August 2007

Check out this for a debacle!

IF ever there was a foul-up of almighty proportions, it is surely the Tesco property website debacle.

What on earth possessed fish4homes and SmartNewHomes to feed the properties on their portals – placed there by estate agents like us at Spicerhaart as well as new homes developers – to the Tesco Property Market site?

Surely they should have known that High Street estate agencies are in direct competition with Tesco and would immediately call for their withdrawal from the site?

Moreover, as both portals are owned by newspaper groups, couldn’t they see how such a move could damage the relationship between the papers and their estate agency advertisers?

My ire isn’t directed at Tesco, who are only providing a ‘sale by owner’ service which many other sites already provide. Indeed, their presence is important to keep portals such as Rightmove in check.

My comments are directed solely to the newspaper-owned portals, with sheer amazement that Newsquest, Trinity Mirror and the Guardian Media Group did not think through the wider implications for themselves.

According to media reports, a Tesco spokesman is quoted as saying that estate agents ‘do not understand our offer and have failed to see the significant benefits it brings to them as well as homebuyers’.

A bit of a cheek, don’t you think, from an organisation that knows nothing about selling residential property!

We understand their offer only too well. And we know the only way their offer will succeed is if we feed them the properties so that people will go to their site and register their own DIY sale – cutting us out of the process, even though they are likely to achieve a lot lower price for the sellers.

Estate agents with sole agency contracts need to be careful. There’s nothing to stop their vendors from also selling privately. You need to consider reverting to sole selling rights and include a clause which prevents the seller from using an Internet Property Retailer at the same time.

We estate agents need to stick together and prove that we are worth every penny that people pay. The house moving process isn’t an easy one – and Home Informantion Packs will add a further complication into the mix.

We also need to make vendors aware that we get them a better price – and we understand the language of negotiation.

We recognise and value the importance of online marketing, but not to the detriment of those who are at the coal face.

Tesco might think that ‘Every little helps’ — but as far as I’m concerned, it won’t be at my expense.

Training goes round the houses

BURIED in the Government’s Home Information Packs paperwork is the little known fact that Housing Minister Yvette Cooper can introduce further bedroom types via a commencement order with as little as three weeks’ notice.

I don’t know about you but I wonder how many of your staff can be retrained with immediate effect every time the Government changes its mind, especially bearing in mind that three bedrooms plus will amount to something like 60 per cent of the market?

Nearly 1,500 Spicerhaart staff have been trained to understand what’s involved for four-bedroomed properties.

If the Government thinks we can keep training on the various degrees of HIPs, it just isn’t going to happen.

Furthermore, if we’re to believe all we’re told, January 1 could see the law extended again to restrict first day marketing.

I ask how the department for Communities and Local Government expects our industry to react to what has amounted to a roller coaster ride and even now, as we move ever closer to compulsion day for four-bed properties on August 1, there is still no certainty in sight.

When prudent housekeeping are watchwords

IF there is one thing we are well known for at Spicerhaart, it is prudent housekeeping. It’s a strategy which we feel other estate agencies should adopt right now as the writing is on the wall for a bumpy ride ahead.

While private investors have been diving in and buying out companies like Countrywide and Foxtons, we have been keeping a low profile on the acquisition trail and have instead been tightening our belts.

It might seem a bizarre step to take after what has been one of the most profitable years ever for the industry, but the signs are that the economy is slowing and, while not facing a nineties style recession, there are plenty of reasons to keep an eye on expenditure right now.

The latest rise in interest rates to 5.75 per cent, the fifth in a year, is certain to add pressure to those trying to get onto the housing ladder — and most economists are tipping rates to reach six per cent by the end of the year, hitting confidence in the housing market.

The amount of disposable income that people have is currently sitting at a five year low. According to Ernst and Young, just 22 per cent of a typical household’s monthly income is left after bills and taxes, down nearly seven per cent since 2003-04.

Meanwhile, monthly mortgage repayments, typically a household’s largest monthly outgoing, have soared 65 per cent in the last four years, and are up 12 per cent in the last year alone.

Additionally, two million borrowers are coming off a fixed-rate mortgage over the next year and a half, so they will be facing additional financial pressure.

While property prices are still rising in places, fuelled by demand and lack of property, we are noticing a shift in many areas from a seller’s market to a buyer’s market.

According to the Building Society Association, mortgage approvals in May fell by 13 per cent compared to the same time last year. Even Marks and Spencer have seen trading at their slowest for two years.

While all these statistics are signs that the Government’s attempts to rein in inflation are beginning to take hold, we should not forget that our own industry is directly impacted by what is going on in the High Street.

So it’s time to tighten our belts and hold onto our hats. The market may be cooling – but the heat is on.