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Government shake up of house price indices
The UK Government has just announced that it has asked the Office of National Statistics to investigate the coherence and comparability of house price indices..
Tax payers are currently funding two indices, produced by the Department of Communities and Local Government (DCLG) and the Land Registry.
Add in the indices produced by the RICS, major estate agents, property portals and building societies and you can begin to see why the general public gets confused as to the state of the market.
I’m all for market clarity and a shake up in the way that property is marketed and analysed.
Nobody will ever be able to predict the future of house prices but we certainly should be able to say what they have done with some degree of accuracy and consistency.
If you have a view on the usefulness of any of the current indices please do let us know and we’ll be sure to pass it on to Messieurs Cameron and Clegg.
Author Biography
Graham Downie has 25 years international property experience including longs stints at both Savills & Chesterton. In 2003 he moved to Cognac, SW France where he now practices as a private client buying agent. He also offers freelance marketing & writing services to companies servicing the property industry.
email: info@grahamdownie.com
twitter: @cognacproperty
Online Marketing for Estate Agents: Pay per Click
Estate Agency is changing. The world is changing. No matter what your stance or perspective you can’t disagree with this basic premise.
However for those at the forefront of the online migration the pace may seem faster than to those Estate Agents whose business model has remained more or less the same for the last 10 years. For those bringing up the rear the greatest changes will be the use of an online property portal to reach buyers – probably Rightmove and no other – and the use of email instead of fax and post.
I sat in an Estate Agent’s office a few months ago and asked what a secretary was doing – she was entering property details in triplicate – to three seperate systems. It doesn’t take A level maths to work out that a 66% time saving could be made by the introduction of a smarter system.
One of the simplest online advertising tools for an Estate Agent that doesn’t want to rely solely on Rightmove for it’s online marketing is Pay Per Click.
Essentially Pay Per Click (PPC) is a form of online advertising where you set a budget of say £20/day and your advert is displayed all over the internet – normally alongside search results (for example in Google) and on other websites that relate to your subject. When a user clicks on your advert and is redirected to your website, you pay for that click. Hence the name Pay Per Click.
Google Pay Per click advertising is displayed above and beside 'natural' search results in a Google search
The most favoured system is Google Adwords – a very clever system which a new user could set up and use in just a few hours, but that has the tools and features that an advanced user requires.
In our next article in this series we’ll show you how to set up a basic Google Adwords Pay Per Click online advertising campaign in a few simple steps.
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How to choose an Estate Agent
Finding the right estate agent can be a daunting task. After all you’re entrusting them with the sale of your largest assest and the difference between a good one and a bad one could be weeks of stress and thousands of pounds.
Choosing an Esatte Agent can be tricky
If you’ve recently bought a house then you’ll have an insight into how the local agents treated you as a potential buyer and what they did that you liked and what you didn’t.
It’s a bit like recruitment in many ways – you know they roughly fit the bill, you interview them and some you will instantly like or dislike and you will have some in the middle that are hard to differentiate – after all they all give roughly the same patter and attempt to tell you what they think you want to hear.
So how do you assess them?
Start by getting clear on your needs and the qualities that you want in the person/ company that you want to work with. What are your aims? A fast sale, the highest price, a personal service, low fees, a local agent, a person you trust? If you can order this list in priority descent then you have a system by which to rate your potential agents.
Six areas we feel are important are listed below:
Property Valuation
You will get a range of valuations from different agents and the most important thing for me is that a valuation is realistic and demonstrable. There’s no point an agent feeding your dreams of a huge profit if the price is unrealistic and will not sell. Likewise a low price will likely achieve a quicker sale but if one of your aims is to make a capital gain then this does not serve your purpose. Most agents will bring comparable properties that are either on the market now (so you know what the competition is) and what has been recently sold, by them and by other agents in the area.
Estate Agents’ Fees
These days the typical fee is around 2% and have been known to go as low as 1% and up to 3%. Some agents work on a set fee, which you could argue removes the incentive for them to achieve the best price, or you could argue that it stops them favouring one property over another. I’m a firm believer that you get what you pay for – but it doesn’t necessarily follow that the most expensive is the best – you have to assess value.
Marketing
Broadly speaking estate agents all do similar things to market properties, but the details matter. Look at some agents’ brochures and there will be only one photo, look at others and there will be myriad, all taken with care and attention to detail to show off the features of your house. A badly taken picture can make the largest, sunniest room look dingy and pokey. The reverse is also true.
Consider where you’ve been looking for properties – does your prospective agent advertise there? The local paper, Rightmove (of course!), Primelocation, what does their own website look like? Is it easy to find (search for ‘properties for sale in …” or ‘estate agents in…..’ on google – are they on the top half of the first page? If not, who is?
Big Office vs Small Office
A small agency may offer a more personal service – a single point of contact and the knowledge that your property is not likely to get lost under a heap of instructions. However, a larger agency will have more resources under its belt, for making calls to prospective buyers, sending out mailing lists and advertising in the local papers. A big office will more likely attract more buyers in to register – but then the overhead cost of that office has to come from somewhere – your fees! Weigh up what is more improtant to you.
Personality
For me the most important aspect. Do you like the agent as a person, do you trust them and believe they can sell your house, and are they the sort of person you want to deal with? If you like them then its likely others will as well, and as the old adge goes: ‘people buy people not products’.
Recommendations
After all this consideration you can get an idea for what it might be like to work with the estate agents you’ve been considering – but you can get an even clearer picture of what this is like by speaking to people who have had the experience. A personal recommendation goes a long way and likewise a negative recommendation can save a lot of pain. Ask friends and family in the area what there experience has been of local estate agents – or even knock on a door displaying a sign, why not!
In the end you have to make a decision based on the sum of these factors and your ‘gut feeling’. Keeping a checklist of things you want in an agent and a list of services that are important to you should make this process much easier – also keep notes on each agant so afterwards you can sit down with a cup of tea and review what they said, how much they valued the house at and any other pertinent advice or information they offered.
Whoever you choose, giving clear instructions and explaining your aims from the start will help the relationship from start to finish.
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Private House Sales in the press again
A friend of mine drew my attention to an article in the Independant on Sunday last weekend about selling your house privately, if you want to read the article you can find it here.
To be honest it doesn’t say much that hasn’t already been said in the press and includeds the obligatory quote from the For Sale by Owner market’s willing talisman, Sarah Beeny. Sarah has done a brilliant job explaining to the public that there is another way and that it is possible to sell your house without an estate agent.
Its good to see continuing press coverage about private house sales as many people I speak to still don’t even realise it’s possible. Most peope worry about the negotiation or the ‘legal bits’. This is where an estate agent can come in handy but also they can complicate the negotiation as they are an interested party – after all no sale no fee! So if the price is less thatn you want but the potential buyer won’t offer more – of course the estate agent will push you to accept the offer. His job is to make the sale, come hell or high water.
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Stamp duty concession for first time buyers
The Royal Institute of Chartered Surveyors (RICS) believe that the Chancellor’s reform of stamp duty will benefit first time buyers and benefit the new home building market.
Alistair Darling made homes worth up to £250,000 exempt from stamp duty for first-time buyers and introduced a higher rate of 5% ab
ove £1m to pay for the concession.
Commenting, RICS Chief Economist Simon Rubinsohn said:
‘Measures to help boost the housing market are welcome and moves to reshape stamp duty by shifting the burden from first time buyers at the lower end of the market towards those buying more expensive properties are a positive step.”
Reader comments on finance website this is money range from people who have just or are just about to complete wondering if they’ll qualify to those unhappy at the obsession with ‘boosting the housing market’. More and more people seem to be questioning whether it is ‘right’ that the cost of housing is so high in terms of multiples of salary.
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Thinking about buying overseas property?
In her insightful property blog facts not headlines Kate Faulkner, property consultant and owner of www.designsonproperty.co.uk says ‘many people just ‘fall’ into buying property abroad’ while on holiday or by the patter of a salesman at one of those dreaded buy property abroad shows.
If you are thinking about investing or buying property abroad you should read Kate’s essential guide to buying property overseas.
Notes:
Kate Faulkner is author of Which? property books and a property consultant. She runs Designs on Property, a property consultancy service based in Oxfordshire, UK.
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January cheaper property sales hit by end of stamp duty holiday
House purchase loans fell by more than three times the decline in remortgages in January, according to data released today by the Council of Mortgage Lenders. This emphatically demonstrates the effect on the mortgage market from the end of the temporary stamp duty holiday in December.
There were 49% fewer house purchase loans in January than in December but only 15% fewer remortgage loans. However, the 32,000 loans for house purchase, worth £4.7 billion, were up from the low of 23,000 (worth £3.1 billion) seen in January 2009. Conversely, the 24,000 loans for remortgage, worth £3 billion, were down from 45,000 (£6.2 billion) a year ago. This is the lowest monthly level of remortgage activity – both by number and value – in eight years of available data.
Source: Council of Mortgage Lenders
House price rise has stalled says RICs
The latest RICS (Royal Institute of Chartered Surveyors) house price survey shows that house prices have stalled as increased supply has put pressure on prices.
As prices rose in 2009 many commentators suggested this was a false dawn created by a lack of supply in the market – those commentators will see this as the first stage in their projections playing out.
Overall market activity is still relatively slow as buyers are concerned with the prospect of tax increases, interest rate rises and the low avasilability of competitive mortgage products.
RICS spokesperson Jeremy Leaf said: ‘Most market indicators are still positive and consistent with further house price increases. However the magnitude of the gains going forward is likely to continue to ease reflecting the fact that new supply coming onto the market is starting to outstrip fresh demand.’
Bank of England Maintains Bank Rate at 0.5%
The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion.
2 year high for first time buyer loans caused by end of stamp duty concession say CML
Loans to first time buyers increased drastically last month as the window for taking advantage of the concession on tax duty for properties in the £125,000 to £175,000 bracket came to an end.
There were 24,900 loans to first-time buyers in Dec 2009 – the highest level since November 2008 and 26% up on the preceding month.
Source: Council of Mortgage Lenders
