There is plenty of transitional activity going on both inside and outside the UK property market at present. From the outside it probably appears that the market is healthy, prices are stable and all related factors are helpfully aligned to provide a window of opportunity for sellers and buyers alike to move with greater ease and in a more balanced environment. The dominance of website portals as the major marketing media has also provided far more transparency, which in turn has settled much of the bartering and mistrust that previously existed.
From the inside, however, there is plenty of pushing and pulling going on! House prices are being artificially propped up by the lack of properties that are hitting the open market. This, combined with the surge in the number of new and confident buyers coming forward, has given the impression that the housing market is healthy and now represents a good time to be involved.
In turn, this lack of new housing stock, alongside the emergence of many on-line and sell-it-yourself competitors, has created a frenzy of activity amongst estate agents and a change of focus and direction from within. A continual flurry of industry articles relating to the huge investment being made into the merging on-line agents, and what impact they might have on market share, has no doubt forced agents to review their practices in order to survive a changing and potentially more challenging future.
The double impact of ‘expected loss of market share’ alongside the reality of lower property volumes for them to sell, has forced high street agents into a psychological corner that has impacted on the way they now behave.
When there is less to go around, and also when what is available to go around is expected to be further diluted by new entrants to the market, then it is no surprise that behaviour becomes more cut-throat and aggressive. This has been demonstrated by agents more frequently targeting each other’s stock via mailshot, direct approach or by offers of joint agency, for example. These types of actions are simply an attempt to win market share while they can, and sometimes by whatever means possible. It is clear that the ‘old tricks’ and possibly a less ethical approach is in danger of creeping back, and unfortunately the professional credibility gained by agents tenaciously fighting their way through the tough recession period may be easily lost.
In turn, the new market entrants have also adopted a rather aggressive approach. The recent ‘high street agents are dead’ march through London by easyProperty demonstrates a willingness to ruffle feathers and risk tarnishing an ethical reputation they have not yet established, in an attempt to capture attention. Whilst the high street era may be dwindling, this type of demonstration does nothing to restore vendor confidence towards the often mocked ethos within our profession.
The recent competitive jostling amongst the online ‘big boys’ at the top (rightmove, zoopla and onthemarket) has forced inward investment and more refinement in terms of how their sites actually work, and how helpful they are as marketing tools for agents.
However, the transparency they provide has lifted consumer confidence and given rise to greater willingness for vendors to risk ‘going it alone’ and selling via an on-line-only source. Similar to robots entering the car production line, staff within estate agencies are in danger of being replaced by the more automated world-wide web! In fact, recent articles have alerted us to the fact that estate agency staffing levels and recruitment are down this year. Fewer staff, however, may result in reduced service levels and expertise. Worryingly, less expertise may then result in lower sales volumes and indeed sale prices, and certainly greater frustration amongst conveyancers who are having to deal with unfiltered issues raised by inexperienced sellers.
If a solicitor’s role becomes more complex and testing, this may ultimately result in delays in the conveyance and an increase in their charges, as they take on more of the role that agents would have undertaken. The reality therefore, is not a reduction is selling cost, but instead a transfer of the cost to another (and potentially more costly) profession and greater inefficiency.
Ultimately the current rumblings and long term adjustments that may take place to the selling process may well have a negative effect on a market as a whole – a market which is already vulnerable and over burdened by debt. Can the online agents or those selling alone cope with a market dip? Time will tell!