A week is a long time in politics and a month is a very long time for a columnist. I can hardly believe that only last month I wrote a piece about how positive the outlook was for the housing market following Covid. Since then, dark clouds have returned with a vengeance.
The war in Ukraine is desperately sad and it has cast a long shadow over everything. Many of us are thinking that it is almost immoral to be thinking about moving house at a time when so many people have lost everything that they own in the world. We all pray that a way will be found to end the war very soon. However, even after the military action has ended, the economic consequences of the conflict will have an impact for a long time to come.
Inflation has been rising rapidly for over a year but the invasion of Ukraine has turbocharged this. The price of gas, petrol and electricity has gone through the roof due to the sanctions that the West has imposed on Russia and things will probably get worse before they get better. The unavailability of Ukrainian and Russian grain will have a significant impact on food prices. As a consequence of the increase in the inflation rate, interest rates have risen twice and will almost certainly rise further. All this is making people very nervous about the future.
All this uncertainty is bound to have an impact on house prices and after a period of rapid growth, the market seems to be cooling. At times like this, it is all too easy for estate agents to become depressed about their business prospects but history tells us that there is no need to feel this way. Good estate agents can continue to do well no matter what it happening in the economy. All you need to do is to focus on the things that you can change rather than the things that you can’t.
If you are short of instructions, think about how you can change your marketing strategies, improve your online marketing, improve your website or spend time phoning old valuations or withdrawn instructions. However good your marketing is, it can always be improved further and there is always another canvassing call that could be made.
If you are not able to sell the properties that you have on the market, then try setting aside protected time every day to phone applicants to encourage viewings. Alternatively, you could try changing how you give feedback to your vendors and set aside protected time to focus on getting price reductions. One of my clients has just started providing feedback from applicants who declined to view each property as well as those who viewed. This feedback has been transformational.
If your sales are falling through, then review who is dealing with the sales progressing calls and how much time they are spending on this. Alternatively, try harder to get your panel solicitors instructed who you know will fight harder to save a sale.
If despite all your best efforts you are still selling less houses than usual, then focus on trying to improve your fee levels so that your margin on each property is better. One of my biggest clients managed to increase their fees by almost 30% in the downturn that followed the failure of Lehman Brothers.
Over the last forty years, I have seen many ups and downs in the housing market and when market conditions change, the agents who come out best are always the ones that adapted to change most quickly.
Taking everything into account, I still believe that there is huge pent-up demand in the housing market from people who are living in properties that no longer meet their needs. Recent world events and economic shocks might delay the recovery in the number of house sales but it will not stop it from happening altogether.
Certainly, our business buyers still have confidence in the housing market and we are still completing record numbers of sales. Letting income has proved itself to be highly resilient but there is also continued optimism that in the medium-term, the prospects for the residential sales market also remain very good.
Adam Walker is a management consultant and business transfer agent who has specialised in the property sector for more than forty years.