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Changing your approach to the current market

Changing your approach to the current market

April 2008. Richard Rawlings

I must admit that I’m a little confused! As I speak to my estate agency clients around the UK I am getting a mixed picture as to how the current market is affecting them. Some are telling me that the market is dire, that they have never had it so bad, that revenue from completions has been an issue following weak trading late last year and that they are worried about the future.

On the other hand, I also hear from just as many agents who tell me they are excited about the future! They are having a near-record year and don’t know what all the fuss is about.

Certainly the media would have us think that there is some sort of property Armageddon ahead. However, we should remember that most media comments are focused on property prices, not the turnover of stock on which we as estate agents are paid. We are simply conveyors of the market, and have little bearing on property prices. Nevertheless, even dumbing down those sensational headlines designed to sell newspapers, the economic outlook does look poor, especially when combined with a reduction in the supply of mortgage funding and lower confidence levels generally.

So why is there such a discrepancy between agents’ perspectives on their business? Is it really their local market conditions, or does it have more to do with their ability to harness whatever business is available at the expense of their competitors? There is no question in my mind that it is the latter. But let’s look first at some key facts, courtesy of Rightmove’s March report. (Smart agents will see the opportunity here).

Firstly, the average number of unsold properties per agency branch (67) is up 20% on last year and up 5% on February. However the amount of time on the market (82 days) is down 12%. Additionally, asking prices are currently listed as being just short of only 1% below last year’s peak, yet actual sales achieved are occurring at some 10% below peak prices.

In other words, that long-awaited stock has finally arrived, but without the flood of oversupply that could prompt more rapid property price falls. It is also selling, but only when it is very keenly priced and looks good in relation to most of the other properties coming to market at too high a price.

Many would-be buyers who might have bought last year were deterred by the HIPs debacle, rising interest rates and talk of further rises. However, these things have now passed and genuine buyers still need to move. Our job as agents is to present them with exciting opportunities. And this always comes down to price.

Remember, a buyer’s primary objective is not necessarily to buy cheaply, but to actually move. However, they are more likely to make that move through you when you offer them a property that is overwhelmingly superior to others they have seen.

So those agents who have the persuasive skills to take on well-priced stock and who systematically plan for scheduled price reductions are likely not only to sell more property more quickly, but will also capture significant market share from those agents who are blaming the market for their troubles.

I admire those progressive agents who see this time as more opportunity than threat and I am enjoying helping them prosper in it. It comes as no surprise to me that these are also the agents who tend to charge a higher fee percentage. These are the attackers, whilst their competitors simply defend their increasingly weakened positions.

In this market, aiming only to survive is risky, whereas seeking to thrive not only reduces that risk, but accelerates the development of your market share.

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© Richard Rawlings 2010
Richard Rawlings is the founding director of Estate Agency Insight, which specialises in helping estate agencies harness opportunity through innovative method, marketing, publicity, and training. He can be contacted at or on 0845 838 1354.

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