On Wednesday 8th July 2020 stamp duty land tax was eradicated – well, almost.
The temporary reprieve will have the desired effect – to inject a big dose of adrenaline into the property market. However those commentators that think that Rishi Sunak must just have a soft-spot for estate agents and that his motivation was one of nicely increasing transactions, are wrong. Obviously.
I’m sure Rishi is a nice bloke and all that but his decision to wipe another £4bn or so from the Treasury’s P&L is much more contrived and is of course purely designed to push up house prices.
This is bound to delight agents and home-owners alike but will, as ever, antagonise would-be first-time buyers, Guardian readers and the ‘anarchists’ at Shelter.
You see Rishi has to be a big picture guy and knows the importance of the housing market to the wider economy.
Not only do rising property prices feed positive sentiment and make owners feel good about spending money on consumer goods but also, monthly reports of a buoyant market fuel the government’s rhetoric that ‘things are going to be ok’.
The prospect of repeated gloom in the monthly stats may be welcome to some of the doom-mongers out there (you know who you are and I’ll be cashing in my bets soon) but it’s certainly not great for economic optics.
Yes, the consequence of this beautiful interference in our market is that buyer activity will soar. In fact it’s already soaring and the Rightmove and Zoopla PR spinners et al are consequently now locked in battle, churning out news of ever bigger daily increases in traffic/enquiries/impressions and so on.
I think On The Market may even have had a couple of website visitors too and so things must be looking up.
It’s certain that this increase in buyer demand will lead to a subsequent rise in prices as homes sell faster and choice becomes scarcer.
Positive sentiment will translate to those that had sat on the fence for a while, previously plagued by Brexit, Covid and political tomfoolery and who were hesitating as to whether to buy a property.
But wait, the upbeat news now presents a problem for you as an estate agent. Because with great power comes great responsibility.
If you thought that your competitors were already minded to provide exaggerated values to would-be sellers in order to secure an instruction, even in a fragile market – just wait until you see what fantastical ‘values’ they place on each property they appraise now in what is to become a much hotter market.
It’ll make Aesop and Enid Blyton look like amateurs in story-telling. Grimm even.
I reckon the next few months is yours to lose if many of you try to trump each other by placing higher and higher values on your appraisals in order to bag the listing.
In the small window of opportunity that now exists it’s sadly likely that instead of selling more homes as a proportion of your stock, you instead list a load of properties at too high a price and consequently simply grab defeat from the jaws of victory.
Why not just be honest instead? A novel concept for some perhaps, but nonetheless rather important in the coming months.
Because did you know that around 60% of properties listed, sell via the second agent subsequently instructed, not the first?
In other words, by overpricing and trying to boast to your Regional Manager that you’ve ‘listed ten this week’, your collective obsession with vanity metrics rather than with actual banked completions, merely hands victory to the next agent.
Anyway as I type this I can already picture the comments racking up below, anonymous of course, that state ‘We never purposely overvalue. It just doesn’t happen’. Well, genius, it does.
Or else please explain to me why so much stock a) languishes on the market for months even in ordinary times and b) a massive proportion of stock is reduced in price before it sells?
We all know the swerve – exaggerate the valuation, insist on a 16 week sole agency agreement and then push for a reduction after a few weeks.
Corporates are especially good at this and I hear that some are even formally trained to do it. I call it the ‘sole agency trap’ and it’s sprung on unsuspecting home-sellers day in and day out.
Be honest. And of course not just honest with yourselves but also with your vendor.
Yes, I know they say they ‘need [x] pounds’ because of [insert ridiculous reason] but isn’t it actually your job, rather than to pucker up and take the pain, to explain professionally using comparables and data, exactly why the true value is actually something a little different to that which their mate in the pub has told them?
I used the word professionally just then. I don’t do so very often when talking about UK estate agents. But I continue to live in hope for a future outbreak of such.
Rishi Sunak, Chancellor extraordinaire, has just handed you a golden goose of opportunity. Now it’s up to you whether you look after it and keep it healthy. Or whether you kill it.
What’s it to be?
Russell Quirk founded emoov, is PropergandaPR co-founder, and a director of Keller Williams (Essex).