Welsh Local Authority Causes Anger by Opening Estate Agency

Competition is rife in the estate agency industry, but you never expect to face competition from your local authority.  Imagine the surprise amongst Welsh estate agents then when a Welsh council decided to be the first local authority to launch their own estate agency.  And then imagine how that surprise turned to anger.

Irritated estate agents have forwarded their complaints about Neath Port Talbot council to First Minister Carwyn Jones and other public figures with senior status.

Neath Port Talbot however have steadfastly defended their position and plan to let and market houses for sale in Wales.  Trading under the name of Property Bay Wales, the council has launched a website although right now they are only advertising one property.

Steve Kidwell, the council’s coordinator for housing regeneration and renewal, said “Property Bay Wales trades within the open market in the same way as any other private company and does not require funding from the council. All running costs are funded by trading income. Although it does not cost the council anything, all income it generates through its services are recycled by the council into local council services.”

Mr Kidwell went on to add  “It is fair to say that the estate agency is at an incubation stage. Assuming that it develops further, there are a number of markets that we are currently interested in other than that of a traditional estate agency service – for example, online “virtual” services.

“This is because we do not have a traditional shop front agency and much of our work is online, targeting disadvantaged groups that cannot move home as they are unable to afford the traditional sale fees. We can also provide a service for clients who specifically prefer a local authority approach.

“The company aims to apply core local authority principles, offering a customer-centred approach and value for money. There is no doubt given the current financial climate that it’s a competitive market, but difficult times require creative solutions.”

Local estate agents see the scheme differently and have branded it as a waste of taxpayer’s money.  There is also frustration about the money being given to the council as business rates and that it is funding their new venture into the property market.

Another Port Talbot estate agent, Peter Morgan,, said: “Whatever the council says, it is able to undercut established estate agents because it is using its own offices and doesn’t have the expense of operating on the high street. Their standard fee is £895 plus VAT – I wouldn’t get out of bed for that,” he said.

“It leaves a very bad taste in the mouth.”

Many estate agents are expecting the latest venture to fail.  Cardiff-based estate agent Kevin Francis, of the Royal Institution of Chartered Surveyors Wales, said: “There’s an awful lot more to selling property than just advertising homes on a website.

“I haven’t heard of a local authority setting up its own estate agency before, but supermarkets have tried and failed. Superficially selling property sounds like a good and easy way to make money, but there are many potential pitfalls and it is by no means as easy as it sounds.”

A spokesman for the National Association of Estate Agents said: “So far as we are aware, this is the first time a local authority has launched an estate agency of its own. Our view would be that whoever works for an estate agency should have qualifications that are appropriate for the industry.”

So, what do you think?  Should local authorities be allowed to get in on the action or keep their noses out?  Is it a case of healthy competition or being priced out of the market?  We’ll be keeping a close eye on this one and report back!