There were reports that 40 estate agents a week are closing. What do you see?
It’s interesting. I have to say when I read that I suddenly thought, where on earth is that coming from? Whilst we have seen closures, it’s certainly to date has not been reflected as far as our own membership is concerned.
There have been two sorts of closures generally. One, are the corporates, who have quite normally taken their opportunity to review their branch networks. …
Generally, the other people have been the little, single offices who have tended to set up over the past 10 years, but in particular last five years, on the back of a strong market, on the basis of, “any idiot can sell a property, it’s easy money, I don’t need any qualifications or experience and I don’t have to train my staff.” And it’s no surprise to me and I have little sympathy, I have to say, if they are unable to deliver the service to the client, the service the client deserves, once the market get tougher again. …
Many of our members are what you’d call the old style traditional estate agencies. They don’t just rely on sales. They have lettings, which have been very strong across here. They may have commercial, a bit of auctioneering, maybe some professional work. So they can react in a different way, tighten belts and generally try to weather the storm.
Have you seen any change in your membership numbers?
No, the end of the year we have the bulk of our renewals and interestingly enough we have had a smaller number leave this year than certainly I’ve ever had in the six years that I’ve been here. And nobody else can remember a smaller number. To give you an idea on that, on the sales side we renewed or sent out invitations to renew to 10,600 individual members. And we’ve only had to send out termination letters for non-payments to 300.
Why do you feel the situation has been blown out of proportion?
Rightly or wrongly, I’m comparing it, because everyone else seems to, with the late ‘80s, early 90s, when we did see a sizable drop in prices, when we saw record repossessions… We had raging inflation that was being controlled by interest rates and interest rates went from 8 percent to 15 percent in six months and that really hurt. We had high unemployment, much higher than now.
The difference this time around, although it still hurts when interest rates go up… mortgage rates are still quite historically reasonable figures. We’ve got low unemployment and the economy, at the moment, underlying economic factors are still OK. We have some concern over inflation, but there’s nothing like the sort of figures there were in 1990. …
Where I’m coming from is the underlying circumstances have not changed from 12 months ago. But what we’ve got is a credit situation that is affecting a number of people. … What we’ve got at the moment is a confidence crisis. And if we can get some good news, I still believe we can end up with a soft landing rather than a hard landing.
Do you think estate agents are getting a bad rap?
I actually get quite cross when people phone me up or e-mail me—and I get appalling e-mail from the public—saying this is all your fault, you pushed up prices. Well, my argument to that is no, how can agents be accused of pushing up prices? They have a job, which is to get the best possible price for their client. If somebody is prepared to pay a certain amount of money and lenders are stupid enough to lend it to them, then how can the agent be blamed? …
Agents have absolutely nothing to do with credit situation or this wait and see attitude we have at the moment.
Do you really think HIPs (Home Information Packs) really had a significant impact on the market?
I believe the government has managed to get away with HIPs. The reason I say that is because the economic situation, the credit situation, makes it impossible to actually say, aha, I told you so, HIPs have had an effect. Having said that, I have got case studies from members where they have absolute proof that potential clients are not putting their property on the market because they have not got the savings and they’re worried that they then take the property off the market, given the current climate, they’re suddenly going to have to cough up £300.
What are your members saying about the activity with overseas buyers these days?
The upper end held up much more strongly this year than the rest of the market. However, we’re beginning to get feedback over the last few weeks that some of this top end market appears to be slowing up as well.
What would you like to see happen to get you through this time?
Clearly some good news would help.