How should the actual price of a house be set within the marketplace?

A simple switch between agents primarily acting for the seller to having agents only acting for the buyer is now desperately required. A change from using selling agents to using buyer-advising agents should be seriously considered.

The effect of such a revision of sales and purchase agents would be twofold as far as house prices are concerned.

For the houses which should be attracting lower prices, it would ensure that each purchase price is generated by finding three buyers’ offers which would fix the price level for that house.

At present that is not happening and instead, the relevant price is being guessed (or garnered) by the owner and their selling agent!

In this new scenario lower prices could be the result through obtaining actual ‘market’ evidence of the property’s current price level.

For houses which are larger and of higher value (sometimes much higher value), the marketing would be more comprehensive and as a result, firm bids from three or more purchasers at any one time could possibly result in even higher prices, as more competition from the market could result in the discovery of more than previously discovered interest amongst buyers at the time.

Of course, the converse could and should apply where the level of interest was evidently declining for a specific house type, size, and/or taking account of its state of repair.

Either way, these proposals should result in an increased throughput of house sales because purchasers would be more encouraged to make meaningful offers, based on what they could truly afford.

For the full details of how to address all these issues simultaneously, please follow the link below:

The House Price Solution

How to Improve all local housing markets in England and Wales

I am currently looking for ‘a wing man’ who completely understands the philosophy of these new ideas and who will join me in extolling the virtues of them to all interested parties everywhere. If you are interested please apply using our Privacy Policy email.

Posted by: Peter Hendry, Housing Valuation Consultant

Author of:– The House Price Solution otherwise known as The Hendry Solution.

The new 2022 proposals by the Levelling Up Secretary Michael Gove were good.

The new 2022 Levelling up Bill was 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 long overdue.

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.

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.

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.”

IF, housing markets around the whole country were near perfect, economically speaking, it wouldn’t take a year or more for each house-move to happen. Houses and flats going onto the market would take much less than a year to attract a buyer ready to complete on their purchase. 

There would then be fewer unsold and empty properties waiting to find buyers. Supply and demand would be in balance. House prices would enable this to happen and would facilitate sales to take place more swiftly than upwards of a year.

On the rental side of things, here markets are in a very different situation. There are far more people wanting to rent than there are rental properties available. Also, the supply of flats and houses is shrinking currently, which is forcing rent-levels to inflate. Demand for these properties seriously outstrips supply, economically speaking. Here, the obvious solution clearly has to be to provide more properties available for rent.

It should be noted however, if there were to be less unsold properties at any one time, there would be a lessening of demand for properties to rent, because more tenants would’ve become buyers! Therefore, improving buyers’ markets would clearly help with lessening the rental-demand side of things as well. That would be an important added bonus for both marketplaces, which is why ‘The House Price Solution’ is the final answer.

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.

In peacetime (i.e. whilst our country is not at war with another), residential planning consents should be delegated to all local town or parish councils for them to determine, depending upon local housing need.

This way, genuinely democratic decisions may be arrived at using local decision-makers whom are best able to understand what the current needs of the community are at any particular time.

The different local housing markets could be brought to balance and price levels better able to reflect local demand for housing, more appropriately.

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).

For the full details of how to address all these issues simultaneously, please follow the 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 the whole of Britain?

Constructive comments are very much welcomed.

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.