How do you best sum up the current market status quo? Given the specific regional nature of the housing market in this country, you are likely to get a very different answer depending on where the responder trades from.
It will not only be dependent on the region, but also the town or city, perhaps even the street on which the agent operates; that’s assuming of course they have retail premises in the first place and are not operating online exclusively.
The point is that determining a UK-wide view on the housing market is nigh-on impossible – that doesn’t stop countless commentators, businesses and institutions from doing that every month of course. But, the experience for each agent – whether sales, lettings or both – very much depends on their sphere of influence and the often, highly acute regional variations they are exposed to. Even if you’re part of a branch network that has another office just a few streets away, your experience of the housing market is likely to be different.
So, what are you getting out of the market at the moment? Have you seen a post-General Election pick-up through June and July? Are you anticipating this to continue through the rest of the year as more people regain confidence in their overall situation? Are you tempted by a move into sales or lettings if you don’t currently offer either of those services? Are you seeing an increase in competition and what do you make of the inevitable growth of online-only agents?
These are important questions because the answers will undoubtedly fuel your strategy going forward, but do they simply pale into insignificance when weighed against, what I suspect, is the over-riding concern for your business: being a continuing lack of housing supply. It is clear that the supply-side issues weight most heavily on our sector at present and we need to address how we get more new homes to market but also how we get more properties for sale onto our books in general.
This fundamental problem is of course exacerbated by the strength of demand. According to the latest statistics released by the National Association of Estate Agents (NAEA), the UK housing market is clearly not one stifled by a lack of demand. Indeed, quite the opposite. It suggested recently, that the number of applicants registered per branch – in June this year – was the highest since August 2004 with 439 potential purchasers registered per NAEA branch. That’s a 15% increase over May’s figures and is perhaps evidence of the greater buyer confidence that was created by the General Election result.
However, and here’s the nub of the problem, housing stock numbers fell from 46 per branch to 44 over the same monthly period. So, again, while this is a very general viewpoint, it may well chime with your own experience. As demand increases, housing supply of course reduces. Good news for those sellers perhaps who are able to pitch higher asking prices and are much more likely to secure them, but still a skewed marketplace where demand is in no way being met by supply.
To a great extent many of these issues are out of agents’ hands. We as a sector, after all, can’t undertake conversions or build the properties ourselves, but this doesn’t mean we can’t act. It doesn’t mean we can’t secure those new-builds when they are developed. In all areas, but especially where there is significant competition, the focus has to be on service and ensuring that where sellers are looking for agents, they come to you rather than one of the myriad of competitors who are undoubtedly operating in your area. To that end, agents have to look at their overall proposition – this is not just about fees but also about the portals you use, the quality of your staff, their ability to service the clients diligently and professionally, the marketing you can call upon, the simplicity and effectiveness of your operation, and everything else that can make the difference when clients are looking for an agent to act for them.
It could well also be about brand – are you operating in a region where the ‘big brands’ tend to dominate? Perhaps it’s time to look at whether your single-site trading name is holding you back – could you fight fire with fire if you had the backing and the significant marketing and operating might of a major brand, such as CENTURY 21 UK. It would be a significant move but it could take you to the next level and ensure you have the firepower to compete and win.
All agents are different and it’s about how you express your differentiation to potential clients and how you show you can go the extra mile to give them the experience they want, as well as being able to offer all those ancillary services that many clients will need. Given the market status quo, now would certainly be the time to evidence your distinction because, in a time of great competition, you can guarantee that other businesses will be looking at ways to secure that all-important edge. It’s up to you not just to keep up, but to lead the pack.
*Rob Clifford is a Director of Central Lettings Solutions and Chief Executive of Century 21 UK, both part of Shepherd Direct