Connells and Sequence axe prices on 5,000 properties – a quarter of their stock

Connells and Sequence, both part of Connells Group, have revealed price cuts on thousands of properties since the start of the summer.

Some  5,000 properties – about 25% of their total stock – have had “meaningful price reductions” over the summer months, which has resulted in agreed sales on 30% of the relaunched listings.

David Plumtree, chief executive of Connells Group, said: “Since the start of the summer, we have run sales campaigns across our branch network and have re-launched almost 5,000 properties to the market, all with meaningful price reductions.

“So far, we have agreed sales on 30% of those properties which goes to show that, despite subdued market conditions and the gloom in the wider economy, there remains decent levels of demand for well-priced stock.

“The truth is there are still good levels of buyers looking to move home and the UK’s love of home ownership is as strong as ever.

“Our figures show that properties will continue to sell well as long as they are correctly priced and proactively marketed by an estate agent who is prepared to work hard to get results.”

His comments come as data from Rightmove shows that new asking prices are down 2.3% on a monthly basis at £301,973, larger than the 2.1% drop at the same time last year, while annual growth has slowed from 1.4% in July 2018 to 1.1% this month.

The portal’s figures also reveal that sales agreed are down 0.8% annually in July and have dropped 3.5% so far this year.

Today’s report shows that average stock per agent was at the highest level for 12 months in July at 53, while it is taking 57 days on average to sell, up from 55 days a year ago.

Although Rightmove refers to August activity, its actual data is based on the period July 8 to August 11, so its September report will also contain much of the current summer month.

Miles Shipside, Rightmove director and housing market commentator, tried to maintain a positive tone, suggesting activity would pick up into the autumn.

He said: “The ‘beast from the east’ weather was a factor in sales agreed numbers being down by 5.4% year-to-date when we reported back in May, but they are on an upward trajectory and are now 3.5% down year-to-date.

“Overall in spite of political uncertainty, sales agreed are holding pretty steady and it is usual for there to be an upturn in prices and buyer activity as we head into the autumn season, especially if sellers maintain their cheaper pricing to attract buyers.”

However, despite Shipside’s optimism, accountancy firm KPMG has warned that traditional estate agencies are in for a rough autumn.

Blair Nimmo, KPMG’s head of restructuring, said at the weekend: “High street estate agents are presently facing an unprecedented set of challenges.

“The rise of online-only agencies have combined with falling house prices, a slowdown in sale activity and a raft of legislative changes, all of which have generated headwinds for your average high street agent.

“I would therefore not be surprised to see operators across this sector struggle over the second half of the year and beyond.”

KPMG said Foxtons was battling a poor London market with Countrywide in full-blown crisis.

 

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22 Comments

  1. smile please

    I think this clearly shows these agents over pricing stock.

    Will print this story so staff can give out on valuations when up against these lot.

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    1. nick.zorab@gth.net

      Yes just an everyday story of corporate agency.

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  2. Property Poke In The Eye

    Good to see agents are being pro active by pushing for the reductions.

    Seems Connells have tested the market at a price (normally set by vendors).  Now it’s time to bring the prices to a level where funding could be possible for buyers.

    I would say 90% of the stock in our area requires a price reduction. The property price correction will keep on taking place over the coming months.

     

    Tough times ahead if you are not pro active in making changes to marketing as and when required.

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  3. MisterP76

    This shows the problem.

    Some agents over value to gain instruction and then when the asking price is brought back to reality the media portray this as a drop in property values and the market panics!

     

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  4. Robert May

    Can I be head of restructuring please? If all that’s involved is stating the obvious after it’s obvious, I could do that!

    I got slated back a while for talking about fee erosion and the causes of fee erosion, now 6 years on when the effects are being seen but not yet understood there might be a chance people will begin to listen.

    While  agents are allowing their dead file data to power online valuation systems and public awareness of (incorrect ) property prices agents are fuelling their own demise. An agent that cannot value accurately and well  can’t win runs the gauntlet of duty of care and skill.

    Getting it wrong is expensive,  any agent who fills their register full of unsaleable stock is a fool, any agent who undervalues to get a quick sale will be punished, and is a fool.

    This market is going to sort the industry out, it is a weeding that’s long overdue. I’d be surprised if in 3 years time agency has half the problems it has right now.

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  5. PeeBee

    “and have re-launched almost 5,000 properties to the market, all with meaningful price reductions.”

    RE-launched?  As in #portaljuggle-type “re-launching”?

    Or just a plain old price-drop to bump the listing Rightmove and Zoopla?

    I trust their listers will all be receiving some well-overdue subject-specific coaching…

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    1. smile please

      Meaningful price reduction for a corporate agent is 5% (otherwise it does not count against your figures).

      RM need a 2% reduction to go out as a new property alert “Reduction”

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      1. PeeBee

        “Meaningful price reduction for a corporate agent is 5% (otherwise it does not count against your figures).”

        Ahhh – those good old KRAs/KPIs again!  In this case, the infamous “Price Reductions” daily/weeklytarget!  Usually sits on the list somewhere between

        “Mortgage Appointments”

        and

        “Solicitor Referrals”

        which are all if I remember rightly.  Well under

        “Market Appraisals”

        and

        “Canvassing Letters Sent”

        but somewhere above (ie more important than)

        “Sales Agreed”

        on the list of branch activities.

        You just couldn’t make it up.

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        1. AgentQ73

          I sat in a weekly meeting once getting a hard time for not referring our conveyancers, who were woeful, I had the fastest pipeline turn, the lowest fall thru rate and the most profitable branch in the region and i got a right telling off because one of my KPIs was off. Then they linked by P + L bonus to referrals. After a short and frank exchange of views i decided it was time to leave.

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          1. smile please

            Let me guess, when you told them why your reasons for not promoting and their woeful service, this was the response.

             

            “Research shows that using our solicitors, cuts the average time by two weeks, and you are paid to sell their service”

             

            Love a corporate BS line!

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            1. AgentQ73

              Ha ha spot on sounds like you may have been on the same “reeducation” course….

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  6. sanctuary45

    So essentially they have overvalued at least a quarter of their stock?

    Bit like when you see their staff celebrating on social media that they won their branch weekly ‘reduction day’ competition – why would you celebrate the fact that your agency overvalues so much of their stock that you need to hold a weekly ‘reduction day’?

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    1. PeeBee

      “…why would you celebrate the fact that your agency overvalues so much of their stock that you need to hold a weekly ‘reduction day’?”

      Maybe ‘cos that’s all you have to celebrate!

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    2. AgencyInsider

      They may not have over valued at all. Perfectly possible these properties have been on for some time and the market conditions have since changed. I have no liking for the corporates but accusations of endemic over valuing are wide of the mark.

       

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      1. smile please

        I can say from my time in corporate agency it was “Don’t lose a property over value” and it was also a way of justifying our higher fees.
         
        also 5000 reductions must be about 25% their stock. That does sound like endemic over valuing to me.

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        1. AgentQ73

          Gotta love a last day of the month instruction…… 

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      2. sanctuary45

        So if there isn’t an endemic problem with them overvaluing, why do they target their staff on reductions and hold weekly ‘reduction days’? My experience (very short experience!) of working for a corporate echoes that of smile please. “Get them on at any price, we have a 16/20/24 week sole agency period to chip away at the price until it sells”. I’m not saying it doesn’t happen in Independent agents as well because it does – typically those opened or run by ex corporate agents who have had that list at any price and worry about the price later mentality drilled into them for so long they don’t know any different.

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        1. PeeBee

          sanctuary45
          The worst offenders where I’m based (NE) are ‘Independent’ Agents who have clearly swallowed the Corporate Manual hook, line & stinker.

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      3. PeeBee

        “They may not have over valued at all.”

        That is correct, AI – for all we know, 25% (so far and potentially rising…) of their entire register could indeed have just been listed at the right price…

        …just at the wrong time to achieve that “right price”.

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        1. AgencyInsider

          In a sort of Eric Morecombe at the piano kind of way?

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          1. PeeBee

            You got it in one, Sunshine!

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  7. Tim Higham

    I am not commenting on any particular estate agent – though I always recommend independent non-chain estate agents, as they trade on their local reputation. Great service, high sale prices achieved.

    Never ever select an estate agent purely on what value they give your house…for obvious reasons.

    (I am choosing one now ion another part of the country following my father’s death, and what a depressing experience. Phoning some of them puts you right off…actually that is an article I will do next.)

    People do not appreciate the shoddy agents out there who know to overvalue a person’s house hoping the homeowner are greedy enough to instruct the estate agent there and then.

    Problem is, whilst you might think ‘if it does not sell, then the price falls back in line with the other lower valuations, no harm done’ ..sadly, a property not selling for weeks, which then falls in price, is alarming to the public. They think, ‘something isn’t right, lets drive on by’. In the end, the overvalued property may well end up getting even less than any other valuations, far less – as by then, the homeowner will take anything.

     

    (P.s If I see certain cheapo estate agent boards against houses, I warn family and friends too, as where else has the owner also been cheap in terms of maintenance and upkeep of their property)

     

     

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