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Written by rosalind renshaw

A well-established estate agent in Scotland, Goodfellow, has shut all six of its branches.

It had been established in Ayrshire for over 60 years and employed 70 staff. Its website has also been shut down.

The firm, which began trading in 1948, was thought to have the largest listing of properties in the area.

The company dealt mainly with the lower end of the market, including first-time buyers.

The Scottish housing market has struggled to emerge from the recession, with lower-priced homes particularly affected. The market has also had to adjust to the use of Home Reports – the Scottish equivalent of HIPs, but which, unlike HIPs, contain a property valuation.

According to new research from the Edinburgh Solicitors Property Centre, less than 30% of properties sold are currently achieving the valuation given in a Home Report. Over the last two years as a whole, almost two-thirds of properties have sold for less than the valuation.

The ESPC research also shows that the lower the value of the property being sold, the lower the chance of achieving the valuation.

For properties that have stayed on the market, the ESPC research says it has become standard practice for many lenders to request an additional valuation.

The ESPC notes: “This means either the buyer or seller is often left facing the cost of one or more additional valuations, and unfortunately, with smaller homes spending longer on the market, these additional costs are most frequently being faced by those who can least afford it.”

Comments

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    Very sad for all affected by the closures.

    • 14 August 2011 22:01 PM
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    Watching: Why do you see this as "a stark warning for any agent still working to the business model of winning instructions by advising the highest asking price over and above the competition"?

    At NO point has it been mentioned by any other poster or the lead story that this company were serial overvaluers.

    Unless you care to share proof, your comment is invalid - and inappropriate.

    • 14 August 2011 14:04 PM
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    The rumblings of things to come and a stark warning for any agent still working to the business model of winning instructions by advising the highest asking price over and above the competition.

    Adding a lot of stock to your portfolio adds a lot of cost. Lots of overpriced stock on your books that cannot attract interest from the public will have dire consequences.

    Gone bust with the most listings

    • 13 August 2011 10:26 AM
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    I fear we will see a lot more of this. I'm lucky to be in the south-east where, despite falling prices, we are still turning over sufficient numbers to get by.

    These peripheral markets like Scotland and NI where prices spiked late and briefly, at silly levels before the credit crunch arrived are the ones hardest hit, as they have SO far to fall from the peak, and volumes are so far down that new far-reduced price levels have yet to be properly established so things can move on. So the whole thing is frozen over.

    I have family up there but am bloody glad my business isn't in Ayrshire or Lanarkshire. As several have pointed out MEW is a big issue there too with spent equity long gone and no prospect for many approaching retirement of getting a sale that will cover what's owed.

    I really feel for those losing jobs but worry there's lots more of that to come.

    • 12 August 2011 22:33 PM
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    Again i will say there are many 30 somethings who do not have mortgages, are renting and that are considered as, but not really first time buyers. It does not always mean they have squandered there money.

    • 12 August 2011 18:50 PM
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    Spot on, Rant. I am quite quick sometimes to point it at the younger ones - hands up for that.

    But, you know, that was the norm back then in the early 00's. Prices we increasing and it was a guaranteed/easy investment!

    "It never goes down..."

    • 12 August 2011 16:46 PM
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    Even though I cannot yet express it in words, slowly, but surely, I am starting to subconsciously understand this debt crises thingy.

    Personal Debt levels=Caqnnot take on anymore
    National Debt levels=each household has £33k to pay back through extra tax, markts struggling to provide more.
    Disposable Income=All time low
    Inflation= High and rising
    Interest rates=Cannot go any lower
    What does all of this mean???

    Ah whatever, I will just sound off about the immorality of people not taking on debt, that will do the trick surely. If I just ignore the problem, it will go away!

    • 12 August 2011 16:09 PM
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    AoS - and it's not just young people. Some of this country's most indebted are the over 55s who've squandered mortgage equity withdrawal on world cruises, sports cars etc.

    • 12 August 2011 16:03 PM
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    On one hand, you could argue that this is a 'worry for the market' as the headline suggests.

    On the other, you could say that they way that said company ran their business of 6 offices had not evolved to perform in a tougher environment.

    Every local agent in my area has been riding the recession storm and are still here. They've down-sized, cut other costs and become more efficient to survive.

    It is extrmemely sad indeed, but to go from 6 offices to zero is a dramatic case, which suggests much deeper questions need to be asked than the 'state of the market'.

    CTW's post on 2011-08-12 14:10:58 raises some undeniably great points. There have been many opportunities for FTB'S (around 38 yrs old today) to make their move over the last 15 years.

    The failure to have done so would suggest they have a realistic deposit saved, but unfortunately this is not the case for many.

    The "live fast, worry about it later" mentality has been a part of the younger generations lives for a while now. The frustration that their wants and needs have now changed and they have not planned correctly (ie savings), are directed at anyone/everyone else.

    • 12 August 2011 15:56 PM
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    Bob – “several of the biggest banks in the world, including UK ones, are probably closer to the being bankrupt than is publicly known. “

    You have no idea how true that is. Several household names are currently having almost daily meetings with the FSA about how to avoid or manage insolvency.

    That so many EAs believe that the 100%, 6x mortgage market is about to light up like a Christmas tree any moment now shows just how desperately they want it to be true, but does not reflect reality.

    • 12 August 2011 15:30 PM
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    @ Concerned of Tunbridge wells -

    Just to clarify for you ...a FTB is not always someone who has never had a mortgage!

    • 12 August 2011 15:26 PM
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    @Concerned of Tunbridge Wells

    There is no such thing as mortgage rationing.

    If it was in the interests of banks lending mortgages on current asking prices - i.e. they could make money from doing so - they would be throwing money at house buyers.

    The banks are not rationing mortgages - they either do not have the money to lend or they have so many current mortgagees on their books who are months behind on payments, or who are in negative equity, or both, that they know that house prices have a long way to drop yet.

    You really need to read some financial articles in the Press and realise that the banks are desperately short of hard cash, that they over-lent on housing and are not going to do that again, and that several of the biggest banks in the world, including UK ones, are probably closer to the being bankrupt than is publicly known.

    We really need to stop blaming the banks for some perceived mortgage rationing. I mean, it is not logical is it - why would a business in the business of making money from lending not lend money? The only answer is that:

    1. They do not have the money.

    2. They have massive numbers of mortgages in negative equity and/or months behind on their payments.

    3. The banks believe that asking prices are ridiculously high and are simply unwilling to lend as they full well, when prices fall, they will lose out financially.

    Go away and read some of the financial websites will you.

    • 12 August 2011 14:53 PM
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    CTW - That earlier post seems a little harsh.

    The first uni fees kicked in during the mid-90s and affected the abilities of those graduating to borrow money.

    The early 90s crash was fresh in people's memories then and a lot of people, especially those in negative equity, were advising AGAINST buying properties at the time.

    Where are your stats from re only 20% of FTBers are unassisted? When the number of FTBs is in freefall, those with their parents help are of course going to make up a larger amount of the total who do buy.

    For what it's worth, my parents divorced when I was a teenager. They both still have mortgages left so can't help me with a deposit in any way. Between the two of them, their two properties have five bedrooms. Divorcing Boomers who now live alone have done a lot to reduce the supply of available properties in the UK.

    Whenever they pass away, the price of houses relevant to how much I inherit will be irrelevant. If house prices fall, I will receive less. But then I would need less anyway.

    If you're lobbying for a return to sensible and historic mortgage lending levels, count me in by the way.

    • 12 August 2011 14:31 PM
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    And as for the article, proof once again that mortgage rationing is killing this industry and the dreams of a generation of FTB-s.

    Time for us all to start lobbying government to restore historically normal and prudent lending to the market.

    • 12 August 2011 14:12 PM
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    RnR,

    Average FTB age is 32. Exactly the same as it was in 1990.

    The average age of unassisted FTB-s is 38, but they're only 20% of the market. The average age of assisted FTB-s is late 20's, and they are 80% of the market. The average age of all FTB-s is 32.

    And on another note, a 38 year old FTB has so far.....

    -Failed to buy at the bottom of the market when houses were at an all time low versus wages in the late 90's.

    -Failed to buy in the early noughties, when prices were still low and cheap mortgages were available.

    - Failed to buy in the mid noughties, at prices comparable to today but with much better mortgages and zero deposit requirements.

    Sorry, but if you spend the two decades since leaving school pissing away all your cash on nights out and then wake up one day expecting a house price crash to save your bacon, having failed not once, not twice, but on three occasions when buying in the past was cheaper and easier......... I have no sympathy.

    • 12 August 2011 14:10 PM
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    God my spelling and grammer is terribel today innit!

    • 12 August 2011 13:19 PM
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    Peebee my point is a disposable income is at its lowest for decades - fact
    Disposable income can be spent or saved for lets say a deposit on a house
    The current method of evaluating diposbale income is based on an average wage
    Most potential FTB do not earn the avearge wage and therefore it is more diffcult for them to save a deposit than in I guess your and my day!

    • 12 August 2011 13:17 PM
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    PeeBee - I reckon a lot of today's 25 year-olds have a bit of uni debt to worry about that previous generations didn't...

    • 12 August 2011 12:03 PM
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    rantnrave: "Average FTB age is now 38. I'd imagine that flats aren't exactly going to meet their family situation at that age." No - but if they had bought at, say, 25 - then they probably would.

    That's what we used to do - start at the bottom of the ladder and work up...

    Unhappy Chappy: "*are not earning". Sorry? - if they aren't earning - they ain't buying, are they?

    What, then, is the point you seek to make there?

    • 12 August 2011 11:54 AM
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    Sadly it looks like plenty of estate agents have created the means of their own demise.

    It is all very well ramping asking prices but eventually you end up going bust.

    I heard a rumour about one of the more, let us say, 'optimistic' valuing estate agents in Swansea who is suddenly getting very panicky about the slow down in his market.

    • 12 August 2011 11:54 AM
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    *are not earning

    • 12 August 2011 11:38 AM
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    Peebee - Arent or cant save for a deposit?
    Disposable income is at its lowest levels for decades.
    Even when based on mean average incomes which a majority of potential first time buyers or not earning!

    • 12 August 2011 11:38 AM
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    Average FTB age is now 38.

    I'd imagine that flats aren't exactly going to meet their family situation at that age.

    • 12 August 2011 11:14 AM
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    agent(still):

    Your final sentence says it all. FTBs now simply want to walk into a three bed semi (...or better...) that they can't afford. And when they can't afford it, THAT is the fault of the greedy vendor or the greedy Agent!

    Recent info is that only 14% of FTBs are even saving for a deposit. Does that mean that the other 86% are simply relying on BoMAD; or that they expect the money to otherwise micarulously materialise at just the time they need it?

    It is a sad story that a company with over sixty years history of riding the waves of the market falls victim to the current climate. I sincerely wish their staff all the best in swiftly securing alternative employment.

    The story content stirs a question. According to ESPC, over seventy percent of properties sold are selling for the 'valuations' in the Home Report. Does this mean that some dodgy legal organisation will stop chasing ambulances and start offering compensation claims to vendors who have "suffered" as a result?

    • 12 August 2011 10:19 AM
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    I feel for them and wonder how so many more agents are surviving, it is those agents at the bottom end who are hardest hit as we cannot rely on the odd 700k house selling every month to stay alive instead we have to rely on 15, 100k houses selling, which is not happening. as the article above shows - where are all the FTB's?? Properties are generally more affordable, mortgages attainable, but FTB's don't appear to be prepared to buy the sort of properties they used to i.e small flats, scruffy terraces to do up, instead they get bough by investors who give them a lick of paint and rent them out to those who should be buying. crazy.

    • 12 August 2011 09:23 AM
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