The top 8 reasons for house sales falling through

Here are the top 8 reasons for a house sale falling through currently:
(The information was gathered from a small cluster of recent sales transactions.)

Notice the majority of the reasons for each house sale failures are buyer related decisions, therefore buyers are the group needing improved representation in the housing marketplace not sellers.

1. The seller decided not to sell their home after all: 26%
(incl. unable to find a house to buy)
2. The buyer’s own house sale fell through: 24%
3. The buyer found somewhere else they wanted instead: 12%
4. The buyer was gazumped: 11%
5. The buyer later decided they didn’t like the property enough: 9%
6. The buyer decided the process was taking too long and pulled out: 7%
7. The seller decided the process was taking too long and pulled out: 6%
8. The buyer and seller couldn’t resolve the final terms of the sale: 5%

The Secretary of State for Housing, Communities and Local Government, Sajid Javid said and the new Housing Minister with effect from 30th April 18, James Brokenshaw MP is so far suggesting:
“Buying a home is one of the biggest and most important purchases someone will make in their life. But, for far too long buyers and sellers have been trapped in a stressful system full of delays and uncertainty.


We’re going to put the consumers back in the driving seat. We will require estate agents to hold a qualification so that people are no longer at risk from a minority of ‘rogue agents’ and can trust the process when buying or selling their home.”

My response is:
Simply requiring those carrying out estate agency work to be suitably professionally qualified won’t resolve the dilemma of the broken housing markets all around the country with prices stretching further and further beyond people’s reasonable ability to afford them.

The only way this could be achieved would be to improve the way each local market itself operates, by making all of them more efficient. If this needs further explanation I’d be happy to provide it.

The necessary way to do this is to remove the incentive for agents to hype up all the prices, by making them work for the buyer (or the renter) rather than for the seller as at present.

There needs to be a more fundamental and wide-ranging concept for dealing with this significant problem. Simply trying to get more houses built isn’t the whole answer either.

The only practical and thought through solution is being championed by a retired Chartered Surveyor, (myself) primarily. People working within the estates sector are simply too reluctant to propose or to accept the necessary changes.

The method by which this substantial improvement could be made is fully explained on my blog pages but does require some study. See:

Improve The Housing Market in England and Wales.
How to Improve the Housing Markets in England and Wales.

I would welcome reasoned discussion about this and I may be contacted via the blog site initially of course.

Peter Hendry, Author:– The House Price Virtuoso Solution otherwise known as The Hendry Solution

Latest government funded research into the crisis within the housing markets across England and Wales

Here’s news (published in February 2018) on the then recent government funded research into the crisis existing within the housing markets across England and Wales.

An awful lot remains to be done to assist those wanting (and needing) to start buying their first houses or flats and thus later to be able to move to better accommodation as and when, and wherever, they may need to.

The Economic and Social Research Council have funded the recent research through the Secondary Data Analysis Initiative (grant number ES/N011872/1) and the Centre for the Microeconomic Analysis of Public Policy at the IFS (grant number ES/M010147/1).

The online link to the IFS research is:
https://www.ifs.org.uk/uploads/publications/bns/BN224.pdf
The decline of homeownership among young adults.

The IFS are so right about the decline in home ownership. It’s a societal loss.
I have worked on producing a policy designed to resolve the current problems within all housing markets across England and Wales.

In my opinion there is only one certain way to resolve this dilemma. It’s my latest online blog-published explanation covering this and taking you on to the actual virtuoso solution which may be found at the following link.

The House Price Virtuoso Solution.
How to Improve all Housing Markets in England and Wales.

Peter Hendry, Author:– The House Price Virtuoso Solution otherwise known as The Hendry Solution

It’s an earnest attempt to be a useful contributor to the future prosperity of our still great nation.

The Hendry Hypothesis and Solution

“The Way to achieve free, civilised and secure trading within the housing market of England and Wales.”

Building sufficient houses to have enough of an effect would take years therefore, by definition, other remedies will be needed.

This hypothesis/solution, as well as stepping up the rate of construction of new houses as a side effect, proposes to retune the housing market itself.

If this hypothesis were to be implemented the effect on house price re-calibration would be swift, fair and effective.

The result would be more houses being brought within the reach of those whom cannot currently afford to buy their own houses to occupy. The knock-on effect of this would be to stimulate the building of more houses to meet the extra demand arising from it.

For more information on how The Hendry Hypothesis proposes to retune the housing market itself please now go to: ‘The House Price Virtuoso Solution’

The House Price Virtuoso Solution.

How to best improve the Housing Market in England and Wales.

Captivating research into house price growth since the late 60’s

No political party in power in the last 50 years has managed to curb excessive house price gains!!

See:
Which political party is best for house prices?
JUNE 6, 2017 credit: MARC SHOFFMAN
.

I would define excessive house-price gains as prices that exceed inflation by over 2%. Most years have seen house prices outstrip this benchmark.

As everyone knows, increases in house prices running in excess of average affordability are currently in the headlines as these are of concern both for those hoping to buy as well as those hoping to move house these days. The effect is to reduce the volume of house sales, resulting in a stagnation of sales volumes across all areas of the UK.

Here’s how to overcome this problem:
Instead of estate agents working on how many houses they can list and gain instructions to sell or let, they should work on how many buyers and renters they can register.

This would be the change that the housing market has been needing for the past few decades.

Estate agents should then work with their new clients to find the best and most suitable properties currently available for them as their primary clients.

They could also then advise and negotiate appropriate prices or rents for them as clients, and present all such offers to the vendors (or the landlords).

This way, more buyers and tenants could be united with the houses that best suit their purposes. This, in turn, would help the housing market to function faster and better.

Turnover of properties going on the market would increase and prices should be more equitably regulated dependent upon the true demand from buyers and tenants..

In other words; instead of each agent trying to get the most, for as many houses as they can get instructions for, buyers should be gathered as their new clients to more correctly ascertain what are the best offers currently obtainable, for each house or dwelling.

Doing things this way would get the housing market to start operating more like an auction, where buyers truly compete with one another to win the use and occupation of each property being marketed.

In auctions, the buyer effectively pays the consideration as the auctioneer takes his commission from the price paid. (He does also take a listing fee from the seller, which is reasonable).

For more on this new idea and how it could change the housing market in England and Wales very much for the better, please see The House Price Virtuoso Solution (otherwise known as The Hendry Solution):

Improve The Housing Market in England and Wales.
How to Improve the Housing Market in England and Wales.

Your thoughts or comments are welcomed.
Regards,
Peter Hendry, Consultant in Housing Valuation

Shelter declares affordable new homes too expensive

Nearly eight out of 10 families across England are unable to afford newly built homes in their local area, a report by housing charity Shelter says.

This story was published in early March 2017 in most of the news media and shortly before the forthcoming Budget Speech.

The links to the BBC and ITV articles are as follows:
(they open in a new tab)

affordable houses too expensive: BBC Shelter story.

affordable houses too expensive: ITV Shelter story.

It finds rising rising house prices hitting all parts of the country, not just London and the south-east.
Apparently, ministers agree the present system for building more affordable houses is broken and still aim to make such housing genuinely affordable.

There are allegations that prices for land, plus the cost of construction, have risen to allow maximum profits to be taken by builders and at the same time housing supply is not being accelerated to meet predicted housing demand.

Many new-build houses are costing over £200,000 and more than half of the families in each region simply cannot afford to pay this.
In addition, second-hand houses for sale are generally cheaper in price.

Shelter says there is a crisis in the housing sector.

The article argues for more local authority involvement enabling the building of properly affordable houses as well as the possibility of involvement by voluntary organisations that may be encouraged to work to build such homes for the public good rather than for increased private profits.

The charity would like to see a “new civic housebuilding” system introduced to facilitate the building of new, affordable high quality houses, with greater powers for local authorities over land acquisition in their respective areas.

Under Shelter’s proposed initiative, landowners could choose to sell at reasonable prices, or invest their land as equity and own shares in a development, instead taking long-term returns and a share of the profit.

A Department for Communities and Local Government spokesman was interviewed about this and apparently agreed with Shelter that the housing market in this country is broken but also confirmed, among other things, that the industry is committed to delivering further increases in supply with more of the types and sizes of houses that can better match supply to demand.

It will be interesting to see what is offered to help with this in the forthcoming Spring 2017 Budget.

As a final comment, my own proposal is for a new way for housing in England and Wales to be marketed which is based on changing from vendor-centric estate agencies to buyer-oriented ones. The details are fully set out in ‘The House Price Virtuoso Solution’. The change would not cost a great deal to implement and would bring massive benefits to every local housing marketplace, by helping to satisfy demand at more favourable prices. It would be achieved by making the process of buying and selling itself considerably more efficient and less costly, whilst still encouraging builders to construct the houses which are of course urgently needed.

To read more about The House Price Virtuoso Solution (otherwise known as The Hendry Solution) go to the following link:

Improve The Housing Market in England and Wales.
How to Improve the Housing Market in England and Wales.

Peter Hendry, Author:– The House Price Virtuoso Solution otherwise known as The Hendry Solution

Fundamental changes still necessary to all housing markets in England and Wales

The BBC has very recently published an article about deemed improvements to the housing market in England and Wales and which should be incorporated in the White Paper coming before Parliament shortly.

In a survey carried out for the Local Government Association (LGA) concerning this, Martin Tett, LGA housing spokesman, is reported to have said that an opportunity to boost housing supply and improve affordability now presents itself to government.

He explained that the government must recognise that a substantial increase in house building by councils will be crucial to help ensure the availability of a mix of affordable homes both for rent and to buy for the people that will need them.

For the full article, please go to:
BBC article on improvements to the housing market

My proposal for the way housing (within England and Wales) should be marketed, is based on changing from vendor-centric estate agencies to buyer-oriented ones, as described in The House Price Virtuoso Solution (otherwise known asy 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’ please go to the following link:

Improve The Housing Market.
How to Improve the UK Housing Market.

Peter Hendry, Consultant in Housing Valuation

The housing market is desperate for economic reform to bring everything back into line with local affordability.

It’s so obvious that the housing market is desperate for economic reform, to bring everything back into line with local affordability?

Please see:
The state of the UK housing market in five charts: The housing market is desperate for economic reform to bring everything back into line with local affordability.
An especially good article with graphs by Tom Ough – 2nd Sept 16.

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 House Price Virtuoso Solution (otherwise known as The Hendry Solution). This would not cost much to implement and would bring massive benefits to all local marketplaces.

To read more about The House Price Virtuoso Solution go to the following link:

Improve The Housing Market.
How to Improve the UK Housing Market.

Peter Hendry, Consultant in Housing Valuation

Simply building more houses can’t solve the housing crisis

Obviously we need to get more houses built, both for rent and to buy but developing this as a strategy for calming the housing market is not going to remedy the prices uplift which we have recently experienced. It cannot do that simply because building more can’t achieve anything for as long as the considerable time it would take to actually complete the building of the extra housing needed!

The market itself is in need of intervention and this does need the steady hand of an experienced government. One that can put effective policies into practice faster than the simple and well-thumbed ‘build more’ idea.

My solution is to overhaul the way in which houses are marketed, both for sale and to let by changing the way agents themselves operate.

A more market friendly method is needed so that house prices can be attuned more towards peoples ability to pay, with less of the speculative pricing by agents, whom currently act only for the vendor legally. It is this which needs urgent attention.

A more transparent housing market would not only take the froth out of asking prices but would have the added effect of calming rent levels too. For more information please go to the link below:

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 House Price Virtuoso Solution. This would not cost much to implement and would bring massive benefits to all local marketplaces.

To read more about The House Price Virtuoso Solution (otherwise known as 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

Why have UK house prices risen now and become way out of line with the rest of the economy?

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 House Price Virtuoso Solution. This would not cost much to implement and would bring massive benefits to all local marketplaces.

To read more about The House Price Virtuoso Solution (otherwise known as 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

There is a problem with the estate agent instruction-gathering machinery

The main point to raise is that calming the housing market is not just a question of doing accountancy tweaks.
It’s how the market is managed that needs the tweak.

There’s a problem with the estate agent instruction-gathering machinery.

The thing is, agents are all too willing to scoop up new instructions in competition with each other, irrespective of whether the client wishes to ask too high a price for the property being sold in the prevailing market, taking account of relevant locational considerations. This is a continuously inflationary approach which has been built into the housing market for decades but need serious revision.

The problem is, there’s a cost for having too many over-priced houses on an agent’s books and this has to be spread across all the other vendor clients. That’s because of the no sale – no fee method of charging which is used. In addition, the cost of maintaining this extra sales data on the various portals does add up and is cumulative. This fundamental problem is not dealt with by tweaking the accountancy of the housing market.

It has been noted in recent media coverage that it’s the successful sellers, the ones who price their properties realistically, that are subsidising the cost of all the unsuccessful sellers, whose properties are overpriced and languish on the market for weeks at a time! Also a significant number of these vendors eventually give up altogether causing even further financial loss to the agents, as well as feeling they have had a poor service from them!

Agents should ask themselves, how many vendors would be happy to keep their property on the online portals for weeks on end if they were the ones whom had to pay for the cost up front, whilst knowingly trying to achieve an unrealistic price for their property as compared with everyone else.

What’s even worse is the practice amongst estate agents of competing with each other by chasing each prospective buyer to the extent of hounding them to make a decision to buy what ‘their particular client’ is selling before it is too late. This is basic arm-twisting and is patently bad practice, especially when the house in question either stays on the market or comes back to the market rather quickly afterwards.

Though agents appear to be trying to help the buyer, really they are trying to effect a sale on behalf of the vendor. This is the biggest turn-off for buyers as it effectively destroys any trust between buyers and estate agents and is therefore seriously counter-productive. This whole model of how best to serve buyers, whilst acting on behalf of sellers needs urgent and fundamental revision.

The Bank of England FPC’s latest proposals to re-unite the two-pace housing market are unlikely to achieve that objective.

Forgetting interest rate rises and MMR restrictions for a moment, the situation described above clearly points to the need for a complete revamp in estate agents’ core practices? If that happened we would all begin to see a new, better and more vibrant housing market in this country.

The definitive way for estate agents to achieve such a game-changing move is fully explained in my earlier article I am a retired estate agent with many years experience in the property sector.

The government of the day doesn’t seem to be doing anything much about these important issues unfortunately.

The views of firms or individual estate agents themselves are sought for moderation and online discussion on this web site.

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 House Price Virtuoso Solution go to the following link:

Improve The Housing Market.
How to Improve the UK Housing Market.

Peter Hendry, Consultant in Housing Valuation