In the final episode of 2023 for The Home Stretch podcast, Iain McKenzie, CEO of The Guild of Property Professionals, and Christopher Watkin, a distinguished property market specialist, delve into the intricacies of the property market in 2023 and offer an exclusive preview into what lies ahead in 2024. Additionally, the two industry experts address the age-old question: is the Boxing Day Bounce a real phenomenon or just a myth?
McKenzie kicks off the episode with words of appreciation for his esteemed guest, saying, "before we get into this, Chris, I actually just want to give a big thank you to you on behalf of the entire industry, because every single week you've been dispelling the myths about the fact that the housing market is going to crash and actually putting reality and data into people's vision, to help them, help their customers, make informed decisions."
Watkin goes on by reciting insightful commentary on the current state of the property market, discussing key metrics such as listings, price reductions, and sales fall-throughs. He provides compelling statistics, stating, "we won't know the exact figure until probably May or June 2024, but I believe that we'll end on 885,000 residential UK transactions. Fundamentally, we are approximately 23 percent below last year's figures in terms of the number of transactions. And transactions, of course, are what we actually get paid on. So estate agents are going to be paid on fewer properties this year than they did last year and they're still going to be paid around 10 percent less than 2017 / 18 /19. In 2022, for every 100 houses that an agent put on to the market, they would have exchanged contracts on 65 of the properties. This year it's 52, so that's a drop of 20 percent."
McKenzie adds, "The interesting thing is, 20-odd years ago, when I used to do a business plan before there was the data that we have now, I always used to assume a 50% completion to listing ratio. So if I wanted to sell 100 houses, I had to put 200 on the market, and that's pretty much where we are now. The last two years have been extreme, but now we're just in a normalised marketplace."
Chris Watkin, known for his statistical expertise, shares valuable insights into pound-per-square-foot figures, emphasising the correlation between the pound per square foot at sale agreed and the Land Registry index. He predicts a slight dip in house prices, followed by a recovery, stating, "House prices are bumbling along quite nicely at plus or minus 1 or 2 percent."
The podcast episode concludes with a discussion on the Boxing Day Bounce, where Iain and Chris explore the reality behind this phenomenon. Watkin offers a pragmatic perspective, stating, "The simple thing is, it's a marketing ploy. What's your opinion?" To which McKenzie responds, "an agent always has to be honourable and give their version of the truth, and so it isn't right to be misleading to people. But if it helps a customer make a legitimate decision at a time that they don't make the decision, then that's good. My understanding has always been based upon data and feedback that I've received from the portals that there is an increase in activity, so therefore it is a good idea." Watkins goes on to reminisce on Connells’ ‘six-week challenge’, “you used to go up against the Connells and think, God's sake, it's just a sales ploy. What we used to do is have the five week sales challenge. Hey, if Connells could do it, six will do it in five!"
As the podcast episode draws to a close, McKenzie asks, "what should agents be doing, or planning to do, next year?" Watkin responds with a call to action for real estate professionals, urging them to adapt and excel in the evolving market. He emphasises the importance of teaching colleagues how to navigate the challenges of the current market landscape, "teach your colleagues how to deal with this type of market. The ultimate thing is this, we all act and look the same. The only difference is you and your team." Furthermore, Chris addresses a critical gap in the industry, highlighting the need for comprehensive training and development. He challenges the status quo, stating, "I find it truly fascinating, Iain, that away from the top 20 estate agents that have their own training departments, there's around 12,000 estate agency firms out there, and I challenge anyone to name me more than 10 estate agency trainers. We want to be a profession; we're an industry. Well, surely, if we want to be a profession, then we need to train and develop."
To hear this conversation in full visit The Home Stretch podcast.