Well-known London agent Friend & Falcke, which went quietly into administration last month, has been sold.
The administrators say they are working with other estate agents that have hit trouble.
The buyers are Thamesview Estate Agents, who own Dexters. The price paid for Friend & Falcke, twice voted London’s best agency in the Daily Mail awards, has not been disclosed.
Mick Sanders and Georgina Eason of MacIntyre Hudson, chartered accountants and business advisers, were appointed administrators of the long-established estate agency, based in Chelsea and Barnes.
The administration followed the failure of a Company Voluntary Arrangement.
Following an extensive marketing campaign organised by independent agents Edward Symmons, a number of offers were received and a sale of the business and assets to Thamesview Estate Agents was achieved.
Mick Sanders said: “The sale represents an excellent result for creditors and protects the jobs of 15 employees. Thamesview Estate Agency stood out as the ideal purchaser – knowledgeable, well-funded and able to move quickly. We wish them every success for the future. The sale also safeguards all client monies.”
Sanders revealed that his firm is currently helping a number of estate agency businesses.
He said: “Following the well-known failures in the banking and property sector in 2008 and beyond, a number of estate agency businesses have closed or had to downsize. We have been helping a number of poorly run businesses and their lenders in this sector, and expect the uncertainty to continue given the ongoing difficulties in the banking sector.
“This should not however affect well-run businesses like Thamesview, which is an extremely successful estate agency trading well across London.”
Chris Beckwith, director at Thamesview Estate Agents, said: “We are pleased to have completed the acquisition of Friend & Falcke, which is a long-established estate agency business with excellent employees, some blue-chip customers and good-quality customer relationships and a particularly strong lettings business.
“The purchase helps us to develop our existing estate agency business of Dexters, based in south-west London and Surrey, and pushes us into central London, where we hope our mix of training, local knowledge and hard work should enable us to continue to grow.”
Friend & Falcke, headed up by Simon Albertini, last filed accounts at Companies House in May, showing total liabilities during 2010 of £1,555,194.
The firm has a well-respected name, but – like so many other estate agencies – was hit for six in the 2008 collapse, selling its premises in King’s Road, Chelsea, and closing its office in Fulham. The firm was established in 1959 in Brompton Road by Norman Friend and Peggy Falcke and at one time had five offices.
Comments
@ Rant
"Also good to see the acknowledgement that houses are currently a poor investment choice, given that they are falling in nominal as well as real terms. I got a barrage of criticism (that's the polite version) for making that point a few months back."
I'm not saying that property is a bad investment at all!! No way hosay. Property is always a good investment, even when prices are falling. You tell me another product you can buy with someone elses money that provides a monthly income over and above the cost of servicing the loan? I can't think of anything!
Any loss of capital while you own a property is only a paper loss, not a real loss, unless you sell it.
I bought two BTL propeties in September 2007, about the highest point of the inflated bubble as was humanly possible and on paper I have lost thousands, but in reality I have lost nothing, zero, ziltch, nothing. Both these properties are in very popular area's and my rents have been rising and I am making a healthy profit (Nearly £700 a month) yet I only put down £15k in deposits in the first place. You tell me how I can make a 50% profit on £15k in any other investment?
Oh and one day, when I'm old an knackerd and need expensive surgery to keep me alive, I can sell one of them, make a huge profit and pay for my op.
If I was a clever man, rather than spend the £700 a month profit, I would make over-payments and pay off the original debt. That way, my nice tenents will be paying off the mortgages for me and eventually the houses will be all mine and they only cost me £7500 each!!!! How can that be a bad investment????? Virtually a free house!
You guys crack me up, you really do. Doom & gloom in every thread. The glass is half full not half empty.
Unhappy Chappy: Funny, that - I have spent 33 years in the property industry and counting. Throughout this time, what I find is that prices may change - but 'things' never do, as you suggest. Sellers sell; buyers buy. The Agent remains in the middle, marrying the two together and managing the process.
What do you suggest has changed so radically?
Oh - and I was involved at "the sharp end" of the market!
Hope that answers your question... ;o)
Peebee - Things have changed a lot since the good ole days. I'm interested what end of the market were you were involved with?
Always interesting to read comments that attempt to defend today's house prices. Normally they are written by people who bought their properties for far lower salary multiples than they would need if they were buying today...
Credit as well to the poster who has admitted that their interest in house prices stems just as much from them being a BTL owner as an EA. I'm guessing there are several other regular posters here who are in a similar situation but don't admit it.
Also good to see the acknowledgement that houses are currently a poor investment choice, given that they are falling in nominal as well as real terms. I got a barrage of criticism (that's the polite version) for making that point a few months back.
@ Honest Truth
What are you suggesting?
In fact, do you know anything much about the legalitiies of lettings & management!
I wonder how many estate agents / letting agents would collapse if all the tenants decided to collect their rental deposits on the same day at their estate/letting agents.
I think that would be quite interesting
The future just ain’t what it used to be.
Always sad to hear of one going under.
@ F Fortescue-Smyth
"We need to be working on getting prices down not just for our own benefit but for the good of the wider population."
Prices are falling like a stone in real terms anyway. Even if vendors are selling for the same money their neighbour sold for last year, the value of Sterling is crashing thanks to QE. (Printing money) I put £125 of Diesel in the tank today thanks to higher diesel prices and one day I will be paying £300 for the same amount of fuel, but house prices will remain at current levels and vendors with think that house prices haven't dropped, but in reality, they have halved.
By the way, I don't buy into the idea that I should drop the price of my home, selling it for less than I bought it for, just to benefit some first-time-buyer who fancies buying a house at my expense. He should work & save just like I had to. You'll be asking me to give all my worldly possessions to the church or charity next!!
@Olly Cromwell
"House Prices WILL revert to their long term average affordability as a proportion of income.
Which is 3 to 3.5x salary."
Dissagree with the 3 to 3.5x bit. This calculation is outdated and has no baring in the 21st century. Globalisation plays a major part in how much people have to spend on mortgages than it did 30-years ago when this formular was invented.
The cost of electricals, car purchase etc. is much less than it once was. In the 21st century an affordability study should still be done, but the size of the salary should only play a small part. Someone without children, without a car, without any credit card or student debt may have more disposable income compared to someone else with an identical salary and should be able to support a bigger mortgage.
@ Priced out for a Decade
"Lets hope many see their demise. And then negative equity. And then Repossession. And the a Cardboard box. "
Dam, got back from my accountants office today after being told that this year, our profits were up yet again and next January I have to pay a staggering £21k in tax!!!!!
Not bad when you consider that we only do sales, no rentals. ;-)
I just hate paying all this tax, though I guess someone has to subsidise the lifestyle of all those people on benefits. In fact some of this money comes back to me anyway as 3 out of the 4 BTL properties I own have DSS tenants living in them, which is helping to pay off the mortgages I guess. :-)
Can't wait until the end of September. The first of my BTL mortgages comes to the end of the fixed period allowing me to pay off one of them with a £60k injection and no penalty. I'm only earning 2.5% in the bank, yet the mortgage is costing me 5.29%, so I might as well pay it off. Happy days!!!
Oh sorry to hear that you have been priced out of the property market for a decade. I bet your next nightmare is getting a mortgage even though the house prices are now nice and cheap. At least your paying off someone elses mortgage for them and making some landlord very happy! :-) Lol.
Fun Boy Agent: "Currently there is less demand for our services as transactions are fewer." Yes - and no. Your "services" are to the vendor - you agree?. The fact that fewer BUYERS are committing is the reason for less transactions - you're still with me on this, I hope?
"70% of listings seem not to be selling." Is this YOUR experience? Or simply Mr Shipside's latest sales pitch aimed at all vendors to demand Featured Property boxes? I guess the latter...
IF, however, that is the case for any Estate Agency, it is an iceberg business. Most of what goes on is below water and never sees daylight. Seventy percent of effort is wasted - seventy percent of effort paid for by thirty percent more effort! Not a good place to be sitting...
I believe that, as in the early 90s, there are only three workable fixes:
Increase success rate;
Increase cost to customer;
BOTH.
Let prices sort themselves. We all (Agents, buyers - and sellers for that matter...) know that a house is only worth what someone will pay for it. Those properties that are priced in cloud cuckoo land will remain there ad infinitum - and will help buyers to differentiate fact from science fiction. When Agents start trying to control prices in the way that FF-S is suggesting - "We need to be working on getting prices down not just for our own benefit but for the good of the wider population." - in my opinion vendors will only vote with their feet.
(For the record, I went for the third option. 0.5% went on our sale fees overnight.)
Okay - that was more than a decade and a half ago, and maybe that isn't possible today - but I guess we will never find out as no-one will try. I simply cannot believe that things are SO different in 2011 as to make it unworkable.
But what about 0.1%? Does that seem more realistic and achieveable? What would that gain you? Two hundred and fifty quid per sale? Three hundred? Maybe more?
Cost to the vendor? ONE POUND for every thousand you sell their property for.
Bloody good deal for them, if you ask me...
And don't forget that they are relying on you to do just that - sell their property. They NEED YOU to achieve that goal.
Or am I deluded? ;o)
Raymondo, I can only agree that no-one can be 100% sure of the answer to all this, opinion based on personal observation and experience is all we have to go on.
As to Churchill's famous quote I'm right with you there!
@ F Fortescue-Smyth
Nice to have a polite exchange of views this week with several posters including yourself.
However, I cannot agree with your last sentence which in my view is too inclusive. I do not like getting into a 'ping pong' situation so we will have to agree to differ on this occasion.
As Churchill said we must all 'keep b****ring on' ;0)
Raymondo, I think it's HIGHLY debatable about whether falling prices are bad for our customers or not ... people who are serious about selling and interested in trading up (or relocating/trading sideways) just want to be able to move and falling prices don't generally hurt them at all, it's the ability to sell that's important.
The number of customers actually trading out altogether is relatively small and most have plenty of equity to spare ... some of the biggest blocks in the system are greedy children of a departed parent who don't need to sell but are quite happy to waste hours and hours of our time attempting silly prices, are these the sort of customers you are referring to?
Falling prices across the board are, on balance, in the current climate, a good thing for housebuyers AND sellers, and will ultimately be good for agents too.
@Raymondo.....to answer no. Yours clearly says will.....and you are correct some will, but only to leave room for more to appear/re open in the next cycle.
There are many on here however who clearly wish hardship on agents....."priced out of the market" for expample....what a clown....I am a alittle surprised he/she is allowed the use of the internet without supervision.
I own NO BTL's despite being in the business 19 and a bit years, never have owned a second property, co-own my current home with the wife, my 6 year old boy and the building society, enjoy life it has to be said, but then worked from Junior neg in the Corp world through to co-owner of a well established indep agent, 6 and 7 day weeks for 19 or so years. So I defend the market purely from the heart not a selfish reason, from a business point of view, good agents will survive and the odd good agent will also unfortunate be swallowed up in the storm.
Be them good or bad agents the people who will suffer when the shutters come down on certain agents are the "normal" staff, mortgage payers, children to feed...I see the odd bankrupt business man still driving the £100k rangerover and in business with a different name and different director heading their empire....its a shame people seem to forget most agents are simply trying to earn a living and are normal folk......get your clip boards out those who bang on about agents are all BTL self motivated people and get in the offices and ask the normal staff if they own BTL property....you may find they dont even own their own houses......
Anyway....lets hope every industry survives the next few years because if the market does STOP DEAD as some wish for....the casualties will be much much more than estate agents......
good weekend to all....be happy and live life, its too short and you are longer dead!
@F Fortescue-Smyth
I was referring to parts of your post, mainly:
...":how do we ensure survival of our businesses..."
and
"...The only answer is the obvious one.for volumes to rise, values have to fall...."
and
"....What we really need is lower prices and more volume..."
I AGREE with that from the point of view of an estate agency business but not from an average clients view for it is they who would pay the price of keeping too many EA's in business..
I understand that this is only one take on the situation but it is relevant don't you think?.
Have a good weekend
@Ric
Hello!
I hope you are not referring to my last post as ....'promoting agents SHOULD go..."
I used the word WILL. In a contracting market many will go, unfortunately that is a certainty and is happening.
Don't get your point, Raymondo ... got a few BTLs not working out as planned?
An unblocked market - which will ONLY be achieved by lower prices, as boom finance is NOT coming back any time soon - benefits the huge majority of people, who are freer to move around, trade up, buy in at the bottom and so on. Not just estate agents.
Those who paid too much in the boom years or who overborrowed on BTLs or mortgage equity withdrawal - well that's life, get over it. Happened in the late 80s/early 90s too and it came right eventually. (Not the BTL bit, obviously).
And those retiring having made a pile on the massive market rise in the last 30 years - well they've made SO much they can afford to lose a slice to stimulate the market and benefit younger generations can't they? (Or should I say, can't we, as I include myself in that category?)
We need to be working on getting prices down not just for our own benefit but for the good of the wider population.
Pee Bee,
Ours is a service industry. Currently there is less demand for our services as transactions are fewer.
To answer your question on fees:-
Listings remain bouyant, EA's make themselves busy running around competing for the listings, competing on both valuation and proposed charges for the service. This is despite the fact that 70% of listings seem not to be selling.
An agent with a high fee policy will find it difficult to gain the required listing ratio to make the 30% work.
Putting your fee price up (effect being reducing your listed stock) could shut you down equally as quickly as having 100's on stock all overpriced and not selling.
The happy medium being fair fees and a sprinkling of good quality saleable instructions.
The fact is, there is not enough cake to sustain the number of agencies the public can chose from.
When every high street has just 2 agencies remaing, maybe once corporate and one undy, then yeah! Hiked fees for sure.
Thats a market.
Fun Boy Agent: "...we need turnover to create cashflow. There is less volume around."
So - what is so wrong, then, with my suggestion that you price your service accordingly? If there is a smaller cake, then simply charge more for each slice.
Vendors know it is harder to sell now than at any time in certainly the last thirty years. They know there are less buyers oout there - and more available for them to choose from. Therefore, their agent has to work harder to marry up a buyer with their property.
So far, I haven't had this debate with you. Your colleagues in industry seem to think that I am crazy (yet I did it in the nineties and succeeded...) - what's your view?
Some very sad people on here who wish hardship on others...I hope their kids never have to experience what mummy or daddy loosing their job and home can do to a family.
For eveyone who promotes agents should go....any of them care to share their job roles?
We are always under pressure, we need turnover to create cashflow. There is less volume around.
I can't help wondering who will crack first though.
I observe a countrywide brand near me with 3 offices all within spitting distance of my office. And between them, less listings than me.
My overheads must be lower.
Why do they keep them all open? Are they waiting for the 'upturn' ?
Or will they shut some?
@ F Fortescue-Smyth
So, he rest of the population owe estate agents a living do we?
Get real, too many residential EA's have appeared during the last 20 years and many will now go..
It's a sad say but it's fairly obvious that a smaller amount of money in the system can't feed the same number of mouths. So unfortunately this may not be the last of these.
The questions is: how do we ensure survival of our businesses, which many here have worked years to build up through hard work and attentiveness to customers.
The only answer is the obvious one: for volumes to rise, values have to fall. Probably quite markedly, back towards the long term averages which the HPC'ers rant about, but which are indicators of a healthy market.
The craziness of the boom years carried the seeds of their own destruction with them ... the crazy valuations which eventually caused the system to go into cardiac arrest (few of us imagined at the time how crazy the valuations were, we were too busy selling .. but we've now had time on our hands to reflect).
The ever more shrill voices bellowing for maintenance of bubble price levels are, I'm convinced, purely those of people who bought (in many cases cases, their own) BTL hype and invested too much, too late, in the BTL basket. I resent their personal vested interest being put forward as some kind of representative view of our industry.
What we really need is lower prices and more volume. The ever more contorted pseudo-arguments which purport to challenge this self-evident fact are, frankly, becoming a sick joke.
Priced out for a Decade: Congratulations - you have shown yourself as a bitter, vindictive idiot.
You are caring in some ways, however - you have saved others the bother of pointing it out to everybody...
The Truth About Estate Agents - Hahahaha!! Man, you are funny. Where do you come up with this stuff?
It's a very funny clip the first time you see it (about 10 months ago), but pretty boring when every have a go mavric posts in on this site to make a 'statement' !!
Britain’s 60 million acres of land was carved up by William the conqueror, handed to his 100 or Barons as 'prize'. LAnd ownership is income, always has been, always will be.
Their ansestors still own a third of the UK.
Oust a ruling class and another will replace it. History worldwide shows us this.
No solution
http://www.youtube.com/watch?v=Fu8pIeeoZcg
Agency Owner: (to Neg) "Experts say that humour in the office relieves tension in times of low transaction volumes. So, here goes…….. Knock, knock"
Neg: "Who's there?"
Agency Owner: "Not you anymore"
As Cahill trenchantly makes clear, the most unchanging feature of rural Britain is the near-monopolisation of land ownership. This is still very much the same as it was nearly 1,000 years ago, held tight in the hands and deeds of a tiny hereditary aristocracy.
Its amazing that in the 21century, people still are fooled into believing the UK is a democracy.
And that a few thousands can control over 70 million of us.
Bring on the Revolution.
The figures are out of date Mark, as I believe the book was published in 2001.
http://www.independent.co.uk/arts-entertainment/books/reviews/who-owns-britain-by-kevin-cahill-751208.html
http://www.caledonia.org.uk/land/cahill2.htm
Q: What are two reasons why HPC'ers don't mind their own business?
1. No mind
2. No business.
Happy funny Fridays
Is it hard work that does it?
A young man asked a rich old estate agent how he made his money.
The old guy fingered his worsted wool vest and said,
"Well, son, it was 1963 I was down to my last penny. I invested that penny in an apple. I spent the entire day polishing the apple and, at the end of the day, I sold the apple for tuppence."
"The next morning, I invested those two pennies in two apples. I spent the entire day polishing them and sold them at 5:00 pm for four pence. I continued this system for a month, by the end of which I'd accumulated a fortune of £1.3’6.d
"And that's how you built an empire?" the young man asked.
"Heavens, no!" the old estate agent replied. "Then my wife's father died and left us two million quid."
I am say you could afford the repayments - that's my point.
These cases should be looked at individually, case specific, to help these well positioned buyers make their purchase who want to make a purchase today.
Deposit - check
Proven affordability - check
There are some good candidates to lend to who aren't getting the backing they have saved for and deserve.
@ Olly: "60 million people live in 24 million "dwellings". These 24 million dwellings sit on just 7.7% of the land. "
It's worse than that. Homes and gardens cover about 2.5% of the UK by surface area.
"By contrast, 57.5 million of us in the UK pay over £10 billion a year in council tax, land tax, over £550 per household. "
It's about £20 billion actually, if you minus off Council Tax benefit.
@AoS
If they can't get approval then they can't afford it.
I WANT to purchase an ex-army Gazelle helicopter in TODAYS market but can't get my bank manager to give his approval. I can't raise the funds elsewhere, therefore I can't afford it (even though I could cover the payments over a 25 year term).
@Olly Cromwell.
Crikey! Watch it, you may get arrested for incitement to riot
P.S. Some of what you say is true (ish)
Too many snounts in the trough I'm afraid. Transactions have halved since the boom, you do the math.
A recent repo involved the bank, asset management company and 2 estate agencies. All of them after a bit of bunce.
House Prices WILL revert to their long term average affordability as a proportion of income.
Which is 3 to 3.5x salary.
It may not happen for years. But the unbelievable unfairness of tis, is that many millions, already priced out for over ten years, may not have a chance to get onto the ladder for another 10 years......
20 years working for nothing. No Capital.
To pay for someone else's mortgage and retirement?
The Government, and fractional reserve banking are mainly to blame.
Lets hope these recent lootings, and riots, turn into real revolution.
-------------------------------------------------------
A tiny minority exploits Britain at the expense of the rest of us.
Just 6,000 or so landowners -- mostly aristocrats, but also large institutions and the Crown -- own about two thirds of the UK. They have maintained their grip on the land right throughout the 20th century.
Just 1,252 of them own about 60% of Scotland.
[They pay no land tax. Instead the government gives them £2.3 billion a year and the EU gives them a further £2 billion. In subsidies.]
The poor are forced to subsidise the super rich.
By contrast, 57.5 million of us in the UK pay over £10 billion a year in council tax, land tax, over £550 per household.
60 million people live in 24 million "dwellings". These 24 million dwellings sit on just 7.7% of the land.
As of 2001 landbanks to a value of 37 billion pounds were known to exist, with capacity to build an additional 3-4 million homes.
This reserved land is almost wholly owned by aristocrats; with none of it on the land registry.
[This land is coming out of subsidised rural estates, land held by off-shore trusts and companies, and effectively untaxed.]
Throughout the 18th century enclosures, the landowning class stole eight million acres of Common land from the people.
The thieves were mainly tyrannical Parliamentary Landlords.
When certain Commoners questioned this. The State had them horrifcally murdered, to make an example of them.
86 years after the creation of the Land Registry, up to 50% of the land in England is still not registered.
Landowners' wealth is a parasite on Britain. Their wealth comes not from farming, nor even from renting, but from a trickling of land onto the urban housing market.
The clearing banks and building societies stripped our industries of investment capital, then supported their clients, the landowners, by running the rigged and overpriced land market.
These are statistics from a Banana Republic. A third World dictatorship.
------------------------------------------------------------------
More and more you can expect to see people asking questions like, Why should i pay for land which should be mine by birthright? When that land was stolen?
Why should I work as a slave for thirty years, to pay off a mortgage, when two thirds of that is interest, going to a bank, which is owned by the taxpayer?!
When a corrupt system of planning laws, are forcing me into debt slavery?
The Government exist to support century after century of criminality, and theft.
Bring on the Revolution.
There simply isn't the money to return to what estate agents call normal volume. Lending has returned to the older standards. They lend out based on what savings they have as well as obliging the capital retention rules.
We need higher interest rates to encourage more savings. However that mean weaker consuming spending in the short term which the bank of england don't want.
Far better for estate agents to sell more houses at lower prices than a few at overvalued levels.
There are simply too many estate agents created during the housing bubble, lets just allow market forces to play their part and kill off the inefficient ones especially those who overvalue to get business.
or he could whinge until he gets the price down to what HE feels is correct.
You missed the point earlier chuckle.
I am saying there are people out there who CAN easily afford the typical monthly repayments and WANT to purchase a house in TODAYs market, they just can't get approval.
I know for you personally, you are desperate to see as least approvals as possible to suit your own wishes.
How about rent now and buy one day, buy now or even rent forever - choose one of the 3 options. You just don't need to throw your toys out of the pram on an agency forum because things aren't going YOUR way.
OR buy a house privately? If agents are the problem, there are plenty of other sources...PLENTY. You'd never need to speak to an agent again. Wouldn't that be great for everyone?!
The fact that lots of lenders are now tighter than a duck's butt, does not mean people cannot afford repayments.
Estate agency is the art of spending the day Googling for lame proverbs, apparently.
Procrastination is the art of keeping up with yesterday.
If you try to fail, and succeed, which have you done?
The market will go where it will.
If you know the market so well, invest and make your fortune
@FBA
So the most "positive" prediction you can find is for real terms falls until 2015?
Your sales pitch is "buy now and watch your asset deflate". Pure class. No wonder you have so much time on your hands.
Reading between the lines, this agency went into administration because it looks as though the bank or another big creditor pulled the plug. If so, this is a story that could and probably will be repeated because so many good agents like this one have struggled with low turnovers and margins, but high overheads. Well done to the administrators for selling the business on and, as they say, preserving the jobs and the client money. An honourable outcome. I agree with previous posts that there are quite simply too many agents in today's markets.
You say ".... Historically normal, prudent, sensible lending would do very nicely....".
Yes! You are so right. Many would then be able to afford to buy. I have been banging on in the same vein for months but most posters on here who disagree keep quoting me as advocating a massive increase in lending, "loose lending" & 125% mortgages. But as you, I am not!
The lenders caused this mess (and not just over mortgages) and now they are screwing everyone to regain their positions too quickly.
Where the market eill go will depend in what you wish to believe.
This news today:-
The Centre for Economics and Business Research says house prices will increase by 14% over the next four years.
The organisation has revised its forecast down from 16% in May.
It predicts house prices will drop 1.3% in 2011 but then gradually rise between 2012 and 2015, up 2.4% in 2012, 3.4% in 2013, 3.6% in 2014 and 4% in 2015.
I repeat earlier advice for Mr Chuckle:-
The wingspan of a Boeing 747 jet is longer than the Wright Brothers' first flight. Things move on Sir.
Any fool can criticise, condemn, and complain - and most fools do. Mr Chuckle, do you really know the future? If so, get your insight working for you, soon you will be a millionaire.
Destiny is not a matter of chance, it is a matter of choice, it is not a thing to be waited for: it is a thing to be achieved. I doubt you will achieve much Mr Chuckle.
Road to success is always under construction. What are you building Mr Chuckle?.. Oh! ,,, nothing! I thought so.
@CoTB
Currently a 10% deposit will get you a rate of around 5%, 15% deposit and the rate is nearer 3%. Historically, that is pretty good.
Fact is that people don't think the houses are worth the asking prices.
The 'crash brigade' are just like rhinoceros.
Their behaviour is aggressive and often unpredictable, and their charge is often preceded by a lot of snorting and kicking up of dust.
They have incredibly thick hide. Their skin actually resembles metal armour - rivets and all.
They have no sweat glands and need to take a lot of mud baths to stay cool.
All members of the species have an excellent sense of smell; their nostril cavities actually exceed their brain in size.
Their eyesight is quite poor and experts say they are incapable of seeing what lies directly ahead during a charge. Quite often they miss their targets.
A group of rhinos is not known as a herd but as a "crash."
And finally, rhinos tend to pile up dung to mark their territory. The dung heap marks the centre of the territory and acts as a stimulus to other rhinos. Other rhinos in flight cannot resist the urge to stop and add their contribution to the pile.
@FTBopinion
We don't have normal lending now, we have absurdly abnormal lending now.
And nobody wants a return to "loose lending". 125% mortgages and self cert have been gone for years now, and good riddance. But the market doesn't need that to survive.
Historically normal, prudent, sensible lending would do very nicely.
The same sort of lending that was available in 2000, in 1990 and in 1980. Where a 5% or 10% deposit would get you a decent rate, and where FTB-s weren't required to enrich their landlords for a decade saving up a quarter of a house, while simultaneously buying a third of a house for their landlords.
CoTW,
Yes, I stand corrected. It is mortgage approvals that are currently circa 40k per month. Then again, mortgage approvals were topping 120k per month between 2004/07 so the point remains the same.
@BC
Take 20% off the price and a 10% deposit becomes a 12.5% deposit. Meaningless, when banks are asking for 25% deposits from FTB-s to get a half decent rate.
Take 20% off the price and banks will be able to ration the same funds among 42,000 mortgages instead of 35,000 a month. Equally meaningless to an industry that needs 120,000 mortgages a month to survive in it's current form and meet the housing needs of a rapidly growing population.
The only solution to this crisis is a massive increase in lending.
Nothing else will help our industry survive.
And nothing else will help get more houses built, to solve the worsening housing shortage. After all, builders won't build what they can't sell.
Concerned of Tunbridge Wells
Only last week George Osborne was admitting that we have "unsustainable household borrowing, unrealistic house prices, dangerously high banking leverage" and "the most indebted households, the biggest housing bubble" and that "surely we have now learnt that growth cannot come from yet more debt".
I wouldn't hold my breath waiting for that loose lending.
@CoTW
I'm sure it was an honest over-sight but you missed....
3) Prices fall to meet the level of funding available, transactions pick up. Everyones a winner.
As for the article, it is inevitable that more EA's will go out of business unless lending improves.
Falling prices will reduce the volume of transactions, as we have seen clearly in 2008, worsening the situation for agents and resulting in fewer people being able to buy as lending contracts even further.
The only real options are......
1) more lending to enable transactions to recover to normal levels, and EA's thrive once again...
or
2) more EA's will go out of business until sufficient market share can be spread amongst the few that remain.
EA's should be lobbying their MP's, local authorities, and industry organisations to put the mortgage famine front and centre as the single biggest problem facing this industry today.
Mortgage rationing is an existential threat to anyone involved in the housing industry, and is building up massive social and economic problems for the future.
We should all be shouting about this as loudly as possible, to anyone that will listen.
The reason my firm is in trouble is cos I spend all morning cracking one off to Homes Under the Hammer and then all afternoon reading EAT.
@AoS
"Being refused a mortgage or the lack of availability, does not mean a buyer cannot physical afford the house price........"
Erm yes, of course, maybe he could pay for it in matchsticks, or bottle tops, or sexual favours.
Fact is if he can't raise the funds then he can't afford to buy the house.
@@@@@@@Barry.
Being refused a mortgage or the lack of availability, does not mean a buyer cannot physical afford the house price/repayments...in many cases they can.
If nobody could afford to buy as prices were too high, there wouldn't be 40k - 50k transactions per month.
Transaction levels are down in the current global climate, just like many other sales industries will tell you.
Priced out - You sound lovely. I may have room to squeeze an extra seat at the Christmas dinner table this year - will let you know if it is free nearer the time.
@SBC
Transactions are running at around 850,000 a year, not 40K a month.
Mortgage approvals are 45K a month or so. The balance are cash transactions.
@BC
Not "in other words". Just my words.
@POFAD
Now, now. Inspector FBA will tell you off for that kind of language. It seems a little harsh even to my ears.
You should read some of his other posts. Apparently now is the time to buy or you'll miss the boat.
How can this be?
House Prices only ever go up.
That's what every slime, erm, Estate Agent told me for over ten years.
Lets hope many see their demise. And then negative equity. And then Repossession. And the a Cardboard box.
@FBA
And then a hero came along................
I'm sure Raymondo is quite able to speak for himself and takes my postings in the light-hearted manner they are intened.
As for your point let me quote Ray's post for you:
"........downturns are not necessarilly caused by so-called overpricing. There are many factors not least the non availablility of reasonable lending policies....."
in other words, it's not over-priced, it's just that nobody can afford to buy it!!!!!!!!!!!!!!!!!!!!
@ Barry Chuckle, I quite enjoy the way you spice up your comments with a sprinkling of @@@s. Next time try a smiley :-)
Mr Chuckle,
Please give your stupid @ button a rest, you are boring, ill informed, inconsequential and rude.
You are not reading the posts.
Raymondo's post relates to business closures.
We all know you cant afford to buy a property, go away and play with yor play station.
@Raymondo
So what you are saying is:
It's not over-priced, it's just nobody can afford to buy it.
Genius.
More evidence that the London market is faltering and not as much as a safe Haven as people have been saying.
London is not immune from economic realities.
Spot on Sibley,
you are good at this 'business' stuff.
It is not just EA's, there are also surveyors, conveyancers, printers, local press, et al, all suffering as a result of lower property tansaction volumes.
It then knocks on to other industries like white goods sales, furnishings sales, diy sales, et al.
It impacts on EA's for sure. There will be office closures, jobs lost and well known names gone. The same will happen through the 'knock on' in other industries.
It defies logic from fiscal and government thinking if you think about it.
Lost revenues from income tax, vat, stamp duty, business rates, etc.
Where does it end?
As with all activities, downturns will result in businesses closing. How many closures depends on the severity and it should also be bourn in mind that the property market has been over supplied with residential estate agents for at least 20 years..
Before the HPC's jump on this, downturns are not necessarilly caused by so-called overpricing. There are many factors not least the non availablility of reasonable lending policies, which are not always currently the fault of the lenders.
Frankly, i'm surprised that there haven't been more closures announced of late. I've said it before, with circa 40k transactions per month there is only one inevitable conclusion.
Sure, there's anecdotal evidence of EAs on here that are 'bucking the trend' but for every firm selling enough to cover their overheads there's sure as heck another two that are barely treading water.
I guess the question is how far the differential between revenue gained by lettings offsets that lost by sales.
Why was astrology invented? So that the property market could be an accurate science.
Happy fun Fidays everyone !!
Please, no more 'knee jerk' 'clever dick' comments.
Estate Agent Today - Dole queue tomorrow.
Unless we stop chewing off each others legs by over-valuing in order to win instructions that will never sell.
Price sensibly and turnover will increase. Job done.
...and the creditors get 2p in the pound?