Buyers get their own back

The strong-arm tactics of certain selling agents won't wash in a cooling market, says Stephen Pritchard
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The Independent Online

Mortgage advances fell once again in October, according to the most recent statistics from the Council of Mortgage Lenders (CML). The trade body's monthly survey is further evidence that the housing market has cooled.

Mortgage advances fell once again in October, according to the most recent statistics from the Council of Mortgage Lenders (CML). The trade body's monthly survey is further evidence that the housing market has cooled.

This should be good news for home buyers. Although house prices have yet to show any significant falls - and economists seem confident that prices will not crash - much of the froth appears to have come off the market. Instead of dozens of buyers chasing properties and bidding up prices, a slower market should mean more realistic asking prices, and sellers who are more open to offers.

Buyers will be hoping, too, that the slower market will dissuade vendors, and their estate agents, from some of the more obstructive tactics they adopted when the market was rising fast.

Clearly, gazumping is less likely to happen in a level market than it is in one where prices are rising quickly. But other tactics, such as agents refusing to accept offers - or in some cases even to show properties - to buyers whose own homes were not on the market or even under offer should become less commonplace, With fewer buyers around, such strong-arm tactics will no longer wash.

According to Peter Bolton King, chief executive of the National Association of Estate Agents, a good selling agent will still need to make enquiries about whether a buyer is in a position to go ahead. But agents will not want to deter buyers who may well be genuine.

As the market cools, both the buyers and sellers who are still active are likely to be serious ones. Vendors who are just "dipping a toe in the water" to test the market are in any case less likely to do so in the run-up to Christmas.

Bolton King notes that this means that sellers who need to move, perhaps because of a job relocation or for schools, account for a higher proportion of sellers. Such vendors are more likely to be open to reasonable offers.

The National Association of Estate Agents expects prices to rise next year, but gently, at around three per cent. In such an environment, rather than one of double-digit growth, there is less pressure on both sides to secure an early deal.

A seller may well accept a good offer from a buyer who has not yet sold their house, because a delay is less likely to mean that they lose out financially as prices rise. A buyer, for their part, may be happy to put an offer on a property where the buyer is involved in an onward chain, because they know they have time on their hands.

But there is often a lag between the market cooling, and vendors reflecting this in asking prices. "When the market starts to change, it often takes vendors about six months to realise it," says Bolton King.

"They may initially be reluctant to bring down the asking price. But it is changing, and it is giving buyers the upper hand."

Buyers, though, may well prefer to blame estate agents rather than sellers for some practices that have made home buying harder. One of the areas where buyers have often felt under most pressure is to organise their finances quickly. Sometimes, that pressure translated into buying property through a financial adviser linked to the selling agent.

According to the lender Abbey, which surveyed first-time buyers over the summer, as many as 35 per cent felt under pressure to arrange finances quickly. And as many as 24 per cent of buyers were told that they risked losing a property if they did not act in time.

"It's alarming that the majority of first-time buyers take the first mortgage they're offered," says Angus Porter, Abbey's customer director. "Even more worrying is that many of them feel pressurised into doing so." He adds that with the number of mortgage deals on the market, buyers should be wary of rushing into any financing deal.

Bolton King agrees that buyers should not be pressurised into organising their financing, and says that good estate agents will not do this. "One thing a slow market does do is bring out the good estate agents," he says.

None the less, a buyer who is well prepared will be in a stronger position when it comes to finding the right house, at the right price, than one who has yet to organise his or her financial position.

"If you want the best chance, you have to get yourself in a position where you can make a sensible bid and can go ahead," he says. A buyer with all their paperwork in order may find that, in the current market, their offer is accepted even if it falls short of the asking price.