Market Review Newsletter (Fulham, Barnes, Balham, Battersea & Clapham)
Mon 20 Oct 2008
The Value of experience
By Liza-Jane Kelly, Sales Director
I think that its fair to say that this is the toughest property market that anyone has seen for a very long time. There are not too many property professionals in the business now who were around in the early 70s when I am told it was just as tough and none of those that are still in the industry had senior, managerial roles at the time. The key is how to react.
Some agents have evidently decided that it is important to be extremely downbeat with buyers and sellers alike and to tell all who will listen that it is a terrible time to buy or sell and that they would do better to come back next year (they dont use exactly these words however their attitude, demeanour and body language shout it). Others have decided that all is rosy in the garden and are still tempting their poor, unsuspecting clients with last years prices and then working the price down to a more acceptable level in a few months.
At Marsh & Parsons we try to find a happy medium between these two stances. Our mission remains to achieve the highest possible price for our clients. However we do, as gently as possible, try and bring our clients expectations in line with the realities of the current market. I think we have the balance just right and our professional, well trained staff (even more crucial in the current market) are able to tread the line between being too afraid of giving pertinent feedback and advice and too impatient to just get the property sold. It is one of the great skills of the job and good agents should be adept at it.
I am pleased to say that there are still many bright spots in the current market, not least of which is our lettings and property management departments who seem to break records every week with the business they are transacting. However, what gives me huge pleasure is when I get a particularly satisfied client who writes me an email that ticks all the boxes for what I want Marsh & Parsons to be renowned for.
Just such a letter arrived on my desk this week and without, I hope, sounding too pleased with ourselves here it is:
Just a quick email to say a huge thank you to you both, and indeed all the negotiators at M&P. I know how hard the whole team has worked right from the day I appointed M&P. The level of viewings has been outstanding and the enthusiasm and professionalism from everyone has been evident. (The buyers building surveyor even commented on how accommodating and friendly you were). To have achieved such a great price, in such a short timescale in this difficult economic climate is incredible. I have no idea where you found the buyers, I am still pinching myself to check if this whole thing is real! Anyway, thank you so much for all your hard work and experienced negotiations in this."
Now: The Autumn Market
By Peter Rollings, Managing Director
Throughout the summer and into the autumn, the media have continued their reporting of the statistics produced by The Nationwide and Halifax, both of whom claimed small monthly falls over the last several months that amounted to over a 10% fall in London property prices from their July 2007 peak. This however, does not accurately reflect our experience. In this more informed era of high speed communications, the majority of our clients were quick to recognise the direction of prices and sellers adjusted their prices rapidly and sharply (in some instances by as much as 20% from the peak) in order to sell. This was a pill made easier to swallow by the fact that sellers who were also buyers had greater opportunity to negotiate on related purchases.
There is no denying that confidence has been knocked with the realisation that in The New Age of elaborate securitised debt, house prices can go down as well as up. The globalisation that provided a decade of low inflation, which in turn permitted low interest rates that underpinned strong economic growth and rapid asset appreciation with an accompanying, flourishing financial sector, appears to have had a sting in its tail. While the lack of availability of finance has been the single biggest shock to the housing market, in our equity-rich environment job security in the closely linked finance sector has been the bigger contributor to what is now a subdued market, waiting to see where the next bit of bad news is going to come from.
In these somewhat gloomy times I see some sort of light at the end of the tunnel - while many buyers are holding back in the hope of further falls and greater choice, a significant element are getting on with their lives and are in the market buying at what appears to be good value. The bankruptcy of Lehman Brothers has, to some extent, stopped an emerging Autumn market from growing any further and only time will tell if we see any sort of resurgence in interest this year. However, what we do know is that the choice of housing available to people to buy is reducing and that there is a definite underlying demand from a good number of potential buyers who will become real buyers as soon as some sort of confidence returns to the market. This coupled with the recent co-ordinated moves on interest rates by the Worlds central banks has at last delivered a message that our government is determined to take decisive action to repair the damage so delivering confidence to the market. In our view, when the market starts moving again, the movement will be a rapid one.
Fulham: Buyer Profiles
The pie chart below shows there are still a wide variety of potential buyers in the market and actively looking for a property to buy in this part of West London. The largest group who are registered are from the banking and finance sector at 17% which perhaps is somewhat surprising. I think what this goes to show is that, despite the gloom, there are still a large number of people employed within the industry who want to get on with their lives and buy a property now that prices ahve fallen to affordable levels. Other interesting sectors are Media at 14% (perhaps they are not believing everything in the newspapers!) and property at 10%. Property people continue to see the advantage of a real and tangible asset in these times of uncertainty.
Lettings: Success in a competitive market
By Patrick Littlemore, Area Lettings Manager
The move from summer into autumn has seen the number of properties on the market for lettings through our Battersea, Clapham and Clapham South/Balham offices continue to grow, reaching their highest level on record. There is no doubt that such an increase has been mainly due to homeowners marketing their property for lettings instead of sales, and in a number of cases jointly marketing for sale and lettings, because they are unable to achieve the price they believe their property to be worth. We are still in what is traditionally the busiest time of the year in the lettings market. This peak season runs from June to November and last year, even stretched into December. There has been an excellent choice of properties available through Marsh & Parsons over the summer months. However our lettings teams have been working hard for our clients and numbers have reduced. As a result its now edging towards being a Landlords market.
Looking ahead to the final three months of 2008, there are still a large amount of people looking who are used to having a plethora of property to choose from. This oversupply has affected prices this year, and rents in the area in some cases are down by 5-15% with landlords having to be realistic in order to secure good tenants. However there are still financial rewards for the property that ticks all the boxes in terms of condition and is available within weeks of coming onto the market. For our landlords to capitalise on what we believe will continue to be an active lettings market will be determined largely by having a hassle free property that is ready to rent. Making sure a property has no outstanding issues in terms of repair or decorative condition, as well as ensuring the management of the property is done to a professional standard is key in this very competitive market. This not only secures a tenant at the right price but also keeps the right tenant in your property for as long as possible.
Marsh & Parsons success in the current market has been due in the main to our ability to employ great people who can deliver excellent results. Having an interlinked office network enables prospective tenants to register their details with any Marsh & Parsons office or with our Corporate Services department and view any property that is being marketed. As a tenant, remaining in contact with a particular negotiator rather than being pushed around from office to office means that you dont miss out on seeing a property that has just come on to the market. As a landlord, the benefits of this are obvious: getting your property seen by the largest audience of suitable tenants possible in the shortest space of time secures the best result.
Marsh & Parsons: Notice Board
Marsh & Parsons had a fun packed summer this year supporting all sorts of local events. We were the exclusive sponsor of the Lowther Primary School Summer Fair in Barnes, helping them to raise in excess of 3,000 which will be put towards new sports equipment.
We also sponsored the Holy Trinity Church, Clapham Common Fayre, a day that attracts between 2,000 and 3,000 people each year. You may have noticed the posters and flyers which we designed and printed and you might also have seen us there on the day. We came with our elephant game which was a big hit with the kids (pictured with staff members from our Balham, Battersea and Clapham offices) which further helped to raise money - we're proud to have helped raise over 20,000 on the day which goes towards the work of the church and Emmaus, a charity which supports the homeless.
We were also proud sponsors of Smiley the Happy Train at the Barnes Community Assocaition Fair which is considered to be one of the capital's best summer events with over 10,000 visitors each year.