Tag: Property

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Sellers desert online agents for High Street rivals, says Zoopla

Sellers desert online agents for High Street rivals, says Zoopla

Almost eight in 10 sellers have instructed High Street agents in the past year – a significantly higher figure than 12 months ago.

The study involved 6,000 people and was conducted for Zoopla; specifically it shows 79 per cent instructed High Street agents in 2019, whereas in 2018 the figure was 66 per cent.

Some 20 per cent of the same instructed online agents – although Zoopla’s research shows only nine per cent actually sold through online firms, suggesting the rest went on to commission High Street companies.

“Estate agency as an industry is increasingly diverse and the emergence of onlines and hybrids have certainly given the market a new dimension. That said, with research indicating High Street agents steadfast in their appeal, it suggests all operators are working to differentiate and add value to consumers whether it’s through local knowledge, sage market insight or competitive fees” says Zoopla’s chief commercial officer, Andy Marshall.

“We are also seeing agents actively diversify the services that they offer vendors. Not only does this reap financial rewards for their businesses, but also provides a one-stop shop and eases pain points for buyers and sellers” he adds.

Regionally, High Street agents are most popular in the South West, with 83 per cent of vendors using a traditional firm in 2019. East Anglia and Wales follow with 82 per cent. Scotland saw the lowest proportion of sellers opting for a High Street agent – 64 per cent.

The portal’s survey also suggests that, aside from their core business, agents are diversifying revenue streams.

Some 43 per cent are now offering mortgage advice and brokering, with 42 per cent providing legal services.

The Zoopla survey – conducted before this week’s government statements about possible disruption in the near future caused by Coronavirus – also shows 52 per cent of agents anticipating more properties coming on to the market in 2020.

This is significantly higher than the 39 per cent recorded in 2018.

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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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Where are BTL landlords most likely to buy property in the next 12 months?

Where are BTL landlords most likely to buy property in the next 12 months?

Buy to-to-let landlords across the Midlands are most likely to acquire new property over the next 12 months, new research show.

A survey of almost 800 landlords conducted by BVA BDRC, on behalf of Paragon, found that almost a quarter – 24% – of landlords in the East Midlands plan to purchase property in the next 12 months, with 22% of West Midlands landlords also looking to add to their portfolio.

Other regions that showed high demand for property from buy-to-let investors included the North East and Yorkshire & Humber, with 19% of landlords in both regions looking to purchase.

Landlords in the South West (8%) and central London (9%) were the least likely to purchase property over the period.

Overall, 14% of landlords plan to purchase property, with the average landlord acquiring three new properties.

More than half – 52% – of those looking to buy property are targeting terraced housing, followed by semi-detached property (32%) and flats (26%).

A quarter of landlords also intend to buy a HMO during the year, reflecting the growing popularity of this property type, particularly amongst professional, portfolio landlords.

% of landlords planning to increase portfolio in next 12 months
East of England 13
East Midlands 24
London (Central) 9
London (Outer) 17
North East 19
North West 13
South East 15
South West 8
Wales 10
West Midlands 22
Yorkshire and Humber 19

Those with larger portfolios expressed a greater desire to buy property, with the research showing that 8% of landlords with one property planning to purchase during the year, rising to 20% for those with 20 or more.

Meanwhile, 12% of landlords with between two-three properties said they will buy, whilst the proportion of landlords with between four-five (15%), six-ten (14%) and 11-19 (14%) properties looking to purchase was broadly balanced.

Richard Rowntree, Paragon’s managing director of mortgages, said: “The proportion of landlords looking to purchase new property has been largely consistent over the past two years, but we are seeing regional variations and also a greater propensity for portfolio landlords to invest in property.

“Portfolio landlords have adopted a number of strategies to adapt to the tax and regulatory changes of recent years and we’re seeing trends such as these landlords buying stock from smaller-scale participants as they exit the market, or targeting higher yielding properties, such as HMOs.”

The researched showed that nearly two thirds (63%) of landlords plan to fund their next purchase with a buy-to-let mortgage, whilst 17% will release equity from existing properties to generate purchase funds. Meanwhile, 18% said they would purchase property outright using previously invested funds.

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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.