Property stories of 'bubbles' and 'bad agents' mislead the public

publication date: Apr 24, 2014
 | 
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
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Property stories of ‘bubbles’ and ‘bad agents’ mislead the public

I was shocked to hear in a radio interview a few weeks ago of a lady that had put her home up for sale. The reason? Because of the pending “bubble” everyone has been talking about.

She was then surprised and disappointed to find out that the real housing economists (rather than those that want PR and typically don’t understand the housing market) were predicting continued rises in her market. With hindsight, if she’d known the reality of the current prices, she says she would have hung onto the property.

Property stories in the media influence what buyers and sellers do, certainly in the short term and as such need to be balanced and accurate.

Currently the fear of prices rising out of buyers reach in the capital is the main cause, especially amongst first time buyers and second steppers who are desperate to secure a family home for the next 10-20 years, to compete heavily via sealed bids to secure a property.

If they knew about the forecasts of house price rises expected to slow down over the next year or so and of new stock coming onto the market via developers and build to rent, would they still be panicking quite so much?

Agents in the meantime are getting blamed for doing everything they can to drive the market upwards. Which is strange, because if they really do have this ability – why did they wait six years to reverse the crash?

And the reality is all agents are doing is the job the sellers are paying them to do.

Things like open days and sealed bids are tough for buyers, but how many sellers want to have 20 viewings over a week if they can get them in a day or over a weekend, especially if they have kids?

I am not a fan of sealed bids either, so as a buyer I never go for a property that has a sealed bid and personally I pull out of a market when it’s that busy – if other buyers did the same, the market would naturally calm down.

A lack of properties to sell versus high demand from buyers isn’t the fault of agents. They would prefer to double their sales and go back to a ‘normal’ market than deal with sealed bids - they would also earn much more money.

Those that criticise agents at times like this are quick to forget that if agents can cause prices to rise, they can also drive them down. So why would they have ‘allowed’ this to happen in 2007/8? Why didn’t they reverse or limit the falls with the same price increase ‘tactics’ in 2007/8.


And from an economic perspective, agents employ a lot of people. A 50% fall in volume means a 50% fall in jobs, so increasing unemployment just when it’s back on the rise. The truth is, whether we like it or not, a successful property market equals a successful economy and vice versa.

One thing everyone should have learned from an economic perspective is if we want more jobs for young people, whether it’s a career in business via the property market or as an apprentice, the property market provides an excellent profession with great prospects.
 

If you want to know more about how the property market is performing at the moment download my full property market report for April.


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