property they could not, and told the paper: “My solicitor subsequently confirmed that the house had been repossessed … by the bank that had provided the mortgage for the previous owner.”

The buyer was told the purchase could only go ahead if they paid the bank’s valuation of £100,000; the buyer could not afford the higher cost but received back only £3,685 – the deposit minus legal fees.

The £6,000 reservation fee was kept by Pattinson at the time, as the firm had said from the outset that the fee was non-returnable.

The buyer concludes in its comments to the paper: “I think it is highly unethical for an auctioneer to list properties under a repossession order without disclosing this to potential buyers.”

The newspaper’s personal finance section pursued the case and obtained guidance from the Royal Institution of Chartered Surveyors that all relevant documents relating to a property should be available for inspection – online, at the agent’s and auctioneer’s office or at the seller’s solicitor.

The buyer claims to have previously been sent a pack containing a draft contract, the property information form and other documents – but none that raised concern with their solicitor.

“RICS found no evidence of misconduct by Pattinson” says the newspaper; nontheless, the paper asked Pattinson to refund the reservation fee – which it has now done.

The newspaper goes on to say that the company apologised for having failed to respond to the buyer’s recent queries. “It said it had been in an ‘unfortunate position’ as ‘the repossession after the sale had been agreed was completely out of our hands’.”

Estate Agent Today understands that three senior figures have departed from a key central London branch of Knight Frank.

Each of them was a partner in the company and they formed the senior management at the agency’s Kensington office: it is not known why they left.

They are believed to be Tom Tangney, who had been in the industry for over 35 years and had been at Knight Frank for 20 years; Pete Bevan, who had been closely involved in high value PCL sales for some years; and office head Sami Robertson, who was regarded as a key contact in the agency for some Far East clients.

Knight Frank recently lost central London legend Daniel Daggers, known in the industry as Mr Super Prime, who was the subject of media speculation with regard to posts of properties on Instagram. He had 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.

Knight Frank has provided EAT with a lengthy statement about the three Kensington departures, which we have published below; it does not mention any of the three departures by name.

Tim Hyatt, Head of London Residential at Knight Frank, says: “We have the strongest leadership across our London residential business that we have ever had. Our best in class team has had a strong start to the year, responding well and capitalising on the positive market sentiment post-election. Of course, it is unfortunate that we have had a significant change in the management team in our Kensington office, a very important post, but only one of our 30 offices across London.

“This is a great opportunity to ensure we have the strongest management and hire the best talent in the market. We firmly believe in recruiting or moving talent from within and in parallel to this, always looking for the very best external candidates within the market who have indicated they would like to join our award-winning team.

“Immediately after the department head for Kensington left the firm, James Pace, proprietary partner and head of the Chelsea office, moved to lead the Kensington sales team. James has been in the Knight Frank Partnership since 2006 and opened the Chelsea office in 2007, building a highly successful team and an unrivalled track record in the Chelsea and wider prime central London market.

“Supporting James, William Allen also joins the Kensington sales team as partner following 10 years at Strutt & Parker in their prime sales team, specialising in the Kensington and Holland Park markets. Tom Van Straubenzee, who jointly runs Knight Frank’s Private Office, will also take up a strategic position working closely with James, William and the existing team moving forward, assisting both vendors and buyers.

“In Chelsea, Charles Olver was promoted to Department Head for sales, taking over from James Pace. Charles has been with the firm for over ten years, based in the Knightsbridge office where he has been a Prime Central London negotiator.

“James is a true asset to our team, with over 25 years of experience and an exceptional track record earned during his time running the Chelsea office. Together with William’s local market knowledge and strong client relationships, they will bring a renewed energy and direction to the Kensington office. Charles is a highly respected agent in Knightsbridge and we look forward to him bringing his enthusiasm and understanding of the PCL market to his new role in Chelsea.

“Kensington is a crucial part of the Knight Frank network of offices and we expect it to remain as such well into the future.”

Any bid by Zoopla and OnTheMarket to displace Rightmove as the number one portal in the UK is at best expensive and at worst futile according to a leading analyst.

Mike DelPrete – former head of strategy at a New Zealand portal and a long-standing analyst of estate agencies in the UK and the US – says Rightmove is an example of a company with what he calls ‘network effects’

By this he means dominant online forces such as Rightmove, Facebook, eBay, and Craigslist are enjoy network effects – being ‘the’ place that people want to be seen, or want their products advertised.

“Even if a new entrant’s product is objectively better, a smaller audience of potential buyers and sellers means an inferior consumer proposition. Sellers want to advertise to the biggest audience possible, and buyers want the largest selection possible” he says in his latest report on the state of portals worldwide.

Specifically referring to the UK landscape he says: “For all the cyclical uproar aimed at Rightmove over its ever-increasing fees, its traffic dominance shows no signs of waning. It remains the undisputed best place to advertise properties for sale, with Millions More Buyers than its closest competition.”

DelPrete says all three major UK portals reported higher January traffic than the two previous years but while Zoopla’s and OTM’s percentage gains may sound impressive, they are from smaller bases than Rightmove’s.

“Rightmove’s traffic lead over its next closest rival remains strong and fundamentally unchanged over a number of years, despite several companies attempting to challenge its dominance” he says.

And he adds that even after Zoopla’s $3 billion acquisition by private equity firm Silver Lake in 2018, and OnTheMarket raising and spending tens of millions of pounds to compete, Rightmove’s traffic dominance remains intact.

And DelPrete writes: “The evidence suggests that it is nearly impossible for a runner-up portal to overtake the leader. In fact, there is no evidence that the all-important traffic leadership metric between the top two portals can be budged even a small amount.

“Which begs the question: Why are upstart portals attempting to displace leading portals? OnTheMarket launched in 2015 to challenge the duopoly of Rightmove and Zoopla in the UK. It was founded by a broad consortium of traditional real estate agencies who didn’t appreciate the market and pricing power enjoyed by the existing portals.”

The analyst says there are similar scenarios in Australia and the United States.

He sums up his analysis this way: “Attempting to compete directly with a leading portal is at best expensive, and at worst futile.”