Napoleon was wrong – England is a nation of estate agents
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.