The Property & Homemover End of Year Report for 2023 released by property data and insights analytics firm, TwentyCi last week, has revealed some interesting facts about the housing market including the ongoing decline in market share of online/hybrid agents, as more people move away from the less personable ‘agency’ in favour of the more traditional High Street and self-employed estate agents.
Last week we reported that independent estate agents across the Southwest were already experiencing a higher volume of activity with the sentiment that the market will be much stronger in 2024.
Using actual data from HM treasury, the TwentyCi report echo’s that sentiment. It reveals no change in the average asking price of property in the Southwest in the last year - asking prices rose slightly in some regions but nowhere in the UK did they decline. Sellers in the UK achieved 96.6% of their original asking price, while in the Southwest this was 96.1%. Across the UK, there were 63% more price changes, 35% more withdrawals and 12% fewer sales agreed than in 2022, all reflecting the decline in buyer demand as a direct consequence of strong economic headwinds, the significant rise in interest rates, and mortgage availability.
On these statistics, Andrew Simmonds, chairman of the Experts in Property, commented: “Having navigated buyers and sellers through all the economic factors that affected last year’s housing market, none of these figures are particularly surprising. It could have been a lot worse. We are currently experiencing a shift in the market with a greater supply of property and buyer demand on the rise, influenced by rising rents, downward inflation and mortgage interest rates, and the widest choice of mortgage products since 2008, all of which lead us to predict a more positive outcome in all these statistics for 2024.”
Other statistics show the number of new instructions was up by 2%, the time to sell rose to 62 days, although this is still 18% lower than pre-pandemic norms, and the time to complete stands at 123 days.
Of particular interest is the reported market share of agents. While around 1,800 estate and lettings agency branches sadly closed across the UK in 2023, the rising ‘Self-Employed Agent’ accounted for nearly 13% of new instructions in Q4. Not that dissimilar to the traditional High Street agency, many members of the Experts in Property adopt this business model, using their local knowledge, expertise, and personal attention to successfully sell homes in their regions.
Given the rise and fall of several online/hybrid ‘agencies’ over the last decade, the volatility of this segment is reflected in the statistics with a continued drop in their overall market share over recent years, from 8% in Q4 2020 to just 5.5% in Q4 2023, with more than 70% of this share dominated by just three players.
The report states that: ‘One might have anticipated that a slowing property market and squeezed wallets would have sent sellers scrambling for the most cost-effective estate agent fee. Surprisingly this wasn’t the case. Instead, we saw cautious buyers embrace the expertise of traditional estate agents during such a turbulent economy, and thus market share for online/hybrid agents fell.’
Andrew continued: “The traditional estate agency model may be a bit old fashioned, but that’s because it’s proven as a winning formula. Our home is our biggest asset (as well as being our home) and as such sellers want to feel it’s in safe hands; they want an agent they can talk with face to face, who has an understanding of what they’re going through and the experience to negotiate the best price; and most importantly they need to trust their agent and rest assured they will be there throughout the whole process to see it through to completion. It’s just impossible to build that kind of relationship over the phone.
“A greater supply and a higher demand for property breeds a naturally higher level of competition for both buyers and sellers – that, along with potentially fluctuating prices and constant legislation changes, means there is as much of a need as ever for the skills of a traditional, trained and experienced, hands-on estate agent, who is there, who cares and is accountable.”
The Experts in Property is a network of independent estate agencies around the Southwest, all of which work together to sell clients’ homes – in person. To find your local office, look for the logo or visit www.theexpertsinproperty.co.uk/agents-directory.