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Written by Rosalind Renshaw

The big stories last week, aside from the Scandinavian blizzard conditions sending the country into a frenzy, were the announcements that interest rates have again been cut to record levels and house prices, according to the Halifax, actually rose in January. With this in mind, what can we expect as the market moves into another new and uncharted phase?

It is well documented that the number of transactions this year will be down to around half of the volumes experienced during most of this decade. I believe we’re going to see an increase in applicants and potential purchasers over the coming months. This will begin to drive the prices in desirable areas and vendors expectations will be tempted by agents who might be more optimistic with their pricing as the stock of saleable properties is devoured by hordes of opportunistic buyers.

Unfortunately it will take a number of months for ‘aspirational vendors’ - the economic drivers - to come back into the market. The latest statistics show that the majority are likely to move at least once every three years but at the moment many of them are in negative equity – one in ten according to a recent report by The Telegraph. What does this mean? There are less properties coming to market.

Prices will rise in the short term as demand increases and is met with a short supply of property. We could potentially be in for an extremely volatile market similar to the seventies where inflation could drive prices up, followed by sharp price falls as the supply of property increases and the instruments used to tame inflation (interest rates) bring prices crashing back down. Fees could be a problem - a smaller pool of properties will mean more competition between established agents remaining in the marketplace and the new businesses entering the market. Does anyone have an opinion on this?...

That’s all the angst dealt with so where are the rays of light? Well there are less of us estate agents to share the spoils of an improving market and it will take a few months for the new-entry businesses to come to market in any meaningful way – so in the short term, we can be cautiously optimistic.

As I mentioned last week, it’s vital that agents develop their businesses online. The cost of developing online businesses to build on existing well-known brands has plummeted. A simple website with a property search will no longer do; vendors/ buyers want to feel that they have control over their entire transaction online and want choice and best value. It can all be done and existing businesses are best placed to take the whole game to another level.

I’m always inspired by businesses that manage to move on from their competition through innovation - just when you think they have reached their limits, businesses like Virgin, Apple, Sony, Nintendo and (unfortunately!) Manchester United develop new propositions that set them apart in their field.

I’m always impressed by the ingenuity and speed of thought in the estate agency industry - sometimes we must wonder if, given the opportunity, some of our peers could become the next iconic, consumer friendly brand. Romans, Foxtons, Hunters, Countrywide, Connells and LSL (Your Move) have all made big impressions in the market but there is still no sign of a true ‘consumer champion’ that will either make it simpler, better value or ‘funkier’ to be aligned with. The challenge is out there for us to be what our customers want us to be and resist the temptation to try and force them into being what we want them to be.

At movewithus we listen to at least ten new ideas every month from people who come to us from inside or outside the industry - people who are looking for financial support or a market for their idea. In our experience this can only be a great thing in the market; necessity is the mother of invention.

So cheer up everyone - businesses will fail, the market will turn and the only things that are sure in life are death and taxes. It is desperately hard but people will respond to us far better if we are working towards something positive rather than worrying about what we can’t affect. In the immortal words of that iconic philosopher Eric Idle, “Always look on the bright side of life…”

* Robin King is a director of movewithus

Comments

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    ysfvfaecwibdyyvxezuoqxlgkaalys

    • 21 April 2009 07:13 AM
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    As you're a journalist, shouldn't it be 'fewer' properties and 'fewer' estate agents rather than 'less'? Otherwise a stimulating article.

    • 10 February 2009 10:53 AM
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    Nothing new here. Necessity has been the 'Mother of Invention' in any industry since the birth of time; and always will be.

    • 09 February 2009 14:27 PM
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    Now now boys, put the claws away. When you get past the blatant advertising, the man has a point. Frankly I have all the time in the world for anyone who is being pro-active in this market.

    • 09 February 2009 13:42 PM
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    nice to have your own exclusive advertising page eh?

    • 09 February 2009 12:39 PM
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