The House Price Solution is devised to resolve the current housing crisis completely

When an estate agent sells a house currently, their client is not the person who is moving in!
This is what needs to be changed in the near future, if we are to correct the flaws within all housing markets across the UK.

What is needed instead is the situation, whenever a buyer moves into a newly acquired house it is HE or SHE who is paying the estate agent – the agent who found it for them – in gratitude for what that agent had done for them.
Only then will they be happy with the service they obtained and of course, the property which they will have just purchased.

This treatise explains precisely how such an outcome could be swiftly and economically achieved. It comes to the conclusion that the Estate Agents Act 1979 is no longer fit for purpose. It should therefore be repealed and a new Act drafted to bring in trained & specialist agency services for carrying out sales and lettings of most residential property assets, across the whole country, taking instruction from the buyers not sellers as happens currently.

Sweeping reforms on this are now sought from those in government if we are to achieve balancing supply with demand for housing in the required locations and at reasonably affordable prices.

This is the complete answer to the ongoing housing supply crisis. It deals with severe buyers’ problems which directly result from the present methods of marketing residential property, including the need to calm excessively rising house prices.

The essence of using The House Price Solution involves a complete and permanent change in the way estate agents deal with residential house sales.

Using this solution, only Registered House Agents (RHAs) would be licensed to deal with residential sales & purchases. The key difference is that this would involve a new type of agent which would always be acting for the purchaser rather than the vendor.

Existing Estate agents could still continue to offer both sales and management services to all their existing clients if they wish except on residential or part residential property sales however. In other words, sales of all types of property other than residential property could be dealt with in exactly the same way as before, i.e. by existing estate agents.

The switch would be only Registered House Agents (RHAs), would be licensed to act in dealing with the sale and purchase of residential property. Only these agents would be licensed to manage such property.

Those licensed to act in such matters would be expected to have passed a new qualification prior to obtaining a license to carry out this type of business anywhere in the country.

You may ask in this case, would anyone else be allowed to act on behalf of those wishing to buy or sell residential property? The answer is NO.

Market forces would have to be harnessed to act both for sellers as well as buyers by using different and competing Registered House Agents, tasked with the work of obtaining for their clients, the best combined buy and sell prices in the market whenever moving house.

Competition would be achieved because the selling process would normally be done using a separate and competing RHA in every case.

Whereas selling residential property may only be carried out by Registered House Agents (RHAs), the existing buying agents, once licenced, may continue to operate as normal by negotiating terms of purchase essentially as they do at present. The difference for them would be that they would be negotiating with other Registered House Agents dealing with the disposal of residential property, rather than with estate agents.

This unique plan is designed to eliminate the exaggerated house prices which are being quoted and which are seriously damaging our housing markets.

By stabilising prices in this way many more people would be able to transit between properties, as and when they may need to. This would solve one of the most prevalent problems in the present-day housing markets, causing the blockages we currently see and slowing the housing markets in the process.

A second reason for the present scale of house price inflation is this:

House price rises are currently being driven by lax bank lending restrictions following the relaxation under the bank and building society lending regulations of the mid 80’s. Later all markets suffered from the effects of QE following the financial crash of 2008. These two factors, when combined, are a main cause of all housing markets in the uk to overheat price-wise.

Just as importantly, the way in which properties are ‘traded’ on the market should be the subject of urgent improvement and reform by adding a new regulatory framework to agency.

Originally published: 5 December, 2013.
(Last updated by PH: 5 June, 2022).

True market prices can only be determined by supply and demand in a perfect marketplace. The present UK housing market as a whole is very far from perfect. The House Price Solution is the best way to finally resolve this failure.

As part of the required process of change, substantial amendment to The Building Societies Act 1986 as subsequently amended, is required because demonstrably, it is causing housing marketplaces across the country to overheat price-wise. The 1986 act is also therefore no longer fit for purpose as it stands today and so needs substantial revision.

A main aspect of the financial deregulation as enacted by The Building Societies Act of 1986 was intended to widen access to homeownership by providing increased access to finance for house purchase. However, by doing this, more risk was introduced into the marketplace. The risk/choice balance was tilted more towards risk, arguably to try and correct the inefficiencies within the supply-side which was slow at housing construction. Unfortunately, the 1986 Act caused the benefits of deregulation to result in swiftly rising house and land prices – the very thing that should have been guarded against.

The new financial regulations set out within the 1986 Act also altered the relationship between the housing sector and the rest of the economy by making household equity more liquid, or more easily turned into cash by allowing increased borrowing. The pricing out of the dream of owner occupation for many people from less well of families which resulted is now plain for all to see.

It is this that the following proposal for improving the housing marketplace is aimed at rectifying.

As explained above, the economic importance attached to increasing total housing wealth was behind the drafting of much of the 1986 policy but so was the rush to increase homeownership. Sadly, these two aims run in direct conflict with each other and so, looking back, or in hindsight, this issue is what should now be fully addressed.

If you agree with this, having read what is outlined on these pages, please take the plea for change to your own MP to try and build support for bringing about wholesale change to make the housing market fully efficient going forward.

Here is the answer:

The House Price Solution – otherwise known as The Hendry Solution

In brief it is essentially about locating and entering into a contract with a highly motivated agent to ‘find’ your next house, negotiate the best terms AND sell your present house too! This is a simple but profoundly important proposal, though nobody else has tabled it to date.

By doing this, a much closer degree of relational parity between what you pay and what you get for your existing house could be maintained and, gazumping should be practically eliminated.

We must change the way we decide house prices from that of depending on how much each buyer might be able to borrow, to how much they each prefer to afford.
It would be a simple change but with profound consequences.

A fact: The definition of affordable homes is currently decided on ‘the supposed open market’ but sadly, the prices arrived at are not at all affordable to those who require housing in very many specific localities around Britain.

Instead, prices, especially at the entry level, ought to be based on what people on low incomes can afford locally.
Unquestionably, in each local area we must have housing that is genuinely affordable to those living and working in that area.

It is simply not feasible to try and remedy this problem and correct this lack of affordability by constructing huge numbers of new houses in a short timescale. In any case, the price problem itself is a market economics problem not a simple supply problem. The shortage of housing supply is, in fact, secondary to the market economics issue described here. Aside from this there aren’t the skilled craftsmen currently available to build upwards of the 300,000 good quality new private and social houses suggested to be needed each year for the next 10 years!

Also, the idea that ‘the market’ might correct for the shortage of housing by facilitating the building of more houses as and when prices rose, is not what has actually happened. The market has patently not done so and has failed to achieve that.

Improved market economics are now required. They are needed to improve the efficiency of the housing market itself.
This could be done quickly and without large government expenditure which is the preferable solution. As explained, we should re-organise how house prices themselves are arrived at. This would lower them in areas where local affordability would require this.

It can only be done by changing the way agents work when selling and letting houses that are currently on the market. It should involve referencing these properties to affordable prices in each local housing market. Now is the time to recalibrate local housing markets in this way and put in hand an economic solution which is of paramount importance and is described below.

As explained just now, new construction should only be a secondary remedy, to help to ensure that house prices never again spiral up to the unaffordable levels that we have currently been seeing everywhere in England, Wales and even in Scotland and Northern Ireland. The primary fix for this is to improve the way houses are bought & sold as well as rented & let.

Each individual local housing market requires this and the best way to accomplish it is to legislate for a complete new breed of estate agent (instead of attempting to build thousands of new houses in a vain attempt to satisfy a supposed national demand).

The fundamental problem with present day selling agents (or estate agents) is, that not only do they maximise house prices by leveraging buyers’ offers ever upwards; they also maximise mortgage loans by dealing in the procurement of ever increasing mortgage borrowing.  This further boosts house prices!

The House Price Solution deals with both these problems by facing them head on. It does not however interfere with the operation of the market economy itself and it completely avoids the use arbitrary and inefficient price and/or rent controls.

For the purposes of this paper let’s call these new agents, Registered House Agent(s) or RHAs”.

The following are full details of the proposals which comprise the House Price Solution.

The main job of these new agents would be not only to sell or indeed let owner’s houses but more importantly to find and secure the houses which their contracted client(s) are seeking for both themselves and their families – whether these clients are wishing to buy or to rent.

How could this be achieved?
RHA or Registered House Agent’s Moving Contracts (or MC agreements) should replace the traditional vendors’ selling contracts. These would effectively be buyers’ agency contracts.

Similarly, ‘Letting Contracts’ (or LC agreements) would be the instructing instruments for agents advising tenants wishing to move from one rental property to another.
All this would be a relatively simple but a game-changing improvement to the way in which residential property transactions occur at present.

The proposal is that we should now do away with old estate agents’ sole selling contracts altogether and bring in Registered House Agents’ ‘MC agreements’, where each RHA or Registered House Agent engaged would be contracted to work to facilitate a vendor’s complete move from one property to another. The aim of this would be to bring greater satisfaction to all those in the throes of moving house and to get the whole UK housing market operating far more smoothly – in all possible economic conditions and, it should be said, without the need for government-backed mortgage guarantees for those requiring to get onto the first rung of the housing ladder either.

MC agreements of RHAs would always include a mandatory clause stating that as part of offering their services, they undertake not to negotiate any mortgage deals on behalf of any prospective buyers at any time or in any way whatsoever.

As a professional valuer (although now retired), I am claiming that this new method would help to stabilise house-prices broadly, across all regions, instead of tending to make them rise a lot in some areas but not anything like as much in others. That alone would be a very significant market improvement.

In addition, the new version of Registered House Agents (RHAs), would be fully empowered by becoming more responsible for ‘the progress’ of sales and lettings of properties across the whole UK and would gain more control of the volume (or throughput) of house sales and lettings completions.

By contrast the earlier government’s plan (and this government’s one too), to increase the availability of mortgage finance, including to people becoming first house owners was and still clearly is not the right approach. As has been seen subsequently, that resulted in higher prices; the very thing that buyers simply do not need or want, either then or now.
‘Help To Buy’ government mortgage guarantee schemes have more recently been taken up in substantial numbers. This is resulting in upwards pressure on house and land prices as more money in the form of long-term loans must have this affect on asking prices by definition.

In some locations, the excessive price levels which we have recently seen, have been generated, in part, by significant corporate purchases of larger residential properties as investments, some financed by business loans. These loans were mainly advanced to private landlords for buying and renting out multiple units and not for owner-occupation. This has been another one of the catalysts for the general increase in house prices as well as dragging up rent levels.

The issue just described is in addition to (and separate from) the unregulated way in which current day estate agents negotiate and agree terms of sales with unsuspecting house buyers. These people are generally unaware of the scope of other offers (if indeed there actually are any) claimed to be being made on the object-property around that time.

A certain amount of regulation in the marketplace would go a long way to helping resolve these serious drawbacks.
With appropriate regulation, Registered House Agents could improve themselves in competition with other agents by becoming more efficient and more factual.
They could, for example, correlate from the current data they would have available from all the applicants, the maximum sustainable rents or buy price levels currently feasible and deduce using their training and expertise, exactly what the mean – mode price should be on any specific property to be acquired.

Having selected the best applicant for the property in question, they could then advance the most suitable offer to be made on behalf of each buyer and be in a position to stop inventing higher offers to help secure the deal their firm aspires to winning!

If the seller (or landlord) agrees, the offer would then be formally accepted and the whole transaction process (exactly as described here) would commence.
As explained there would be no question of agents ‘tweaking’ buyers’ (or tenants’) offers upwards any more as to do this would contravene their business ethics as well as putting them in jeopardy of their licensed (or newly regulated) business registrations.

Here are the three main benefits of using this new marketing solution.
Included below are the most significant advantages which the various different local housing markets around the country could derive benefit from. They could be used to increase sales and lettings throughput right across the whole of the country.

  1. First-time buyers (or renters) of both new and second hand houses, would not have to budget for agency fees when making their house purchases because these buyers/renters would not need to engage a buying agent or sign a Moving Contract (or MC agreement) with any agent. The arrangements would not therefore penalise first-time buyers financially. These applicants should simply approach the agent marketing the property in question. (The agent involved would already have a fee arrangement with the person moving from that property to their next one.)
  2. Registered House Agents would benefit since it would become more difficult for owners or landlords wishing to transact their own sales, purchases or lettings without using them. Indeed with this system, it would even be possible for government to declare that such a practice would be banned if they should decide there is a need to do so. The extra sales/lettings throughput generated by making all of the local housing markets around the country more efficient would further enhance RHAs’ profitability.
  3. It would also be possible to identify, specifically, all those transactions that involve house purchasers who are moving a long distance, when in the process of buying the house in question. Additional taxation could thus be applied to second home purchasers if it was deemed appropriate. For example the government could start to levy a tax on all second home buyers. This would tend to help reduce prices in those areas where second home buyers have been pricing local residents out, thus helping first time buyers as well as raising taxes for the government.


Below is a brief description of the new ‘RHA’ or Registered House Agent’s strategy including using the House Price Solution:

We need something considerably more effective than the current Neighbourhood Plan’s H1 The affordable homes provisions and H2 The full-time Principal Residence restrictions, to help bring local house prices down further towards levels affordable to the local workforce and especially to assist local key workers. I reason that prices of full freehold registered titles of ‘affordable homes’ are still well beyond the reach of most key workers within their sectors.

The need for The House Price Solution (otherwise known as The Hendry Solution), is because price levels in basic housing stock everywhere are currently driven by and depend upon how much any individual buyer can afford, including the most that buyers might be able to borrow at the time!

To correct that as far as local buyers are concerned the new buyer-agents advocated here would be called Registered House Agents (RHAs) and they could operate from either retail-based premises or online, or both and would replace present-day estate agents.

Facet 1 of explanation:
All agents (RHAs) would work by operating on behalf of buyers rather than being paid by sellers as happens at present. Their fee income would be solely from finding buyers the next houses they seek.

In other words all RHAs would have to forgo signing to act as a selling agent completely. This would include not acting to sell a house that the client they’ve just found their next house for, is still needing to sell. This is probably the most fundamental change being advocated here.

Facet 2 of explanation:
Nevertheless, there would be no restrictions on buying agents advertising or displaying for sale, houses on behalf of non-clients in order to introduce more enquiries by the buying public or from other buying agents. This would be a free of charge (FOC) or non-fee producing activity only.

All free of charge (FOC) advertising would have to wait for another RHA (with a signed Moving Contract arrangement with the buyer) to bring a buyer forward and by doing so the introducing agent would earn their sole fee payable on completion.

However, and this is critical, each agent or RHA could introduce any of their other signed-up buyers to purchase those properties – and thereby earn a second fee from a different successful purchaser in that way. A valuable second income stream would result.

If the house was one that the RHA had been advertising free of charge (FOC) for an earlier client, then the introducing RHA would be negotiating the BUY price on that house, acting for the new buyer – not the seller. Whilst different RHAs may often be working simultaneously on various chains of purchases, they would always be working solely for their respective buying clients of course.
In other words because the buying agent would be working for different clients in each case, (albeit on a chain of purchases) there would be no conflict of interest.

To emphasise the main change, all agents would always be negotiating for buyers rather than sellers.

Facet 3 of explanation:
Another aspect of this is that all agents would be looking carefully over all properties being marketed, in search of its good qualities, both structurally and from locational point of view. They would always be representing their buyer-clients’ best interests in the process.

Prices paid would therefore better reflect the condition of each property currently on the market as well as better reflecting the prices which buyers might be prepared to pay.

Facet 4 of explanation:
The new Registered House Agents (RHAs) would need to modify their existing agency skills and abilities, to be able to best represent buyers and negotiate (generally to lower the purchase prices) on behalf of their clients instead of trying to maximise them. This would clearly involve new training schemes for any existing estate agency staff to include both the different emphasis and the extra skills required.

Facet 5 of explanation:
An important point is the actual prices being obtained would be decided primarily by different buyers’ offers, with buyers operating in competition with one another for any one individual property, using the services of multiple buyer agents (the RHAs), simultaneously having to consider the various written offers involved and get their clients instructions on which ones to accept in writing.

Facet 6 of explanation:
Borrowing levels by individual buyers ought to be a significant factor and excessive borrowing requirements should naturally weigh against some higher offers being considered. That is another reason why there should be new government initiated restrictions on such lending, including rules for lending institutions wishing to make loans specifically for housing occupancy purposes. This would help to create a more level playing field for all buyers. That ought to particularly help local buyers, because the prices they could afford would tend to become the benchmark price levels for each separate locality. This is a very important aspect of the implementation of the House Price Solution and should not become a secondary or separate matter at all.

Facet 7 of explanation:
Fixed-fee terms of commission must be mandatory for all licensed or RHA agencies and must be a requirement of all agency contracts made to facilitate a buyer moving from one location to another i.e. complete Moving Contracts or MC agreement would be required – please see the main explanation below for further details.

In other words, no percentage fee commissions should be allowed, as otherwise these would provide an incentive for agents to try and edge prices up which is the practice requiring to be curtailed. Also reverse percentage fees must similarly be disallowed.

Facet 8 of explanation:
The anticipated effect of this new house marketing solution would be to increase house sales turnover across the nation, reduce the amount of abortive work experienced by present-day selling agents and in so doing, increase the actual fee income potential for all licensed agents acting for buyers. This method would breathe new life into what are currently, moribund housing markets in most localities around the country.

*******
AND The $64,000 Question is:
HOW can this solution bring house prices down in your area?

As explained above this can only work if existing estate agents, acting for sellers, are exchanged for agents acting exclusively for buyers instead. These agents would have to be legally registered or licensed to operate under a process of national registration. To distinguish these new agents from agents that no longer have a mandate to deal with housing they should be named for example, “Registered House Agents”. All house agents registered would be required to carry out business in accordance with the rules laid down by the new registration authority.

The first difference would be that each house being sold (owned by different sellers of course) would also have several different Registered House Agents (RHAs) sending in offers for the present owner’s consideration.

Buyer’s agents or (RHAs) appointed by local buyers are likely to have received offers at broadly similar levels to each other.
Buyer’s agents or (RHAs) working with clients wishing to come from further afield may have higher or even much higher offers in respect of the subject property.
The existing owner, in each case, would have the choice whether to sell to a local buyer or to refuse to and instead sell to an incoming buyer.

If they should choose to sell to local buyers they will know that the price-level is based on local affordability not incomer’s affordability whereas with the present-day estate agent system – they, the existing owner, cannot be certain of this when making their decision to sell because the lower offers are soon discounted, especially by the commission-earning estate agent.

Despite this if they are moving to an area having similar price levels they need not necessarily take a higher (incomer’s) offer.

Significantly with Registered House Agents, the buying agent whose offer is to be accepted will not know what the other offers were – only the seller will know that so, once again, they will be protected from coercion by agents wanting to escalate the prices just in order to win the fee.

In addition, where there are Neighbourhood Plans with restrictions on the sale of certain houses in favour of local residents, local planning departments could take enforcement action against anyone conducting a sale to an incoming purchaser if there is any breach of the requirements.

Finally, if there are occupancy restrictions applicable to specific groups or classes of house in any one location, all Registered House Agents would be expected to know and understand this and therefore would not take on instructions from outsiders to negotiate to buy such properties in the first place! This could thus become a self-policing issue.

I hope this illustrates the advantages of moving from a selling agent system to a Registered House Agent one as being the main development of the solution I am proposing.

For a 2nd (or further) explanation of this unique proposal please click on the following link.

The House Price Solution 2nd (or further) explanation

If there remain outstanding questions relating to my proposals I’d be glad to discuss these.

Posted by: Peter Hendry, Housing Valuation Consultant
Author of:– The House Price Solution

The new proposals by the Levelling Up Secretary Michael Gove are good

The new 2022 Levelling up Bill is a breath of fresh air and would introduce new ways to speed up housebuilding. It would help new homes get built to a better specification, get built in the locations which need such housing, get them built more to the requirement of the local communities that need them and be priced more in-line with the level of affordability within those communities needing them.

Scrapping the previous and much debated Planning White Paper is therefore seen as being a very necessary decision, as this has failed to stimulate the building of the housing that people actually want in the places they want them and at the prices they can realistically afford.

The new White Paper is expected to change all of this.

Among the features in the new Bill will be:

Design codes enabling local communities to set rules about the layout of new developments and the materials which could be used.

A new infrastructure levy determined locally to raise the funds for projects such as schools, hospitals and roads by basing the levy on the value of the property when it is sold instead of as it gets planning permission.

More will be added here about this, as we hear more about it.

For the correct way to deal with the present and escalating housing crisis, you can simply search on The House Price Solution. This explanation is what would restore the housing markets across our land to rude health at long last. Here is the reasoning set out in brief.

I advocate a complete reorganisation of the way in which houses are bought, sold and rented in this country, which is is long overdue.

The right formula for such a reorganisation is what now needs to be fully debated and once arrived at I am confident that the formula for change would embrace much of what I am presenting and is not only worthy of full scrutiny but is a correct formula for the necessary change and is overdue for adoption.

The explanation of how to peg accelerating house prices as well as delivering all the other housing market improvements desperately needed starts here. You can read all about these fresh new proposals at the following link:

The House Price Solution

How to Improve all local housing markets in England and Wales

Anybody who agrees with what is presented here should go and challenge their local MP asking them to properly examine this and get it fully and properly debated in The House of Commons without further delay.

Posted by: Peter Hendry, Housing Valuation Consultant
Author of:– The House Price Solution otherwise known as The Hendry Solution.

Are estate agents taking us for fools?

The continuing rise in house prices during and following COVID clearly show that the following proposals for re-shaping house-marketing are fully justified and long overdue.

The severe reduction in the number of sellers putting their houses on the market is a clear indication of their concern for not being able to successfully move house, owing to the unexpectedly rising house prices!

The explanation of how to resolve accelerating house prices begins here. Read all about these fresh new proposals at the following link:

The House Price Solution

How to Improve all local housing markets in England and Wales

Posted by: Peter Hendry, Housing Valuation Consultant
Author of:– The House Price Solution otherwise known as The Hendry Solution.

We must face the housing affordability dilemma head on

Yes we must face the housing affordability dilemma head on.

We must very soon deal with the upcoming cost-of-living crisis in energy, fuel, food and housing which are the main essentials of increasing concern to those living on tight budgets in our newly independent country. Housing is the most expensive of these.

House prices have radically outpaced affordability at a time when western economies (both here and abroad), are on shaky ground. This clearly indicates that something is seriously wrong with the operation of our housing markets as far as house buying, selling, renting and letting is concerned.

If you agree with this then what follows is a considered assessment of how best to deal with this problem.

The explanation of how to resolve accelerating house prices begins at the following link

The House Price Solution

How to Improve all local housing markets in England and Wales

Posted by: Peter Hendry, Housing Valuation Consultant
Author of:– The House Price Solution otherwise known as The Hendry Solution.

What do you think about this idea for drastically improving the operation of all housing markets potentially across Britain? Would you be interested in signing a petition to government to debate this matter in The House?

All the pages in this blog deal with the underlying reasons why the most troublesome housing affordability issue of our time has come into being over the years. It’s a marketing error not an economic one and that is quite different from the old supply and demand argument which is generally trotted out by agents in an attempt to explain the matter away.

Constructive comments are very much welcomed.

Best possible ways to resolve the housing crisis in Britain

Let’s examine the best possible ways to resolve the current housing crisis in Britain, starting from the viewpoint of Baroness Thatcher, arguably the most successful Premier of the post war era.

How might Margaret Thatcher have dealt with the housing crisis unfolding across Britain?

I think that we can reasonably accurately guess the stance she might take by considering the main benchmarks which were directing her political compass in the Seventies.

Her campaigning for housing reform resulted in the Housing Act 1980 which gave security of tenure, and controversially, the right of social tenants to buy the homes which they lived in.

From this we can reasonably assume that she held the view that every family should be responsible for their own housing by having ownership of the houses in which they live.

As a result she would’ve been uncomfortable with the idea that those who couldn’t manage financially, should enjoy housing provided by those who can.

Assuming this, one can see that her ultimate goal appeared to be to create a home-owning democracy spreading to all quarters, whilst not unduly marginalising those who can’t get started with home ownership.

On this basis, it seems to me to be patently wrong for government and various local government organisations, including Housing Associations to carry on attempting to provide part ownership-part rented housing, as some form of essential, yet seriously flawed, stop-gap.

All this can do in effect, is to countenance a continuance of the previous lack of affordability in housing because by using such policies, prices must have to find the highest level within a subset of what are ‘totally unsatisfactory‘ ground-rules. This leads me to the thought:

What if a different method could be used?

Could housing be provided without part ownership schemes?

We currently have one important advantage today which was not available to buyers in the seventies. It relates to the level of interest rates.

In today’s housing market, borrowing money has never been cheaper and interests rates have never been lower, so now would be the perfect time to switch from organisations taking money for rent, to prospective occupiers of houses being lent the money for them to buy the house they live in outright.

Surely this would be the ultimate Thatcher goal and the reverse of the existing half-baked idea of first-time buyers having to pay an equivalent-sized mortgage repayment chunk of money every month to organisations that are only giving them part ownership at similar price levels!

The whole idea of part ownership and so-called ‘affordable’ homes should now be cast aside so that the final frontier of widespread home ownership could be brought in much more quickly.

Having witnessed the expansion of the private rented sector since the seventies, we now know with certainty that this sector has not and can never provide a similar degree of freedom security and support to that offered by outright home ownership and, it is also fair to say, neither can large scale council housing ever achieve this.

Shortly after the decision was made by Conservatives to promote the sale of council houses to their occupiers in the mid seventies it soon became clear this was a very popular winner all over post-war Britain.

Of course housing authorities would still need to retain some council housing but at nothing like at the scale it used to be, if widespread home ownership should become mainstream once again.

Now is the right time to expect the market economy to provide a high degree of home ownership to the majority.

Forget part ownership / part rental schemes, for they are exactly just that just – schemes. Everyone wanting houses to live in should go for full ownership at prices below or similar to the existing cost of renting.

This way, most families would be empowered to take control of their own housing requirements and enjoy a brighter future.

The only question now remaining is, how could all of this be achieved?

The way such dramatic progress in home ownership could become a reality today would be by changing the way all residential property is handled by house agents. We need a whole new system where everybody who wishes to, could go out and buy a place of their own at prices that are truly market compatible.

The present house price crisis is not because of a shortage in housing nationally. That is not why house prices have been escalating. There is a more fundamental reason. It is because of the imperfect way in which estate agents currently deal with house sales. This is the main cause of the current house price crisis. A better way of describing the present housing crisis would actually be to describe it as a house price crisis.

A sea-change is therefore needed in residential estate agency methods. This is the final conclusion.

Will politicians and their policy makers please take a good hard look at this aspect of the problem and engage in detailed discussions about the merits of bringing the changes I outline here to fruition, because now is the opportune moment for doing this.

It is now a matter for our elected government to resolve this.
It is they who should act to secure the future wealth and security of the house-owning general public.

To read about how this very special change could be put into effect, please follow the link below to a set of pages which fully explain this:

The House Price Solution

How to Improve all local housing markets across England and Wales

Posted by: Peter Hendry, Housing Valuation Consultant
Author of:– The House Price Solution (otherwise known as The Hendry Solution).

What do you think about this idea for drastically improving the operation of all housing markets potentially across the whole of Britain?

Constructive comments are very much welcomed.

The Housing Markets all over the UK are overheating

Here is the evidence put simply, also published in The I Newspaper on Friday 31st December 2021.

Record Annual Rise in House Prices

The average UK house price rose by nearly £24,000 during 2021, the biggest increase ever recorded in a single year in cash terms, according to the Nationwide Building Society. The typical price of a home reached a record high of £254,822 in December, marking a £29,902 increase over the past year.

Robert Gardner, Chief Economist at Nationwide said: “Prices are now 16% higher than before the pandemic struck in early 2020.” Nationwide said house prices were 10.4% higher annually in December 2021.

When you consider annual growth in total pay was at best 4.3%, nobody could seriously argue that the housing markets are not overheating price-wise.

See Gov link for stats:

At some point, this dilemma must be addressed and new policies introduced by government to correct it. The  brightly burning question is when?

We wish a Happy New Year to everyone, especially those interested in improving the housing markets across the UK.

Thoughts and views are welcomed as to how this could best be achieved.

A Challenge to Estate Agents to Improve The Housing Market in the UK

A CHALLENGE TO ESTATE AGENTS TO IMPROVE THE HOUSING MARKET IN THE UK

We all deserve a better housing market in which to find and purchase houses and flats for ourselves so I now challenge all estate agents and the landed professions to a full debate on the merits of my prescribed solution to the present and unacceptable house-price crisis, as well as to discuss the pressing need to correct the insufficient number of houses currently being purchased for owner occupation.

“There’s currently NO genuine competition between sellers who employ their own agents, as happens at present. I propose that instead, estate agents should be working for buyers in a similar way to travel agents and sales of tickets in the airline industry.” Travel agents help travellers to find the best value holidays for their chosen destinations.  This is what should also be happening with housing.

House prices themselves should find a level based on real competition. For this to happen, housing should be priced in a similar way to the methods used in the travel industry.

Fair competition should be introduced into our housing markets so as to achieve best throughput in the market, whilst maintaining price stability by using The House Price Solution.

The proposition:
Here is the essence of what I am saying by using this method.

It involves a complete and permanent change in the way estate agents deal with residential house sales.

As far as residential sales are concerned, to use this solution, only Registered House Agents (RHAs), would be licensed to deal with residential sales & purchases. The key difference is, this would involve a new type of agent which would always be acting for the purchaser rather than the vendor.

Existing Estate agents could continue to offer both sales and management services to all their existing clients except on residential or part residential property sales. In other words, sales of all types of property other than residential property may be dealt with in exactly the same way as before by existing estate agents.

Only Registered House Agents (RHAs), would be licensed to act in dealing with the sale and purchase of residential property. They would also be licensed to manage such property.

Those licensed to act in such matters would be expected to have passed a new qualification prior to obtaining a license to carry out this type of business.

You may ask in this case, would anyone else be allowed to act on behalf of those wishing to buy or sell residential property?

The answer is no. Market forces will be harnessed to act both for sellers as well as buyers by using different and competing Registered House Agents, tasked with the work of obtaining for their clients, the best combined buy and sell prices in the market whenever moving house.

Competition would be achieved because the selling process would normally be done using a separate and competing RHA in every case.

Whereas selling residential property may only be carried out by Registered House Agents (RHAs), existing professional buying agents may continue to operate as normal by negotiating terms of purchase on behalf of buyers as they do at present. The difference for them would be that they would be dealing with Registered House Agents when buying rather than with estate agents as at present.

This unique plan is designed to eliminate the exaggerated house prices which are being quoted and are seriously damaging our housing markets.

By stabilising prices in this way many more people would be able to transit between properties, as and when they may need to.

Your thoughts are welcomed on this new idea for smoothing rising house prices whilst helping to stabilise the capital values of privately owned residential property as part of this process.

The House Price Solution

How to Improve all local housing markets across England and Wales

Posted by: Peter Hendry, Housing Valuation Consultant
Author of:– The House Price Solution (otherwise known as The Hendry Solution).

What do you think about this idea for drastically improving the operation of all housing markets potentially across the whole of Britain?

Constructive comments are very much welcomed.

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The Politics of Housing

The Politics of Housing is necessarily societal. In other words you can’t divorce housing from politics.

When canvassing for the Brexit vote in 2019 and accepting becoming our Prime Minister in July 2019, Boris Johnson promised that his government would be a government inclusive for all in society, having won the popular vote on that basis.

Whatever political view an individual may wish to take, it would appear that there are three institutions that should be held as being at the very crest of present day society. These are The Judiciary, The NHS and The Town and Country Planning Acts.

Whenever setting out to make new policy for the benefit of Britain’s populace, these three established pillars of fairness should always be fully considered beforehand.

Tough love, directed towards some parts of society, may be necessary for further improvement but it would, by its own definition, have to be based on love and nurture, not prejudice.

However even so, the noblest of decisions, taken in the quest to improve the lot of the many may occasionally fail, especially where housing is concerned.

What follows is a set of proposals specifically designed to resolve our present housing distribution problems.

FIRSTLY: Before designing a new Town & Country Planning system for the whole of Britain, it would be a pretty good idea to get a clear picture of what would make each local community thrive, and then incorporate precisely that into the new model.

To date we have seen little evidence of such an approach and practically no justification for the arbitrary zoning designations which are being proposed in the Planning White Paper currently being debated in Parliament. This does therefore deserve much further consideration.

The clear and over-riding objective must surely be for ordinary working people to be able to find openings for good new jobs close to where they may live.

This must mean the forward plan must involve a proper debate with business leaders to start searching for and employing more-skilled people, including training them up and paying them substantially more whilst expecting more productivity/profitability from them in return.

The resultant gain to industry could be achieved from increasing the incentive amongst school leavers and university graduates alike to decide on a higher-skilled career for themselves, earlier, and then to train more intensively for that.

Those youngsters who do not choose to follow this path would be likely to have to accept whatever unskilled jobs there may be at low wages (and with little or no prospects), of course.

This is, in effect, increasing the requirement on job seekers to decide what they would like to do earlier and to embark on getting the best training and qualifications they need for their choices of career.

Other successful economies have already achieved such outcomes and because this has been done elsewhere it could certainly be done in Britain if the incentives were provided.

One organisation, KPMG (the accountancy conglomerate) is already in the news for helping in the battle for greater diversity among types of job especially within the poorer communities by offering apprenticeships. It wants nearly a third of their staff to be coming from working class backgrounds by 2030. Enabling diversity of perspective, fresh thinking, and wide-ranging insight should help all businesses to perform.

People from routine maintenance and service organisations may apply. Levels of pay and prospects in life really matter to employees but so does aspiration. Van drivers, butchers and factory workers should be among those applying for schemes such as these if they should wish to do so.

What is Levelling Up really about?
Added to this post 2 jan 2022:

Levelling up is about empowering local leaders and communities.
It’s about raising living standards and growing the private sector.
It’s about spreading opportunity and improving our public services.
It’s also about boosting local pride and improving our local environments.

Young people should be empowered to learn all the skills they need and be enabled to use their passions and their abilities to help them get good jobs in the future wherever they may choose to live.

All this is can now be achieved with the localised Towns Deals which are being made available by government as well as the Community Renewal Fund and other funds also to do with Levelling Up.

Link to: Department for Levelling up Housing and Communities

Equally important however is the house price crisis itself!

To find out all about everything to do with the extreme lack of adequate and available housing on the market and how to deal with the non-affordability of it, see below.

The House Price Solution

How to Improve all local housing markets across England and Wales

Posted by: Peter Hendry, Housing Valuation Consultant
Author of:– The House Price Solution (otherwise known as The Hendry Solution).

What do you think about this idea for drastically improving the operation of all housing markets potentially across the whole of Britain?

Constructive comments are very much welcomed.

Where are estate agents going wrong nowadays

Where are estate agents going wrong nowadays?

Well, first please fully understand that the vagaries of the housing market are complicated as most people will admit.

As a retired property professional I have watched how things have been going for several decades and a clear picture is at last emerging.

The estate agency sector, since the last war, has been increasingly failing to balance demand and supply in the housing market over the decades for reasons other than the imbalances in supply and demand!

The problem is that the estate agency sector itself is mistakenly working on the basis that the demand for housing is economically highly elastic whereas housing supply, they would frequently tell you, is highly IN-elastic. They say, that it is this mismatch which is causing price peaks and troughs in the housing market to occur. This argument is completely wrong for the reasons I will now set out.

Firstly, the supply of houses coming onto their books is not IN-elastic and neither is it dependent upon the total number of houses actually built.

Here are some other reasons why they are mistaken:
As just explained estate agents are actually only dealing with the number of houses currently on the market – or on their books, from a supply point of view. This is quite different from the total supply of all the houses currently built and in use in the whole country!

Once they ‘get this’, they can free themselves from such confusion and begin to help those wishing to instruct them when moving house. They ought to be able to do this for those hoping to buy their next house in any case.

Secondly, and on the fluctuating level of demand for houses from buyers, the agents generally assume this is highly elastic in nature but sadly this is again mistaken.

In fact, agents very much affect the level of demand from buyers directly, (by affecting the number of homes coming onto their books as mentioned above).

This is because buyer demand is greatly affected by the level of wealth of buyers wishing to buy houses at any one time.  Understanding this is very important for generating successful house completions, especially because buyer demand is not highly elastic at all.

Why is that? Because overstating the asking prices of houses going onto the market will put many buyers off, lessening demand. In addition, it also provides misleading information to sellers concerning apparently increasing prices, which can also put many sellers off; rather ironically.

I say this because if agents were to act for buyers instead of sellers, they would see the various opportunities available in the marketplace quadruple, bringing many more house hunters onto the marketplace and thus onto the agents’ books.

Once agents realise that they do in fact influence the number of houses coming onto the market (i.e. by influencing the total supply of houses becoming available for purchase), then business will increase for the agents because this depends on the way in which they interact very much with the buyers as well as with sellers.

This means they should realise that they can and should influence the number of houses sold from a buyer’s point of view, since that must depend on the levels of wealth currently being enjoyed by those in the market to buy themselves a house at any one time.

It should be stressed, acting as an agent in housing is completely different from agents who may be selling, for example, expensive cars and/or yachts, because house agents are dealing with capital assets, not depreciating assets or chattels. Capital assets require extra special skills, involving advising buyer-clients, rather than merely advising the seller, after having obtained a selling contract!

Please understand. No current asking prices indicate a house’s true market value. Neither should you think that whatever reduction you can negotiate will be the actual market value of the property. The asking price is just part of the marketing. Most sellers are optimistic, all selling agents are ambitious sales people and so most sales naturally complete for less than the initial asking price for that very reason.

Therefore and in conclusion for the reasons I have just provided, prudent agents should be acting for or serving buyers as their primary clients instead of sellers, in order to bring about the greatest number of sales in every specific market situation.

Prices should be dependent upon or determined by what different buyers might be willing to pay. Where estate agents almost invariably go wrong, is they confuse this with how much buyers can each individually be made to pay!

Doing the latter is incorrect and it is that which actually causes markets to begin a ripple, which then results in price peaks and troughs, inflating and then deflating again and again on a regular or cyclical basis, throughout the various housing markets, spread across the whole of the UK.

Please notice these peaks and troughs do not always coincide with periods of greater and lesser wealth.

This explanation supports my argument that agents should change their mode of operation to one of acting for buyers rather than for sellers. As well as that, it fully explains that the massively increasing price levels we see currently are not as a result of increasing net wealth but these are in fact more to do with buyer coercion. Such coercion must be taken right out of the agency-equation if prices are to stabilise at safe and supportable market price levels.

The House Price Solution

How to Improve all local housing markets across England and Wales

Posted by: Peter Hendry, Housing Valuation Consultant
Author of:– The House Price Solution (otherwise known as The Hendry Solution).

What do you think about this idea for drastically improving the operation of all housing markets potentially across the whole of Britain?

Constructive comments are very much welcomed.

Footnote:
This is not to say new houses should not be built to provide new accommodation, wherever this is strategically necessary within each local jurisdiction.

What do you think about this analysis of the present situation please?

Comments are moderated but constructive ones are always welcomed.

The Cure For The Malady Across All British Housing Markets

The cure for the malady across all British housing markets is to use a combination of two cures, in a similar way to a doctor using two specific antibiotics to cure a bacterial infection.

The expertise required to achieve that would involve first acquiring an accurate knowledge of the causes of such infections and following this, the ability to diagnose the correct medicinal cure for the specific infection involved.

It is of course imperative to be able to understand precisely how and why a specific illness or malaise will have occurred. Only then can the correct medicinal cure be prescribed.

Peter Hendry says, “I can explain in simple terms why house prices are continuing to rise despite the increasing lack of affordability affecting ever more prospective buyers.”

In a nutshell, the housing market should find the values of houses in a quite specific way.

The true value (or the correct buy price), of any house being offered for sale should be arrived at by adding THREE separately-assessed components together:

1 The land value – which depends in part upon location.

2: The construction cost (including a profit element to the builder or developer).

3: A further amount of equity or profit produced as a result of having combined these two.

These are the things that a sensible buyer should theoretically be considering, even if only subliminally.

All too often however, anxious buyers will base their offers on a combination of how much they could possibly afford and borrow, together with knowing the asking price being quoted.

What makes this task particularly difficult to quantify is that house prices in today’s housing marketplaces are not derived in perfect market conditions at all. The reason for this is because in a perfect marketplace, the whole amount of homes on the market would be sold and the demand for them would also be fully satisfied at all times.

Instead, the present day housing markets have large overruns where, either there is too much property being offered at any one time or alternatively, there are too few properties being offered to purchasers.

Both extremes are most unsatisfactory for prospective purchasers of houses in the regional marketplaces and especially in tourist and second-home prevalent communities.

Unfortunately, current day estate agency does not assess house prices in the way described just now. Instead they peg asking prices at the level they might simply guess they could sell a house for but also they may well often include what their client (the seller) might hope to achieve when determining an asking price!

Worse, they base their asking prices on what other asking prices are, including what the other recent sales will have achieved, albeit these would have used skewed marketing comparisons themselves for the reasons just set out.

To justify what is being explained here, a year ago for example a typical estate agent had 37 properties available and 379 applicants on their register (according to statistics published by the NAEA). Today, after a spirited first half of the year and after COVID has started to reduce, a typical estate agent apparently has just 23 live listings and over 400 applicants on their register.

If knowledge such as this were to be broadcast, it would skew prices-levels downwards whilst the market is flush with houses for sale and it would skew prices-levels upwards when there were not enough houses coming onto the market – as now.

In the former case, sadly there is inherent pressure within estate agency to want to hide the true facts of an excess of properties being listed for sale compared with buyers so as not to spook the market and to keep things going as smoothly as possible, rather than face the reality of a downwards-changing market, with prices dipping.

In the latter case however, with too few properties on their books and too many buyers wanting them, broadcasting the lack of supply actually helps agents to justify trying for rising prices even against general economic trends! This has been what’s going on recently of course.

Selling agents may try to argue that it is the desperation of buyers which is forcing the prices up but that does not explain why the housing markets are operating at such low efficiency in terms of completed sales. This shows serious imperfections, resulting in their lack of stability which means these markets are in need of a completely new approach to buying and selling houses.

In my analysis and resultant diagnosis following understanding the true causes of these problems, two specific ways to deal with them emerge.

A: Firstly there should be restrictions on the right to occupy a proportion of houses in each locality as being permanent “Primary Residence” restricted. This would mean these houses would be for use only by local people, such as key workers for example.

Most people seem to agree that each locality absolutely needs housing to be affordable to those fulfilling the essential roles in their community. This should therefore be enshrined in each area’s local planning rules.

Secondly and very importantly:

B: The emphasis on all prices should be changed so that these are set by ‘buyer offers’ rather than seller price-rigging, which is of course not an open market practice in any way if this is carefully scrutinised.

This is where The House Price Solution (formerly described as The Hendry Solution) could come in. It allows for both of the essential changes cited above.

It would do this by re-shaping house sales methods entirely and by including the use of “Primary Residence” restrictions on certain properties.

AND

It would enable all buyers to be free to participate and establish the price levels themselves, (subject to declared “Primary Residence” restrictions, which would be locally established using the local planning rules).

To read more about how The House Price Solution could improve the way in which houses are bought and sold across all local housing markets in the whole country, please click the following link.

The House Price Solution

How to Improve all local housing markets across England and Wales

Posted by: Peter Hendry, Housing Valuation Consultant
Author of:– The House Price Solution (otherwise known as The Hendry Solution).

What do you think about this idea for drastically improving the operation of all housing markets potentially across the whole of Britain?

Constructive comments are very much welcomed.