There have been a number of reports in the last couple of weeks showing that activity in both the sales and lettings market has risen as people realise that they need to “get on with life” after understandably sitting on their hands during the summer waiting to see any immediate changes as a result of the UK’s decision to leave Europe.
Whilst there has been some immediate reaction in terms of the currency markets, it will undoubtedly be two or three years before any significant changes get implemented and potentially impact on daily lives and, the need for people to move home cannot, in most cases be put to one side for that long.
Whilst the currency situation may see inflationary pressures in the economy and therefore some upward pressure on interest rates during 2017, with a starting point of 0.25% this is unlikely to be severe and, may see more people bring forward moving plans to take advantage of the very attractive fixed rate mortgages that dominate the market.
Sensible pricing is key to a successful sale or let. With the majority of potential buyers and tenants scouring the internet, the need to have a property “stand out from the crowd” is vital. This needs to work alongside a proactive approach by the agent in talking with customers and matching properties and people.
These are areas where experience should come to the fore and, whilst agents should fully utilise the latest technology to efficiently run their businesses, they should not rely on anonymous software to successfully sell or let properties. Transactions are far more important than that and every person and situation is different and requires a personal and individual approach.
I don’t believe in “bad markets” but do believe that there are “bad agents” – agents who see simply sticking a property on the internet as the way to get people moving.
The “traditional” High Street agents are currently being “threatened” by the growth in online agents with different, and usually significantly cheaper, business models. There should be much greater value in the full services offered by the “traditional” players but unless they ensure they demonstrate this to consumers and justify the extra charges, I can see their market shares being eroded.
November will see the Chancellor’s autumn statement and there is much speculation as to whether he will seek to mitigate the damaging increases in stamp duty applied by his predecessor from April 2016. The key change saw a 3% “surcharge” on all second homes and investment properties. Statistics show a reduction of around 50% on landlord buy to let purchases since April. Of course, the intention was to encourage first time buyers rather than landlords to buy but the crude level being used is, in my opinion, not working to achieve its goal.
Government intervention in the property market has a long history of distorting and ultimately damaging the market. Help to Buy was created, initially as a sop to developers, and latterly as assistance to buyers. The mortgage guarantee scheme ends this December. Again, will the Chancellor introduce new measures that will impact in this area?
One thing is certain, we live in interesting times.
Michael S Day MBA FRICS FNAEA
Managing Director