Category: Estate Agents

Share both good and bad experiences when using estate agents without specifically naming firms. (Be careful not to explicitly name firms to avoid unwanted law suits.)

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Intro to: The House Price Solution – the key to fairer house prices

The Independent newspaper recently published in its online version with the headline:
“More than 8 million people in England are living in unaffordable, insecure or unsuitable homes, the report says.”
If accurate, this predicament is unacceptable and in urgent need of remedying with the help of our government.

There have been many claims of similar housing crises over past decades in the media. These claims suggest that all is very far from well in the housing sector. as the old adage goes; there’s no smoke without fire!

This is why over decades past and as I’m now a retired valuation surveyor, I have views on the reasons for these failings, particularly as they adversely affect poorer communities.

Because of this I’ve devised a new and better way to deal with the currently unaffordable level of house prices and associated housing issues because purchase prices currently being claimed as being ‘affordable’ are very clearly not really affordable at all.

Once you take a look into this, it should become crystal clear that it is the poorer buyers whom are actually propping up the house prices for the rest of the home owners!

Why is this so? Because it is they who must borrow astronomical sums of money (to them), by mortgaging the very properties which they need to live in, so that the present very high prices prevailing in a so-called open marketplace may be maintained. One has to ask, who gains most from them doing this?

Firstly, it is those fortunate enough to already have substantial property assets and who enjoy a healthy and almost guaranteed rise in the capital values of their relatively extensive holdings. Secondly, it is the banks and financial organisations that gain from earning interest on the substantial loans which they can thus arrange. Profits derived from these activities depend on the ability of those on this side of the equation to be able to liquidate these large financial rewards each time they sell these assets, without having to do much to earn the extremely large profits involved.

Borrowers today by comparison, have increasing job insecurity issues, especially borrowers on the lower rungs of the property ladder who have to commit to high mortgages by taking on burdensome and increasingly risky and long-term borrowings. These families and individuals are the ones who need relief, by way of a lessening of their large and onerous borrowing commitments they are being forced into making.

It is time the whole rigged house-selling regime, which is being played out using the historic role of estate agency, is re-balanced, such that those wishing to make money from owning property are seen as causing excessive un-affordability issues being experienced by an increasing number of poorer, aspiring to become, home owners in this country.
Is there a political party in the land that might contemplate such a re-think? Let’s hope so.

Those requiring housing should rightly expect to depend upon an efficient and fully functional housing marketplace in order to move house and should expect be able to reasonably afford to buy, or alternatively rent, their next housing accommodation.

Judging by the recent dramatic slowdown of sales transactions as shown in the current sales completion statistics, efficient agency services are simply not available at present.

For anyone interested in the best and only way to correct this unacceptable shortcoming, please read, mark and digest the proposals within: The House Price Solution starting at the following link.

The House Price Solution (otherwise known as The Hendry Solution)

How to Improve the Housing Markets in England and Wales.
The background of this, leading to the logically deduced conclusion arrived at, starts at the following link:

Home Page – improvethehousingmarket.co.uk

As author I would be happy to engage in online discussions about the technicalities and/or the new strategies necessary in order to reach perfection in the operation of all local housing markets in England and Wales. This web site sets out how these housing markets may be improved for the benefit of owner-occupiers, private tenants and in fact, everyone using all forms of housing everywhere in our country.

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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How can the housing market be made more efficient in Britain?

On face value one might be forgiven for thinking that if you want to sell a property, you might simply advertise it for sale or employ an agent to do just that.
But have you ever thought; Can the housing market be made more efficient in Britain?

To help answer this, if you were selling any other item such as a car or a boat for example, advertising it or using an agent to do so would be a reasonable thing to do but not with houses as I will explain.

With houses things are different because houses are capital assets, rather than depreciating ones. In other words, they are not mere chattels to be chalked up at a notional price and simply sold.

How is this so?

It’s because the amount of work and expertise required to build a house is sufficiently great to cause its value in the market place to adjust, upwards or downwards, depending on buyer’s demand and their ability to pay to purchase the property.
Secondly, houses are expected to last for around a century, which is different to most other things that are sold or let.

Thirdly, the availability of finance or mortgage borrowing is another primary factor which affects the prices of houses in the marketplaces wherever they are situated.

Question:
Why can’t a selling agent just deal with all of that?

Because the important aspect when selling is to know and understand how many buyers are out there and what might they each be prepared to offer (or bid) once they have everything in place to make a final decision. Buyers also need to arrange things they require like a survey, a confirmed mortgage offer, completed legal searches etc…

The best people to deal with all these matters would unquestionably be an agent acting specifically for the buyer in question.

Only they could best represent each buyer and in fact therefore could also serve vendors to best advantage too.

Why would this be an improvement?

It would be an improvement because selling agents do not, in fact, act for any of the buyers whereas buying agents would be able to do so all the time.

Selling agents can only act for those selling their houses. This is half of the marketplace of course; and that’s exactly where the problem lies.

Registered House Buying Agents, [RHBs] on the other hand, would be acting for multiple buyers simultaneously so they would be fully in touch with these buyers as well as knowing what houses are currently available for sale on the market. They would know all of this because their other buyers will be among those selling too.

The difference between the two types of agents is that with selling agents, once they sell a property on behalf of their vendor-client, they aren’t interested in who else is buying. They’re only interested in who else may be selling!

Working in that way is, as I say, only dealing with one half of the housing marketplace at any one time. It is this which is causing the housing marketplace to malfunction or to perform badly. It is this which is causing wild price swings upwards and downwards, depending upon the availability of purchasing power (or buyer demand) at the time.

For as long as the existing estate agents are isolating themselves from being responsible for dealing with the buying side of the housing marketplace, price anomalies will continue.

The result must be more of what we see today, buyer frustration at what might have been, as regards home ownership.

In full response to the ‘lack of supply’ pontificators, whom are rather prevalent currently, the whole rationale or philosophy behind my carefully considered solution for restoring the housing markets around Britain to good health, embraces the wisdoms of bygone days. How so? There was a time when latin was in general parlance and the words: “Caveat Emptor” were in frequent use. The meaning of this should never have been forgotten.

This used to be an express warning which was applied especially where property or real estate was concerned. The words of the warning mean: ‘Let the buyer beware – unless they are covered by the seller’s warranty in terms of quality and worth’. The meaning of this simple latin saying amply describes why the current failures are occurring, manifesting within all housing markets up and down our still great country. 

We should remember this because in actual fact it is the one thing which is required, in order to restore and correct the damaging anomalies surrounding today’s accelerating house prices. As explained, these anomalies arise from our having departed from and forgotten what were previously well-known and established wisdoms, to be relied upon whenever undertaking commercial transactions such as those involving the buying of houses for family use.

The problem of unaffordable house prices today simply isn’t a supply-side matter at all. It is a price-side problem not a supply-side one. A-level students studying economics ought to know this! Once this is understood, the requisite changes to the way in which our housing markets operate across the whole country may be realised so that they may, once again become normality. Central government necessarily would need to take a lead in resolving this current-day house price crisis of course.

In the local area where I live for example, there are clearly more than a sufficient number of houses that certainly could be used to satisfy both present and future demand for residential housing but they are not coming onto the market. Instead they are being used for non-residential uses. It is this that needs addressing most urgently, not the headlong rush to build more houses to satisfy a purely notional lack of supply when in fact, there is a more than adequate supply of suitable property both in our locality and in plenty of other locations all over the place!

Please consider what is being explained here and raise any relevant questions on this for public scrutiny and discussion. A campaign ought to be mounted to bring this matter to the attention of our government should those interested in this wish that to happen.

Using this logic (as well as other arguments), I emphatically suggest that the existing vendor-centric estate agent model is no longer fit for purpose, is out of date and is way too inefficient.

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.

Extra reading:
Article in The Property Industry Eye dated 9th May 2019 giving the current market downturn information:
Estate agents are reporting a drop in property instructions
New instructions sink to a three-year low – and worse is expected.

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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 required.

The market itself is in need of intervention and this does require the involvement of government. A government that can put effective policies into practice faster than the simple but over-quoted ‘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 required 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 requires 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 Solution. This would not cost much to implement and would bring massive benefits to all local marketplaces.

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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Defining a modern-day estate agent

Can anyone accurately define the present function and purpose of the modern-day estate agent?

Can you go further and define what the precise function and purpose of a modern-day estate agency should be?
We’re also hoping to hear from people who can re-define what they really want from estate agents, including things they could to do better:

Current Definition:
A person (or organisation) that tries to get the best possible price for a house whilst acting on behalf of a property owner, usually rewarding themselves with a percentage of the price they manage to achieve on the legal completion of each sale.

Problems resulting:
This basic remit permits them to do almost anything, even if it happens to be somewhat beyond the law, and/or against the economic trends of the market itself. For example, they may take bids from gazumpers (real or imagined), obtain extra mortgage finance for a buyer as a condition of finding a property at the named price, or just pretend additional offers are being made at any stage when in fact, these are fictitious. They may also fail to take the current poor condition of the property into account and they may even misrepresent the true state of the property market itself, not only to prospective sellers simply in order to gain the initial selling instructions but also ‘guild the lily’ as to the present state of the property market to prospective buyers at the same time!

An analogy intended to help highlights these defects:
If you were to eat or drink more than your body can comfortably handle the result would be, to start putting your own body in peril.

In just the same way, if a house owner (or indeed his agent) should try (through nefarious means) to extract more than the current market value of a property from buyers, he is by doing this, putting the operation of the whole marketplace in peril. He is thereby not acting in his client’s best interests at all! This seems to be what has been happening recently. This behaviour no longer relates to the role for which estate agents were originally conceived.

Alternative and new proposal:
New and improved estate agencies should be set up and named ‘Registered House Agents’ or ‘RHAs’ for clarity.
Their job:
A person (or organisation) whose primary function is to locate and assess suitable properties, establishing their true value in the present market conditions. Their instruction would be to act primarily for the buyer, not only in the capacity of finding and presenting to them the best choices of property to purchase for their specific purposes but also to engineer the best overall sale and purchase package for their client. Once formally instructed to, they would see the agreed package right through to combined legal completions.

Since these more modern agents or ‘RHAs’ knew they would have to demonstrate each client that their’s was the best set of proposals for that client in the present market situation, they would automatically be seen to be earning the level of fee that they would expect to be charging for that service.

This would mean that less external regulation for agents would thus be needed, not more!

My new proposal is to improve the way all housing in England and Wales is marketed and is based on moving away from vendor-centric estate agencies. Instead it would use buyer-oriented ones as is fully described in The House Price Solution. This would not cost very much to implement and would bring massive benefits to all local marketplaces.

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.