Estate agents have collectively been fiercely criticised for allegedly exaggerating valuations to win instructions, doing a disservice to vendors and not taking into account the damage to the market being done by Brexit.
Ruban Selvanayagam, co-founder of a ‘quick buy’ company called Property Solvers, has issued a statement making the outspoken attack.
It says: “Even some of the most experienced estate agents are failing to understand the current realities. Arguably due to the cloud of uncertainty surrounding Brexit, we’re operating in a buyer’s market at the moment and the fact that agents knowingly state exaggerated valuations at the initial stages is a disservice.”
He continues: “Overly inflated price valuations in the current sales climate invariably leads to properties lingering on the market for a lot longer than they need to.”
Selvanayagram claims to have tracked 65,384 property sales between August 2018 and August 2019 from start to finish, contrasting asking prices on Rightmove and their actual sold prices lodged at HM Land Registry.
He says that of 575 assessed properties in South West London, sellers were dropping their asking prices by an average of over £71,000 to secure a sale.
It was a similar story was seen in North West London, where 206 vendors reduced their initial prices by almost £69,000 on average.
“When we speak to homeowners, we always underline the importance of referring to HM Land Registry sold price data. It’s never been easier to access this kind of information online” he says.
“Of course, it’s never a bad idea to incorporate a bit of wiggle room into the price. Also, if a client has spent a significant amount of money on extending [or] refurbishing or there’s more floor space then, of course, it makes sense to command more.”
On Brexit he says there is no sign yet of a housing market crash but warns that a No Deal could “change the trajectory of house prices.”
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Translation: The valuations we are seeing at the moment make it difficult for us to pick up BVM deals.
It's always the same. Inexperienced staff being pushed to hit unrealistic targets on instructions. In the last 6 months, i have had 8-9 vendors tell me that a "valuer" asked them what they were hoping to achieve, rather than actually doing the job and giving a fact-based market appraisal.
I've said it before, if a valuer knowingly over-values a property to gain an instruction and then discounts it by more than 30% inside the sole agency contract (max 12 weeks) then they should waive their fee.
Philip I wish £70k represented 30% of London prices! In the areas mentioned this equates to around 10% of the average property price- not that big of a difference in a challenging (London) market. In many cases the £70k will have been a considerably lower % of around 5-7 which is perfectly acceptable.
Would love to see the data of the prices they have purchased properties for compared to local comps sold by agents- doubt their clients would find that nice reading.
Basically the co-founder can't find cheap houses anymore. The usual low stock corporate tactics of overvalue, lock-in contract then spend months beating owners up for price reductions. Where is the story?
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