Estate & Letting Agents Are Not Going To Like This!

When Landlords & Homeowners Can Save So Much Money Online, Why Use A High Street Agent?!

A change is currently sweeping through the Estate Agency world, largely unnoticed but it is starting to make its mark and it is forcing the traditional High Street Estate Agent & Letting take notice, don’t just take my word for it.. It has recently been announced that Savills one of the worlds leading Estate Agency brands has invested £16million pounds in a new on-line Estate Agency YOPA, talk about keeping your friends close and your enemies closer!!!

Due to the rise in popularity of Purple Bricks and the serious investment in YOPA, property professionals like myself need to be innovative, we need to stand out and we need to be able to hold our own against the cut throat world that is the High Street Agent and the commodity driven market that is beginning to throw its weight around on-line.

Is it all about fees?

Of course its not, but there’s no doubt about it, the on-line property market will take a significant market share through its varied and attractive fees model. Leading industry experts estimate on-line agents account for 5% of property transactions per year currently, with the rise in popularity and the number of on-line agents we can expect up to half of all property transactions being completed on-line by 2020.  

The High Street needs to wake up, smell the coffee and ensure their offering, and their fee structure is in line with their products and services. The High Street can, justifiably in my view charge a higher fee but the lame excuses of higher overheads and increased staffing costs needs to be replaced with innovative services, increased market exposure [increasingly via social media] and a back to basics approach with the idea of being a true local property professional – this starts with the tea person and follows through to the top of the organisation, and not just the Owner.

The ‘local touch’ will be the on-line models stumbling block, it is my prediction within the next 3 years the on-line property revolution will be bursting at the seems and the only way to truly dominate will be to have a ‘local property expert in every town’. This change in concept from a regional expert to a town expert will bring a new era of property sales and lettings to the UK, and at a time where property prices in certain regions are stagnating, where house sales have fallen of the edge of a cliff in certain postcodes and landlords are literally being beaten down with a stick by local and central government [google Wrexham Property Market Newsletter for info] this increased on-line based offering will be a heaven-sent to the masses.

Let’s look at a slightly different Hybrid Agency HelpMeRent.co.uk. After 15 years working in the property industry & 11 of those for a High Street Agent I recognised the changes happening within the industry.

Buyers and Landlords are being hammered by George Osborne with wave after wave of new legislative requirements and tax changes – it is clear to see why minimising costs becomes so important, but, and it’s a big but, there is still a huge appetite for using local  

and the clear message I received?

the majority of Homeowners and Landlords do not mind paying more whilst giving a local company the opportunity to sell or rent their property if they believe the service warrants it, service is the key.

My answer to all of this? A competitive fee structure whilst maintaining a high standard of quality. The local knowledge HelpMeRent.co.uk offers is second to none in the Wrexham and Chester property market. We have the ability to look at an overall picture in a refreshingly unique way.   

The fee structure is appealing too! No Tenant Finders Fee for our managed service! We simply start charging a competitive monthly management fee from the day your new tenant moves in.

If you self-manage your rental property HelpMeRent.co.uk offers a range of tenant find packages starting from £99. Our unique product range also offers Pik N’ Mix service where you can employ us to complete one off tasks for a competitive fee, useful if you ever need an extra pair of hands!

Will it all come down to fees?

There’s a few different scenario’s being played out in the graph below, the Jones family have built up a property portfolio and are considering using High St vs Online. Mr Jones owns 7 properties, his brother owns 3 properties and his daughter Miss Jones owns one Buy-To-Let property.

• ·       An average rent of £700pcm
• ·       Assuming a High Street Agent only charges Half of the 1^st months rent plus Vat
• ·       Each property is let once in the 1^st year
• ·       10% a month management fee
• ·       Savings for a landlord with 7 properties | Savings for a landlord with 3 properties | Savings for a landlord with a single rental property

Mr Jones has 7 properties. In our example they recently completed new builds and currently unoccupied. By employing HelpMeRent.co.uk to find a tenant and manage his rental properties Mr Jones has increased his rental income by 8.5% in the first year alone! Where else can you move your asset management structure so easily and generate an additional 8.5% overnight?!

In fact, this scenario is the same for the whole family. The concept is a game changer, and with the introduction of Rent Smart Wales for Welsh landlord and Clause 24 [The Tenant Tax] in England & Wales from April 2017 the extra income generated by simply switching agents could mean the difference between a Buy-To-Let Landlord making a profit or a loss.

After reading this what are your reasons not to swap to an on-line agent?

The savings here make for some interesting reading. All three examples in the graph show a Fee Saving of over 41% - that is real savings, cash left in your pocket!

  

If you would like any information about the content of this post or if you would like to read more posts, please google the Wrexham Property Market Newsletter Blog written by Craig Swire – Wrexham & Chester Local Property Specialist.

What BREXIT Means For The Wrexham Property Market? ..

59% of Wrexham Voters voted to leave the EU – What now for the 1000 Wrexham Landlords and 35,000 Wrexham Homeowners?

It’s 5.50am as I start to type this article and David Dimbleby has just announced the UK will be leaving the EU as the final votes are counted. As most of the polls suggested a Remain Vote, it came as a surprise to most people, including the City. The Pound has dropped 6% this morning after the City Whiz kids got their predictions wrong and MP’s from the Remain camp are using words like “challenging times ahead”.

.. and now the vote has been made .. what next for the 35,000 Wrexham homeowners especially the 19,358 of those Wrexham homeowners with a mortgage?

The Chancellor in the campaign suggested property prices would drop by 18%. Using Treasury estimates, their method of calculating this was tenuous at best, but focused around the abrupt and hasty increase in UK interest rates, which in turn would raise the cost of mortgages, and therefore lower demand for property, causing a drop in property prices.… and I would say, yes .. that will probably happen.

Wrexham  Property Values

Wrexham property values will probably drop in the coming 12 to 18 months – but by 18% - I am sorry I find that a little pessimistic and believe that figure was rhetoric to get homeowners and landlords to vote in a particular way. But the UK property market is quite a monster.

Since the last In/Out EU Referendum in June 1975,

property values in Wrexham  have risen by 1620%

(That isn’t a typo) and whilst property prices did drop nationally by 18.7% between the peak of 2007 and bottom of the market in 2009, when one compares property values today in the country, compared to that all-time high of 2007, (the period before the financial crisis of the Credit Crunch of 2008/9) .. they are still up 10.14% higher.

Another Credit Crunch?

And so, notwithstanding the Credit Crunch, the worst global economic outlook since the 1930s and the recession it brought us, a matter of a few years later, the Government were panicking in 2012/3/4 that the housing market was a runaway train.

Now the same Credit Crunch doom-mongers and Sooth-Sayers that predicted soup kitchens in 2008/9 are predicting Brexit meltdown. Bad news sells newspapers. Stock markets may rise, stock markets may fall, yet the British public continued to buy property in 2009/10 and beyond. Aspiring first time buyers and buy to let landlords dusted themselves down, took a deep breath and carried on buying… because us Brit’s love our Bricks and Mortar .. we need a roof over our head.

However, as mentioned previously, if the value of the pound drops, in the past UK Interest Rates have risen to reverse that drop. However, whilst a cheaper pound will make your pint of Sangria a little more expensive on your Spanish holiday this year and make your brand new BMW pricer .. it will make British export cheaper! Which is great for the economy.

Interest rates

… and what of interest rates? Since 2009, interest rates have been at 0.5% and lots of people have become accustomed to those sorts of levels. So what if interest rates rise .. end of the world? Interest rates in the 1986/88 property boom were on average 9.25%, the 1990’s they were on average around 6.5% and uber-boom years (when UK property values were rising by 20% a year for three or four straight years across the UK) .. 4.5%. Many of you reading this who are in their 50’s and older will remember interest rates at 15%.

But I suspect interest rates won’t rise that much anyway, as Mark Carney (Chief of the Bank Of England) knows, raising interest rates causes deflation – which is the last thing the British economy needs at the moment. In fact they have been printing money (aka Quantitative Easing) for the last few years (which causes inflation) to the tune of £375bn a month. A bit of inflation because the pound has slipped on the money markets (not too much mind you) might be a good thing?

.. because whilst property values might drop in the country, they will bounce back. It’s only a paper loss.. because it only becomes real if you sell. And if you have to sell, again as most people move up market when they sell, whilst your property might have dropped by 5% or 10%, the one you want to buy would have dropped by the same 5% to 10% .. and here is the best part – (and work your sums out) you would actually be better off because the more expensive property you would be purchasing would have come down in value (in actual pound notes) than the one you are selling.

The Wrexham  landlords of the 7000 Wrexham  buy to let properties have nothing to fear neither, nor do the 15,000 tenants living in their properties.

Buy to let is a long term investment. I think there might even be some buy to let bargains in the coming months as some people, irrespective of evidence, panic.  Even if we pull up the drawbridge at Dover and immigration stopped today, the British population will still increase at a rate that will exceed the current property building level. Britain is building 139,600 properties a year, but needs according to the eminent ‘Barker Review of Housing Supply Report’, the country needs to build about 250,000 properties a year to even stand still, and as the the birth rate is increasing, the population is living longer and just under a quarter of all UK households now are occupied by a single person demand is only going up whilst supply is stifled. Greater demand than supply equals higher prices. That is definitely a fact.

So, what will happen next?

Well, there are many challenges ahead. The country has spoken and we are now in unchartered territory – but we have been through a couple of World Wars, an Oil Crisis, Black Monday, Black Wednesday, 15% interest rates and a Credit Crunch … and we survived!

And the value of your Wrexham  property? It might have a short term wobble… but in the long term -it’s safe as houses regardless.

If you have any questions, about what brexit means for your property rental or property sale, call Craig Swire - your local property specialist - 01978 799 588 / 0787 237 6768