Napoleon was wrong – Eng­land is a na­tion of es­tate agents

Yorkshire Post - Property - - PROPERTY - Richard Smailes

AC­CORD­ING the to the Of­fice for Na­tional Sta­tis­tics, a record num­ber of peo­ple work in es­tate agents of­fices and the sec­tor is grow­ing so fast that it amounted to the fastest grow­ing part of the na­tional work­force in the three months end­ing in June 2013.

Out of the 334,000 to­tal num­ber of new jobs cre­ated in the econ­omy in the past year, one in four was cre­ated in the real es­tate sec­tor, which in­cludes es­tate agents and prop­erty de­vel­op­ers. Ac­cord­ing to the ONS 562,000 peo­ple are now em­ployed in the real es­tate sec­tor in the UK; the largest num­ber since records be­gan in 1978. What makes this all the more re­mark­able is when one con­sid­ers there are only around 130,000 po­lice­men and women in this coun­try, which equates to roughly one po­lice­man or woman per ev­ery 500 head of the pop­u­la­tion whereas on the sur­face it would ap­pear there is now one es­tate agent for ev­ery 44 homes in the UK.

The sta­tis­tics give cre­dence to the view that Bri­tain’s cur­rent growth is be­ing driven by a new hous­ing boom. Cer­tainly grow­ing con­fi­dence gen­er­ally, a surge in mort­gage ap­provals, ris­ing house prices na­tion­ally, new lev­els of in­vestor de­mand and Gov­ern­ment fund­ing ini­tia­tives are not only en­cour­ag­ing peo­ple to buy their own home but for many prop­erty own­ers to be­lieve that this is the right time to sell their prop­erty.

Much of this boom is be­ing driven by the surg­ing Lon­don hous­ing mar­ket, It is viewed as a safe haven for money by in­di­vid­u­als, funds and coun­tries. The eu­ro­zone cri­sis aptly demon­strated this with bil­lions of eu­ros pour­ing into the cap­i­tal and in par­tic­u­lar Chelsea, May­fair, Kens­ing­ton and Bel­gravia.

Set against this, 26 per cent of Lon­don house­holds re­ceived hous­ing ben­e­fit in 2012, a higher pro­por­tion, and one that has grown faster than the av­er­age for Eng­land, so said the New Pol­icy In­sti­tute. It would ap­pear that not only do we have a north/south di­vide but there ap­pears to be a di­vi­sion in Lon­don as well.

This in­flux of new money has then, ac­cord­ing to the ONS, in­creased Lon­don house prices by on av­er­age 9.7 per cent be­tween July 2012 and July 2013. Yet in the sur­round­ing sub­urbs they rose by a mere 2.6 per cent and the far­ther away from Lon­don you go, the lower the num­bers be­come. How­ever, the rip­ple ef­fect is al­ready hap­pen­ing and will grow grad­u­ally as more and more Lon­don home own­ers get dis­placed for one rea­son or another and money finds its way into the re­gions.

So with a plethora of ev­i­dence sup­port­ing house price growth is it any won­der that es­tate agents are tak­ing on more staff to han­dle the ex­pected in­creased de­mand and what does this rise of the es­tate agent mean for home own­ers in gen­eral? Well, over­all it has to be pos­i­tive news. Cer­tainly it is fur­ther ev­i­dence that es­tate agents ex­pect house prices to keep ris­ing in the short to medium term. This as­sump­tion is based upon de­mand con­tin­u­ing to out­strip sup­ply as it has done over the past decade as in­suf­fi­cient houses are built to sat­isfy de­mand and prop­erty is con­tin­ued to be seen by in­vestors as an as­set class in its own right.

It also sug­gests that the in­crease in the num­ber of es­tate agents will cre­ate in­creased com­pe­ti­tion be­tween es­tate agents vy­ing for prospec­tive sales. Of course, es­tate agency is a re­sults driven busi­ness, so sales are key, there­fore prop­erty own­ers should ex­pect to see a greater im­prove­ment in ser­vices and the pro­fes­sion­al­ism shown by es­tate agents but should al­ways en­sure that any es­tate agent used is a mem­ber of RICS, NAEA, NAVA, ARLA and the prop­erty om­buds­man scheme.

Napoleon Bon­a­parte is of­ten credited with coin­ing the phrase, “Eng­land is a na­tion of shop­keep­ers”. Fast for­ward to to­day and it seems the phrase should more cor­rectly be “Eng­land is a na­tion of es­tate agents”.

Richard Smailes is a part­ner at Feather Smailes Scales, Har­ro­gate.

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