If you don’t know, this would indicate that you, along with quite a few estate agents genuinely do not see that there is a need for improvement in the way houses are marketed and sold in this country.
There are 3 basic reasons for this happening.
1. Too many houses which go onto the market currently fail to sell at all.
This results in an increased shortage of available properties to buy, which also tends to move prices further in an upwards direction.
I estimate the current rate of failure on agent-instructed sales is approaching 50% currently, but there appears to be no reliable data on this for some peculiar reason. I wonder why?
2. The difference between the price one pays when buying and what is obtained when selling is greater than it ought to be, the result of which is fewer actual sale completions than might otherwise be attainable; when one thinks about this.
In theory, there should be little or no difference between buying and selling prices at any one time – except for tax and stamp duty plus area or locational differences and accommodation size and quality differences. Of course, the fees and the other ancillary costs of moving do need to be accepted as being payable.
3. The price differentials caused by 2 above, i.e. by estate agents’ general over enthusiasm to get more houses onto their books all the time, is what causes the problem described in 1 above. This is what is called a negative feedback loop. That is, it has a negative or opposite affect on the operation of the market.
Until this is satisfactorily corrected, the housing market will continue to operate in its present inefficient and imperfect way.
This must actually harm the national economy – especially when the country is trying to get out of the previous deep recession – and that is still the true situation in the UK.
IF, instead of agents continually competing with each other to increase their own individual share of the number of houses coming onto the market at any one time, agents were to actually work in harmony with each other to help those wanting to move house, the likelihood of individual house buyers simultaneously completing when buying and selling would be very greatly increased. This would have an equally substantial effect on the whole nation’s economy.
This is the primary reason why a fundamental CHANGE in the way houses are marketed in the UK is desperately needed.
My proposal for the way housing in England and Wales should be marketed, is based on changing from vendor-centric estate agencies to buyer-oriented ones as described in The Hendry Solution. This would not cost much to implement and would bring massive benefits to all local marketplaces.
To read more about The Hendry Solution go to the following link:
Improve The Housing Market.
How to Improve the UK Housing Market.
Peter Hendry, Consultant in Housing Valuation