Like almost every other business sector in the UK, the estate and property business has undergone some changes, post Brexit. Although there were early predictions of the ramifications that the UK’s exit from the European Union would have, only a narrow minority of them predicted the actual consequences, the ones that we are seeing today.
The definitive results of the vote are yet to manifest themselves, for every online estate agency UK, and the property business in general.
UK Residential Property Market Post-Brexit
The nature of the change has varied across the country, depending upon the type of property common in certain areas. The private, residential property sector has seen significant variation as well, with a decline in value being the most common occurrence.
There were several surveys conducted by the Royal Institute of Chartered Surveyors on the effects that Brexit will have on residential property in the UK. One of those surveys emphasised on a period of three months, directly following the momentous vote. A 27 percent majority of the opinions were in favour of a fall in housing prices.
The consequences are slightly weightier than that however. Due to an expert estimate, the sudden change in attitude and the fall in prices for residential properties will persist for up to 12 months after the Brexit. Although there are still conflicting reports issuing from different media sources, this recent prediction shows indications of remaining true, as we can see from the behaviour of homeowners and property investors throughout the UK.
Sudden Fall in Enquiries, after the Referendum
This sudden shift was not only limited to the asking prices of the properties. Compared to previous years, the number of enquiries from buyers as well as estate agents fell by a surprising 16 percent. This is, as compared to the same time bracket, a year ago. Although there are a number of media outlets stating that the property market has experienced no more than the usual upheaval, the plethora of evidence proves otherwise.
Similarly, the number of new properties coming on to the market, dropped by a degree. This was mainly due to the sentiment regarding the vote itself, and the general uncertainty in the minds of prospective buyers and sellers. The general public was not sure as to what the outcome of the vote would be on the property market and it showed in the generally sluggish owner and buyer response.
Foreign Interest replacing Domestic in the Property Market
There is a new, unprecedented phenomenon that has been observed in the UK’s and especially London’s property market. Following the shocking decision, as domestic property buyers all but pulled out of the market, there was a surprising increase in foreign enquiries regarding UK properties. The Director of Sales at Chesterton’s, reported a barrage of incoming calls from investors and property magnates as well as well-off homeowners from the Middle East and the rest of Europe, all enquiring about UK properties.
Even an online estate agency that may have enjoyed a degree of ease and smooth sailing, will eventually note this sudden alteration in the nature of the market.
This occurrence has been observed before as well, albeit at a much smaller scale, as the majority of the UK’s and specifically, the capital’s property market have historically been dominated by the domestic buyer, seller and trader.
However, since the deciding vote, a number of prime properties have already been picked up by foreign investors, with an increase in this statistic being predicted by experts. This change of interest was accompanied by the sudden yet somewhat expected fall in the value of the pound sterling. Investors worldwide saw this decrease in value as an opportunity to purchase as much of UK’s property as possible, something that has not been seen before at this scale, owing largely due to the usually high property prices.
Although this shows that the property market in the UK is not bound to fall as many prophesised, there will be, as there have been, several value, opinion and interest shifts in the coming months.
Domestic Buyers Withdrawing from the Market
Out of fear of financial loss, stemming from the wave of rumours that predict impending doom, a great number of local buyers in the UK have now started to pull out of deals. This is not only true for people born in the UK. A great number of foreign investors and homeowners as well as employees in foreign based establishments have started to withdraw from their respective positions, out of widespread concern for monetary damage.
The Persistent Minority
Despite the number of UK based buyers and investors pulling out, it has been predicted that some UK locals may not follow the withdrawal trend. This may be due to the current state of the market or a general unwillingness to sell at all. There is currently not much evidence to accurately predict what the future would hold for this minority in terms of finances.
Buyers Now Seeking Greater Bargains
For many years now, the bargain culture has been prevalent in the UK property business. Prices had seen a continuous rise for some time, pre-Brexit; and the buyer had started haggling more and more, in order to get a good deal on their investment.
This process of discount through vigorous bargain has been taken up a notch. The great majority of vendors, just as confused by the vote as the general public, have come to the realisation that in order to sell, they need to bring the prices down.
The EU referendum has not only affected the property vendors in this way. Local buyers are now displaying more caution than ever, when looking for and purchasing property. This is mostly due to the uncertainty already surrounding the future of the UK property and estate market. Buyers want to shield themselves from any further declines in property prices, and so, they have begun demanding better prices and more valuable deals.
Price Cuts being viewed as Corrections
One observation regarding the fall in prices is that the price cuts are not bad news. Some view it as a correction in the already overpriced market; something to even out the divide between owners and those struggling to have their own property.
This was the case for areas such as London and most of southern England, the highest price regions in the country. The regions have been ‘saved’ in a manner, by foreign buyers. However, the situation still remains uncertain for the most part, regarding the future of local buyer stake in the UK property market.
It is true that you might find yourself worrying about the return, if you wish to sell your property quickly. But for the buyer, this means that a formerly expensive and unattainable property might have been overpriced already. This is where the majority of the contention lies between the private buyer and the private seller.
The Vote’s Consequences according to UK Estate Agents
There has been a general air of pessimism in the estate agent community in the UK since the momentous decision, taken on the 23rd of June. As the vote continues to make waves among various business sectors and areas, the estate agents appear similarly affected by the vote. Touting conflicting numbers but all agreed on the negative impact of the Brexit vote, the property vendor and agent community remains adamant on the considerable fall in property value and what that would mean for the business.
The Brexit Vote and its Impact on the Online Estate Agency
The online estate agency UK, just like its non-online counterpart, has been affected in some ways by the Brexit vote. As mentioned earlier, the online estate agency has hitherto enjoyed relative success and smooth sailing, despite the ongoing fluctuation in the markets in the years that it has existed.
The onset of the Brexit phenomenon brought with it winds of doubt on the online property business. The effects of the decision were, for the most part, predicted with the properties themselves and the market as a whole in mind. Very little ponderance was given to the business in the online world.
Even now, there are very few to almost no actual surveys being conducted on the opinions of the people as well as the online estate agents, with respect to the impact of Brexit on the online estate agencies.
A Shift in the Property Business
As we have seen in the past, regarding the move from brick and mortar to an online presence, the landscape has changed considerably for both the buyer and the estate agent. A large number of homeowners gradually took their activities online and the estate agents followed suit. The property business changed massively as the property market, although based solidly on the ground, took to cyberspace in essence.
More recently, we saw new trends take root in the online property marketplace. As competition between agencies increased, vendor prices dropped to a degree, allowing the buyer greater scope and opportunity as well as more choices.
Specific Changes on the Online Property Business caused by the Brexit
Although the property business as a whole, along with business in general, has been affected by the deciding vote, there are some specific changes that have been brought forth as a result of the decision.
Below are some of the most major changes that the online property business is bound to undergo, as the after-effects of the vote make their presence felt.
- Accurate valuation is next to impossible: In light of recent events, the market value of properties is almost impossible to determine. There have already been significant changes in prices, with some areas experiencing up to a 15 percent decline in residential property value. Whether you wish to sell your property online or simply get an estimate on its value, there are very few chances of an accurate valuation. The situation seems to be settling however. There have been indications that the property market will see resurgence or if not, some stability in the coming months, as England shakes off post-Brexit upheavals.
- Different areas have undergone different changes: The online estate agency works on the principles of area/region wise uniformity in prices. This is how an online estate agent guides you with respect to your specific area. The Brexit case however, has changed the scenario for the online estate agent in the way that different regions have experienced varying degrees of value decline. This point is in direct relation with the property valuation dilemma, as it is almost impossible to give a precise valuation of a property, when there are consistent fluctuations in the market.
- The complexity of the business is more visible: The advent of the internet has made the property business significantly easier for buyers and sellers, as well as the estate agents themselves. However, even though it is still less tedious than conventional property trading, the variation in prices has upset the relative equilibrium, when it comes to region-wise operation.
- Profits are falling as transactions result in withdrawals: Probably the most significant difference is the fall in estate agents’ profit. As mentioned previously, the majority of buyers and investors are withdrawing from transactions due to financial uncertainty. This is starting to reflect on estate agencies in terms of lower profits from local sources. The client withdrawal situation is not limited to prospective clients either. Those with transactions already under way are opting out of deals while the direction of the market is still hazy.
- Not enough evidence to determine an outcome: The issue is still new and there is not enough evidence to determine what the results of the vote will mean for the property business in the UK, in the long term. This is true not only for the online property business, but the business as a whole.
How the Online Property Business is Coping with the Brexit Crunch
Individual online estate agents as well as groups have started to come to terms with the current state of the market in their own unique ways. The majority of the agents have now started to take opportunities as they come. And they are mostly coming in the shape of foreign interest, as discussed earlier.
The clients have changed as the very mood of the business underwent a variation. People who once saw the UK property landscape as a viable business opportunity are now pulling out, as new investors are picking up what is being left off at a rapid pace.
Online estate agents have largely stuck to their usual practice, despite the changing circumstances. However, there are several key points of difference, as mentioned above, when talking about how online estate agents operated pre-Brexit versus now.
To cope with those differences, online estate agents and agencies have implemented the following changes. It is important to note that these changes are largely temporary, as the situation is still in the process of settling down to a conclusion.
Estate agents operating on estimates: As market values of various properties in assorted regions and areas continue to experience inconsistency, estate agents have begun to operate on averages and estimates of the prices. Although there was always an element of estimation as far as online property valuation was concerned, it has now generally taken over the online property trade.
What this essentially means is that if you wish to sell your property online, an online estate agent will not have an accurate value of the property in question. Instead, they will produce a median value, calculated by taking into account all the fluctuations that have occurred, and all the values that the prices have landed on.
Online estate agents have adapted to regional value changes: This presents one of the biggest advantages of the online property business; the flexibility and adaptability of the agents and agencies involved in it.
As property worth changed across the country, online estate agencies adapted accordingly, implementing the aforementioned change on to their valuation procedures. This is a positive change and it displays the efficiency of the online estate agent, despite wavering circumstances. Accuracy is still lacking. However, online estate agents are maintaining their standards for the most part.
The business is being kept as uncomplicated as possible: Despite the current situation having brought the inherent complexity of the property business out into the light, agents are doing all they can to maintain as much simplicity as possible.
To accomplish this, estate agents are now keeping a closer eye than ever, on the rise and fall and various minute changes in the property industry. Their estimates are usually more accurate than those working from a non-online base.
Foreign clients are now being catered to: This is by and large, the only way how online estate agents are maintaining a reasonable income of profits. Foreign clients have begun to show an increasing interest in the local UK property market, which was predominantly covered by local investors before the vote.
By catering to interested foreign buyers, estate agents have kept themselves out of potential bankruptcy and for the most part, refrained from issuing profit warnings.
Another method of financial redemption that online estate agents have adopted is competitive costing. By lowering the vendor costs, they have attracted local clients even though the majority of them have withdrawn at some point. And yet a reasonable number have remained in place, attracted by the lower costs.
Online estate agents have persisted despite lack of evidence: Until the situation is resolved somehow, and brought to a point where estate agents can make definitive decisions, they are persisting with their current courses of action. As there are predictions of some stability in the future, the online property business and traders can be expected to stabilise as well, with regard to the accuracy and efficiency of their service.
How to Sell your Property Online in the Current UK Market
If you wish to sell your property, UK offers many options. Despite the variation in prices, the best possible decision for you would be to hire the services of an online estate agent. Online estate agencies have several advantages over conventional property vendors. But by far the biggest advantage, especially in recent times, is the significantly lower fees that online estate agencies charge. Cost saving would be especially beneficial to the local seller, as property prices have already experienced a decline.
Advantages of using an online estate agency in the post-Brexit market
Below are some additional benefits you can reap if you sell your property quickly using an online estate agency.
Comparatively easier property valuation: The process of property valuation became somewhat complex following the separation vote, as noted earlier, due to the variation in property costs across the country. And to tackle this issue, online estate agencies have now adjusted their valuation procedures accordingly. Although still not as accurate as before, the estimates provided by online agents are considerably more precise than the ones provided by conventional, non-online sources.
- Better understanding of target area: Online estate agents have a better understanding of the area that they work in. This level of understanding is essential, as the nature of their business demands up to date knowledge of what they offer to prospective clients. The knowledge aspect and its importance is specifically augmented by the fact that the market is still subject to change and will remain variable until the dust settles in the months to come.
- Ease and fluidity of service: Whereas a conventional estate agency might be significantly hindered by the uncertainty of the market, an online agency will be comparatively more fluid. This is mainly due to the automation of time consuming processes that a conventional estate agency performs. Contacting an online estate agency, as well as understanding the change in the system will be a lot easier and stress free. Conventional property traders have a multi-layered process that is often more confusing than it is beneficial. An online estate agency eases the procedures quite a bit, making for a much more fluid process, from start to finish.
- Consistent quality despite tumultuous circumstances: Another noteworthy advantage of using an online property dealer is the consistency of quality in their work. This is again due to the automation of several services and procedures where there would be a greater margin for human error. Areas such as property valuation, cost related guesswork and variation of value in different regions, all are performed without much compromise on quality and accuracy. The reason for this is the greater accuracy that online estate agencies are capable of.
- Service transparency is preserved online: This is another aspect of the business that an online estate agency excels at. Seeing as confusion is rife at the moment, almost all over UK, a business that can offer superior transparency and less chances of misguidance will be the obvious choice for any client, in any business. The online property business in particular, could benefit from this advantage, as could their clients.
How to sell your property using an online estate agency
As we established earlier, to sell your property, UK’s best option is using an online estate agency. The following guide will explain why in detail, as well as discussing the process by which you can sell your property quickly using an online estate agency.
1) Get your property valuated: The valuation process is the first step towards selling your property. In the case of an online estate agency, it is usually conducted via an online form that the seller would fill, which then calculates the approximate price of the property. This property is based on approximation, and calculated upon an average that is specific to the region in which the property is located. Property valuation will provide an estimate value for your property, which you can then decide to act upon, when asking for a price of your choice.
There are several online tools that are available as well, for the purpose of property evaluation. These online tools are most often from independent sources and they use the same evaluation process as online property dealers, to calculate an approximate price. The use of most online tools is free of cost as well, which is an added convenience and point of ease for the seller.
The best online valuation tool is provided by iMoveEstates; which is both efficient as well as accurate, as compared to the rest of the market.
2) Contact an online estate agency: The next step is to contact an online estate agent of your choice. You can either choose to contact an independent agent or an online agency. The former is a slightly more cost-effective choice. However, due to there being only a single professional responsible for all the tasks, there may be some compromises on quality and accuracy, as well as efficiency. The latter choice provides a more significant degree of quality assurance as well as a much broader scope, when it comes to successfully selling your property for a good price.
The vendor’s fee is slightly higher as well, for the second option. However, with the higher charge, a seller can expect superior service.
3) Provide necessary information and viewings: After you have chosen an online estate agency to represent you, provide the selected agency with all the relevant details. Information such as the type of property you own, the area in which it is located, the amount of value addition work that has been done on it and the approximate value. This last detail can only be submitted if an online property valuation has already been done.
It is beneficial to first get a free valuation on your own time, instead of letting the agency do it. This way, you will already have an idea of how much your property is worth, which will aid in avoiding any short-changing.
After the initial submission of details, the online estate agency will either send a representative to visit the property or demand high-quality pictures. The former will take place in most cases as a representative can perform a viewing much more comprehensively.
4) Wait for prospective buyers: After the above steps have been completed, all you need to do to sell your property quickly is to wait for prospective buyers. An online estate agency can bring in a much larger group of buyers as compared to conventional estate agencies. This is mainly due to their much more accessible online presence, as well as the potential of your property to reach a much wider buyer base.
Key Factors for Consideration when Selling your Property in the Post-Brexit Market
It is extremely necessary to note that despite the various advantages of using an online property dealer as compared to a conventional one, especially in the post-vote market; the situation is still rocky as far as stability in prices is concerned. The decision has proven to be much more influential in affecting the property market, than initially expected. As such, proceeding with caution is advised when selling your property through any means.
Additionally, it is crucial to first determine whether or not you should be selling your property in the first place. There is limited evidence to prove either way, and the only influencing points are opinions from various media outlets. Therefore, waiting for a definitive outcome may prove to be enormously beneficial, financially.
In conclusion, it is advised to keep a keen eye on the variations in the property market in the UK, as doing so will keep you in the know whenever the situation is settling down and stabilising.