Posts with tag: estate agents

Lawyers warning on stamp duty deadline

Published On: March 11, 2016 at 11:20 am

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The Law Society has warned its members to inform clients and estate agents if there is a chance that ongoing transactions for additional homes could miss the March 31st deadline to avoid stamp duty hikes.

In an address to members, the Society said that the deadline is piling pressure on those involved in transactions. However, it accepts that the deadline is immoveable and that lawyers should inform all of those who could be affected if one element of a deal could threaten to see it fail to be completed before the set date.

Warning

More specifically, the Society told members, ‘you should warn your client that if completion is fixed for a date on or before March 31 but completion takes place after March 31 then, provided the transaction is subject to the new SDLT provisions, the additional SDLT will be payable. The reasons for a delayed completion will not be material and will include the sellers’ default.’[1]

‘You should explain to your clients that there are aspects of the transaction which are to some extent beyond your control, for example, if you are still waiting for a mortgage offer or search results, or if the transaction is leasehold and you are still awaiting information from managing agents and landlords, or if you are not certain that those on the other side of the transaction-or indeed further along the chain-will be in a position to deal when requested and that you are therefore unable to give warranties as to timings,’ the note continued.

Lawyers warning on stamp duty deadline

Lawyers warning on stamp duty deadline

Further information of the implementation of the stamp duty is expected in Wednesday’s budget. The Law Society is instructing members to tell clients of the uncertainties until that time.

For comprehensive news on budget announcements that will impact on the sector, keep checking Landlord News for the latest updates.

[1] https://www.estateagenttoday.co.uk/breaking-news/2016/3/lawyers-advised-to-inform-agents-if-stamp-duty-deadline-cannot-be-met

 

 

The Varying Costs of Using an Estate Agent

Published On: February 7, 2016 at 4:01 pm

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Selling a property can often be a difficult process, with a variety of estate agents to choose from and the issue of getting stuck in a chain. But then there’s the fees themselves to think about.

And estate agent costs are anything but consistent. Depending on location, fees range from 0.9% to 2% of the property’s purchase price, according to Urban.co.uk.

The Varying Costs of Using an Estate Agent

The Varying Costs of Using an Estate Agent

The firm contacted 450 estate agents across the country, requesting a quote for a standard package, including photography, floor plan creation, online marketing and shop window marketing.

However, estate agent fees do not always rise in line with purchase price.

Unsurprisingly, London dominates the top of the list, with the seven most expensive locations for estate agent fees situated within the capital.

Farrington and Euston come out on joint top, with an average estate agent fee of 2% of the sale price.

In Farrington, where the average property costs over £1m, estate agent fees equal a huge £21,000.

As is happening in most industries, the online estate agent sector has boomed in the last few years. There are now many online agents that offer their services at much lower costs than high street firms. They typically charge set fees rather than commission percentages.

These agencies claim to be able to offer lower fees due to not having the overhead costs of running a physical branch.

However, vendors should be aware that they will have to host viewings and take on more of the work themselves to make the most of the savings on offer.

Many sellers might prefer the face-to-face interaction of using a high street agent, but billions of pounds worth of property is now sold through online agents every year.

Online estate agents are still controversial, as many believe that physical agents are irreplaceable. But it is clear that the potential savings are definitely significant.

A comparable package from an online agent, including a floor plan, for sale board and photography, costs around £1,000 – who would blame a vendor in Farrington using this service?

What’s your opinion of online estate agents? And do you think traditional agents are too expensive?

NAEA and ARLA’s Housing Market Predictions and How to Overcome the Crisis

Published On: December 17, 2015 at 9:36 am

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The National Association of Estate Agents (NAEA) and the Association of Residential Letting Agents (ARLA) have joined together to set out their housing market predictions for the next ten years and suggestions for overcoming the current crisis.

The organisations report that house prices and rent prices will soar over the next decade, while buying a property will become further out of reach for many.

NAEA and ARLA's Housing Market Predictions and How to Overcome the Crisis

NAEA and ARLA’s Housing Market Predictions and How to Overcome the Crisis

The NAEA and ARLA predict that homeownership will decline by 7% by 2025, while the number of people living in rental accommodation will increase by 9%.

ARLA believes that rents will rise by over a quarter, while the NAEA expects house prices to surge by 50%.

The sister bodies state that a “drastic and immediate” overhaul is needed to fix the current housing crisis.

The report, compiled with the Centre for Economics and Business Research, suggests what can be done to repair the broken market.

The average house price in the UK is currently about £280,000, with the Housing 2025 report forecasting that it will rise to £419,000 over the next ten years.

In London, prices are expected to almost double in the next decade, from an average of £515,000 at present to £931,000.

Rent prices are predicted to grow by 27% from the current average of £134 per week to £171 in 2025.

Again, those in the capital will face higher rises, paying an extra 34% in rent per week by 2025, from £234 to £314.

The study states that the current level of homeownership amongst the working population of around 62% will drop to 55%, while those living in rental housing will rise from 20% to almost 29% in the next ten years.

David Cox, Managing Director of ARLA, says: “Buying and renting a home is a giant step, and is out of reach for many. Rent costs are already growing at a rate that people are struggling to keep up with and they’re due to become even less sustainable over the next decade.”

Mark Hayward, Managing Director of the NAEA, also comments: “House prices are only going to go one way and unfortunately, that is up. For so many already priced out of the market, this is news aspiring house buyers will not want to hear.”

The organisations are calling for a number of measures to be introduced. These include:

  • Building on some parts of the greenbelt.
  • Mandatory licensing of landlords and letting agents.
  • Encouraging institutional investment in the private rental sector.
  • Encouraging more construction workers from outside the EU to work in Britain.
  • A Stamp Duty exemption for pensioners looking to downsize.

The managing directors say: “The housing crisis Britain is facing is deep-rooted, and if it is to be solved will require finance, suitable land, time, new skills and most importantly, the appropriate national regulation of the key stakeholders, not least the estate agents and letting agents that form our membership. We are calling for change, and it needs to happen soon.”1 

1 http://www.propertyindustryeye.com/do-something-about-it-naea-and-arla-say-housing-market-is-broken/

First-time buyer sales in six-year high

Published On: November 30, 2015 at 11:17 am

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A new report from the National Landlords Association of Estate Agents has revealed that the average number of sales made to first time buyers increased for the second consecutive month.

In fact, last month’s rise brought totals to their highest level in over six years.

Increases

During October, there was an average of nine sales secured per estate agent branch, with 31% of these sales made to first-time buyers. This was a rise from the 29% recorded in September. In August, just 20% of these transactions were to first-time purchasers.

‘It’s really promising that, for the second month running, the number of sales being made to FTBs has risen,’ noted Mark Hayward, managing director of the National Association of Estate Agents. ‘Competitive mortgage products and the increasing pressure of an interest rate rise could be encouraging first steppers to take the plunge, as well as the dwindling supply of rental housing stock-putting pressure on renters to buy.’[1]

Seasonal Shift

The supply of available housing rose in October before the traditional Christmas slowdown. The number of properties available to purchase per branch rose by 16% from 37 in September to 43 in October. However, demand for property dipped slightly from an average of 342 house-hunters per branch in September, to 336 last month.

First-time buyer sales in six-year high

First-time buyer sales in six-year high

Hayward noted, ‘although it is great to see supply growing and demand falling-albeit by just two per cent, we cannot rest in knowledge that the housing market is on the road to recovery. What we’re seeing is a seasonal uplift. Those selling their homes are keen to push through sales before Christmas, hence the uplift in properties entering the market-but with the average sale taking between nine and twelve weeks, it’s unlikely transaction will be pushed through before Christmas now. Buyers are holding off until January to kick off the New Year with a house-hunt.[1]

‘The only way we can attempt to repair the market is simply by building more houses. Osborne’s pledge last week to build 200,000 new and affordable starter homes-with a discount for those under the age of 40-and his promises to offer loans to small builders, reform the planning system and re-designate commercial land to build new homes are all a step in the right direction. But until it’s all put into motion and we see the walls of new properties going up, we’re not holding our breath,’ he concluded.[1]

[1]http://www.propertyreporter.co.uk/property/ftb-sales-at-six-year-high.html

 

 

Estate Agents Urged to Stick with Buy-to-Let

Published On: November 3, 2015 at 12:08 pm

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Estate Agents Urged to Stick with Buy-to-Let

Estate Agents Urged to Stick with Buy-to-Let

Some estate agents have started avoiding buy-to-let property sales due to recent Government clampdowns on the sector. However, one expert believes that agencies risk missing our on their share of £1.5 billion of fee income.

Martin Wilkinson, the founder of property investment portal Buy2Let.com, says that despite recent proposals for tax relief cuts and mortgage restrictions, the sector still provides a healthy stream of income for estate agents.

He reports that about 70% of buy-to-let investments are cash purchases, so will not be affected by mortgage accessibility changes. He also found that the sector generates around £100 billion worth of transactions every year, producing typical fee income of £1.5 billion each year – “that’s the equivalent of £60,000 for every agency branch,” Wilkinson states.

He continues: “We know that some agents and investors have been put off buy-to-let by these recent changes, but for many landlords, it’s business as usual. A buoyant rental market is producing some fantastic yields, and rising property prices mean that investors continue to build up equity too, in addition to their rental income.

“There are actually very few asset classes, including bonds or annuities, which offer the same levels of returns as a buy-to-let portfolio, so the sector will continue to attract savvy cash investors who are looking for long-term investments with decent returns.”1

What are your plans for your buy-to-let business in the future? And are these affected by the Government’s proposals?

1 https://www.lettingagenttoday.co.uk/breaking-news/2015/11/estate-agents-urged-not-to-be-deterred-from-seeking-buy-to-let-instructions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Agents missing out on referral charge income

Published On: October 22, 2015 at 10:29 am

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Categories: Finance News

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Estate agents are missing out on potentially substantial incomes by failing to charge for referrals of their clients to financial advisors, lawyers and other groups, according to a research from the FBA.

An investigation involving 166 estate agencies indicates a culture of free referrals leads to 62% of agents not receiving a single penny for the referrals that they make. 18% said that they had not attempted to raise income in this manner.

Research

The FBA is a company that operates a platform for fee-based referrals between agents, lawyers and others. Results from the research show that the culture of a good deed for a god deed may have worked previously, but is now holding the sector back.

A spokesman for the company stated, ‘the lack of trust is particularly concerning in a world where transparency and fairness are all-important. Estate agents who believe that they should only refer cases to people they know and trust, or those that rely on reciprocal agreements, may not be doing their clients any favours. The referral networks that some estate agents and property professionals have formed over the years may not give clients access to the best professional advice.’

Continuing, the spokesman said, ‘ the rapid growth in popularity of consumer websites for property buyers and sellers is creating an unprecedented level of competition in the sector and is causing significant disruption to estate agencies. The lack of awareness around alternative ways of working is adding to the problem and is indicative of a knowledge gap that is preventing estate agents from increasing their revenue through new money-making techniques.’

Agents missing out on referral charge income

Agents missing out on referral charge income

Fees

Agents have a range of potential fee-generating referral systems open to them, according to the FBA. These include:

  • Reward-based referrals-This could involve receiving a cash reward or commission for client work that is referred to anther advisor
  • Referral agreements-Some estate agents have signed deals with specialist providers in order to secure additional advice to meet consumer demand
  • Using online open market platforms-This could allow agents and advisors to upload details of work to entice other registered members to bid for the lead.