Market Comment

It’s true. However, that’s the straightforward part. The role of your estate agent is not just to sell your property but to use their marketing capability and knowledge to obtain the very best price that the best buyer will pay and that is absolutely NOT straightforward.

Here is the first paragraph of a letter I received this week from a delighted client:

"We exchanged contracts on our house last Friday at more than 10% over the asking price, having instructed Marsh & Parsons only 10 days before.  As the property had been on the market with another agent since the previous September, we were delighted with this result."

My latest video blog gives an overview of what is currently happening in the London property market, as well as providing my predictions for the rest of this year. There continues to be much uncertainty, but with some very positive signs already this year, I do believe that London, having recovered some lost ground during 2009, will continue to grow during 2010. This blog highlights how stock is still an issue in the market, what I think will happen to property prices in London and my concerns about political interference in the market. I hope you enjoy watching it, and as always, please feel free to give your comments below.

Click here to view the video

This time last year we were all approaching the coming year with a mixture of fear and trepidation.

The World was in turmoil, the property market had been the first to enter recession (we were the ‘Canary in the coal mine’) and had been on the way down since August 2007 and we were expecting a miserable year ... and then the phones started ringing.

By January 20th last year, we had registered literally hundreds of new and surprisingly motivated buyers and by the end of the month that had risen to over 1000.

The second half of 2009 has seen a definitive shift in market conditions for lettings. Following 18 months of falling rents, the last six months have seen the market stabilise - and indeed rise in a number of cases - compared to the same time last year. The shift can be clearly attributed to two main factors; the first being the reduction in available property to rent as the ‘reluctant landlords’ of 2008 take advantage of the more buoyant sales market and decide to sell as opposed to let; the second being the traditional seasonal increase in tenant demand over the summer and autumnal months. This has lead to the supply and demand balance finally moving back in favour of landlords.

We have seen a number of properties we let in 2008 be re-let for approximately 15-20% higher this year as tenants bargaining power eases. It is worth bearing in mind, however, that prices in Kensington & Chelsea fell by as much as 30% when supply of rental property was at its peak, therefore rents are still largely lower than many landlords were achieving in 2007.

An increase in purchasers and a shortage of stock has led to over 100 sealed bids across our London offices already this year. It comes as no surprise then, that we are seeing more and more situations of ‘gazumping’, a phenomenon that contrary to popular belief, is NOT advocated by Estate Agents.

Gazumping, is when a seller accepts a higher offer from a buyer, despite having already accepted an offer from another purchaser. This can be very frustrating for the ‘gazumpee’, who in some cases, will have already committed financially to legal fees and surveys, as well as the emotional attachment to buying a new home.

However, as the law currently stands, if an agent receives an increased offer at any time prior to an exchange of contracts, they are legally obliged to submit the offer to their clients. In actual fact, it is a criminal offence not to do so, not just a civil offence which would be bad enough.