Property market won't recover until sellers and agents get real
Russell Quirk, director of online estate agent eMoov.co.uk, argues that until the penny drops with sellers and estate agents, the property market will continue to struggle.
We’ve all heard the pundits bandying around those stock phrases related to the demise of the UK property market. If I had a penny every time someone mentioned the ‘banks’ reluctance to lend’ or ‘lack of serious buyers’ I'd be pretty well off by now.
But what if I was to tell you that the only thing stalling the UK property market is the failure of agents to manage expectations? This is due to the fear of losing an instruction and the unrealistic expectations of sellers.
Although it’s easy to lay into the banks and their reluctance to lend, the number of available mortgage products has actually more than trebled since 2009, and there are now more higher loan to value mortgage products on the market.
Also, there’s no proof that people aren’t looking to buy. In fact, one third of the adult population visits property portals, either online or on the high street, each month. Admittedly, it doesn’t mean they are necessarily looking to buy, but a significant number will be.
According to the Nationwide, UK property prices have fallen an average of 13% since their 2007 peak. Is this drop because sellers are putting their properties on the market at lower prices than 2007 levels? In a lot of cases it isn’t – many sellers are still marketing at close to 2007 levels, but are then having to accept offers 10-20% lower than the asking price to get a buyer to bite.
But a property is only worth what a buyer will pay for it. And, thanks to the internet making sold prices freely available, buyers are armed with more accurate and relevant data than ever before.
Months later, when the ‘for sale’ sign starts growing moss and the agent tells the buyer they should consider dropping the asking price, it becomes all too clear that the initial valuation was not representative of the local market.
Then agents shrug their shoulders and blame the ‘banks’ reluctance to lend’ and a ‘lack of serious buyers’ and disappointed sellers accept their excuses. And we’re still no closer to breaking that vicious circle.
Russell Quirk is director of online estate agent eMoov.co.uk
What do you think? Is Russell right? Are estate agents telling vendors what they want to hear in order to win the instruction? Do vendors still have unrealistic expectations of what their homes are worth? Let us know your thoughts in the comment box below.
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