Major moves are underway to cut the red tape that surrounds property sales. But agents tell Tim Harrison it will have little effect on central London
Politicians are going through one of their periodic blitzes on rules and regulations, with the property market in their sights.
The aim, according to consumer affairs minister Jo Swinson, is to make it simpler to buy and sell homes online.
Her target is to cut a lot of the red tape... but estate agents don’t think it will have any real effect on the prime central market.
“A flourishing housing market is hugely important to the economy, and one of the ways to boost it is to cut through bureaucracy,” said the minister. “This is why we are proposing to change the rules so that businesses that facilitate private property sales aren’t caught out by the regulations for estate agents.”
The very notion of exempting websites from the rules that apply to high-street estate agents is a risky strategy that could backfire, the industry has warned, leaving sellers at the mercy of sharks. But the coalition thinks it’s a vote-winner.
Matthew Marchant, sales manager at Bective Leslie Marsh in Ladbroke Grove (020 7221 0330), believes that the biggest effect that the shift will have on the market in Kensington, Notting Hill, Hyde Park, Marylebone, Ladbroke Grove and Fitzrovia is in lettings… an area where much business is already done on the internet. “A lot of people already do lettings via the websites such as Gumtree,” he said.
However, when it comes to house sales in prime central London areas, the impact is not likely to be as great as it may be in other parts of the country.
“It’s not something that will really affect the central London postcodes,” he said. “Our cheapest transaction is probably around a quarter of a million pounds, and when people deal with those sorts of figures, they tend to stick to the professionals.”
Nationally there is unease about deregulation, and the prospect of anyone setting up a website to facilitate house sales, whether they have any knowledge of the industry or not.
“Selling the house is the easy bit,” said Mark Hayward, of the National Association of Estate Agents, when asked about the changes due to come into force later this year. “Much more difficult is dealing with the offer, checking the chain, and talking to lawyers.”
The BBC’s website recently stuck its oar in, arguing that sellers could save thousands of pounds by avoiding estate agents and using websites.
It prompted a wave of online comments, confirming that estate agents are held in the same esteem as politicians and journalists. “Mourn not the demise of estate agents,” wrote one. “They have sold worn-out rope for too long.”
But Peter Bolton King of the Royal Institution of Chartered Surveyors responded that private sale websites offered a different level of service to estate agents.
“There is a huge difference between paying a few hundred pounds to put the property on the internet, compared with the services that should be provided, and the security that should be offered, by the good local traditional estate agent,” he said.
One difference is that estate agents always come out to look at the property. A DIY house sale website simply accepts your description of your own home, relies on you to take photos, and sends you a couple of bits of wood to make a sign with your phone number on it.
A good estate agent will value your property, based on detailed knowledge of the local market. That includes being realistic and honest. You may be proud of the paint job you did 10 years ago, but a good estate agent will tell you if it’s time for a fresh lick.
Agents charge for a successful sale, while websites demand cash up front, meaning a seller may pay several hundred pounds, fail to sell, and then have to engage an estate agent anyway.
Estate agents fear that if private sale websites launched by get-rich-quick merchants run into difficulties, the whole industry will be blamed. And then there’s the property ombudsman scheme, providing financial compensation should things go wrong. It applies to estate agents, but not to websites.
Bective Leslie Marsh firmly believes professionalism will win, especially when dealing with high-value properties. It prides itself on not being ‘a churning, corporate machine’, relying on word of mouth for much of its business.
The RICS reckons five per cent of UK house sales are currently done via private websites, but the government hopes deregulation will boost that to nearer the United States’ figure of 10 per cent.