It’s been another hectic week for the industry, and here is what has caught our eye.
First: Brexit blues
Results season has begun among many of the big agency and property brands, and rather predictably, Brexit is being blamed for lacklustre performance.
Connells group chief executive David Livesey said that in the three weeks prior to June 23, sales agreed were 11% down on the same weeks of 2015, when the market was strong, but 1% up on 2014, when it was starting to weaken after a strong spring.
Foxtons announced a huge tumble in profits for the first half of this year.
Pre-tax profits of £10.5m fell from £18.1m for the same period last year.
Countrywide’s pre-tax profits tumbled 25%, in the first half of this year, the UK’s largest estate agency chain reported.
Countrywide chief executive Alison Platt also warned that a period of uncertainty post-Brexit will “inevitably impact the level of transactional activity in the second half of the year and, although it is too early to quantify accurately, we will not meet last year’s results at the EBITDA level.
“Notwithstanding this, and following the significant investment we made in the business in the second half of 2015, we continue to make real progress in executing our strategy.”
Meanwhile LSL, which doesn’t even report until next week, warned of lower profits than expected.
Newsboy commented: “I must admit that we have certainly seen a seed change in the market. The corporates around here have lost out big time with the local independents very quickly gaining market share as vendors turn to experience and local expertise.
“Rather a welcome surprise, unlike the unwelcome surprise three weeks ago!”
Many have commented that companies could just be using Brexit as a scapegoat. That is at least what this interesting blog from Glentree posits.
Second: £696,967
That is the average asking price on sellmyhome, according to research into valuations among online agents.
The data, from SellingUp, shows Purplebricks has an average price of £285,223.
This is a long way behind the average asking price of sellmyhome, which is a touch off £700,000 at £696,967.
However, major differences are that sellmyhome is based in Fulham and some 40% of its 151 listings are in London.
Tepilo (£381,601) also has relatively high asking prices compared with Purplebricks, as does Urban (£373,711) and hatched (£367,688).
Chris Wood commented: “Interesting data but the only facts that will determine how effective an agent is, are not the number of properties they have for sale but factual, accurate (not juggled) answers to the three key questions.
“1. How likely is an agent to actually sell my home? – Listing to completions ratio
“2. How effective is the agent at valuing and negotiating a sale price for my home? – original asking price to eventual sold price (at the HMLR not the last quoted asking price used by Zoopla) and, compared on a like for like basis to similar sale properties in the area
“3. How long am I going to be up for sale? – Time from initial advert to exchange of contracts.
“None of the call-centre agents seem willing or able to offer these statistics without clear attempts by a couple to deliberately obfuscate and twist the figures, presumably to deceive in order to gain financial advantage.”
Third: Post Brexit
Should overseas investors be banned from buying up UK property? That is the latest debate on The Arena forum.
JSSoxted58 said: “Now that we are out of the EU, the government needs to regulate overseas buyers from investing in UK property thinking that they can make a good yield at the cost of the UK residents – we will become a nation of rentals to overseas landlords and all the UK property will be owned by overseas investors if we are not careful, driving the prices beyond the reach of all the UK.”
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