Tag: Property for Sale

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Mystery surrounds top agents quitting firm’s landmark branch

Mystery surrounds top agents quitting firm's landmark branch

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.

“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.”

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Stamp Duty change set to take centre stage in Budget next week

Stamp Duty change set to take centre stage in Budget next week

Increasing numbers of reports suggest that the government will use next week’s Budget to confirm a three per cent stamp duty surcharge on the purchase of homes by non-UK tax residents.

The new surcharge – strongly hinted at by the government for many months – would be on top of existing stamp duty on a property, and on top of the current three per cent additional homes surcharge.

The Financial Times, citing well-placed sources in The Treasury, suggest this measure will be finally confirmed by new Chancellor Rishi Sunak in his first Budget on March 11.

Leading PropTech entrepreneur Neil Cobbold, who is chief sales officer at automated payment platform PayProp, says this new stamp duty will be welcomed by domestic investors who may see competition from their overseas counterparts diminish over the coming months.

“It’s likely to have the biggest effect in the capital, where the government estimates that one in eight new London homes were bought by non-UK residents between 2014 and 2016. The surcharge was previously mooted at one per cent but its increase to three per cent will certainly act as a deterrent” he says.

But Cobbold warns: “Tenants in large English cities could suffer in the long-term if the additional tax burden leads to a fall in overseas investors and subsequently the number of rental properties available” says Cobbold.”

He adds that while there has in the recent past been much speculation surrounding wider stamp duty changes, the government appears to have put those on ice.

“Stamp duty is a hot button for consumers and property professionals, so the calls to reform the system are always plentiful in the lead up to a Budget. Boris Johnson has previously said that stamp duty rates are ‘absurdly high’ so there could be changes later in his tenure.”

“In the meantime, property professionals and consumer groups will continue to lobby politicians to reduce the pressure. Reconsidering the three per cent surcharge on additional homes and the tax rates which affect the very top end of the market would be a good first step” he explains.

Richard Donnell, director of research and insight at Zoopla, also wantsa to see SDLT reform in next week’s Budget.

“It’s time for the Chancellor to turn his attention to the core housing market and review the price bands and five per cent stamp duty rate that covers averaged priced homes across large parts of London and the commuter belt. No government wants to cut taxes indiscriminately, particularly when losses could be high. However, any cut to the rate of stamp duty could stimulate much-needed marketed activity in southern England in particular” says Donnell.

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Trying to beat Rightmove is “at best expensive, at worst futile“

Trying to beat Rightmove is “at best expensive, at worst futile“

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.”

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Purplebricks banked £18m fees for unsold homes in 2019 – claim

Purplebricks banked £18m fees for unsold homes in 2019 - claim

Purplebricks banked more than £18m in fees for thousands of homes it did not sell last year according to this morning’s Daily Telegraph.

It says the agency withdrew 21,380 listings in 2019 as market jitters forced many buyers and sellers to stay put.

The paper cites housing market data firm TwentyCi as the source of the figures.

Purplebricks is quoted in the article saying: “We are very confident our customers understand our upfront fee model and know it gives them a much higher chance of selling, for a much lower cost.”

The agency is also quoted as suggesting that it had saved its successful customers over £150m in fees they would otherwise have paid to traditional agents

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Online agent who swindled pensioner of £5,000 escapes jail

Online agent who swindled pensioner of £5,000 escapes jail

An estate agent who swindled a 69 year old woman out of £5,000 has escaped jail – and has been ordered to repay the sum to the pensioner.

Claire Ainsworth’s UK Online agency was instructed by elderly owner Jennifer Scott to sell her house; Ainsworth brokered a sale to a local builder but told the vendor that the purchaser was unwilling to pay over £80,000.

In reality, the builder had said the highest price he would pay was £85,000.

Local media in Burnley report that prosecutor Stephen Parker told a court case: “She told Ms Scott that [the builder] Mr Walker wasn’t prepared to go any higher than £80,000 and Ms Scott reluctantly agreed to sell the property for that price.

 

However she told Mr Walker that the bottom price was £85,000, but that £80,000 would go through the books and £5,000 was to be paid in cash. Mr Walker paid that £5,000 in cash to the defendant believing that it was going to be given to Ms Scott.”

In reality the vendor knew nothing of the £5,000 until she was talking with the buyer, later.

The matter was reported to the police and now Ainsworth, from Oswaldtwistle – who denied a charge of fraud by false representation – was convicted in her absence when she failed to turn up on the day of the trial.

She had failed in a bid to have the case re-opened.

Defending, Christopher Hudson said his client was a woman of previous good character who was an “intrinsically decent and talented young woman” who bought her own first house at 20 and set up her own agency at 30.

She added: “This was a mean offence and the impact on your victim has been considerable. It isn’t just the money for her. She trusted you. You betrayed that trust.”

Ainsworth was ordered to pay the vendor £5,000 compensation within six months and complete 200 hours’ unpaid work.

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Referral Fees: No change “for a while” but reform coming

Referral Fees: No change “for a while” but reform coming

The Trading Standards report on the future of referral fees is almost completed and will be sent to government next week.

However, James Munro – head of the National Trading Standards Estate and Letting Agent Team and author of the report – has told EAT that it will “take a while” for government to decide next steps.

Munro says the report will be a summary of findings based on NTSELAT’s assessment of referral fee transparency over the past 12 months, following the introduction of new guidelines.

The report will include a set of options for government to act on – these are likely to range from amending existing Trading Standards regulations, which could happen within months, to an outright ban which would require legislation.

The latter course – if chosen by government – is likely to take some years, says Munro, as it would involve substantial Parliamentary time just as priority is being given to Brexit and related trade issues.

A further option could be for NTSELAT to pursue individual agents seen to be flouting transparency on referral fees with specific investigations: if this problem grew to a wider number of agencies, a warning could come from NTSELAT to the agency industry as a whole threatening specific legislation if the problem continued.

Munro told EAT that while some agents have been hugely cooperative in telling consumers about fees – he singled out Foxtons and Hunters. But other agencies, often smaller ones, made it clear to NTSELAT that they were not informing consumers about fees. “That beggars belief” he said.

In February 2019 NTSELAT told agents that ”failure to disclose referral arrangements may render an estate agent liable for criminal prosecution under the CPRs and/or action by NTSELAT for warning or prohibition.”

Guidance sent to agents at that time outlined how they should inform consumers of any referral fees they received for recommending the likes of conveyancing, legal services or other connected services.

That guidance was produced by NTSELAT with assistance from NAEA Propertymark, The Property Ombudsman, the Property Redress Scheme, the Guild of Property Professionals and the Royal Institution of Chartered Surveyors.

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Transaction times slashed and fall-throughs cut by new agents toolkit

Transaction times slashed and fall-throughs cut by new agents toolkit

The National Association of Estate Agents has launched its Sales Protocol Toolkit, in a bid to reduce fall-throughs and dramatically improve transaction times.

The kit, introduced at the NAEA conference yesterday, has been road tested with 200 completed transactions in the Buckinghamshire, Bedfordshire and Northamptonshire areas with startling results.

The average transaction time dropped from as much as 40 weeks to only eight weeks, but the NAEA’s ultimate target is to get that down to a mere 14 days.

The association worked with other agents, conveyancers, the Law Society, The Property Ombudsman and NTSELAT to finesse the documents involved in the pack.

Simon Wilkinson, a partner at agency Wilkinson in Leighton Buzzard, is the NAEA board member who has steered through the pilot programme.

In an interview with Estate Agent Today at the conference he said that the launch of the toolkit marks the start of agents across the country operating it.

It works like this:

– a vendor is emailed a 16 page Property Information Questionnaire which they can complete either before the agent pays a home visit to measure and take photographs, or work through it with the agent at the property. This helps get the property ‘market ready’;

– at the same time the vendor is encouraged to instruct a conveyancer who will assist the vendor getting title deeds and other up-front information and identify problems – missing building regs documents and the like;

– once a prospective buyer has expressed interest, he or she then receives this upfront information, allowing them and their conveyancer to identify areas of concern – if any – or to have comfort that the appropriate documentation is in place;

– a single-page Declaration of Offer subject to contract is then completed by the would-be buyer, giving conveyancer details, status on the sale of their existing property, and details of funding to purchase the vendor’s home;

– a single-page Memorandum of Sale is sent to all parties as soon as a sale is agreed in principle. This would include details of vendor and buyer, chain details, a link to property details and additional information about the property.

“In time – some time off but it will happen eventually – as much as 80 per cent of the details in this online paperwork can be automatically completed by the likes of the Land Registry’s Digital Street project and by portals which will carry a lot of this basic information on every property. The systems will be linked up” says Wilkinson.

The pack will now be circulated to NAEA members and has been designed to comply with CPRs.

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Rightmove loses agents as latest figures show huge rise in fees and profits

Rightmove loses agents as latest figures show huge rise in fees and profits

Rightmove has released another stonking set of results – but there are signs that some agents are defecting from the ever-more-expensive portal.

Figures released to shareholders this morning relating to the full year of 2019 show revenue, underlying profit and operating profit all up eight per cent – and earnings per share up no less than 10 per cent.

The key Average Revenue Per Advertiser or ARPA – how much each branch or developer pays per month – is up £83 to £1,088.

However for the first time there is a drop in membership numbers over the year.

There’s been a three per cent fall from 20,454 in December 2018 to 19,809 a few weeks ago at the end of 2019.

The breakdown shows that the portal listed 16,347 estate agency branches last year, down from 17,328 in 2018; developer numbers rose from 3,126 in 2018 to 3,462 last year.

Rightmove tells shareholders this is “reflecting a decline in mainly low-stock agency branches offset by strong growth in New Homes development numbers.”

In a statement accompanying the figures, chief executive Peter Brooks-Johnson says: “Rightmove is synonymous with home moving, with 2019 being the ninth year in a row more people searched on Google for Rightmove than for property.

“We continue to innovate, not only for home hunters, but also to help property professionals become more efficient and more resilient to a rapidly changing environment.

“Our culture of restlessness has led to the development of a number of innovative solutions which allow our professional customers to market to by far the largest audience in the UK.

“January 2020 was our busiest month ever with more than 152m visits and that trend has continued as we’ve recorded our five busiest days ever in February.

“I’m pleased that many of our customers who are seeing opportunity are choosing to invest in our digital solutions to grow their businesses.

“By working with our customers, 2019 has yet again demonstrated that Rightmove is a business which can continue to grow in uncertain times.”

In a section of this morning’s report, issued on the London Stock Exchange RNS system, it says of agents:

“Winning the right to an instruction to sell or let a property is critical to an agent’s success. 

“Our premium packages, Enhanced and Optimiser, help our customers to generate more opportunities to win instructions cost effectively. The packages include branding and property promotion solutions to boost agents’ performance in the ‘awareness’ stage of the marketing funnel, while our popular Local Valuation Alert and Rightmove Discover products fast-track agents to the ‘consideration’ stage. 

“We continue to enhance the performance of these products to keep them at the forefront of digital marketing for our customers. Following a number of enhancements, Local Valuation Alert and Rightmove Discover delivered over 20 per cent more leads from people asking for a valuation on their home in 2019 over last year.

“Against the backdrop of a cautious housing marketplace estate agents continue to recognise the value of our additional marketing products and packages with penetration of the Enhanced and Optimiser packages reaching 38 per cent of independent estate agency customers up from 27 per cent in December 2018.”

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Social Media: Agent sells home off-market via Instagram teaser images

Social Media: Agent sells home off-market via Instagram teaser images

An estate agent has sold a home off-market by posting teaser photographs on Instagram.

The buyer – who was in the French Alps on holiday when she saw the social media posts for the property in the Warwickshire village of Lapworth – was attracted by a series of teaser photographs.

These were not of the property itself, nor even a general view of its interior, but were instead so-called ‘teaser shots’ – in this case, the first images were of goldfish in an antique watering can sitting on wooden decking. The caption said the photos were from a property going on sale soon in Lapworth.

The buyer has told local media that it was these posts that triggered her interest; she has now completed on the property.

“I liked their pictures and I follow hashtags like #victorianterrace and #darkdecor. I’d also started following the #Lapworth hashtag too as I knew that was the village we wanted to be in. I wasn’t desperate to move but it felt too good an opportunity to miss. The post on Instagram for me was the deciding factor” she says.

The agency behind the Instagram posts is Mr and Mrs Clarke – a hybrid with the business model of using self-employed or freelance agents operating under the same brand. It’s six years old and has featured frequently on Estate Agent Today, most recently here.

Paul Clarke, the agency’s founder, says 50 per cent of the houses which are pictured on Instagram attract enquires.

He’s told Birmingham  Live: “Agents have done this sort of off-market selling for ages but through databases and email lists. With Instagram, you can make it more aesthetically pleasing and interesting.

“There was a picture we put on Instagram that featured a cockapoo running through a living room. Within hours, a lady in her early seventies had sent a message. She viewed it and offered the asking price before the house hit the market.”

Amongst the tips he has suggested for publicising homes for sale via Instagram is to use hashtags.

“People follow hashtags and you can create a buzz around a picture by using relevant and popular hashtags. It might be a roaring fire in the winter, some flowers popping out of the ground in spring or it could be an architectural feature of the home. For these images use useful, descriptive hashtags like #springgarden #featurefireplace #interiordesign.”

And he urges the photographs to be taken and selected with a view to making prospective buyers smile. He suggests: “Homes are places to be enjoyed and Instagram is a great place to share light hearted moments. If something about your home brings a smile to your face then it’s likely to do the same for your viewer, so have fun with it. You’re more likely to get engagement with something that draws a smile.”

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Agents asked to confess if their firm has been price-fixing

Agents asked to confess if their firm has been price-fixing

A new call has been issued this morning by the Competition and Markets Authority for estate agents to confess if their business has been involved in a price fixing cartel.

In a statement released this morning the CMA says: “If you think your business has been involved in illegal activity, you should notify the CMA as soon as possible – you may benefit from lenient treatment by being the first to come forward to the CMA.

“We also recommend that you seek independent, legal advice.

“If you have information on other companies in your industry that may have been involved in an anti-competitive arrangement, report it to us.”

The CMA’s announcement this morning makes the call after expressing concern that there have been three cartel issues in the estate agency industry in recent years.

The latest was in December 2019 when four estate agents were found to have broken competition law by agreeing to fix and maintain a minimum level of commission fees to be charged for the sale of residential properties over a period of almost seven years.

The agents were fined a total of £605,519.

This morning’s statement from the CMA says: “Competition law exists to ensure businesses compete fairly and customers are protected from getting ripped off. Price fixing cartels are among the most serious kinds of anti-competitive behaviour as they cheat customers by forcing up prices and reducing quality and choice.”

And referring to the most recent case it says: ”By fixing minimum levels of commission rates, the estate agents denied local people selling their homes the chance of getting the best possible deal.”

And the statement goes on to issue advice to agents, saying:

– Do not discuss what you or your competitors intend to charge;

– Just receiving or sharing sensitive commercial information is likely to be illegal;

– Make it very clear you will not participate in illegal arrangements or discussions about them and take active steps to distance yourself from the outset;

– All anti-competitive arrangements – written or verbal, formal or informal – are equally illegal, and the CMA has sophisticated means of tracking down evidence;

– There are no excuses for illegal anti-competitive activity – ignorance of the law is not one either;

– If two competitors participate in an anti-competitive arrangement, this is sufficient to make it illegal – it doesn’t matter if not all competitors in the market participate;

– If you are a small business competition law still applies to you.