Estate Agents

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Agency cartel scandal – watchdog wants agent directors disqualified

Agency cartel scandal - watchdog wants agent directors disqualified

The Competitions and Markets Authority has started court proceedings seeking the disqualification of two estate agency directors over a price fixing scandal.

The CMA has this afternoon announced that it has issued proceedings in the High Court of Justice, Business and Property Courts seeking the disqualification of:

– Stephen Jones, a director of Richard Worth Holdings Limited and Richard Worth Limited (in administration); and

– Neal Mackenzie, a director of Michael Hardy & Company (Wokingham) Limited, Michael Hardy & Company (Lettings) Limited and Geocharbert UK Limited.

The Richard Worth and Michael Hardy firms, together with two other estate agencies, entered into an anti-competitive agreement to fix a minimum level of commission fees for the provision of residential sales services in the Berkshire area.

Shortly before Christmas the news broke of the CMA’s fines – totalling over £605,000 – on three of the firms involved in the scandal. This followed a year-long investigation.

The CMA also revealed emails sent between people working at Michael Hardy, Prospect, Richard Worth and a branch of Romans; the discussions took place between September 2008 and May 2015 and were part of what the CMA claims were a “concerted effort” to maintain a minimum commission fee for sales in the Wokingham, Winnersh, Crowthorne, Bracknell and Warfield areas of Berkshire.

This afternoon’s announcement says the CMA issued proceedings under section 9A of the Company Directors Disqualification Act 1986 following an investigation into the directors’ conduct in relation to the breach of competition law.

“It is now for the court to decide whether to make a disqualification order against each director” says the authority.

The CMA continues: “Provided they continue to comply with the terms of their leniency agreement, the CMA will not seek the disqualification of the co-operating directors of the two other estate agencies, which qualified for leniency under the CMA’s leniency policy.”

Under the Company Directors Disqualification Act 1986, the CMA may seek the disqualification of an individual from holding a company directorship or performing certain roles in relation to a company for a specified period where that individual was a director of a company which has breached competition law and their conduct makes them unfit to be a director. The CMA may seek disqualification by court order or may accept a legally binding undertaking.

Auction success shows property sector can still thrive – claim

Auction success shows property sector can still thrive - claim

Two auctions held behind closed doors have been deemed a success, and evidence that the property market can still function despite the lockdown.

Savills has held its first ever remote-bidding-only auction, run by a single auctioneer supported by almost 30 staff working remotely connected using technology.

Over the course of the day it raised over £18m and successfully sold 67 per cent of the lots – taking 3,000 remote bids.

The company – which has its next auction on Wednesday May 6 – will supply an increased number of photographs alongside a virtual tour and floorplan for all lots.

Meanwhile SDL Graham Penny’s 100th Derby auction, and the first in its history to be held behind closed doors, was a success according to auctioneer Andrew Parker.

The firm says that for the 500 viewers watching on the internet, very little looked different – and the bids came in as thick and fast.

With over 120 pre-registered remote bidders, buyers placed their bids on the telephone, by proxy and over the internet, and more than £2.6m was raised for sellers.

“It was not the 100th auction celebration we had planned but we were delighted to have such great support from our remote bidders. I missed seeing everyone at the auction but it was wonderful to know they were out there, watching from the safety of their own homes” says Parker.

“We have proved that, despite the current social distancing rules, it is possible to keep the property industry moving – and that buyers are showing just as much interest in our properties as before.”

Big surge in distress sales even before virus – top agent

Big surge in distress sales even before virus - top agent

One of London’s most experienced estate agents says there has been a very significant surge in foreclosure sales in part of the capital’s housing market – even before the Coronavirus outbreak began.

Marc Schneiderman is the director of Arlington Residential, an independent agency that offers sales and lettings at the middle to top end of the market in central and north west London.

He says that clearly during the lockdown period that will be almost no new business, although he notes that predatory buyers are already on the prowl for casualties of the crisis – forced to sell at significant discounts.

However, Schneiderman believes there have been significant weaknesses in the market even before the Covid-19 calamity.

“Notwithstanding this current crisis, never before in my 35 years as an agent can I recall so many sales on behalf of banks and mortgagees in possession” he says.

“The property market has always been a barometer of the business world and reflected how well industry and retail is performing. For some time now bank foreclosures and mortgagee possession sales have been prevalent at the top end of the market.

“At the end of 2019 my firm acted on behalf of receivers on the sale of one of London’s largest flats. This penthouse apartment had an impressive 8,342 square feet of space and a further 4,125 square feet of terraces. It overlooked Regent’s Park, had underground parking for seven cars and an asking price of circa £10m.

“This is one of many receivership sales that have taken place in recent months at the top end of the London property market and it is no longer unusual for us to be contacted by a bank who are foreclosing on a £10m, £20m or even £30m property.

“Sadly it is just indicative of the wider depressed economic environment in which we find ourselves as a country”.

Separately, Savills has issued its routine quarterly figures for Prime London – unusually ending them not at the end of the quarter, but at mid-March to reflect the situation before the Coronavirus outbreak.

Nonetheless, in an introduction to the figures, the agency admits that the virus has impacted the market and Lucian Cook – the agency’s head of residential research – says: “It seems inevitable that there will be a period of low transactional activity over the spring and summer months, so it will probably be autumn before we can understand what this will mean for future price growth.”

Two new portals set to launch despite Coronavirus chaos

Two new portals set to launch despite Coronavirus chaos

Two property portals insist they’re going to launch this spring despite the Coronavirus chaos effectively closing down much of the housing market.

OpenBrix has been 18 months in the making and says it’s finally launching at an unspecified date in early April.

It says it’s seeking to address what it describes as agents’ frustrations with the current leading portals – lack of control, price hikes and “the uncomfortable feeling that the agents hard acquired and costly data is being sold without benefit to the agent.”

It says its structure is reliant on a database shared across a Blockchain network of agents, rather than located at one central point.

Its structure is similarly devolved – it says each agency brand, irrespective of size, will have one vote in determining strategy and policy. It describes this as “community control” and pledges that “all price increases will have to agreed and voted on by the community.”

And it adds: “If the UK agents want control of a portal for the first time, then this is the solution.”

Meanwhile Homesearch, a relatively new supplier to the industry that has until now specialised in data for agents, says it too is to launch a portal – this time on May 25.

The company says it has information on Britain’s entire 29m housing stock and pledges to be not just another portal but “the future of the industry”.

Creators Giles Ellwood and Sam Hunter say on their website: “We have self-funded the business since 2017 and have reinvested over £3m in data and engineering. Last year alone our software delivered over a billion pounds worth of market appraisals to the agents using our services. Over the past few days, with help and honest truths from agents closest to us, we believe we have engineered a long term solution. Not just another portal, but the future of the industry. A platform that networks you, the agent, with every home and client in the country.”

Calling itself a truly agent-first platform it describes itself as: “A network where consumers can interact with your agency and your instructions, as well as placing your agency in front of them for every other property they search for in your market. Everything will lead back to your website and the phone numbers and links will be yours, not ours.”

It promises agents will “not ever pay to list instructions” but property developers and house builders will; half of those charges will go to homeless and social housing projects.

Say No To Rightmove – the fight goes on says campaign leader

Say No To Rightmove - the fight goes on says campaign leader

The key figure behind the Say No To Rightmove campaign says the fight for more realistic fees goes on – and agents are still joining the campaign hour by hour.

The portal caved in to pressure from agents a week ago and agreed a short-term 75 per cent fees reduction to help the industry through the Coronavirus crisis.

However Robert Sargent, chief executive of the Acorn Group, has today told industry analyst Chris Watkin in a video interview that the campaign now has 900 business owners with more still joining “on an hourly basis.”

Sargent’s company has 36 branches across London and the south east and spends close to £500,000 on fees to the portal.

He says the short term fees reduction was a sign that Rightmove realised the importance of agents who provided its content, but it was simply the portal realising what it had to do for an industry going into lockdown – it was not a solution to a longer term problem.

The core of the issue, says Sargent, is that independent agents pay top dollar – up to £3,000 per branch per month – whereas corporates can negotiate substantial economies of scale and thus smaller fees.

The interview is just under 10 minutes long and provides a fascinating insight into the campaign which has caught the imagination of much of the industry, and what it plans next.

Housing market could be ‘frozen’ to avoid Coronavirus crash

Housing market could be ‘frozen’ to avoid Coronavirus crash

It’s been reported that the government is talking with banks and building societies about putting the housing market ‘on ice’ during the virus crisis to avoid a crash and to allow financial institutions to offer mortgages.

Today’s Financial Times says UK Finance – the trade body representing mortgage lenders – has told members: “UK Finance has been seeking urgent clarification from the government about whether home purchases should continue at the current time, particularly as physical property valuations are no longer possible.”

One suggestion is that offers of mortgages in principle could extend to six months rather than three.

The FT story follows growing concern yesterday that many mortgage lenders were withdrawing their products or severely restricting access to them; this was thought to be because valuations were not possible ‘in person’, and because of uncertainty that homes would retain their value over the coming months.

Lloyds Banking Group and Barclays, two of the UK’s biggest lenders, are temporarily pulling many of their mortgages. Lloyds has stopped offering mortgages or remortgages through brokers unless the customer has a deposit of at least 40 per cent of the value of the property.

Barclays told brokers it would no longer offer mortgages for customers that did not have a deposit of at least 40 per cent, but it will continue to offer remortgaging deals.

Last evening the Housing Secretary, Robert Jenrick, took to Twitter to say: “I know that many people across the country are due to move house tomorrow. Whilst emergency measures are in place, all parties should do all they can to agree a new move date. If you’re socially isolating or being shielded, it’s especially important to try and delay.”

And this was followed up by tweets from the MHCLG saying: “People should delay moving where possible … Estate agents must work remotely to support their clients … If your home is on the market, you shouldn’t let buyers visit your home.”

Earlier this week the Ministry of Housing, Communities and Local Government had advised buyers and renters to, if at all possible, delay moving home until the Coronavirus crisis has subsided.

The same guidance also allows tradespeople to continue repairs and maintenance work, “provided that the tradesperson is well and has no symptoms.”

“No work should be carried out in any household which is isolating or where an individual is being shielded, unless it is to remedy a direct risk to the safety of the household, such as emergency plumbing or repairs, and where the tradesperson is willing to do so.”

Agents Beware: definitive government guidance on buying and selling

Agents Beware: definitive government guidance on buying and selling

The government has at last issued extensive advice on home moving and the activities of estate agents during the continuing Coronavirus crisis.

This came last evening after days of debate on how much marketing, valuing, viewing and conveyancing could be done during the lockdown.

Here is the guidance in full:

There is no need to pull out of transactions, but we all need to ensure we are following guidance to stay at home and away from others at all times, including the specific measures for those who are presenting symptoms, self-isolating or shielding. Prioritising the health of individuals and the public must be the priority.

Where the property being moved into is vacant, then you can continue with this transaction although you should follow the guidance in this document on home removals. Where the property is currently occupied, we encourage all parties to do all they can to amicably agree alternative dates to move, for a time when it is likely that stay-at-home measures against coronavirus (COVID-19) will no longer be in place.

In the new emergency enforcement powers that the police have been given to respond to coronavirus, there is an exemption for critical home moves, in the event that a new date is unable to be agreed.

Recognising parties will need to alter common practice, we have sought to ease this process for all involved by:

  1. Issuing this guidance, developed with Public Health England, to home buyers and those involved in the selling and moving process;
  2. Agreeing with banks that mortgage offers should be extended where delay to completions takes place in order to prioritise safety; and,
  3. Working with Conveyancers to develop a standard legal process for moving completion dates.

Advice to the public

What does this mean for my property move which is scheduled whilst the stay-at-home measures to fight coronavirus (COIVD-19) apply?

  • Home buyers and renters should, where possible, delay moving to a new house while measures are in place to fight coronavirus (COVID-19).
  • Our advice is that if you have already exchanged contracts and the property is currently occupied then all parties should work together to agree a delay or another way to resolve this matter.
  • If moving is unavoidable for contractual reasons and the parties are unable to reach an agreement to delay, people must follow advice on staying away from others to minimise the spread of the virus.
  • In line with Government’s advice, anyone with symptoms, self-isolating or shielding from the virus, should follow medical advice which will mean not moving house for the time being, if at all possible. All parties should prioritise agreeing amicable arrangements to change move dates for individuals in this group, or where someone in a chain is in this group.

What if an extension goes beyond the terms of a mortgage agreement?

UK Finance have today confirmed that, to support customers who have already exchanged contracts for house purchases and set dates for completion, all mortgage lenders are working to find ways to enable customers who have exchanged contracts to extend their mortgage offer for up to three months to enable them to move at a later date.

If a customer’s circumstances change during this three month period or the terms of the house purchase change significantly and continuing with the mortgage would cause house buyers to face financial hardship, lenders will work with customers to help them manage their finances as a matter of urgency.

If your home is not yet on the market

Getting your home onto the market may be more challenging than usual in this period.There should be no visitors to your home. You can speak to Estate Agents over the phone and they will be able to give you general advice about the local property market and handle certain matters remotely but they will not be able to start actively marketing your home in the usual manner.

  • If you are thinking about selling, you can use this time to start gathering together all of the information you will need to provide to potential purchasers.
  • Advice for people to stay at home and away from others means you should not invite unnecessary visitors into your home, including: Property Agents to carry out a market appraisal or take internal photographs prior to marketing your home; and Energy Performance Certificate assessors.

Viewings

If your property is already on the market, you can continue to advertise it as being for sale but you should not allow people in to view your property.

  • There should not be any visitors into your home, and you should therefore not let people visit your property for viewings. Your agent may be able to conduct virtual viewings and you could speak to them about this possibility.

Accepting offers

The buying and selling process can continue during this period but you should be aware that the process is likely to take longer than normal.

  • You are free to continue to accept offers on your property, however the selling process may take longer.
  • Advice for people to stay at home and away from others means you should not invite visitors into your home, including prospective buyers or advisors.

Exchanging contracts

Once you have exchanged contracts, you have entered into a legal agreement to purchase that home.

  • If the property you are purchasing in unoccupied you can continue with the transaction.
  • If the property you are purchasing is currently occupied, we recommend that all parties should work either delay the exchange of contracts until after the period where stay-at-home measures to fight coronavirus (COVID-19) are in place, or include explicit contractual provisions to take account of the risks presented by the virus.

Advice to industry

All businesses must follow the Government’s latest Guidance for employers and businesses on coronavirus (COVID-19).

Estate Agents

Estate Agents should ensure they are able to support clients during this period:

  • Agents should work with their clients and other agents to broker a new date to move where sales are due to complete on occupied properties in the current period where emergency measures are in place to fight coronavirus (COVID-19).
  • Agents should prioritise support for anyone with symptoms, self-isolating or shielding from the virus, and those they are in chain with, to agree a new date.
  • In line with advice for certain businesses to close, agents should not open branches to the public during this period, or visit people’s homes to carry out market appraisals.
  • Agents should ensure that employees can work from home, to support existing clients and advise potential new clients.
  • Agents should continue to progress sales where this can be done whilst following guidance to stay at home and away from others.
  • Agents should advise clients to be patient and not to exchange contracts unless the contracts have explicit terms to manage the timing risks presented by the virus.

Conveyancers

Conveyancers should continue to support the sales process as far as possible and should make sure their clients are aware of the difficulties of completing transactions in this period:

  • Conveyancers should continue to support the sales of unoccupied properties as far as possible.
  • Conveyancers should make every effort to support clients who are due to complete on occupied properties in the stay-at-home period to change this date.
  • Conveyancers should advise their clients who are ready to move not to exchange contracts on an occupied property unless they have made explicit provision for the risks presented by the virus.
  • Conveyancers should prioritise support anyone with symptoms, self-isolating or shielding from the virus and those they are in chain with, and we urge them to do all they can to help a new date to be agreed in these circumstances.

Surveyors

Surveyors should not expect to carry out non-urgent surveys in homes where people are in residence, and no inspections should take place if any person in the property is showing symptoms, self-isolating or being shielded. It may be possible to carry out some of your work online and also carry out urgent surveys on empty properties, or those where the occupants are out of the property or following guidance to stay at home and away from others.

  • Surveyors should follow the latest Government guidance which currently (26 March 2020) states that work carried out in people’s homes can continue, provided the tradesperson is well and has no symptoms of coronavirus (COVID-19).
  • It is important to ensure Government guidelines are followed, including maintaining a 2 metre distance from others, and washing their hands with soap and water often for at least 20 seconds (or using hand sanitiser gel if soap and water is not available).
  • No work should be carried out by a person who has coronavirus (COVID-19) symptoms, however mild.

Removals Firms

There will be people who have already committed to moving home; where possible we are encouraging them to delay their move but a small number of moves may need to go ahead. We would urge everyone to take all sensible precautions to ensure the move can happen safely.

  • Removers should honour their existing commitments where it is clear that the move can be done safely for the client and your own staff and it is clear that the moving date cannot be moved.
  • Removers should follow the latest Government guidance which currently (26 March 2020) states that work carried out in people’s homes can continue, provided the tradesperson is well and has no symptoms or coronavirus (COVID-19).
  • It is important to ensure Government guidelines are followed, including maintaining a 2 metre distance from others, and washing their hands with soap and water often for at least 20 seconds (or using hand sanitiser gel if soap and water is not available).
  • No work should be carried out by a person who has coronavirus (COVID-19) symptoms, however mild.

Vendors can create video tours for agents to market – here’s how…

Vendors can create video tours for agents to market - here’s how…

A video has been launched this morning explaining how agents can get their sellers and landlords to use iPhones to make videos appropriate for marketing.

The ‘How To Do It’ video is 12 minutes long and produced by industry consultant Chris Watkin, and it’s shared below with Estate Agent Today readers.

Chris says: “Have a look at the video and then send it to all your landlords and vendors. Make yourself look pro-active as an agent.

“Please tag every agent you know to ensure they can help their clients too. This isn’t the time for rivalry with competitors – let’s help each other.”

Later this week Chris will be revealing a video series for agents to learn how to edit videos like a pro using inexpensive software and a small amount of hardware.

This may be exactly what the industry needs for the next few months.

Government tells agents to shut offices immediately

Government tells agents to shut offices immediately

Propertymark has been told the agents should shut their offices immediately – they are not “essential businesses” under the new Coronavirus safety guidance.

A statement from Propertymark issued this afternoon says:

“Propertymark has spoken to a senior civil servant at Ministry for Housing, Communities and Local Goverment (MHCLG) this morning. 

“The civil servant stated that agents are not ‘essential businesses’ under the new rules and therefore their view is that agents should close their offices immediately.

“Furthermore, they stated that there should not be any in-person viewings, routine inspections or house moves.

“MHCLG is still looking into property maintenance tasks such as gas safety checks and hopes to issue guidance on these points as soon as possible.

 “In a further development, British Association of Removers (BAR) has issued communications this morning instructing members that moves should only be completed if they are already underway, any move that has not yet started, should not go ahead. 

“Propertymark will keep members up to date later today and as any further information becomes available.”

Over 600 agents Say No To Rightmove – but will they stick by it?

Over 600 agents Say No To Rightmove - but will they stick by it?

Over 600 agents have now signed up to the Say No To Rightmove campaign including some of the biggest names on the High Street.

Fine & Country, Hunters, Northwood and Belvoir are amongst the company names cited on the Say No To Rightmove website as being signatories: however, the website makes clear these were opposed to the deferred payment plan initially put forward by the portal.

On Friday that plan was pulled and instead a much more appealing 75 per cent reduction was announced for the near future – bringing some support for the measure from critics of Rightmove.

The question for the number one portal is whether critics will continue with their threat of de-listing from Rightmove, seeing the current Coronavirus crisis as an opportunity for the wider industry to reset its marketing priorities.

Meanwhile Zoopla’s more complicated ‘two options’ offer to agents has drawn criticism because of what some see as its opportunistic nature.

The portal is to be free of charge for agents with fewer than 30 branches, which it says comprises 80 per cent of its client base.

This free period will be nine months if an agent leaves Rightmove, and up to five months for free if the agent does not. Both options then require agents to sign to an 18-month contract with Zoopla after the free listing ends, and the portal’s normal fees resume.

On Property Industry Eye one critic wrote of the Zoopla offer: “Is this really the time to use the virus for your own benefit? For me, the Zoopla offer is tasteless – why can’t they just make it free or reduced with no caveats? Maybe they are RM in disguise”.

On Twitter the digital consultancy Propportunities tweeted: “Zoopla’s supporting Zoopla! Is their response to crisis just a misleading opportunistic offer to prise agents off RM and on to long-term contracts?”

And property commentator, agent and PR company chief Russell Quirk tweeted: “Crass from Zoopla. PR rule number one – don’t try to capitalise on a crisis, at least not publicly.”

Industry analyst Anthony Codling summed up the situation by saying on social media: “You couldn’t make this up – Zoopla now offering agents nine months free if they leave Rightmove – as if times weren’t interesting enough. Who will be the first portal to pay estate agents to list?”

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