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Agent protests over tripling of Digital portal charges

Friday 13th August 2010 - EstateAgentToday

An agent in Sutton, Surrey, is protesting over huge hikes in his rates to FindaProperty. Dozens of other agents are affected.

He has been told that his subscription to The Digital Property Group will triple between next month and March.

The agent, who has asked not to be named, says it means the cost of advertising on Digital's sites, which include FindaProperty and Primelocation, will double - and will cost him considerably more than Rightmove.

The agent says he received two aggressive phone calls from sales staff at TDPG, which is owned by the Daily Mail, informing him that his subscription would go up in three staggered hikes.

He says the sales staff told him that the price increases would affect almost 800 agents within the M25 - although Digital told EAT the real number is in fact closer to 70.

He added: "I think they are very arrogant in their approach when the market is still depressed, and when you ask any agency about their revenue levels, they are still way down on what they were at the peak."

He also said he was unhappy with the makeover of the FindaProperty site back in May and the fact it now takes on third party advertising.

"In my opinion, the site looks awful. Advertising from third parties is all over the pages my properties are displayed on, as opposed to Rightmove which has none. In my opinion, this has degraded the website and TDPG are being very greedy. They have compromised the website."

He said his firm is receiving many less inquiries than a year ago, and believes he should get a price decrease. "There are many agents like me who will not put up with ridiculous increases," he added, saying that he had never wanted to be on Primelocation in the first place and that it was "a complete waste of time". TDPG puts it pricing for all its websites in one package, even where agents have no interest in listing on, for example, FindaProperty, or Primelocation.

It is believed that the agent in question, along with others in price negotiations, is currently on an old rate, below rate card.

In an official statement, Digital said: "The Digital Property Group rate card was created to provide a fair and transparent reflection of the value we deliver; it takes into account the agent's location, our market share as well as the number of properties listed and their average cost. By advertising on each of The Digital Property Group portals, agents benefit from inquiries across all levels of home buyer and renter as well as profit from the positive brand association with our portals - especially important when attracting new instructions.

"Our subscribers gain from significant investment into our portals through TV, radio, print, online and outdoor advertising across the country, not to mention the positive addition of Globrix.com into our portfolio. They also benefit from innovations such as our iPad app and the FindaProperty.com redesign which has yielded a significant number of enquiries and a record 3.8 million unique visitors in July.

"We cannot comment on specific cases but we would be very happy to speak to this customer on an individual basis and discuss our value to their business."



EPCs to last ten years

Wednesday 26th May 2010

Energy Performance Certificates may not be required each time a home is sold in future.

That is because the shelf life of an EPC has now been extended to ten years.

So, if a property sold today with an EPC comes back on the market within the next decade, a compliant EPC will already be in place.

The suspension order of HIPs and the amendment of the EPC regulations has an explanatory memorandum which says at Clause 4.7:

"The provision in regulation 11 of the EPB Regulations 2007 for an EPC to be valid for a period of three years in cases where a duty under section 155(1) or 159(2) of the Housing Act 2004 applies is revoked. This means that the validity period of EPCs for sales of residential property is, under regulation 11 as amended, now ten years. This is consistent with the validity period for EPCs for all other types of transactions covered by the EPB Regulations 2007."

Confirmation of the news has led to despair among Domestic Energy Assessors, who are predicting a decimation of their numbers and workloads.

It is also widely predicted that estate agents will go back to doing their own floorplans – work that had increasingly been done by DEAs.



NEWS FLASH – HIPs suspended

Thursday 20th May 2010

Home Information Packs have been suspended with immediate effect pending primary legislation for a permanent abolition.

CLG Secretary of State Eric Pickles said: "HIPs are history. This action will encourage sellers back into the market and help the market as a whole and the economy recover."

Housing minister Grant Shapps said: "This is a great example of how this new Government is getting straight down to work by cutting pointless red tape."

They made the announcement this morning at a press conference held at Bullman Booth estate agents in Battersea, London, owned by Philip Bullman.

Many jobs – up to 10,000 has been estimated – will now be at immediate risk and specialist HIP providers will fold, unless they are able to diversify.

However, there is no doubt that most estate agents will greet the suspension with relief.

For AHIPP, there was a surprising acceptance, although it made it clear there are still battles ahead.

Director general Mike Ockenden said: "We want to work with the Government and we want the consultation we have been promised. We are not suggesting that HIPs should be retained. AHIPP has accepted that they will be scrapped.

"However, we have been proposing for months that a legal pack – or exchange ready HIP – be instructed at the start of the sales process. We think it would be crazy to throw the baby out with the bathwater and remove at a stroke all the good things that have come about with HIPs, and the lessons we have learnt.

"If we do this, then the opportunity for reform will have been lost for a generation."

Nick Salmon, tireless campaigner and founder of SPLINTA, was absolutely delighted.

He said: "The ending of HIPs is a victory for the consumer, the estate agency industry and the SPLINTA campaign. We applaud the swift and decisive action of the coalition government and the contribution of the housing minister, Grant Shapps, who has always been clear about HIPs in his words and deeds.

"The chequered history of this flawed piece of legislation stands as a shameful monument to the ineptitude and arrogance of a succession of Labour housing ministers who failed to heed the warnings of those who actually know how the property market works."



Budget 2010: Stamp duty plans met with caution

Source: news.bbc.co.uk 24 March 2010

Estate agents and mortgage lenders have given a "cautious welcome" to plans in the Budget to help first-time buyers.

Stamp duty on sales up to £250,000 will be suspended for those buying their first property this year and next, Chancellor Alistair Darling said.

However, industry bodies argue this should have applied to all homebuyers as it could be difficult to police.

The change will be funded by a planned increase in stamp duty to 5% for properties costing more than £1m.

Currently, stamp duty for buyers of properties worth more than £500,000 is 4% of the purchase price. It is 1% for properties between £125,000 and £250,000. For properties between these brackets the stamp duty is 3%.

The Council of Mortgage Lenders (CML) argued that it would have been "clearly far simpler" to exempt all properties under £250,000, rather than restrict it to first-time buyers only.

Both the CML and the Chartered Institute of Taxation warned that defining and proving who is a first-time buyer could be difficult.

"The idea sounds good on the surface, but runs the risk of there being complex definitions of first-time buyer that cause anomalies and difficulties in practice," said John Whiting, the Institute's tax policy director.

The CML warned that it would be difficult to verify genuine first-time buyers, as opposed to people who had previously owned property but no longer did so.

Who qualifies?
The new rules state that in order to qualify for the stamp duty holiday:

'Dampening' effect
The other change to stamp duty outlined in the Budget - the increase affecting the million-pound-plus properties - will come in from April next year, if Labour wins the forthcoming general election.

Estate agents said the move would "put a real dampener" on the sale of properties between £1m and £1.25m, if it comes in.

"In the short term, the new rate is going to mean the market for properties worth between £1m and £1.25m will be flooded," said Stephen Ludlow, a director of Ludlow Thompson.

Knight Frank's Liam Bailey, said it would be little more than a "minor irritation" at the very top of the market.

But he added: "For houses worth around £1m, there will be pressure from buyers to pull back asking prices below the new threshold to avoid paying the extra stamp duty."

Over the next three financial years, the help for first-time buyers is expected to cost £550m, Treasury documents show.

The increase affecting more expensive properties is expected to bring in £390m over the same period. The Treasury said the two amounts would balance each other out over four years, however.

Conservative leader David Cameron accused Alistair Darling of stealing his party's policy on stamp duty.

"The only new ideas in British politics are coming from this side of the House," he told the Commons.

The Liberal Democrats welcomed the announcement on stamp duty but added: "It's quite astonishing the Budget was completely silent on the urgent need for more affordable homes for all."

This the second major change to stamp duty in recent years. In order to try to kick-start a recovery in the battered property market, the chancellor increased the stamp duty threshold from £125,000 to £175,000 in 2008.

Alistair Darling said the measure had helped 260,000 homebuyers before it ended in December last year.



House hunters remain enthusiastic

Source: http://www.naea.co.uk 16 March 2010

Britain's house hunters continued to brace the bad weather conditions in search of a new home in February, according to estate agents. The National Association of Estate Agent's market report for February showed that the bad weather did little to curb the enthusiasm of eager house hunters looking for their dream home.

While the bad weather had an impact on the number of people registering with an agent this month, the number of houses sold increased from six (5.7) in January to seven (6.8) in February.

Only 258 house hunters registered with an agent compared to 291 in January, the lowest number recorded over the last 12 months.

The number of houses available for sale increased slightly from 55 per branch in January to 56 in February meaning there were still four house hunters for every property.

The percentage of sales made to first time buyers increased in January from 23% to 24% this month.

President of the NAEA, Gary Smith, said: "It's encouraging to see that the bad weather hasn't deterred agents from making sales this month even if it has stopped some house hunters from registering with an agent. These figures suggest that there's an increasing appetite for property which will feed recovery over the next few months as the weather improves. This growing confidence is reflected in the fact that first time buyers now take up a quarter of the market.

"Supply and demand continues to be an issue and one we are taking up with the Government ahead of the budget. More needs to be done to make house building a top priority over the next 12 months if we want the market to strengthen rather than stall."



Building societies offering cheap niche deals

Source: http://www.ft.com 12 March 2010

Building societies are leading the mortgage market with innovative products, while state-supported banks have less competitive rates. Over the past 12 months, Cheltenham & Gloucester, Halifax and Northern Rock have consistently charged higher rates on their two-year fixed-rate mortgage deals than the rest of the market says Moneyfacts, and mortgage deals from bailed-out banks also account for just eight out of 50 best-buy products currently on offer, according to figures from realpricecomparison.com.

"Many hoped that the state-owned banks would be at the front of the queue for unlocking the mortgage market, but this isn't the case," said Michelle Slade of Moneyfacts.

For a two-year fixed rate mortgage at 75 per cent loan-to-value, the average rate across the whole of market was 4.19 per cent at the beginning of March, compared with 4.57 per cent from C&G, 4.37 per cent from Northern Rock and 4.27 per cent from Halifax.

Because building societies are unable to compete on price with the big banks for "plain vanilla" mortgage deals due to limited funding, they're focusing on niche mortgages to attract business.

For example The Mortgage Works, an arm of Nationwide Building Society, has launched a range of guarantor products that brokers have praised as innovative. This includes a "limited liability product", where the borrower must be able to afford - on normal lending criteria - at least 70 per cent of the loan amount. The guarantor of the loan - usually a parent - is only financially liable for the other 30 per cent of the debt, rather than the whole loan, plus a further 10 per cent.

"The idea of limiting the guarantor's liability is unique and a brilliant idea," said Jonathan Cornell of First Action Finance.

"It's good to see a lender looking to add something new for first-time buyers, although the rates won't be the sharpest and some come with fees of as much as 2 per cent," said David Hollingworth of London & Country.

Coventry Building Society has a four-year fixed-rate first-time buyer deal at 5.99 per cent, available up to 90 per cent loan-to-value for borrowers who are existing customers, or whose relatives have a mortgage or savings account with Coventry. It comes with a £199 fee.

John Charcol is also marketing an exclusive three-year fixed-rate buy-to-let mortgage with a building society at 6.49 per cent. The deal is available at up to 80 per cent loan-to-value - an area of the buy-to-let market with few products on offer - with a £995 fee. Rental cover required is 125 per cent.



Tories will put pledge to scrap HIPs in manifesto

Friday 10th July 2009

The Conservatives' promise to scrap HIPs immediately they get into power is to be in the party's general election manifesto.

The news was revealed by shadow housing minister Grant Shapps in a meeting with the chief executive of the NAEA, Peter Bolton King, and president Gary Smith.

Smith said of Shapps that he was extremely well briefed and that his approach "was in accord with ours on virtually every point" raised in the meeting.

Shapps also confirmed that the Tories will retain Energy Performance Certificates, whilst making them less bureaucratic.

He did not, however, offer any support for compulsory licensing of estate agents, letting agents and landlords. Smith said it was made clear that the Tories favour self-regulation. Only if circumstances necessitated regulation in the future would licensing be considered, but even then it would be a 'light touch' approach.

Other subjects discussed at the meeting included the difficulties of home buyers in obtaining mortgages, rates on empty commercial properties, and the problems for private developers in raising finance for housing projects which could lead to a shortage of supply of new properties when the market picks up again.

Smith said: "We came away with the feeling that the points we raised had been listened to and understood, and where we believed action was required it would be carefully considered."



UK interest rates lowered to 0.5%

Source: BBC News 5th March 2009

The Bank of England.

The Bank of England has cut interest rates to 0.5% - a fresh all-time low - and says it will now boost the money supply to help revive the economy.

Interest rates have now been reduced six times since October, and the latest half a percentage point cut from January's 1% had been expected.

The Bank said it would expand the amount of money in the system by £75bn in an attempt to boost bank lending.

This policy, so far untried in the UK, is called quantitative easing.

Buying assets
Quantitative easing is the process of increasing the amount of money in circulation in an attempt to revive the economy.

While the Bank will initially add £75bn, Chancellor Alistair Darling has given it permission to extend this to up to £150bn.

The idea is that if the amount of money in the system is boosted, commercial banks will find it easier to lend.

Quantitative easing is sometimes incorrectly referred to as printing money, but the Bank will not expand the supply of money by making new banknotes.

Instead, it will buy assets - such as government securities (gilts) and corporate bonds.

Similar measures were implemented in Japan at the beginning of the decade and are considered to have had limited success.

'Pleasantly surprised'
BBC economics editor Stephanie Flanders said that while the initial size of the quantitative easing scheme was smaller than some analysts had expected, "it's a lot more than dipping their toes in the water".

"Those who feared that the Bank would defeat the purpose of the policy by doing it only half-heartedly may be pleasantly surprised," she said.

Philip Shaw, chief economist at Investec, said that quantitative easing "should in principle encourage the banks to lend to private sector agents such as households and businesses, stocking monetary growth and stimulating activity".

Mervyn King, the Bank's Governor, sought permission from the Chancellor to start quantitative easing in a letter on 17 February.

In his reply, Mr Darling said that in the "current circumstances" the measures were now "appropriate".

Both letters were released on Thursday.

Rate cuts attacked
Business groups have attacked the recent cuts, saying they have done little to encourage banks to lend more.

Others argue that they are unfairly hurting the returns of savers.

"Today's decision is a kick in the teeth for savers who will see their already diminished interest payments fall even further," said Adrian Coles, director general of the Building Societies Association.

The Council of Mortgage Lenders (CML) said the latest cut would be a "double whammy for prospective mortgage borrowers".

"This latest cut presents immense challenges for lenders whose margins are already squeezed as a result of previous reductions, leaving little scope to lower discretionary mortgage rates further," said CML director general Michael Coogan.

"Savings are the lifeblood of mortgage lending, and unless lenders can offer competitive rates to savers their ability to offer new mortgages is restricted."

Ian McCafferty, CBI chief economist, said the continuing rate cuts were "becoming less and less effective as a means of stimulating the economy".

"Though this latest cut will help support business and consumer confidence, it is unlikely to have a dramatic impact on the cost or availability of credit," he said.

The Bank has had the room to cut interest rates because inflation has fallen on the back of reduced energy costs.

The most recent official figures showed that consumer prices index (CPI) inflation fell for the fourth month in succession in January to 3%, from December's 3.1%.

However, CPI inflation still remains above the government's 2% target.



Interest rates hit all-time low

Source: BBC News 8 January 2009

Bank of England's official bank rate since 1951

The Bank of England has cut interest rates to 1.5%, the lowest level in its 315-year history, as it continues efforts to aid an economic recovery.

The half percentage point reduction brings interest rates below 2% for the first time since the Bank of England was founded in 1694.

Manufacturers' association EEF said the move was "too timid", and that the Bank should have cut rates further.

The Bank has now reduced rates four times from October's 5% level.

Explaining its decision, the Bank said the level of contraction in business activity had "increased during the fourth quarter of 2008, and that output is likely to continue to fall sharply during the first part of this year".

It added: "Surveys of retailers and reports from the Bank's regional agents imply that consumer spending has weakened."

Sit tight?
BBC economics editor Hugh Pym said the Bank was now being more cautious after the sharp cuts in interest rates in November and December.

"There is a hint in its statement that it may sit tight for a while to assess the impact of the big reductions over the last couple of months," he said.

Hetal Mehta, senior economist from the Ernst & Young Item Club, said the cut to 1.5% was "appropriate", but that the Bank should not stop there.

"With survey data continuing to languish at record lows - manufacturing and services surveys in the past few days have confirmed that activity is falling sharply - we see no reason for the Bank to hold back in cutting interest rates to 1% or below in the coming months," she said.

Mortgage impact
Most mortgage customers with tracker deals will automatically have the cut in interest rates passed on to them by their bank or building society.

Customers with an average £150,000 repayment mortgage will see their monthly bill drop by £46.

Those tracker deal customers with a £250,000 mortgage will see their monthly payments drop by £76.

But those on standard variable rate deals must wait for a decision from their lender.

While Lloyds TSB, HSBC, HBOS, Nationwide, and Skipton Building Society have already said they will pass on some or all of the reduction, most of the other lenders are currently saying their rates are under review.

The pound, which has fallen in recent months, rose to a three-week high of 1.1198 euros following the rate cut, before slipping back slightly to close at 1.1077 euros. It ended slightly higher against the US dollar at $1.5176.

Societe Generale economist Brian Hilliard said the pound's recent sharp fall was likely to have played a part in the Bank's decision to cut rates by no more than 0.5 percentage points.

London shares closed almost unchanged following the Bank decision, with the FTSE 100 index ending down just 0.05% or 2 points at 4,505.

Redundancy woes
The latest cut in interest rates comes amid further signs that some firms are continuing to struggle.

Nissan said on Thursday that it is cutting 1,200 jobs, or a quarter of the workforce, at its Sunderland factory due to falling sales.

And the administrators of music, games and DVD chain Zavvi have closed 22 of the firm's stores with immediate effect, at a cost of 178 jobs.

It comes two days after the last remaining Woolworths shops closed their doors for the final time.

However, not all companies are struggling. Sainsbury's has reported its "best ever Christmas performance", saying sales rose 4.5% in the 13 weeks to 3 January compared with a year earlier.

Injecting money?
The Bank's latest rate reduction comes as the Treasury has denied reports it is planning to inject more money, a policy known as quantitative easing.

A number of newspapers said the step was being considered once interest rates fell close to zero as a tactic to help both stimulate the economy and avoid deflation.

Treasury sources said that while the move had not been ruled out, it was not currently on the agenda.

Institute of Directors chief economist Graeme Leach said the MPC's apparent caution in not cutting rates further this month "highlights the uncertainty over what effect the existing monetary and fiscal stimulus will have on the economy".

He added that there also seemed to be uncertainty over "whether or not the Bank of England should go nuclear with limited printing of money or thermonuclear with extensive printing of money".



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