Tag: Estate Agents

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Now is the time for agents to go up-market claims Fine & Country

Now is the time for agents to go up-market claims Fine & Country

Fine & Country says now is “a great time” for estate agents to go upmarket and become “the luxury agent” in their respective areas.
 
F&C – which before the Coronavirus outbreak described itself as the fastest-growing premium estate agency brand in England and Wales – is hosting a series of webinars starting this week to push the possibility of agencies moving towards higher value properties to sell and let.
 
Nicky Stevenson, head of the Fine & Country Associates programme, will be leading the webinars which will be open to all agents wondering how to become a luxury estate agent and what a day in the life of a luxury agent looks like.
 
“The market has been massively impacted in recent times and the estate agency business is shifting. With the market currently on hold, this is the ideal time for experienced estate agents to relook at their opportunities, see how they can prepare for the months ahead and how they could take their business/career to the next level and bring in much needed additional revenue when restrictions are eased: says Stevenson.
 
Contributors to the four webinars – the first of which is this Thursday – include Alice Watson-Smith, who has premium property experience in the UK, South Africa, and currently operates in the French Riviera.
 
Others include Jonathan Hansford, last year named as the best overall operator from 325 Fine & Country offices across the world, and the well-known UK industry figure Sean Newman who has been working in premium property for nearly 20 years across the Oxfordshire, Northamptonshire and Warwickshire markets and has over 50 luxury agents across his network.
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Demand for stamp duty holiday to reignite housing market

Demand for stamp duty holiday to reignite housing market

Rightmove and Knight Frank are today both calling for a series of government incentives to kick-start the market after the Coronavirus lockdown ends – and a stamp duty holiday is the number one suggestion from both companies.
 
In an unusual statement that stretches beyond its usual commentary on prices and demand, Rightmove says an obvious requirement in the immediate future is for the government support for businesses and individuals to remain in place for some time after the lockdown ends “in order to facilitate a quick recovery on many fronts.”
 
Specifically to help buyers and sellers it says a stamp duty holiday, an extension of Help To Buy, and some for of incentive to lenders to offer mortgages would be required. In addition, it says ;enders need to keep offering low deposit mortgages, which would help both the resale and new build sectors of the housing market.
 
“Owners need to be encouraged to move by reducing the costs of moving, and prospective buyers encouraged to buy by reducing the costs of funding their purchase. Given the government’s interventionist strategy to date that might include encouragement for lenders to resume business as usual with their full range of products” suggests Miles Shipside, Rightmove director and housing market analyst.
 
“We need to avoid a repeat of the post-credit-crunch mortgage famine which took from 2008 until the 2013 launch of Help to Buy to bring the mass market back into play with low-deposit mortgages” he adds.
 
Rightmove says lender should also “show forbearance to those in arrears and do not rush to repossess, leading to forced sales.”
 
These would, it fears, lead to reduced property prices, depressed activity and ultimately negative equity for many.
 
The portal says much depends on employment rates, as most buyers need appropriate employment to get a mortgage or to keep up repayments on their existing mortgage. “These are all-important factors influencing market sentiment, and it’s currently hard to predict how that will fluctuate in the months ahead” it admits.
 
Rightmove also says agents have a part to play. “It’s very important that the property industry tries to keep some activity simmering on the back-burner during the lockdown. Then after the end of the full lockdown, it needs a plan to overcome potential buyers’ and sellers’ new-found caution, and to cope with the need to maintain social distancing during visits for marketing, viewing, valuing and surveying” it states.
 
On the PropTech front it says some properties that are for sale or rent have pre-recorded videos available for would-be buyers or tenants to view online.
 
The portal admits it would be highly unusual to buy a property without a physical viewing, but virtual tours help them to work out which ones are worth viewing in person when stay-at-home restrictions are relaxed. Some sellers, guided by their estate agents who are unable to visit, are using mobile phones with their high-quality cameras to record their own videos.
 
To help with this creative approach, it says, the portal has released a new ‘online viewing’ label for agents to highlight properties for sale or to rent that have video tours.
 
“Some innovative agents with good knowledge of the local area are also using live stream video to offer virtual valuations to prospective sellers, in preparation for future marketing” it adds.
 
The portal says that with so few transactions its usual monthly asking price index is effectively redundant but for the record, it reports that the average asking price of the dwindling number of properties coming to market from March 8 to April 11 fell 0.2 per cent to £311,950, with the annual rate of increase from last April being 2.1 per cent.
 
Visits to Rightmove fell by around 40 per cent at the time of the lockdown announcement “but has now started to recover slowly across the last week.”
 
The buoyant start to the year before the lockdown saw the number of sales agreed in the year to March 23 up 11 per cent compared to the same period last year, which was the best start to a year since 2016.
 
It states that most sellers already on the market, and those with a sale already agreed, appear to be continuing with their plans to move once it has been deemed safe enough to do so.
 
Available stock for sale is down only marginally, by 2.6 per cent, “and since the lockdown the level of fall throughs is similar to what we would expect to see in a normal three week period” says Rightmove.
 
Meanwhile Knight Frank makes a similar set of demands on the government.
 
It forecasts that there will be 526,000 fewer home sales in 2020, 350,000 fewer mortgage approvals and overall some £4.4 billion lost in stamp duty accompanied by a loss of at least £1.6 billion in VAT for property-related expenditure not happening during the lockdown.
 
This fall in transaction volumes represents a reduction of 38 per cent on 2019 and is based on the assumption that the current lockdown will remain in place through April and May, with a gradual lifting through June.
 
This fall in activity will be multiplied across the economy. Knight Frank’s estimate is a loss of £7.9 billion in DIY and renovation spend and £395m on removals companies.
 
There will be a wider economic impact, including the loss of employment and general mobility.
 
“Moving house has a clear multiplier effect for the economy” says the agency’s head of London residential research, Tom Bill.
 
“Different-sized businesses in all areas of the economy feel these benefits, which is something the government will take into account when drawing up its post-lockdown stimulus plan.”
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Rightmove downgraded as bank warns of agency closures accelerating

Rightmove downgraded as bank warns of agency closures accelerating

Investment bank RBC Capital has downgraded its rating of Rightmove and is warning that the property market is entering a prolonged downturn with agency closures on the horizon.

The bank has cut Rightmove’s share price target from 550p to 440p.

In an advice note to investors it warns: “The likelihood of an immediate, sharp impact on the property market from Covid-19 extending into a drawn-out period of weakness has increased, in our view. As such, we expect an acceleration in estate agent closures and greater pressure on Rightmove’s Average Revenue Per Agent [ARPA, a key measure] near term.”

It goes on to say: “Rightmove’s pricing power may be undermined by a downturn. Rightmove’s ARPA has increased almost four-fold in the last 10 years and now represents circa five per cent of an agent’s revenue …

“We are concerned that this degree of price rises many not be sustained going forward, particularly in light of negative press coverage Rightmove continues to receive from disgruntled agents and more aggressive competition from number two player Zoopla.”

In its most stark warning to the industry as a whole and the leading portal in particular, the bank continues: “The Covid-19 crisis may act as a catalyst forcing agents out of business and undermining Rightmove’s ability to resume annual seven to 10 per cent prices rises in the future.”

This compares to a 13 per cent fall during the credit crunch over a decade ago.

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Agency using ‘Covid Clauses’ to keep transactions on course

Agency using ‘Covid Clauses’ to keep transactions on course

Agency using ‘Covid Clauses’ to keep transactions on course
 
An estate agency says it’s using so-called Covid Clauses in contracts to keep transactions on course.
 
Knight Frank says it’s writing ‘Coronavirus Event’ clauses into some contracts to protect buyers and sellers from claims that may arise due to delays during the virus outbreak.
 
Such clauses typically cover delays triggered by parties in the buying process having to self-isolate, disruption to Land Registry searches and removals, as well as the ability to transfer money or sign documents.
 
It says completion dates are typically left flexible and can be reviewed on a rolling basis; the use of relatively distant completion dates means that after an agreed point in the future either side can walk away without penalty.
 
A statement from the firm says: “A number of simultaneous exchanges and completions are also taking place, which minimise the risk of anything untoward taking place between these two stages, which are usually several weeks apart. Furthermore, some buyers are paying reduced exchange deposits of five to seven per cent compared to the usual 10 per cent to minimise the financial risk.”
 
The agency says that in terms of its London activities, one in five property sales underway in London when the pandemic struck have fallen through “meaning the vast majority of buyers and sellers have held their nerve.”
 
“You’d be surprised by how much activity there still is. Buyers and sellers can see what is going on in the world and are most are prepared to wait it out. Some sales are falling through but you’d expect that in a normal market” explains James Clarke, head of London sales at Knight Frank.
 
The agency warns that of course the number of new deals starting from scratch is now small, but the pipeline that existed a month ago was buoyed by the new year ‘release’ of pent up
 
The agency says that although some buyers are requesting price reductions to reflect the added uncertainty created by the pandemic, it is happening in an ad hoc manner.
 
“One buyer asked for a reduction to cover their rent between now and whenever the completion date will be” says James Gubbins from Knight Frank’s Mayfair office. “We worked out the buyers’ daily rent and suggested that instead of the reduction the vendor would cover their rent, showing they were prepared to do everything they could to get the deal completed as soon as possible.”
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Good News: Estate agents’ offices will be first to reopen says newspaper

Good News: Estate agents’ offices will be first to reopen says newspaper

Estate agents’ offices will be in the first category of High Street premises to reopen when the lockdown finally ends, newspapers claim this morning.

Although there is a widespread expectation that the lockdown will be extended for another three weeks, agents’ offices – along with coffee shops and restaurants – are today reported to be the first premises likely to be allowed to reopen in early May.

The claim comes in this morning’s Daily Star and Sun newspapers.

They say the recommendation has been made in a report written for the government by Conservative peer Lord Gadhia and Sir Jonathan Symonds, chairman of GlaxoSmithKline.

They suggest a limited re-opening of Britain’s commercial activities with appropriate social distancing measures until an anti-Coronavirus vaccine is widely available in 12 to 18 months time.

The papers say their report states: “The initial focus for reopening the economy should be on sectors that have the greatest multiplier effects with minimum risks – such as coffee shops and restaurants which support agriculture.

“The property market is another that has wide multiplier effects. We need to avoid a stop-start economy which would sap public morale and damage business confidence yet further.”

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Agents Jobs At Risk: furlough scheme must be longer says industry chief

Agents Jobs At Risk: furlough scheme must be longer says industry chief

Agents Jobs At Risk: furlough scheme must be longer says industry chief
 
A high number of agents across the country have been furloughed in recent weeks and are now at risk of losing their jobs if the scheme is not extended beyond the end of May.
 
That’s the view of a senior industry figure – Jon Cooke, chief executive of epropservices which is the parent company of Fine & Country and the Guild of Property Professionals.
 
Cooke warns that while many agency chiefs have made their companies as lean as possible, with the housing market on ‘ice’ and transactions plummeting, many will have to make tough decisions at the end of May if the scheme is not extended.
 
Furloughing, under which the government pays some 80 per cent of staff pay for a three month period under the Coronavirus Job Retention Scheme, was announced a month ago and applies for three months from the start of March.
 
“With a large number of staff furloughed and salary costs greatly reduced, many estate agencies have been able to hunker down and ride out the storm for the short term” says Cooke.
 
“However, during this month, many businesses will be looking at their financial situation and making the decision whether they will be able to keep staff on their payroll beyond the end of May. That is unless the government extends the job retention scheme, a decision that would be essential to a large segment of the industry.”
 
He continues that while the government could start to ease constraints on our freedom of movement as we head into summer, it will likely take some time for the economy, and more particularly, the property sector to bounce back.
 
“Unlike other sectors such as pubs, cafes and restaurants, that should see a relatively fast recovery once restrictions are lifted, the sentiment-driven property sector will take longer to find its feet and will need more support from the government” cautions Cooke.
 
“While it seems that the majority of agents’ transaction pipelines remain intact, delays caused by the lockdown will mean that it will take a while before those transactions are completed and the revenue streams begin to flow once again. If restrictions are lifted on June 1 and transactions resume, it will only be late summer that agents will start to see the fruits of their labours.”
 
This echoes a prediction by Zoopla market analyst Richard Donnell, which we reported on Tuesday, that agents’ revenues would be hurt for some months to come even if the Coronavirus lockdown ends relatively soon.
 
Jon Cooke continues: “There is no doubt that the government has already been crucial in helping estate agents and the economy tread water during the crisis – but if the taps are turned off, the industry and the property market will take a substantial knock. We urge the government to continue taking measures to protect the industry and job roles that will be needed to get people moving again.
 
“Moving home has knock-on advantages to other aspects of the economy, so action taken by the government to reignite the property market after restrictions have relaxed will have a positive impact on the financial health of the country as a whole.”
 
And he concludes that while the government has already forecast an estimated cost of £40 billion to cover the cost of the initial three-month furloughing scheme, “failing to take further measures to protect the industry would be far more financially damaging.”
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Agents quit Rightmove in new spurt of publicity for OnTheMarket

Agents quit Rightmove in new spurt of publicity for OnTheMarket

Two agents have quit Rightmove and taken to social media to give their reasons.

One is the 12-branch Andrew Craig agency which serves Tyneside, Wearside and County Durham handling sales, lettings, auctions, property management, conveyancing, surveying and mortgages.

In a tweet posted by OnTheMarket the agency – which has quit Zoopla as well as Rightmove – says: “I have cancelled my contracts with both Rightmove and Zoopla to fully support OnTheMarket because we think it’s the best value portal by far and because it’s agent-backed.”

And another OnTheMarket tweet quotes Simon Fisher of the three-branch Absolute Sales & Lettings agency in Torbay as saying: “We cancelled our contract with Rightmove just before their offer of a deferred payment scheme. We decided they hadn’t looked after agents and had become too far removed from what they set out to do.”

The OnTheMarket website says: “More and more agents are saying that OnTheMarket is generating a good flow of quality leads at a reasonable cost. As agents review their portal choices, many have cancelled other higher cost portal contracts and many are signing up to list with OnTheMarket.”

The most recent update on OTM’s members came from the portal in Christmas week last year, at which point it said it had “over 12,500 agent offices” – there has been no more recent update.

The latest defections come as the Say No To Rightmove campaign, set up by Robert Sargent, chief executive of the Acorn Group, has reached some 1,100 branch members.

Sargent’s company has 36 branches across London and the south east and spends close to £500,000 on fees to the portal.

The portal debate has become increasingly heated since the start of the Coronavirus lockdown with disputes over the varying offers made to agents by Rightmove, Zoopla and OTM and challenges by newer portals such as free-to-list Residential People and yet-to-launch sites called OpenBrix and Homesearch.

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PropTech Today: Ignore 2024, discover 11 home truths happening now

PropTech Today: Ignore 2024, discover 11 home truths happening now

On April 4, EAT published a piece titled: ‘It’s 2024: what will the industry look like, post corona-virus’. To me, this was a completely irrelevant article and there was simply no point in reading it – although well over 3,500 of you have done so.

Okay, let me retract the word ‘completely’ but, at this time, we should be concerned with what the industry will look like on June 24 not 2024. That is what is currently important to each and every one of you. This will be a date where more will be known about the initial short-term impact of this tragic situation we all find ourselves in. 2024 is currently irrelevant.

Let me start with a light-hearted observation. I think we all recognise that the status quo has been blown away. We are seeing, on the one hand, many adopting a much more technological and collaborative aspect of our business and home lives.

Virtual viewings are booming. Virtual house parties, discos, pub quizzes and poker evenings are commonplace. We are learning new ways of communicating and working.

On the other hand, we are all becoming more traditional. I suspect many of you will be baking bread at home, some will be growing seeds.

Others might even be investigating how to make pasta and start drawing again. We have been going out for family walks (when we are not trying to work out how to balance home and work). Doing jigsaw puzzles together – and the occasional game on the Xbox or PlayStation.

What is changing is the middle ground, the status quo. We are upskilling our knowledge of the traditional and the technological. The normal has disappeared. The way we have always done things has changed. We are gaining a sense of control that has been missing for some time.

I wanted, therefore, to use this column to give you some home truths on what I see as happening today. Some you may like. Some you may not. Whichever way, this is a mish-mash of thoughts and feelings I have at the moment and not in any particular order.

1. Technology is forcing us to rethink what we actually ‘do’

There are positives to come out of this situation – I felt this was an excellent and practical example of some changes that are coming into effect right now. Property management is changing, viewings are changing and so are planning meetings and Merger & Acquisition discussions. A positive look at some possible changes.

2. Furloughing is only a short-term positive step

This is where it takes a turn. Furloughing for me is not a positive step. Understand what this really means. Yes, it is putting the role into hibernation. You will get paid for not doing a great deal. Great. But coming out of that hibernation doesn’t mean you spring out of bed. The business landscape will come out of hibernation at different times; it will be sleepy and sluggish for a considerable period.

I can’t help but think there is going to be a huge wake-up call (no pun intended) for a lot of back and front office staff in the next eight weeks. It will not be pretty.

3. What you do during your furlough will define the next steps in your career

If point two comes true, steps you take during your furlough will mean the difference between having a career and not. Some of you will quite rightly be celebrating your paid time off. A well deserved break, no doubt. But, don’t relax. Learn a language, learn a new skill but always have one eye on your career. What will you do to advance it (or change it completely!?).

People will ask you questions like ‘How did you spend your furlough?’ in future interviews. Investors will quiz PropTech people on how they changed their business plans in this period. Having an answer and showing what you did will show leadership and ownership and that you understand the opportunity presented.

4. A new portal is not the answer

Articles I have read this last week are delighting in new portals launching. 2,500 branches are interested in Homesearch, apparently (interested means nothing, by the way) and Openbrix, 18 months in the making, is nearly ready. These are not going to be able to compete for the foreseeable future with Rightmove, Zoopla or OnTheMarket, if ever.

They are missing the point. It isn’t just about pricing. It is about what that pricing gives access to. A £155 per branch subscription model till 2025 will still be expensive, especially with no audience for a considerable period of time. We all know that. Despite the challenges those existing portals all face, they are still going to be the leading marketing channel – whether you like it or not – for some time.

Having said that, these existing portals need also realise the pricing models in place now will not reflect the new normal coronavirus is creating. They need to adapt, and quickly, because of factors I will now discuss…

5. Offices will shut

Yes, home working is tough. Yes, we may want to shut our children in a room and lock the door. Yes, we may want to work in our pyjamas. Yes, we may miss our co-workers. But we are in control. We have flexibility. We have time. Most will realise the benefits of working with more flexibility.

High streets will never be the same again as agents finally realise there is a better way (and they have an excuse to work differently).

6. Brokers and self-employed agents will become the norm

With inevitable layoffs, these models will quickly become more normal and accepted. Consumers will want to work with individuals and won’t think twice because of what has just happened. Service will become the absolute essential aspect of any home transaction. Purchases will be a far more personal experience between the buyer, vendor and ‘agent’.

7. Online agents and iBuyers will struggle

I might suggest there will be a short-term blip of possible survival here for these models. People will panic and want to shift quickly or lockdown will mean they realise now that their home is not fit for purpose. They will realise (like baking bread and making pasta) they can self-serve and want to try. They will also be craving for the certainty that an iBuyer model gives them.

This will be shortlived as they will firstly want human-to-human interaction and feel reassured about decisions being made. iBuyers will not be operating at this time. The algorithms used to predict price viability will simply not be built with pandemics in mind. They might, however, be ready for the next one…End of story.

8. Management should be showing leadership

This is the time where you will see whether there is true leadership in your organisations. Firstly, they should have been decisive, transparent and guided you through the first process of what is a difficult situation. Now, they should be sitting back and thinking. If we started again, how would we build the best ‘estate agency’.

There has been no better time for people to take their brains out of their everyday business operations and reflect. How is this going to change the organisation? Are our fees reasonable or do we need to change how it all works? How are we going to look after this has all settled down?

Estate agents should no longer be carbon copies of each other. Like political parties, they need to be clear of what they offer and why. They need to share their values and why people should work with them.

9. What is the purpose of membership organisations now?

As a founding director of the UK PropTech Association, I know this is something we have taken seriously ourselves. What is the purpose of the association? What is our role now? Many of you pay membership fees to these organisations to help you. What are they doing for you now? It is going to impact them as much as it will be impacting you. Already some are starting to show their true colours, perhaps – read this about ARLA.

At the UKPA, we realised this is the time the property industry needs us most as digital transformation has been pushed from a 10-year process to a 10-week process! The question you need to ask your associations is what their relevance is now? How are they going to help you and what guidance can they give?

10.  Conferences will simply not happen in 2020

ARLA has made decisions as referenced above – it will be a slow car crash of a PR disaster for many conferences if they continue this way. We have to realise that there will not be any conferences this year.

If they do go ahead, by a small miracle that we come out of this okay and are not 6ft under, I might suggest the value proposition is no longer the same. Meetings will be cautious, numbers will be down and so the opportunities for being an attendee or exhibitor is just not there this year.

11. There is no better time to be a friend to your customers

Aside from all the difficulties we are all going to face, there is no better time to prove that you care. Over the past number of years, you will have helped people to move – whether renting or buying – a process that is the most stressful period of their lives along with death and divorce.

This is no doubt going to be another stressful time for them again. Why don’t you simply see how they are getting on? They will be at home. They might appreciate now, more than ever, a simple call to see how they are. If you are helping out in the community, tell them about it, see if they want to help to.

Above all else, this is a time to come together. A time to reflect, realise things won’t be the same and to create a new normal that, while it might be tricky for a period, will benefit you in the long-term. Therefore, this isn’t about 2024 at all. Quite the opposite. Lets focus on June 24 first and make sure we all get there.

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First ‘virus’ survey shows sellers expecting a five-month delay

First 'virus' survey shows sellers expecting a five-month delay

What is thought to be the first survey of sellers since the start of the Coronavirus outbreak suggests that they anticipate a five-month delay to their plans.
 
This means that the usual spring market surge may take place in late summer, assuming restrictions allow something like normal business to resume.
 
A survey conducted for online mortgage firm Trussle by polling organisation Censuswide shows that 49 per cent of those planning to buy decided to stop looking for a new home as a result of the lockdown.
 
However, fewer sellers pulled the plug with just 20 per cent deciding to halt proceedings on the sale of their home.
 
Overall, both would-be buyers and would-be sellers expect to defer their property plans for an average of just over five months.
 
“With the government’s latest plea discouraging buyers from moving house, It’s entirely understandable that people are putting off their housing plans” says Trussle chief executive Ian Larkin.
 
“At a time of financial uncertainty, it’s a good time to think about your personal outgoings. We know that people could save an average of £4,100 per year just by switching their mortgage to a better deal.
 
“During these uncertain times, people are taking steps to protect themselves financially. Reducing mortgage payments, the biggest monthly outgoing most homeowners will face, is a priority for many.”
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Furlough pay – some agents’ commission can be included

Furlough pay - some agents’ commission can be included

 

 

 

 

 

 

 

 

 

 

The government has amended the eligibility criteria and will allow some agents’ commission payments to be included in claims for Furloughed Pay.

An announcement came via NAEA and ARLA Propertymark which has received clarification from the government. A joint NAEA/ARLA statement says:

The clarification states that agents will be able to claim for any regular payments that they are obliged to pay employees including

– wages;

– past overtime;

– fees;

– compulsory commission payments.

Discretionary bonuses and commission payments however, and non-cash payments cannot be included.

In circumstances where the employee has been employed for 12 months or more, you can claim the highest of either:

– the same month’s earning from the previous year;

– average monthly earnings for the 2019-2020 tax year.

Where the employee has been employed for less than 12 months, employers can claim for 80% of their average monthly earnings since they started work.

The scheme is in place from 1 March 2020 for 3 months and may be extended if necessary. To be eligible for the grant, a furloughed employee must have been enrolled on the company’s PAYE payroll and cannot undertake work for, or on behalf of, the organisation. Staff who are working reduced hours are not eligible for pay to be reimbursed.

Where an employee has been made redundant on or after 28 February 2020, agents can re-employ them, put them on furlough and claim for their wages through the scheme.

A furloughed employee is free to take part in voluntary work if this is in line with public health guidance, as long as they are not providing services for their employer.

Furloughed employees are free to participate in training and this is encouraged as long as it is not part of work to generate income for the organisation within the furlough period.