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Estate agents urge government to extend coronavirus support

Estate agents have urged the government to protect the industry as house viewings drop and sales activity slows due to coronavirus.

The sector has called for the government to extend the business rates holiday, which applies to retail and hospitality firms, to estate agent companies.

The UK’s housing market looked set to bounce back this year with increased certainty over Brexit due to the Conservative election victory.

The price of property coming to market in London surged 5.1 per cent year on year last month to an average of £638,826, the highest annual rate of growth since May 2016.

However the coronavirus pandemic has caused viewings to drop, as people follow recommendations to avoid social contact. Knight Frank research found that new buyer volumes were down four per cent last week.

”Typically spring is when we see an influx of properties coming into the market but we are already seeing low stock levels and less demand for viewings,” Mark Hayward, chief executive of the National Association of Estate Agents, said.

Despite challenging circumstances people will still need to buy and sell, so we are advising agents to move to virtual viewings where possible and for buyers and sellers to take a pragmatic approach.”

The government last week said all retail, leisure and hospitality businesses would be given a business rates holiday, regardless of the size of the firm, however the allowance will not extend to estate agents.

“As it currently stands, estate agents are the only businesses on the high street who will continue to have to pay business rates, due to the fact our offices are classed as commercial space and not retail,” Simon Gerrard, managing director at Martyn Gerrard Estate Agents, said.

He added: “Under social isolation measures, no one is able to view homes or properties, and so sales agreements will grind to a halt.

“In addition, we are at the coalface in dealing with both residential and commercial clients unable to pay rent due to loss of earnings and jobs. We have been left out in the cold by the Government, to deal with a crisis that they have failed to sufficiently plan for.”

Liam Bailey, global head of research at Knight Frank, said: “Given the unique nature of real estate, many investors still need to see assets in person before making a decision.

“Their ability to do so is currently curtailed, especially for those without a local market presence. For some this is undoubtedly slowing and even postponing the decision making process.”

By Jessica Clark

Source: City AM

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28% of estate agents predict house prices to fall next year

More than a quarter (28%) of estate agents expect house prices to fall next year, down from 43% last year when agents were asked the same question, NAEA Propertymark has found.

Over half (56%) of agents expect house prices to stay the same.

A quarter of estate agents think the number of sales made to first-time buyers will increase whilst over half (58%) expect it to stay the same.

Mark Hayward, chief executive at NAEA Propertymark, said: “The changing political landscape throughout 2019 has undoubtedly caused uncertainty in the housing market, which in turn has affected sentiment and decision-making.

“Once the current political impasse is resolved and it’s clear how and when we’ll be leaving the EU, we hope there will be a degree of certainty which may trigger a flurry of activity.

“Regardless of the colour of the new government, housing must be a priority.

“A clear strategy is needed to tackle key issues such as stamp duty costs.

“Additionally, we’d like to see the government commit to bringing regulation into the sector as soon as they can in the New Year and to consider the introduction of digital logbooks to allow for a more interactive, streamlined and transparent process for home buyers and sellers.

“The housing market needs reassurance from the government, which will in turn inject some confidence into the market for both buyers and sellers.

“Despite the difficult year, the UK property market remains a strong sector overall, and has demonstrated a huge amount of resilience in the face of political turmoil.

“We hope for a more certain outlook and some stability in 2020, which is hopefully provided sooner rather than later.”

A third (32%) expect demand to drop and a further 28% think supply will increase.

By Michael Lloyd

Source: Mortgage Introducer

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Estate agents facing pressure as housing market cools and online players expand

Estate agents could be next on the high street casualty list, with more set to experience financial difficulty as the housing market cools and online firms move onto their turf.

Experts at accountancy giant KPMG reckon that pressures on high street agents will come to a head in the second half of the year, piling further pain on town centres reeling from hundreds of retail store closures.

Blair Nimmo, KPMG’s head of restructuring in the UK, said: “High street estate agents are presently facing an unprecedented set of challenges.

“The rise of online-only agencies have combined with falling house prices, a general slowdown in sale activity and a raft of legislative changes, all of which have generated headwinds for your average high street agent.

“I would therefore not be surprised to see operators across this sector struggle over the second half of the year and beyond.”

High street strugglers

  • House of Fraser
  • Maplin
  • Toys R Us
  • New Look
  • Carpetright
  • Mothercare
  • Jamie’s Italian Byron

Profits at the likes of Foxtons have come under intense pressure recently, with the London property market slowing considerably since the Brext vote.

Britain’s biggest listed estate agency Countrywide, which is behind Hamptons and Bairstow Eves, is also in full-blown crisis as it seeks to raise emergency funding.

It comes as the rise of online firms such as Purplebricks, Emoov and Tepilo has eaten into the market share of bricks and mortar firms.

The high street has been pummelled this year by several high profile retail administrations and store closure programmes.

House of Fraser, Maplin and Toys R Us have all gone bust, while New Look, Carpetright and Mothercare have all shut stores.

The casual dining space has also come under pressure, with Jamie’s Italian and Byron among the firms to close restaurants.

“We continue to see companies in the casual dining and retail spaces battle hard in the face of changing consumer attitudes towards spending, coupled with increased costs as a result of the living wage and business rates pressures,” Mr Nimmo said.

“Whilst a number of chains have survived through the implementation of successful CVAs or via pre-pack administrations, inevitably there have been site closures and job losses across many parts of the country.”

But a study by KPMG of notices in the London Gazette shows the total number of companies in England and Wales entering into administration during the second quarter of 2018 fell sharply.

A total of 302 companies went into administration between April and June 2018, compared with 347 in the previous quarter, a fall of 13%.

Year-on-year, the number was up from 297 administrations seen during the same period in 2017.

Mr Nimmo added: “The latest figures reflect a relatively positive picture for most businesses.

“For the most part, adopting a long-term cautious approach appears to be paying off for the majority of firms, although sectoral-specific challenges and broader global economic changes will inevitably force some businesses to reconsider their operations and potentially restructure their organisations to improve efficiencies.”

Source: Shropshire Star