London (Pimlico) Estate Agent Goes Viral

Pimlico Estate Agent Douglas Gordon has sparked controversy, and gone viral with a controversial video about estate agents which has featured in the Daily Mail. It is a grossly unflattering film that shows estate agents as their many detractors would imagine them – as obnoxious, sleazy, unprincipled louts.

Outrageous: James Turner strikes an arrogant pose in the Under Offer film, which has gone viral 

Douglas Gordon are one of the top agents in London, so the film is unlikely to damage their reputation, nevertheless the reaction to the film hasn’t been to recognise it’s intention – as a spoof – but to recognise the stereotyped characteristics as being a genuine documentary. Who knows how this will play? Nevertheless the Property Industry should be alarmed at the number of people who look at what is intended to be a spoof & say “that’s just like my agent!”.

I Was Totally Wrong About Flat Prices

Semi-detached houses in Croydon for sale

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I Was Totally Wrong About Flat Prices – there, I said it. I’m always Mr. Doom & Gloom predicting disaster & Flat price crash, I’ve been out of step for 2 years now, arguing against the crowd that now isn’t the time to buy, that the crash wasn’t the real one, that the worst is yet to come. So now is the time to hold my hands up & say I was wrong.

I was wrong that it doesn’t matter

I’ve often said that Flat Prices don’t really matter:

  • If you are a home owner it really doesn’t matter what value your home has unless you are either a first time buyer, or you are dead. The rest of the time you just swap one home for another at whatever the the going price is.
  • If you are Property Investor the what, where and how of what you buy are far more important than the when. I have demonstrated time and again that that investing in the wrong part of the country (recently Scotland), or the wrong type of property (recently non-London city centre flats), has far more effect on the price that you pay than whether you time the market.
  • The reason that I am wrong about it not mattering is a simple word – insolvency. If you lose your job you can’t pay the mortgage. If you have a Property Portfolio which relies on the rent to pay the mortgage interest, and your tenant loses their job, and you have to sell at below the mortgage price ……..

These are unusual financial circumstances, but we are entering unusual financial times.

I was wrong that you can’t predict the Market

I’ve always had the view that media articles and predictions look at the past. I based this view on the fact that I always know which direction rents are going to go – I am fairly unique in having a large number of similar flats in one location, this gives me a unique view of the Central London Rental Market and prices movements that I see often get reported in the media 2 months later. Consequently I have learned to value my own opinion above what I read in the media. However the RICS survey is also that kind of view writ large. It’s a Nationwide report of the “gut feel” of Estate Agents. Frankly I’ve always ignored it as something that is opinion not fact, however Moneyweek have completely changed my attitude on the basis of this graph:

RICS & Nationwide House Prices

RICS & Nationwide House Prices

Clearly the RICS survey has value, and most importantly it has predictive value. Anyone can tell you what Flat prices have done, what we all need to know is what are they going to do?  This graph gives us all a very clear picture as to where House Prices will be in 6 months time.

I was wrong. Flat Prices DO matter and we CAN tell what they are going to be.

If you have a view please express it at Property Price Predictions Week where expert views are summarised, but YOUR view is valued.

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HIPs are History – What is the Future?

Home Information Packs

Although the details aren’t clear, it’s definite that HIPs are no longer a requirement to sell a house. What I look forward to is some new system for selling houses. The old system of the 80s & 90s was expensive and not very secure for buyers, further it proved itself incapable of dealing with the housing booms (in particular that of the late 80s). What new system will we look forward to in the new millenium? Something that will make buying and selling a house as cheap and easy as buying and selling a car?

The Problems with House Selling

I am reminded of a discussion I had with a Solicitor friend in 1986. At the time it seemed that the problems and expenses of house sales might be solved by licensed conveyancers. This was of great concern to lawyers as the bread and butter profits for family solicitors were and are to be made from conveyancing of property (generally a job which can be delegated to clerical staff, but billed at good rates). I suggested to my friend that if (as seemed likely at the time) Estate Agents took over the conveyancing market, that it could well become the end of the family solicitor. His reply 25 years ago was that it was far more likely that Solicitors would take over selling Houses than Estate Agents would take over processing the sale.

Over the ensuing 25 years we have seen the computerisation of Land Registry, the growth of the Internet & WWW, and most recently an attempt to streamline the actual selling process which was generally acknowledged as being very unsatisfactory. Additionally the traditional Estate Agent is challenged by Internet Portals and Websites which threaten to replace their role in the selling process.

In unrelated developments Solicitors have become ever more specialised – I used to have a specialist solicitor who had a dual practice suing solicitors for malpractice, and suing/defending builders in disputes. One day he contacted me to let me know that he was dropping the building dispute side of his practice “My work in suing solicitors for malpractice has led me to the conclusion that people who work in more than one area don’t have enough expertise, and end up in trouble. Consequently I’m concentrating on one area only!”.

HIPs had a difficult gestation in which many of their objectives were watered down, or postponed in the face of opposition by vested interests led by the RICS. One of the most controversial pieces of legislation to influence the housing market Home Information Packs (HIPs) intended to eliminate many of the costs, and much of the heartache involved in a sale by providing residential property buyers with all the information they needed about a home without needing to employ solicitors to carry out any searches, it would speed up the process and prevent many deals failing at a late stage. Each pack would include a Home Condition Report (HCR), Energy Performance Certificate (EPC) and title deeds as well as planning searches. It would be the responsibility of the vendor to supply this information. The story of HIPs progression, and the compromises that were made to get the idea past it’s opposition was told in 2007 here.

I notice on Twitter that the general euphoria amongst Estate Agents at the news of HIPs demise, but to my ears this sounds like the cackle of  turkeys voting for Christmas. Whilst  the role of two Solicitors administering the contract seems cemented by a return to the old system, it looks to me as if Estate Agents are allowing a role in the buying/selling process to slip through their fingers, as without the need for a HIP a seller’s first point of contact in selling a house will be a website.

The Future of House Selling

But for the future – well the old system bears up fairly well under the conditions of a housing slump, so we will be safe for some time, but once the next housing bubble comes along all the same problems will come to the fore of public conciousness and a government will feel obliged to fix the problem. It must be certain that nothing like HIPs will be considered, with countless small businesses about to close, and an estimated 3000 people to lose their jobs, it’s unlikely that there would be an entrepreneurial will to repeat the mistake of setting up a business so reliant on the whim of government. Maybe a future house selling system could mimic the French system where public Notaires administer the house selling process on behalf of both parties – one lawyer, half the price, twice the speed.

If you would like to express your views you can either comment on this blog, or join our Property Forum and comment on the thread there.

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Use an Estate Agent or Letting Agent to Market a London Flat

Ruth Phillips, Purple Hat, Property, Lettings, Property Management

Ruth Phillips

With the growing popularity of do-it-yourself property sales, letting and management it’s worth pointing out the value of having estate agent representation when dealing with your largest assets. Ruth Phillips from Purple Hat Property points out the advantages of appointing a full service agent to represent your interests …….

Estate agents may say that they have unrivalled access to the key Internet portals that private sellers don’t; Rightmove, FindaProperty and Zoopla, (and all their associated sites) only allow estate agents to advertise on their sites. The emergence of “advertise only” estate agent websites – a fixed low fee that gives the vendor or landlord access to the same Internet marketing tools as a High Street estate agent has blown a bit of the estate agent’s raison d’être out of the water. Or has it? The “advertise only” option is exactly that, I offer this as a service if it’s what the client wants – generally it’s not, they want more but just don’t want to pay more. Similarly the online, low, fixed-rate websites are the same estate agents that everyone loves to hate, all that they are offering is an alternative vehicle for marketing the property while building a client base in order to cross sell estate agency products.

It therefore stands to reason that the add-on-products, those that may soon be considered additional estate agency services are part of the estate agent’s service that have the most clout.

I did say that marketing the property is only a small part of the service but it becomes a big part to market it to it’s best potential. It’s not just where, it’s how and I’m not just talking about writing descriptions. There’s photography, media options, good quality floor plans etc

An estate agent worth their salt will be able to value a property by carrying out the correct research, knowing the market conditions and the client’s requirements. The good estate agent will be able to back up their valuation with hard facts not their own requirement for hard cash.

Estate agents dedicate time to take telephone enquiries and deal with email enquiries in an effective manner. An estate agent will know the questions to ask and how, even whether, to take the enquiry to the next stage. If a vendor or landlord is doing it themselves these enquiries are likely to be an interruption to their normal routine or worse still, left on voicemail or unanswered until the time can be found.

Estate agents are negotiators. They are skilled at being able to get the right deal for their client without compromising their position. Private sellers may let emotions affect their decisions. Estate agents will be sensitive to the emotions not affected by them.

Estate agents accompany viewings. An estate agent will know when the buyer wants their input and when they just want to be left alone to take in the surroundings. The estate agent will be able to get and assess honest feedback from the viewing. In addition to this the estate agent provides additional security to your property and it’s inhabitants.

Estate agents will provide their client with regular feedback on all aspects of marketing, viewings and progression of the sale or letting of the property and will liaise between all parties to keep on track of the processes.

Estate agents have a wealth of experience and knowledge to draw upon. Whether on contractual and legal issues with property sales or, if they are qualified letting agents, tenancies; market conditions; local knowledge; sales progression or just some advice on the best way to present the property.


Ruth Phillips

Purple Hat Property Services

Tel: 0208 123 4766

Mobile: 07747 607467

Email: Purple Hat Property

Purple Hat Property
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How much would a London Lettings Agent be Worth?

It looks like a London Lettings Agent would be worth well over a million pounds judging by today’s announcement of a buyout of the Leaders chain of 42 Letting Agents, based in SE England. The existing business has been bought for £35M with a further £12M earmarked for expansion.

Lettings Agents are seen as so valuable because while the house buying sector may be suffering in the economic downturn, the residential lettings market is booming – worth £2.5bn, growing at 9pc a year, across the UK about 12pc of properties are privately rented, but this rises to 17pc in London and the South East, where Leaders operates. Since 2005, the company has bought and integrated 31 Lettings Agents, with revenues growing at 28 per cent per year to their current level of approximately £25m. The rental proportion of the property market is expected to increase dramatically due to the housing shortage and decreasing affordability. Young people are also increasingly opting to rent as a lifestyle choice.

Nevertheless the high valuation of Lettings Agencies contrasts dramatically with reports of the death of the traditional Estate Agent. New kids on the block (iSold, Tepilo, Google, iTurnip – to name just four recently mentioned in the press) offering internet marketing of properties directly to the vendor without the use of an agent, have been taken widely to herald the end of the High Street Estate Agent, and most Estate Agents are also Letting Agents. Is there a contradiction in the two trends?

An Estate Agent is principally a salesman selling a product (a flat), they have no influence over the flat, or even it’s presentation – can you imagine an Estate Agent saying “I have to redecorate your hall before I can sell your flat”? In contrast a Letting Agent is often responsible for the management of the property and it’s tenant on an ongoing basis. The Estate Agent is most likely to be representing a resident Vendor, the Letting Agent is very often acting on behalf of a remote Landlord.

These are the reasons why the Estate Agent of the future may disappear into a website hosted in India, whilst a new breed of Letting Agents are renting their old offices, and presenting flats to a high street near you.

High Street Letting Agent

High Street Letting Agent

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