Market Comment

Much has been written about the state of the UK property market over the past 4 months and most of it either ridiculously dramatic – the end of the world is nigh or overly complacent—slowdown? What slowdown? What is true however is that we have lived through two years of a very generous market when selling property in many cases was just like ‘shooting fish in a barrel'

In mid November I was asked to debate the property market on Radio 5 live with the founder of housepricecrash.com. As you can imagine it was a lively conversation as he was insistent that the market was due to fall '30-40% in the next 3 years' (he's actually been saying this since 2002 – when he took the decision to sell his own property!) My view is that we should put the property market in perspective. Whilst I don't believe that the market will have such a dramatic correction – falling interest rates, high levels of employment, - no market continues on an remorselessly upward trend forever and all markets have a natural slow down—this is healthy and it would concern me much more if it didn't.

It is notoriously difficult to understand the significance of what is happening around us at the time it is actually taking place; only with the perspective of hindsight can the meaning of events become really clear to us.

This is especially true in times of transition and the present is certainly a time of transition for global property markets.

Any attempt to explain recent and current events in these markets must at this stage, be necessarily, tentative and impressionistic.

What is clear is that the global binge of cheap credit is over and there is a supply crunch arising in terms of global oil markets.

The above quote is one of my favourites. It was said nearly 500 years ago yet it has just as much relevance today as it did back then and with the property market entering a new and different phase it’s simple message becomes ever more pertinent. I’ll tell you its ‘author’ at the end of the article.

I have been lucky enough over the past month or so to be judging a category in the Estate Agents of the Year Award 2007. It has been a refreshing, eye opening, sometimes frustrating but most of all rewarding process. I have been able to speak to the Chief Executives of a number of the best estate agency businesses in the country and quiz them on why their business is thriving (or not as the case may be) and what they put their success  (or otherwise!) down to.  In general I have been extremely impressed and in some cases made to feel a fairly inadequate! Let’s face it, as an industry we have our fair share or rather more than our fair share, of bad press however from what I can see we can be proud that in the vast majority of cases we run an extremely tight ship.  I am realistic enough to appreciate that as an industry we will always be pilloried in the press—it’s our job to be the middle man, the meat in the sandwich and to take what buyer and seller throw at us. However, just like any other business, there are good and bad out there.

The thorny subject of Estate Agency fees is constantly at the fore front of my mind. It simply amazes me how many of my colleagues in the industry have so little pride in the service they offer and are so ready and willing to compromise themselves and their business by cutting their agency fees at the drop of a hat. Do they really believe that their clients judge them so much on the fee they charge? If this is the case then I suggest they take a long hard look at the service they are offering and workout ‘Am I worth it?’

It seems to me that more and more of my better known competitors are cutting their fees more and more easily without any thought of the consequences for the future. There will always be room in any market for a discount agent, however I am surprised by how many of my competitors are placing themselves in this bracket when their service offering on the face of it they should be more expensive than ‘the pack’.

I listened to a debate on the radio last week in which the general public were being asked to vote on who they thought was more trustworthy: an estate agent, a tabloid journalist or a politician. I am delighted to be able to report that despite what many people may have thought, the politician was voted the least trustworthy, closely followed by the tabloid journalist with the estate agent voted the most trustworthy.

Now - I am conscious that none of the three are at the top of people’s favourite professions however I do believe, in London especially, that estate agents are starting to earn the respect we deserve for carrying out a job fraught with difficulties when dealing with people at their most demanding. After twenty five years in the business it never ceases to amaze me what estate agents can get blamed for. It is incredible how sellers and buyers alike can change from charm and respect to vitriol and irrationality upon receipt of some disappointing news. Don’t get me wrong, I’m afraid it will always be our job to be the “meat in the sandwich”, to be the peace maker and be the bearer of good and ill tidings. As a job it’s exhilarating and frustrating, exciting and demoralising all at the same time.