It’s been another hectic week for the industry, and here is what has caught our eye.
First: Brexit: Should we listen to the agents or the surveyors?
The housing market continues to shrug its shoulders over the impact of the Brexit vote.
According to the LSL Housing/Acadata survey, transactions fell 20% in the second quarter of the year compared with the same period in 2015.
But it said this had more to do with the Stamp Duty deadline than with nervousness in the run-up to the referendum.
The survey also said that while annual house price growth slowed to 5.5% in July – the average house price standing at £293,318 – transaction levels edged up last month.
Jackson-Stops & Staff says reports of a post-Brexit housing crisis are unfounded.
The agent measured properties for sale nationally the day of the referendum, and again this week.
It found that on June 22, there were 866,179 properties for sale nationally. Of these, 352,301 were under offer, representing 40.7% of the market.
The same analysis on August 8 showed the total number of properties on the market had risen 1.7% to 872,953.
Of these, the number of properties under offer was 335,176, representing 38.4% of the market, a 2.3% drop.
Average asking prices rose from £240,470 to £241,510 during the period.
Yet RICS forecasts remain gloomy.
Surveyors are reporting the fastest drop in transactions since 2008, but there is little consensus over whether this is caused by the Brexit vote or the aftermath of the Stamp Duty rush.
The RICS residential market survey for July found 34% more respondents reported a fall in transactions for the second month in a row when 45% more reported a decline.
J1 came up with an interesting view on why the RICS report seems to say the opposite to agents: “Let’s face it, surveyors a gloomy souls.
“Often sat by themselves at the office party or wandering around aimlessly jangling the change in their pockets.
“Perhaps a cup of tea and a bun are in order – that might cheer them up.”
Second: Woodfor(d) the trees
Fund manager Neil Woodford has a reputation for strong returns. He is perhaps best known for calling the financial crisis and pulling out of banks in 2008, but is he on the right path with Purplebricks.
Despite the online agent yet to make a profit, former Invesco manager Woodford, who now runs his own self-named business, hailed the role of Purplebricks, which has seen shares rise 50% this year, in his investment trust.
He said the market has become “increasingly aware of its long-term potential and disruptive business model in the UK’s estate agency market”.
He went on: “We see the online estate agency model eventually overtaking the traditional model here in the UK.
“Purplebricks is uniquely well placed to capitalise on this structural shift in the estate agency market, which should deliver exceptional growth and excellent long-term returns to its shareholders.”
Interestingly, his own trust’s performance has been lagging.
Perhaps unsurprisingly, readers’ disagreed. Agencynegotiationlimited said: “Ask Neil Woodford to debate high street vs online or hybrid and chances are he will have little new to say. It’s been profitable for investors so far, but Purplebricks is never going to disrupt this sector. The irony is that Neil doesn’t understand why.”
Mark Rowe said: “Crazy world we live in.
“How on earth is any business worth more than existing one, when it hasn’t made a penny profit!?
“If I were the owner of this business I would be genuinely confused and feel quite sick as to why I’m personally gaining wealth when my company hasn’t made any profit. It’s insane.”
Third: Target practice
Do targets help motivate agents? That is the latest debate on The Arena forum.
LocalAgent201625 said: “Targets are a necessity, as it gives the individual direction and focus, and when those targets a hit a sense of achievement is a very rewarding feeling. It’s just about what targets you set, the consequences of not hitting those targets and rewards for achieving/exceeding those targets is a key factor in motivating people.
“I usually worked off the basis of how much money per viewing, or per market appraisal a negotiator would make. Seems drastic but when converting into money you see a completely different more motivated side to people.”
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