Let is Snow.. Let it NOW! A Reflection of 2016 by the managing director, Colin Hayes
A play on words; Let it snow… let it (s)now….. Let it now…..As we move ever closer to Christmas and the New Year it is time to reflect on 2016 and to look forward to the year ahead.
This year has seen Stuarts win an award, We are very proud to be.
NEWCOMER EMPLOYER OF THE YEAR AWARD WINNERS !
The work Amanda and Clare put into achieving this was frankly incredible. To train and mentor two new members of staff whilst maintaining the accounts, references and every other aspect of administration was some achievement. We also welcome Lucy to Stuarts – We have high hopes for our new addition.
The start of 2017 sees our newest addition, Lewis Hamilton who will be joining us as a young apprentice through Damar Training too. We are excited to have Lewis join us and think that between Lucy and Lewis, our marketing team will flourish. The office window decorated by Lucy features our play on words…. LET it snow / LET it NOW…. it’s all about thinking out of the box and this is what our wonderful apprentices can do to attract new clients.
On top of that we launched a new Stuarts Website, a website that was two years in the planning has now come to fruition….. www.stuartshomes.co.uk please take a look, we hope you like it. Credit to all involved, the results speak for themselves and no doubt will it be copied by our peers in the coming months.
2016 was also a best for our fundraising efforts for Cancer Research UK. Directors and staff at Stuarts joined by other friends and family and our overall 2016 fundraising raised £13,925.05 This could not have been achieved without the many, many clients that donate on our team page so a very huge thank you to each and everyone.
As one of the very last independent letting agencies we face the might of the multi nationals who are buying up agencies daily. Most high street agents are now owned by hedge funds or larger nationals.
Legislation changes – The changes to the industry over the past few years have brought hidden costs that the Government fails to recognise when passing ill thought out legislation – The time it takes to change paperwork at no notice whatsoever.
Changes to Tenancy agreements, Application forms and referencing forms has been huge. We do this on behalf of clients; a behind the scenes tweak if you like. With this it brings days of administration work for staff, printing costs etc. all the while the office is running as normally as possible. I have even considered investing in border control uniforms for my team, sadly Ebay did not have my size !!!!
On a lighter note Boris and Donald have confirmed that blondes do have more fun. Let’s hope Vladimir is a fun guy.
2016 has been a year of change for the property market and notable for a few key Government interventions, particularly in respect of the private rental sector.
Reviews – Thankfully Stuarts have more positive reviews than negative but most of these remain by word of mouth or on an email rather than on the world wide web. We are trying to encourage clients and tenants to post truthful reviews about us. We conduct post move in surveys and this is take constructive criticism where needed and so to evolve and improve our systems where needed. We are mindful that whilst it is time consuming to post a review when you are happy, people do seem to find the time if they are not happy! Negative reviews have been a new one for Stuarts this year. Clients can be assured we have investigated both and found that one of them was by person unknown to us – Lets be honest, it is another agent! The other from outgoing tenants who know no better sadly. This all be upsetting for us and just the world we live in, persons using the web for reasons only known to them. The industry is calling for changes to the practice of sites accepting any old nonsense as gospel, and we of course support this. Nobody likes poor comments about the services they offer however, we would like them to be true and fair and in the case of tenants who are not capable of adhering to their tenancy agreements and their first abode away from home, unfortunately you get school ground tactics of name calling all be it on the web. We always invite anyone with a grievance to deal with us directly rather than on review sites with no intention of wanting a solution. Stuarts work within a framework set out by The Property Ombudsman, SAFE Agent and NALS. Long gone are the days of agents making it up as they go along thankfully. In a recent audit by The Property Ombudsman, we got pulled up for not displaying their sticker in the window – yes that was it!
Property Market – An additional 3% stamp duty payable on second home and investment property purchases was introduced in April and has slowed the number of buy to let investors entering the market. This move was designed to encourage a more level playing field to allow greater number of first time buyers to buy homes and there is some evidence that first time purchase numbers are up although overall sales transaction volumes have been static or falling, particularly in London and the South East. Reductions in tax relief on wear and tear and, in coming years, on mortgage payments have also targeted landlords. The Government is clearly targeting an increase in owner occupation which has fallen to around 63% of households – down from around 71%. The differential has been largely taken up by the private rental sector which now stands at around 20% of all UK households. The balance in these numbers being social housing.
The Government had previously introduced two schemes under the Help 2 Buy moniker and the second of these, aimed at the second hand market through a mortgage guarantee type scheme will end this month. The scheme aimed at helping the new homes market will continue.
Importantly the Government did announce additional expenditure on infrastructure and this is likely to lead to improved transportation links and greater job creation. Unemployment has fallen considerably in recent years and with interest rates at record lows, affordability for those with enough funds for deposits, has become more attractive. House building, whilst still falling short of required levels is increasing and this is positive news.
Despite the, some would say “attack” on private landlords, there will remain strong demand for rented property both through necessity and choice and, whilst some highly geared landlords may see slightly reduced yields as a reason to exit the market, the majority of the sector is not highly geared and returns are still likely to look OK against other investments (particularly if taking a medium term view and the likelihood of further capital growth).
Many landlords have also seen significant capital growth during their period of ownership. This is likely to remain subdued in the coming months but will not prove damaging. Keeping property occupied is the key to investment success and the majority of landlords take a pragmatic and sensible view on rental levels in order to maintain income.
People need to live somewhere. Improving employment will mean greater mobility is needed and there is still a pent up demand amongst those who are looking to upsize or downsize.
Tenant fees – An announcement in the Chancellor’s autumn statement on 23rd November said that upfront fees to tenants would be banned at some future date (probably not before 2018) and is also likely to see costs to landlords increase. This announcement was unexpected and unhelpful in that it proclaimed the outcome before any consultation had taken place. The exact detail is therefore unknown and the announcement currently looks like a bit of political posturing that could get “watered down” or “delayed” in a legislative environment that will have to come to terms with Brexit and its implications.
Moves to remove tenant fees are however likely as they have already taken place in Scotland and Wales and there is a strong political lobby in favour of their demise. Letting agents would be well advised to consider their fee strategies now and see if there are sensible ways of maintaining the income derived from tenant fees (which I estimate to average around 15% of total fee income).
Brexit – Of course the big news in 2016 was the vote to leave Europe. No-one is really sure of the impact and repercussions of this decision but, in the short term, we are likely to see inflationary pressures brought about by the devaluation of the pound against major currencies such as the dollar and the euro. This may, in turn, see interest rates have to rise in the coming months albeit from a very low starting point.
Movements in interest rates have much less impact on the property market now than in years past as the majority of mortgage holders are on fixed rate schemes and have hedged their positions accordingly.
The majority of estate agents and those operating in the property industry remain quite conservative (with a small c) and this could prove to be a growing threat in the weeks and months ahead as a number of exciting projects and innovative new products and services start to hit the market.
Property Portals and Advertising – Many agents are still spending more on their desks and chairs than they do on their online and database marketing strategies. I know which is likely to produce the better return!
If you look at the portals, it is only sixteen years since Rightmove launched as a £10 million “start up” and it is now capitalised at around £3.7bn. But even Rightmove will need to evolve its business model from that of primarily being an online advertising medium if it is to retain its leadership position. Zoopla is taking a different approach to the sector and I can’t see On the Market surviving as anything other than a small niche player.
The growth of the internet and the portals has seen the number of people contacting agents diminish and the stage at which they contact agents become delayed, and yet, agents still, in the main, do little to capture the customer earlier and staff are often “order takers” rather than proactive business generators. Selling and buying, letting and renting is still a people business yet I feel that the quality of communication offered by many is well below what it could be and, if faced with an online execution only service at a fraction of the fee, agents should ask themselves whether they are really doing enough to justify to their clients a significant fee differential if that client cannot differentiate between the services being offered..
So what does this mean for the property market in 2017?
Well, crystal ball time, but I do not see a significant change from where we are now.
The simple fact is that demand for housing outstrips supply and this fact alone is likely to ensure that there is no collapse of the market in either volume or price terms although uncertainty around Brexit and affordability are likely to be restraining forces.
The busiest time of the year for internet activity in the property market is the period between Christmas and New Year and so bringing a property to market at this time can help it stand out from the crowd and get “first advantage” over those who wait until the New Year – Landlords place your properties on view now.
To conclude, I expect 2017 to have its challenges STOCK STOCK AND MORE PROPERTY STOCK IS NEEDED. …..
Finally, I would like to take this opportunity to wish you, your family and friends a very Merry Christmas and a Happy, Healthy and Prosperous New Year.