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David Pollock: Blog

Wednesday 22nd February 2012

Property indices have been friend and foe to estate agents over the years, but the recent turbulent market has created sharp contradictions which have caused me on many occasions to question their reliability and accuracy.

According to Knight Frank’s recent Property Sentiment Index, property prices fell for the 20th consecutive month, yet Rightmove’s latest House Price Index shows asking prices seeing their sharpest rise in ten years. This kind of contradiction reported across the country only creates confusion with the general public and uncertainty in the market.

The property market is built on confidence and, like every other economic market, is easily influenced by positive or negative market sentiment.

All of the monthly indices utilise different sources of data and represent different stages of the buying process, something that the public doesn’t necessarily appreciate.

Whether it’s asking prices (Rightmove), industry or general public market sentiment (RICS / Knight Frank), mortgage approvals (Nationwide, Halifax) or transaction prices (HM Land Registry / LSL Academetrics), the wealth of indices and their vast inconsistencies have a huge impact on the market.

Although a national perspective is useful for property investors and industry professionals, it is important to remember that for most people reading these headlines, their property is their home and their main asset.

Yes, buying a property will probably be one of the largest investments most people will ever make, but I am constantly reminding buyers that this will be their home first and foremost. This sounds very simple and straightforward, but I think households across the country have lost sight of that.

Micro-markets exist not only in every town and city but even street by street, and it’s our job at the sharp end to understand these markets and advise clients appropriately. Defending the latest news agenda is something we are quite used to doing.

If a buyer falls in love with a property and buys it, does it matter that in six months or a year’s time, the price might have dipped by 0.5%? No, I would hope they will stay there, add value and enjoy their home for a number of years before starting to worry about the market again.

As experts in the housing market we should be advising our clients to take these indices with a pinch of salt and concentrate on the basics of what makes a property a good investment and mostly importantly a home.  

* David Pollock is managing director at Greene & Co in London. Last year, he published his first book, ‘101 Things Your Estate Agent Should Tell You’

(6) Comments

Added by PeeBee on 2012-02-23 11:50:44

Sir:

"If you are not prepared to listen and learn from others but instead prefer to continue to fight your position aggressively and ignorantly..."

You could be no further from the truth. I CRAVE knowledge. It is what makes the world revolve, as far as I am concerned. There is knowledge to be gained from anything and everything. I am STILL awaiting a single shred of proof from you that your ideas are not simply tied to personal gain - that your own agenda is the ONLY agenda here. You can wrap sh!t in Christmas paper as much as you like - it still smells to high heaven. I have 'listened' to you like I have never listened before. I know every word you commit to screen.

Why do you feel that "listening and learning" from your preachings will bring progress? We do not have to agree with everything we "learn". Over the years I have learned many ways of inflicting severe personal injury or worse on my fellow man or beast - but I certainly do not plan - nor have the slightest wish or desire - to use any of them. Squishing spiders is about as far as I take this knowledge.

"Your continued release of personal insults are of no help here." Personal insults? Where? Sorry - is calling you "misguided" a heinous slur on you? Wow - shall I remind you of the past phrases you have cast upon me? In fact - "aggressive" and "ignorant" are two that I only have to go back a few words to recall...

I am neither, by the way. You just don't like me gnawing at your heels.

"More listening and some face-to-face dialogue between those who matter is needed."

You once again make a misguided assumption - that YOU are someone who "matters". Sorry to break this to you - but you are no more this than me or any other individual on the planet. Tell you what - climb down several thousand steps from the pedestal you place yourself upon, and you will at least be visible to the rest of humankind with the help of the Hubble telecsope.

THIS is Reality, Sir. You are but a mere mortal. A tiny tooth on a tiny cog in a tiny gearset in an INFINITELY MASSIVE machine. Just one pea in the grand soup of life.

You have not answered any of my questions in the two previous posts below. At the risk of adding fuel to your argument of me festooning personal insults at you, are you avoiding the questions out of pure ignorance as you clearly feel you are vastly superior to me, or simply that you canot answer without one way or another dashing your entire stance?

"Bon voyage"? Sorry - am I going somewhere? I don't think so...

Told you before; will tell you again. The day you promise faithfully never to post again on this site, I will do the same. Until then, I will be snapping at your heels.

Gnaw... gnaw... gnaw...
Added by Realising Reality on 2012-02-23 10:25:32

I have read what you think but if you want a further discussion, first you need to re-consider the counter-argument in the the light of the overwhelming evidence that suggests you ought to.

If you are not prepared to listen and learn from others but instead prefer to continue to fight your position aggressively and ignorantly, you will merely be trying to assert that which cannot bring about any progress. Your continued release of personal insults are of no help here.

In such circumstances as these, 'others' need to take control, if the housing market is to shed its imperfections and start functioning more usefully, once again.

More listening and some face-to-face dialogue between those who matter is needed. Until that day comes, everyone must be content to remain patient.
Bon voyage, Sir PeeBee.
Added by PeeBee on 2012-02-22 13:19:43

"The problem seems to be that many selling agents don't feel it's their job to give 'appropriate' asking price advice to their clients."

RIGHT! NOW we are getting somewhere - a tiny point of partial agreement!

I accept that there are SOME Agents who do not give their prospective clients realistic price appraisals.

I accept that in some instances this is simply to 'win' the instruction.

I accept that this is unprofessional.

I accept that this practice should be 'dealt with' in better ways than it currently is - as there seems to be NO 'dealing with it'.

HOWEVER...

I DO NOT ACCEPT that it is the majority of Agents (as you CONSTANTLY infer...) who are implementing this practice; and that ALL of those who do so do it simply to win the business.

A percentage of homes put to market sell. A percentage don't. They don't sell for a MYRIAD of reasons - you can't pull the 'overvaluing' string on all of them, sorry. Why, for example, did YOUR OWN property not sell recently? It was being fully marketed - Rightmove and all - did the Agent give YOU duff advice? Was YOURS £70k over-the-top as Mr Shipside and your goodself bleat out on a daily basis? Or was yours the ONLY ONE to be marketed "in the right range"? Did THAT confuse buyers? Did yours look cheap against the competition? Do you think that they may have taken this as an indication that there may be some underlying problem?

In a nutshell - you are misguided. Mr May summed you up perfectly - "...he has put the pieces together in the wrong order and reached a wrong conclusion."

Either that - or you have gone completely barking and are currently conga'ing with the fairies at the bottom of your neatly manicured, fence-enclosed, rear garden with patio area and floral borders...
Added by Realising Reality on 2012-02-22 11:13:53

It's that house asking prices, in too many cases, are not bearing a reasonable relationship with Land Registry sales price data for the area in question.

This is the fundamental problem needing to be tackled by sellers, in conjunction with receiving better advice than they currently do from their preferred selling agents.

The problem seems to be that many selling agents don't feel it's their job to give 'appropriate' asking price advice to their clients.
Added by PeeBee on 2012-02-22 10:38:57

"I don't agree that the wealth of indices and their vast inconsistencies have a huge impact on the market."

Oh, dear. Mr Realising Reality (can't even remember which name he uses these days, can he...?) clearly has a memory problem. THIS is what he says on his woeful website...

"...as is clearly shown by the Land Registry statistics on completed house sales and their differentials with average house asking prices. The whole of the housing market has suffered as a direct result of this failure."

So - which is it to be, Sir? DON'T have a huge impact - or WHOLE-OF-MARKET SUFFERING?

The lunatics HAVE taken over the asylum...
Added by Realising Reality on 2012-02-22 10:12:12

I would agree that contradiction between the various indices being reported across the country may create confusion with the general public and uncertainty in the market. On the other hand, it should help to keep the different systems of measuring market performance honest.

I don't agree that the wealth of indices and their vast inconsistencies have a huge impact on the market. They are simply charting the market and giving the market feedback about itself. This is extremely useful of course. It needs to be taken seriously by both owners and their advising agents. The more knowledge that is available in a specific market place, the more perfect that market will become.

Micro-markets do indeed exist as described and it is the job of each agent to understand them fully and to advise their clients appropriately.

Rather than taking the indices with a pinch of salt, as is suggested by the author of this article, dare I say that such useful data should be incorporated into the subsequent market appraisals given by all agents touting to new business from intending sellers?

Fat chance at present it seems.

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