Part of our job as estate agents can be helping with overcoming fear. Whether its impending General Elections, Brexit, interest rates, unknown locations, perceived prejudices or difficulties understanding complicated legal jargon, we all have clients who are worried or frightened and we’re generally able to gently coax them through to cope with most of the inevitable bumps in the road. However, I think there’s a bigger issue to do with fear that is a major problem within the Bath property market at present.
Today I had one of my regular catch ups with a longstanding contact who’s heavily involved with local politics and one of the tangents we drifted onto was local housing policy. Tapping into his experience as usual only confirmed that one of our biggest local issues in Bath is lack of property supply. Although there’s quite a bit of new housing being built in the city, very little of it seems to be affordable for the majority of local residents (in fact it has been about 17 years since the last affordable large scale development had been built in the city) so overall property supply levels have to rely on current owners moving on.
Here’s where the big fear comes in – lots of owners we know really want to sell but they just can’t see where they would move to and they’re worried about putting their house on the market until they find something they like.
Families upsizing aren’t going to make the decision to disrupt their kids education without seeing some realistic options. Retired clients downsizing need to know they’re not going to go into rented and make two moves. Even first time sellers would like some variety in their search.
Overall, many sellers need the faith that what they want to buy exists before they take the plunge.
Chickens and Eggs
In strategic terms, Bath has a chicken and egg property problem – to recreate a two sided marketplace we need to kickstart the virtuous circle
The current situation is only exacerbated by the speed of the market (+ some agents leanings to sell properties “off market”). Demand is also at such a level that estate agents have no shortage of “no chain” buyers, of which recent survey findings show the following;
Nine out of 10 people selling their home would prioritise buyers who are in a position to move quickly compared to those offering more money, according to the findings by credit checking service ClearScore and published in yesterdays Daily Mail.
More than a fifth of sellers (22 per cent) would accept an offer that was 5 per cent lower than the asking price if their buyer was chain free and had a mortgage agreed.
Suitable houses may therefore come and go so quickly (or never be seen at all) that local sellers have no time to get their own house in order to stand a chance of competing.
So what do local sellers do? The easy answer from a typical estate agents point of view is for them to gamble – put their home on the market, agree a sale and then make the buyer wait until they’ve found. If buyers won’t wait, there’s usually another in the wings. You might have to repeat the selling process a few times but eventually all the balls will drop in the right holes and you’ll be moving.
However, that kind of answer takes no account of the emotional strain of selling, or the various practical issues around running a home alongside marketing it. Selling is stressful and starting with a potentially open ended scenario is even more so. There are other considerations as well, including not wishing to disappoint buyers or feeling pressured into making choices when you’re not ready to.
So where does that leave us? Many of the properties that are coming on to the market at present tend to be those where there is a real need to sell – the classic deaths, divorces, marriages and births. A lot of the “choice” movers are absent and thus the supply levels spiralling downwards just makes the problem worse and worse.
The city really needs a major increase in local affordable homes being built. However, lets face it, many politicians will promise this but recent history shows none are likely to deliver. In addition, with developers profit margins to take into account, it is highly unlikely any new properties built in Bath will be suitable for the majority of residents price wise unless some planning constraints can be brought to bear.
A partial solution we have already tested is for estate agents and owners to discuss ways of marketing properties to allow all types of buyer to have a fair shot at buying. On occasion, we have been able to delay the start of viewings until 10 days or so after start of marketing (which at least allows existing owners a head start to a) spot a new instruction that may suit and then b) get their own properties marketed).
Note – There might also be benefits in exploring setting up a local owner to owner network where interested parties can exchange moving requirements in a relaxed fashion with professional advice available when necessary. Expanding what already happens at school gates into a more structured arrangement might create some more matches without the pressure of competition.