Furious estate agents have complained to the First Minister of Wales and other senior politicians about the Welsh local council that has set up its own estate agency.
Neath Port Talbot Council is thought to be the first local authority in the UK to set up a commercial estate agency business, although other authorities have set up lettings agencies.
The agency concerned, Property Bay Wales, is run from the council’s offices in Port Talbot and describes itself as offering a high-standard sales package.
At the weekend, it appeared to have ten properties for sale, although the local paper had reported only one. The website did not produce any rental properties on our search.
It charges a set £899 fee and is a member of the NAEA.
Agents have complained angrily to First Minister Carwyn Jones about the venture, saying that it is an inappropriate use of public money.
But the local authority has strongly defended its decision.
Steve Kidwell, the council’s coordinator for housing renewal and regeneration, said the company was set up using legislative powers to enable local authorities to trade.
He said: “Property Bay Wales trades within the open market in the same way as any other private company and does not require funding from the council. All running costs are funded by trading income. Although it does not cost the council anything, all income it generates through its services is recycled by the council into local council services.”
He added: “It is fair to say that the estate agency is at an incubation stage. Assuming that it develops further, there are a number of markets that we are currently interested in other than that of a traditional estate agency service – for example, online virtual services.
“This is because we do not have a traditional shopfront agency and much of our work is online, targeting disadvantaged groups that cannot move home as they are unable to afford the traditional sale fees. We can also provide a service for clients who specifically prefer a local authority approach.
“The company aims to apply core local authority principles, offering a customer-centred approach and value for money. There is no doubt given the current financial climate that it’s a competitive market, but difficult times require creative solutions.”
However, Port Talbot estate agent Mathew John said the scheme was “an astonishing waste of taxpayers’ money”.
He told his local newspaper: “Although we are seeing severe cuts in services throughout the borough, the council has invested in a brand new website, advertises weekly in the local property guides and employs staff to run this enterprise,” he said.
“It is an irony that, as if estate agents are not finding the current climate difficult enough, they now find themselves paying business rates to a local authority that is using this money to directly compete with and undercut them.
“Local authorities should be spending their budgets on essential services to the benefit of the community, not on an enterprise which is having a detrimental effect on the very people who live and work in them.”
Peter Morgan, another Port Talbot estate agent, said: “Whatever the council says, it is able to undercut established estate agents because it is using its own offices and doesn’t have the expense of operating on the high street.”
A spokesman for the NAEA told the paper: “So far as we are aware, this is the first time a local authority has launched an estate agency of its own. Our view would be that whoever works for an estate agency should have qualifications that are appropriate for the industry.”
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Comments
I was pretty shocked when I heard this news a few months ago, but due to it being Neath and Port Talbot council I had assumed that they would only trade within their borders.
They have now taken instruction of a property in Llansamlet, Swansea.
This could cause more EA's in Swansea to become involved.
I'd be surprised if they can make a profit on a £899 fee, even with free council office space. Rightmove would swallow one sale a month straight away with newspaper costs, staff salaries, phone calls, postage costs, boards and a company car eating into profits, they would need to sell quite a lot of property just to balance the books!
The real point here is that they should not be using ANY Council Tax money to finance this venture - whether they are successsful or not. Council Tax is paid for general services to the community - not speculation of this kind.
Paul. Who'se worried? To be honest, I'm quite glad they're doing it, because I'm sure they won't make a fist of it and will have to admit they have failed. Perhaps when they've taken time out from another coffee break or a seminar on their pensions, it MAY dawn on them that there is a real world out there, but I won't hold my breath though.
Wooden Top. If they were doing "the same job" I'd be worried, but to be blunt as far as I can see they haven't made ANY job yet. All they seem to have done is opened a website and banged 11 properties on it. Unless I'm missing something they sold sweet FA yet. Some "job" eh?
I think public interest in something run by the council will be pretty thin on the ground. This is reflected in the level of instructions they have.
Maybe they will go the way of Woolworth selling houses which they did for a very short time at £99 a go. They pulled out of the market because it was not what the public perceived as their line of business. Buy a reel of cotton and a house on one visit! I dont think so somehow.
Seekers were doing the same and there are and they now charge £999 to sell.
Stop worrying lads it will not last. How many cheap fee agents in your area have closed down?
IF it is self financing then what is the problem? By the sound of it, it is trading at a loss or being subsidised by the ratepayers. Either way, its days are numbered.
Truth will out when the next annual accounts by the council are published I suspect. If it is trading at a loss, it will be a wake up call to all of the civil servants and politicians who seem to believe that running an estate agency is a license to print money.
From a customers point of view; would you really trust someone from the council to sell your property? Really?
Only if there doing the same job for at least half of your fee?
With respect, I would only be worried if the Council were subsidising their little venture. I'm already in competition with at least 10 rivals, so would one more make any difference?
A worrying time for the local agents if this takes off. So is this the start of the thin end of the wedge for other councils? Lettings within other councils has been common for some time.
Will they soon be doing groceries and florists from the council gardens, Landscaping your lawn with the public funded mower. The mind boggles at what they could do and should be worrying for anyone in business, not just estate agents.
I’ve kept this website on my favourites since the news first broke months and months ago. At the time, I’m sure they had a section showing how much vendors could save by selling through them. Perhaps the fact that this section has been quietly dropped speaks volumes.
Frankly I don’t understand how the council can say it doesn’t cost them anything unless the papers are running free weekly adverts, all the staff are volunteers, BT are giving them free calls etc etc; and let’s be blunt – none of these will apply, so they will have running costs. If they have running costs, they will need to bring in some money to cover these costs – it’s not rocket science, simple O-Level economics. The site is currently showing 10 properties for sale. For months they only had 6 or 8 for sale. As far as I can see not 1 property has been sold, and if I’m right then they must be running at a loss because they haven’t made a penny yet.
Are we playing in the councils hands here? Possibly being shut down from industry pressure is just what they would like, if as I strongly expect, they are losing money. Sooner or later, if they are losing money, someone will see sense and pull the plug, but wouldn’t they just love to turn round to their clients and say “Sorry Mr Blogs, we can’t offer you a superb service any more, because the vested interests have forced us to close”?
There is no point a single agent asking for this information, but I reckon the NAEA or the RICS should obtain disclosure of their full trading figures to date (under the Freedom Of Information Act if necessary because don’t forget this Act “gives you the right to ask any public body for all the information they have on any subject you choose.” Well I for one would like to know how many properties they’ve sold, what prices they had for them, how many properties they have had on their books and more importantly would like to see their full accounts. To this end I would be quite happy for a part of my NAEA / RICS subscription to be used for it.
My argument is by all means keep them to account, but if the plug does eventually get pulled on this, I would rather they admitted they couldn’t make a fist of it than being closed due to pressure from vested interests like me.
On a slightly separate point, what are the irritating clicks whenever I open up a link? Are they some automatic click throughs to adverts? If so, please get rid of it because
1) I haven’t clicked on any advert
2) It would give advertisers a false information and
3) Its bloody annoying.
It appears to be self-financing, as the Estate Agency is only a part of what the business offers.
EA's don't like it up 'em.
The mere fact that Steve Kidwell is involved in this scheme all in this means that his time being involved is being paid by the council tax payers and therefor it cannot be fully self financing.. Disgraceful!
Imagine the conflict of interest when a property goes multi-agency and other agents start putting their boards up - a nice little letter from the council planning department reminding the vendor of their responsabilities under the Town and Country Planning Act souldn't be too hard to come by for a council run estate agent...
How can it be self-financing (yet) on the basis of 1, or even 10 listings?
What were the start-up costs? Surely more than £899?