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Can We Talk About House Prices Again? - Updated 16th August 2011
We all know that analysis and discussion of property prices is something of a national obsession (even where there is no immediate prospect of moving house) and a homeowner’s perceived wealth and therefore his/her propensity to spend is greatly affected by the equity accumulated in their home,
Yet the recent turmoil seen across the UK in several major cities challenged this view, when online discussions centred on how property prices might be affected sharply divided public opinion (in the short-term at least).
Whilst the vast majority of the population are rightly shocked and appalled by what has taken place, the normal business of buying and selling property will quickly resume in all the areas affected by the riots, and a fundamental part of that process will be intelligent valuations, driven by local expectation and sentiment…so maybe the question is just one of diplomacy and timing.
I was in London myself most of last week just a mile or so away from Brixton during the troubles. Like many others, I was frustrated by the apparent lack of response from the authorities, but was emboldened by the reaction of the general public in organising a citizens’ cleanup. I even met a young man on the train home to Huntingdon who had given up his birthday to travel down to help (one of the silent majority who decided that actions speak louder than words – ladies and gentlemen, I take my hat off to you).
So after a few days of reflection, and hopefulIy in a calmer environment, I have concluded the following (a simple question, and two powerful observations);
- who provides leadership in difficult times?
- just how quickly events can move, and the need for those in charge to make rapid and informed decisions
- the phenomenal power of social networking: for example, the 65,000 people who registered on Twitter within 24 hours from across the UK to come and help clean up the streets
And here is perhaps the controversial part; I see the some of these issues affecting the current housing market, where conflicting forecasts for prices and repossessions are published almost on a daily basis, where the public are increasingly able to share their views and opinions in real-time using Facebook and Twitter, and also where asking prices continue to rise - almost in a futile attempt to defy gravity when prices achieved are falling and a typical home takes over 7 months to sell.
Yet ‘normality’ will return, and demand and supply will gently fall back into balance. In the interim, the most successful buyers and vendors will secure a comparative advantage by using the very best source of guidance and information – that being your leading local, Guild estate agent, who will always give you honest and professional advice just when you need it.
Intelligent Choices for the Private Investor - Updated 8th August 2011
Two pieces of financially challenging news emerged this week. The first is that stock markets around the world are heading into another period of uncertainty.as two of the powerhouse economies, the USA and The European Union, struggle with over-indebted economies that are out of kilter. The second is the fast looming pensions crisis, which is caused by the end of the ‘baby boom’ reducing social contributions from the working population just as demographics skew towards a retired economy
Neither of these is likely to be a quick fix, especially as no workable solutions have been offered (just extended lending arrangements), and as partisan groups struggle to find common ground. It is maybe to be expected that the richer countries start to baulk at the consistent bailout of their less frugal relations. Yet in the end, someone has to ‘pay off the overdraft’, or default will surely follow.
As a result, the price of gold has risen to a record high (of £1,667 per ounce) as investors flee from risk and seek safe returns. Some forecasters project the price to rise further to over $2,000, but precious metals and commodities in general are notoriously speculative and not for the faint-hearted.
So what is a private investor to do? Well, as Mark Twain famously said “Why not invest in land….they are not making it any more”.
House prices in the UK have remained remarkably resilient despite the reported oversupply (as completions have halved since 2007). Yet the population is continuing to rise, forecast to be over 70m by 2013.People are also living longer and with an increase in divorces / single occupancies, the number of required properties increases. As a result, the type of housing required has a major focus for builders and planners.
Therefore the most savvy investors are mixing their portfolios, including pensions, property, and maybe more exotic elements such as wine or art. However, rather uniquely, property can give you an ongoing return during your investment as demand for rentals rockets (up 15% in the last 12 months alone). In fact, rental costs now outstrip equivalent mortgages in most parts of the country.
Many households are choosing to reduce to down their mortgages, yet this only offers an average of 4% return compared to up to 8% for ‘buy to rent’.
So if you can look beyond the short term, property is still probably the best bet in town. It is stable, offers comparatively good returns, consistent and regular yields, and there are bargains to be had as the most committed vendors accept ‘cheeky offers’ rather than remaining married to emotional valuations. No wonder the private investor is returning to the market.
What the QR? - Updated 2nd August 2011
You may have seen these square, almost pixellated images recently appearing on signs, buses, business cards, in magazines and shop windows across the UK - and even on TV cooking programmes. So what are they, and how can they hep buying and selling properties?
A QR (or Quick Response) code is a specific matrix barcode that is readable by dedicated readers and camera telephones. The code itself consists of black modules arranged in a square pattern on a white background. The information encoded may be text, URL, or other data.
QR codes were created by Toyota subsidiary Denso-Wave in 1994, and are now is one of the most popular types of two-dimensional barcodes. The QR code was specifically designed to allow its contents to be decoded at high speed.
Users with a camera phone equipped with the correct reader application can scan the image of the QR code to display text, contact information, connect to a wireless network, or open a web page in the telephone's browser. This act of linking from physical world objects is termed hardlinking or object hyperlinking. They have quickly come into fashion as a result of the rapid growth of iPhones and similar mobile devices.
Estate agents are also starting to utilize this tool, for example by including QR codes on property information to allow quickly and easy access to additional information such as the full details of the house, the website of the agent, or even a videoette showing the property’s key features.
The Guild Of Professional Estate Agents is once again at the forefront of agency marketing, able to quickly generate a QR code for any property managed by its 600 plus members – that’s over 40,000 properties, each with a unique QR image!
So if you want your home to stand out from the other 1 million plus properties currently for sale, or simply want to work with an independent estate agent who has their finger on the pulse of the latest marketing techniques, scan a this code below to help find your local Guild agent.
The Gap between Buyers and Sellers - Updated 15th July 2011
A total of 85,104 properties on the market had their prices cut last month, according to the property search engine Home, which was 15% more than in June last year.
The website, which takes its data from almost every estate agency website and portal in the UK, also reports that properties are now taking 113 days to sell – 13 days longer than a year ago. Put another way, less than 5% of properties on the market will sell in any given month
Yet Rightmove recently reported that asking prices are rising (1.2% in June), and Zoopla recently researched over 2,000 householders, 57% of whom expect house prices to rise in the next 6 months. So something strange is happening – but what exactly?
The truth may be quite simple; many vendors are still overambitious, possibly supported by estate agents who are desperate to with the instruction, and buyers are becoming more canny in understanding and exercising their power in the market.
On the first point, valuing property can be as much as art as a science – and it in truth a home is only worth what any one particular person is prepared to pay. Yet many vendors become confused and somehow think that any number of personal aspects should be reflected in the price, such as; -
- what they paid for the property
- what they have spent on it
- what they need for their next purchase
- what their neighbours or friends say it is worth
- what similar houses sold for last year
- ‘blind’ or guide valuations from portals and the internet
- What other houses in the road are trying to achieve
Desperate estate agents can feed this by exaggerating the value, to try to increase their appeal to the seller, and the dangerous cycle is complete.
Yet the only reliable guide to value is what has already sold. What remains on the market is arguably not selling precisely because it is overvalued, and in a uncertain market, this is a very dangerous position for a vendor to be in.
Houses attract the most interest when they are first brought ‘fresh’ to the market. Enquiries can tail off significantly after only a few weeks, and a home unsold for any length of time attracts a certain stigma; how often have you asked an agent ‘how long has this been on the market?’, and when told several months, have asked yourself what or where the problem might be. A stale property also encourages ‘cheeky offers’ from potential buyers, further upsetting the vendor who feels that the price gap is growing even larger – and the agent gets the blame for not doing his job. He then responds by suggesting a significant price reduction to get the property moving and everyone is left bemused.
So the initial valuation is absolutely crucial to a speedy and successful sale. There are now sophisticated tools available to help the agent and seller determine this, such as the Guild’s proprietary Intelligence software. Vendors should rigorously challenge the agent’s valuations until they are confident that it is based on sound logic, relevant expertise and expertise – and there is no-one better placed to deliver this than your local independent Guild agent.
A little more time and attention here could literally be worth thousands of pounds, and save you months of disappointment!
House Prices rise by £67 a day - Updated 14th July 2011
Homeowners will be pleased (and maybe a tad relieved) to hear that according to Halifax, the UK’s biggest mortgage lender, a typical three bedroom house rose in value by over £2,000 to £163,000 in June – a 1.2% increase over the previous month.
The property market seems to be regaining a little its mojo after an uncertain month in April, which was dominated by three bank holidays and the royal wedding. This improvement is due to a number of factors, but in particular continued low interest rates, cheaper and more plentiful mortgages, and rising employment.
Typical mortgage payments for new buyers fell from a peak of 48% of average disposable earnings in mid-2007 to 28% in the first quarter of 2011. Although obtaining a first time mortgage is still relatively difficult, the financial advantages of buying over renting continue to grow as costs for the latter continue rise in real terms at over 10% per annum, and considerably more than this in major conurbations such as London. Demand for Buy To Let mortgages also continues to increase as private investors realise the attractive returns available compared to other investment opportunities.
An extra 80,000 people moved from ‘looking for work’ to registered employed in the three months to April compared to the previous quarter, due primarily to a flourishing services sector.
One leading solicitor practice advised potential buyers who were waitjng for further price falls to act quickly before price rose further, and many leading commentators such as HIS Global Insight have now revised upwards their forecasts for house prices for the coming 12 months, as interest rates are expected now to rise more slowly than previously predicted. Estate agents are also reporting a higher ratio of sales to unsold stock, traditionally a good indicator or house price trends.
There is still inherent risk in the property market, as over 1m homes remain unsold (often due to unrealistic expectations from the vendors) – and there is a real danger that sellers could become greedy and now hold out for even higher prices. Different areas of the country are experiencing varying demand and the economy remains fragile with confidence levels at a historically low level. Yet property remains a great investment opportunity over the medium term, and a increasingly better financial proposition than pensions, savings accounts, or simply paying rent to your landlord!
The most important point to emphasise therefore is to always seek professional guidance from a local expert who can supply the latest information on local conditions and also trustworthy advice on how, where and when to move. The Guild Of Professional Estate Agents has over 600 member offices right across the UK who can give you the highest standards of independent advice – to help make your journey easier, quicker, and more profitable!
Asking Prices Rise Again To A New June Record - Updated 27th June 2011
Asking prices for new properties to the market rose again in May, despite the number of transactions falling year on year. The leading portal, Rightmove, described this as “sellers continuing to romp away from reality”.
The latest rise, of 0.6%, or an average of £1,520, means that the average asking price for a home new to the market now stands at £240,394 – this is the highest ever asking price for June and is the sixth month in a row where these have risen. Altogether, asking prices for properties coming on to the market have risen 8.1% or an average of £17,984 so this year. Yet the comparable numbers for ‘mortgage agreed’ selling prices are £160,519 (Halifax) and £167,208 (Nationwide)
Several leading commentators are now forecasting that asking prices will need to fall by up to 7% over 2011, to ‘rebalance’ the market. Again, according to Rightmove, there is an average of 78 properties unsold at each estate agency office, compared to 69 per office in January. This suggests a significant excess of sellers compared to buyers, and in particular consistent overpricing by vendors versus what the market is prepared to pay. So why then are prices still rising?
It could be that the very fact that asking prices are being reported as increasing creates a bubble of expectation; a temporarily self-perpetuating mirage where reality and pragmatism are not front of mind for vendors. These sellers would rather believe the hype than the evidence.
This is compounded by the fact that vendors are often in no hurry to sell, or feel that they want to achieve a certain price (maybe to afford their next move, the financial investment made in the current property, or even their friends’ valuations). Yet in reality, a house is worth what someone is prepared to pay for it, and not what the vendor hoped to achieve.
It could also be that some estate agent themselves have fed this myth, in their eagerness to win your business. After a few weeks, they may then come back to you and suggest that the market has changed, and that pricing needs readjusting significantly downwards accordingly. The vendor ends up with a delayed sale, and emotional frustration and disappointment from the service.
However, the most professional agents can now give you up-to-date and accurate market statistics (such as Guild Intelligence proprietary software) to fully justify their valuations. Whilst this can be as much an art as a science, gross overestimating property values help no-one. In fact an increasing number of agents are now walking away from unrealistic vendors, and will wait until the seller adopts a more achievable price.
So the message for sellers is simple; if you want to sell your property quickly and relatively efficiently: -
Always use a professional estate agent
Make sure that he / she can fully explain their valuation
Be realistic about what is achievable
Ask for a regular review of the market and relevant local pricing
Use every marketing tool you can to help differentiate your property from the other 1m unsold homes.
Does Your Agent Have The Right Connections? - Updated 27th April 2011
We're not just connected now, we're hyper-connected: superfast, always-on, and on the move. And the biggest change, both in business and the home, is the use of real-time flow of data.
For starters, forget about PCs. For every desktop computer, there are 10 mobile devices. Around the world, mobile phones outnumber toothbrushes two-to-one.
These devices generate data and this torrent of information, which is aimed straight at us, is changing the way we live, work, learn and even how we buy and sell houses!
Adapting to change can be stressful and often challenges our preconceptions - when the railroads were built, there were people who argued that humans would suffer brain damage from seeing the landscape rush by so fast! Yet we now think of train travel as mundane and maybe even slightly archaic.
"Hyper-connectivity will change every business model and supply chain; it's at an inflection point this year... and the uptake of connectivity is accelerating ever more," says the CEO of one of the leading internet companies reccently at the World Economic Forum in Davos.
What does this mean for us? Hyper-connectivity turns us all into information sharers, and this gives a great opportunity to ‘smart’ property vendors.
Your leading local independent estate agent is now able to promote your property virally via the major social networking channels, using natural profiling to direct the details to a self-selecting, appropriate audience. After all, the person most likely to buy your home is probably about your age, with similar financial and family circumstances.
Elephant & Castle Independent Estate Agents leads the industry in its innovative use of this powerful new marketing tool. If you want to be one step ahead of the competition, why not pop in to our offivce and find out more about how hyper-connectivity can work for you.
Elephant & Castle Staff Gain Prestige Training Qualification - Updated 16th April 2011
Leading local estate agents Elephant & Castle have really got something to celebrate after their entire team succeeded in gaining a top professional qualifaction.
After completing the necessary training, Rob, Steve & Zoe have been granted the title of Associate Members of The Guild of Professional Estate Agents - the UK's most prestigious network of independent agents, to which Elephant & Castle belong.
Talking about thier acheivement, Steve Bell said:
"We have always been proud to belong to The Guild, which represents the very best in independent estate agency. Now through our efforts in successfully gaining Guild Associate status, which recognises our knowledge, skills and professional competence, we can proudly claim to have the best-trained team in Coventry.
So, if you want to experience the very best that estate agency can offer, it now makes even more sense to call in at Elephant & Castle Independent Estate Agents on Cannon Hill Road in Coventry.
Could The Market Finally Be Picking Up? - Updated 14th April 2011
At last, there is some encouraging news from the housing market - there are tentative signs of a recovery in both demand and sales.
Although house prices declined very slightly in February by 0.2% (independent data supplied by Hometrack), sales agreed leapt by over 25% - and the slight fall in prices was the lowest monthly decline for six months. Average time on the market also fell slightly, to ten weeks, down from 10.2 weeks for the previous month.
There was also a 14.7% increase in new buyers registering with agents – which is the highest monthly increase for two years, in contract with a significant fall in demand over the final six months of 2010.
This positive overview is also supported by separate data from our own market intelligence, which shows sales up 10% and new instructions 16% higher compared to the same period last year.
There could be several underlying reasons for this apparent improvement:
- It is likely that a significant proportion of these buyers reflect unfulfilled demand carried over from the second half of 2010, when volumes were extremely low (down 15% on same period 2009)
- Similarly, February saw a 7.5% increase in the supply of new housing coming to the market, which was the highest monthly increase for three years.
- Logically, many potential sellers are also would-be buyers, so the two should move similarly
- Finally, the data may also reflect an increase in the volume of owners wanting to sell in advance of anticipated price falls over the coming year
Estate Agents in particular realise the importance of the forthcoming Easter market, when traditionally large numbers of the public look to move home - so if you are currently considering buying or selling, this is could be an ideal opportunity to approach your local agent, Elephant & Castle and discuss the options.
Call us on 024 76 697 699 or click on "Request a Valuation" from this website.
How Do You Make Your Home Stand Out From The Crowd? - Updated 4th April 2011
With over 1m homes currently up for sale in the UK, and an average of 50,000 buyers in any given month, this means that there is a less than 1 in 20 chance of a typical vendor achieving a sale in the next 4 weeks.
Your property is therefore effectively in a ‘beauty parade’ on the major portals, and being attractively priced and a motivated seller may not be enough to entice the right buyer. We therefore need to take every advantage in marketing our home in the most compelling way possible. Yet almost all estate agents are now on Rightmove, and offer floor-plans, photography, and accompanied viewings. So how is your estate agent offering a point of difference?
Fortunately The Guild Of Professional Estate Agents has developed a innovative solution, called the Accelerated Marketing Package. Elephant & Castle as your local Guild agent will hold a personal review with you, establishing how the marketing is progressing, drawing insights from your discussions, and identifying why your home is unique. This information can then be translated into a powerful, new marketing campaign which can refresh your property in time for the critical Spring market.
The programme is built around a powerful and innovative campaign, designed to increase interest and viewings of your property, and includes;
- A high quality videoette showcasing the best aspects of your home, than can be easily uploaded on all the major portals (such as Rightmove) and also sent out to prospective buyers.
- An attractive 8 page printed brochure showcasing your property, which is also available electronically for emailing to potential buyers.
- 50 canvassing cards, which will be distributed in the area around your home.
- A dedicated feature page for your home in the agent’s exclusive property magazine, which they distribute locally to interested parties. No other agent has access to this powerful and attractive medium.
Elephant & Castle will also make regular appointments with you to appraise the marketing promotions and sales process, ensure that you receive timely feedback on all viewings, and we will keep you fully updated on local market conditions and whatever else we feel can be done to help sell your home.
We need to seek every advantage in presenting our clients’ homes in the most compelling way possible. So why not call your Elephant & Castle now to learn more about this exclusive accelerated marketing package – it might just secure you the result you deserve for your home.
FIRST TIME BUYERS GET A TIMELY BOOST - Updated 1st April 2011
A new initiative by the Government to assist first time buyers (’Firstbuy’) was announced in the budget this week. This provides potential access to a shared equity scheme, helping to resolve the chronic issues surrounding minimum deposits. At least 10,000 first-time buyers will be eligible, many of whom have been struggling to raise sufficient funds to get a foot on the housing ladder.
According to the City regulator, only 2% of new mortgage lending in the last quarter of 2010 was to those who could offer a deposit of less than 10% of a home's value.
Under the scheme, the government and house builders will offer loan help for first-time buyers purchasing a newly-built home. Buyers are required provide a deposit equal to 5% of their property's value, with the government and housebuilders putting up another 20% via an equity loan – thereby enabling people to qualify for 75% LTV mortgage.
The equity loan will be interest-free for the first five years, with interest charged at 1.75% in year six, and at inflation plus 1% thereafter.
This initiative is especially important, as new buyers are seen as the key to boosting the property market (“90% of buyers are also sellers”). The scheme could therefore unlock a much larger number of transactions, and help ‘get the country moving’ once again.
So what does this mean for current participants in the housing market?
- If you are currently looking to sell, make sure that your property is correctly valued and that the marketing of your home is fresh and compelling. No-one likes a ‘tired’ or ‘stale’ home, and there are some great new tools available such as videoettes to help your property stand out from the crowd.
- If you are a potential purchaser, there are some great deals to be had but competition may be about to increase. With interest rates expected to rise shortly, it could be the perfect opportunity to secure a fabulous property at an attractive and historically low fixed interest rate.
So how can you gain a crucial edge in time for the crucial Easter period, when traditionally activity in the housing market rises significantly? The property market can be complicated, unpredictable and stressful, but you can quickly be a smarter player by visiting your local independent Guild estate agent and taking advantage of their unparalleled experience and expertise.
