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The issue of over-valuing in the PCL lettings market

These days we have a wealth of information at our fingertips, the mere touch of a button or two provides more data than we realistically know what to do with. 

Statistics, graphs, fluctuations, percentages, spreadsheets, pie charts, reports. With the abundance and availability of hard facts from reputable sources, why is the industry still being criticised for inflating property prices and over-valuing?

Speaking in relation to the Prime Central London (PCL) lettings market, this is an issue. And not one that seems to be going away any time soon. 

There are several concerning contributions to this problem, some being contradictory and conflicting, making it a complex issue.

Competition for instruction is the most basic of these. Pandering to the greed of a potential client is a business model used by too many – a cardinal sin few landlords show resistance to. 

Pitching for business based on unachievable and unsustainable values is short sighted. Occasionally the someone with more money than necessary is prepared to pay over the odds due to a lack of knowledge, information or market fatigue, but why target the exception when we should be chasing the rule? 

The emotional value of property means more to some owners than the actual value, especially when the financial return is of little importance. 

There is an undisputed link between supposed wealth and unrealistically high expectations. Pride comes before a fall and owners of super prime properties show little concern for the cost of void periods, with the main priority being winning. 

The ultimate prize? The knowledge of receiving a record price for their street or building. 

Rightly or wrongly, some agents instruct properties knowingly over-valued; be it at the landlord’s price or other agent’s instruction winning price, in the hope of finding the exception. 

There is little benefit to this way of thinking, but unless agents are prepared to work together instead of against each other these inflated instruction prices will be difficult to overcome. 

What is the point of a market saturated with overpriced properties costing everyone time, effort, money and disappointment? 

While the reward for achieving that price may feel well earned, time and money should be spent catering to the majority of our customers, those who are ‘the rule’. 

What is the solution, should valuations be controlled and monitored? 

Marketing prices are the basis of all external judgement, so what if merit could be attributed to agents on the amount of correct valuation prices achieved, not the amount of listings on the books? 

*Olivia McSweeney is Lettings Manager at UK Sotheby's International Realty

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