Some agents might ask, ‘What post-General Election surge?’ Others might have seen a noticeable increase in supply coming to the market buoyed by the certainty of the Conservative Party’s Election victory but has that already fizzled out? Talking to agents, as I do, that improvement in supply appears to have been short-lived and they are now back to a point where demand continues to be extremely strong and supply remains the single biggest concern for all.
Which is of course not to say that those houses coming to market are not being bought, because clearly they are; it’s just that agents will be looking at the current situation and hoping that more homeowners are looking at moving now and are willing to put their homes on the market. Added to this will be a sincere wish that this new Government can get a grips on the chronic shortage of new homes being built and somehow make inroads into the ‘deficit’ we have seen in the housing market for many years.
Despite the fact houses are being bought and sold, I also get the sense from agents that over the past few months, the overall process of buying and selling has slowed down somewhat. This could be for any number of reasons – lenders taking longer to issue offers and approve applications, conveyancers/solicitors struggling to take cases through within the right timescale, far longer property chains which require a much more co-ordinated approach across many transactions, the list goes on. But what this does mean for agents is that the pipeline is getting bigger and bigger.
Now on the face of it, there may not seem too much wrong with a large pipeline. However, take the example of one agent I recently spoke to – during one month earlier this year they were expecting to earn close to £180k of fees from transactions destined to go through. However, due to hold-ups and delays the eventual take-home fee was closer to £40k. That’s a huge difference and one which can have a severe impact on a business.
The layman might think that there’s £140k which will come through in future months, plus add in the fees you might expect from that month anyway. It will surely mean a bumper month for the agent, won’t it? Well, that’s not necessarily the case – in fact delays don’t tend to end and finish all within the space of one month. They move on and sometimes on, and the big overall issue for agents with cases in the pipeline is that the longer they’re in there, the more chance they have of falling over. Which will clearly impact on those fees which were once anticipated but never actually make it into the agent’s bank account.
Therefore the pressure is on to get those cases through the pipeline, and have the fees bagged within those anticipated months rather than see them dragging on and on to a point where the income might never be delivered. It’s a tricky situation and one that agents have to deal with professionally, cautiously but effectively – at the end of the day it’s probably in no-one’s interest to allow cases to sit in the pipeline for month after month. So an agent’s ability to earn their corn and chivvy along the stakeholders who might not be working in such a time-sensitive manner will be vital. If that housing supply isn’t at the right levels then the important point is to ensure those transactions that can happen, do happen, and happen quickly. Keeping on top of these will be crucial particularly if any sort of momentum is to be achieved.
