Q and A with Founder Rob Hill about the current 'over-valuing' model
The 'over-valuing' Model - What is it and how is it harming the Central London Property Market - feel free to watch the full interview
Rob Hill, Director and Founder of Greater London Properties discusses how agents in area over valuing properties to win Property Valuations is harmful for the Central London Property Market as a whole. Watch the full interview here..
1: Can you elaborate on the current sales figures for properties in Central London and how they compare to the rest of London?**
Since the Mini budget the number of transactions in Central London Compared to the rest of London is substantially down. So much so that From November to January 2023, Only 3.5% of properties across Central London sold within 3 months, as compared to over 14% across the whole of London.
What might these sales figures suggest about the current market situation?
It could suggest a multitude of things. Firstly in many cases buying centrally is less emotive, for example we don’t get many buyers registering for a specific school catchment or buying the “forever home”, often it’s a purchase for a more limited time period before moving onto to a larger house further out.
The rising interest rates and the lack of urgency on some buyers parts may well make people think twice about entering the market at this time.
Secondly a number of properties have reached the market for prices that were completely detached from the reality of the current market. This can be put down to over valuing by agents or indeed the owners of the property.
**Q3: Has there been a noticeable change in property prices during this period?**
Yes, there has. During the same period, over 40% of properties saw a reduction in price.
**Q4: What might this reduction in property prices suggest about the behaviour of fellow agents?**
To me either they are not experienced enough to be valuing or are financially incentivised to win the business at all costs or they are deliberately over valuing in order to win a long term sole agency in some cases as much as twenty weeks and then sell the property once a price reduction has been achieved.
Q5 What would you say is the effect on this on the overall price achieved?
Buyers are more educated than ever before on property values and it’s a national obsession. Overpriced properties do not get many genuine viewings, sure agents may drag buyers round as part of a property tour but they don’t necessarily have a real interest in buying that specific property.
The longer it sits on the market its visibility is reduced and the perception is there must be something wrong with it. Ultimately it takes much longer to sell and sells for a lower figure than it could have done had it come to market at the correct figure.
Vendors should also factor in their costs during the selling period, e.g. mortgage costs, service charges, council tax perhaps loss of rent when considering the overall figure they receive. If the sale takes six plus months these can really add up.
**Q6: Can you comment on the recent takeovers of smaller agencies by larger firms corporate firm?
Buyouts have always happened but the number of buyouts in recent years has really accelerated. A number of firms have been bought recently and still trade under the original name and I believe this is misleading the consumer.
It is leading to a standardisation of service, higher staff turn over in the sector and is reducing the professionalism and knowledge base within the agency sector as a whole. Undoubtably it works for the agents but I do have reservations for the vendors and landlords as to the experience they will have and the results they will see.
**Q7: As the Greater London Properties Director, what are your thoughts on these practices?**
It's problematic when our vendor receives three values, often with ours being the lowest and most honestly accurate, without knowing that the other two are simply conspiring to win the valuation. This is not only dishonest, but it also disrupts the local market and can have negative effects on individual properties.
**Q8: As an independent Central London Agent, how do you see your role in the market?**
Being independent is a huge advantage because we are undoubtedly more flexible and we genuinely care about selling properties. As a smaller team clients are dealing with in many cases just one or two people within the company throughout the whole process, this leads to better communication and helps to remove stress for the vendors and the purchasers
**Q9: What advice would you give to vendors in this market?
Before calling in any agents try to get an idea as best you can as to what you feel is the correct value in the current market.
See at least three different agencies. Ask them questions as to how they have come up with the valuation and ask to see visible proof. Find out more about the individuals involved in the transaction for example who will be doing the viewings? Who will look after the sales progression? How long have they been at the company? How long have they been an agent.
No two sales are identical so experience not just in getting the property to the market, but also in agreeing the sale. the conveyancing process and problem solving are essential skills.
It sound obvious but make sure you read and understand the terms of business sole agency may well mean if you sell to a family member you may well still have to pay the agent.
Whatever you do don’t sign a twenty plus week sole agency, if any agent suggest that alarm bells should be ringing in your head as to their motive.
When you select the preferred agent speak to them about things that may help the sale. They can range from simple things such as decluttering and cleaning to getting a sales pack ready to speed the process up further down the line.
Please give me a call to discuss any of this in more detail or if you'd like an honest, transparent Property Valuation for Sales or Rent on your property.
Many Thanks
Rob Hill, Director