The best way to manage rising house prices tendencies in the UK
Are there no agents bothered about the current house price levels? No, probably not and I’m not surprised, as they are mainly interested in getting the best price possible on each individual sale and in earning themselves commission based largely on this!
The government idea of taxing rising house prices by way of Stamp Duty may well scoop extra funds for the treasury but it can’t deal with the underlying market difficulties which beset the UK housing market. The problem is that nowadays, being able to simultaneously sell and also buy a house to move into is fast becoming a distant dream for more and more of us. Taxing all the transactions more won’t help if lending limits are simultaneously relaxed!
The only way to deal with this problem effectively would be to bring in agents that could act for each client both in selling their existing house and buying their next. Only in this way can price parity start to be achieved once again. It must be done by agents starting to advise their clients on relative value differences.
The old notion of estate agents simply having to get the best price possible is really only a partial business service for their client. It is no longer adequate in this modern and data-centric world of ours as most people go on to buy somewhere else to live following the sale of their existing property.
Price disparities abound nowadays and these will need to be swiftly resolved in order to get the rate of completed transactions increasing and thus to build-up public confidence in current market pricing, once again.
Sole agents simply selling houses for owners was, of course, a turn of the century idea, commenced in the wake of the last world wars. It is now long overdue for revision.
For this reason increasing the supply of properties to buy, by building relatively few new houses (percentage-wise), cannot deal with the current problem within the marketplace itself. This is because it’s a price-setting problem.
There are far better ways of dealing with the house-price crisis.
For more on this problem and for full arguments for a need for a change to estate agency law instead of this, please read:
Earlier article published on this blog site
Posted by: Peter Hendry, Housing Valuation Consultant