Spring is officially with us and the days are getting longer. Traditional signs that herald the arrival of the spring/summer market and the early signs are for a reasonably positive period of activity in the housing market.
The first quarter of 2017 has generally been a little more buoyant than anticipated and the market has shown resilience in the face of uncertainty surrounding Brexit. However, volumes are down on previous years and with Article 50 having now been triggered, there is bound to be some uncertainty in the market as we begin the long journey towards leaving the EU.
The market is sensitive on price and properties need to be sensibly priced to attract interest but, where sellers and landlords are being realistic, considerable interest and numbers of transactions are resulting. A shortage of supply does, of course, tend to ensure that prices remain robust but price inflation has almost come to a halt and, in higher price ranges (due to higher stamp duty) and closer to London (due to an overheated market) the position has edged downwards or been flat for some time.
Interest rates remain at historic lows – the Bank of England base rate (currently 0.25%) has been at or below 1% since February 2009 – and mortgage costs reflect this low interest rate economy and look just as likely to go down as up in the coming months.
Housebuilding numbers – whilst still well below the numbers needed across the country – are rising and the Government Help 2 Buy initiatives (both on new homes and ISAs) are seeing a strong take up. Over 1 million people have now used the various Help 2 Buy schemes to assist them with house buying since their introduction. Increased housebuilding is also helping generate more affordable homes and greater numbers of homes built to rent.
Of course the next few years will see some twists and turns as we exit the European Union but undoubtedly as some doors become more difficult to walk through, others will open and new opportunities will present themselves.
The amount of property owned outright by the over 65s now exceeds a value of £925 billion. No wonder we are seeing an increasing amount of help for younger generations not just coming from the bank of mum and dad but also of grandma and granddad! Asset rich older people are becoming more and more inclined to release equity for both themselves and their families and the equity release market is a fast growing market with reports indicating that “lifetime mortgage” volumes increased by 22% in 2016.
Key to a successful sales or letting transaction remains sensible pricing coupled with excellent marketing. This remains the domain of quality estate agents who know their market and the people within it. They do however need to demonstrate this “added value” through excellent communication and demonstration of their points of differentiation.
Cheap, fixed fee, “execution only” service offerings where the “agent” gets paid for putting the property on the market rather than selling or letting it, may look attractive but can be very costly. The cheapest fee is usually the agent who delivers the best service, gets you the best price and a transaction that meets your needs in terms of timescale.
The challenge for the online operators will be in demonstrating that they are getting tangible results for their clients and that their low fee models are sustainable.
There is certainly a battle in the “High Street” and traditional operators must change to meet the challenges of the market. Of course there will be “winners” and “losers” as there will be amongst the many new offerings coming to the market.
One thing is for certain – standing still is going backwards. Never a dull moment in the property industry!
Michael Day MBA FRICS FNAEA
Managing Director – Integra Property Services
Michael Day is a well-known figure with over 40 years in the property industry (he says he started when he was three!). He is a Chartered Surveyor and was the inaugural Chairman of the RICS Residential Faculty. He is also a Fellow of the NAEA and holds an MBA from Reading University.
Having held Partner and Director positions at A C Frost, Prudential and Connells, Michael formed Integra Property Services in 2003 providing a range of business consulting, mentoring, training and marketing services to the property industry.
His courses on Consumer Protection Regulation and Money Laundering Regulation have been attended by over 1000 delegates in the last two years and he is the official compliance contributor for leading industry publication Property Industry Eye.
Integra Property Services won the Silver award in the National Supplier of the Year category at the ESTAS in 2012 having also won ESTAS in 2006 and 2008. Integra were finalists as Supplier of the Year in the 2013, 2014, 2015 and 2016 Negotiator Magazine awards.
Michael’s client list is a “who’s who” of the estate agency world and includes the winners of literally hundreds of major industry awards. He says that either they are mixing with the right people or he is!
A leading member of the property industry’s “Twitterati” Michael is often called upon to speak at seminars and conferences. He is also an experienced judge at many industry awards and is a regular contributor to the trade media.
Away from business, Michael is a weekend warrior musician, avid gig attender, Watford supporter and besotted grandfather to three gorgeous girls and two handsome grandsons.
Michael can be contacted by phone on 01753 889287 or by email at email@example.com
The Integra website can be found at www.integra-ps.com