|low graphics version | feedback | help|
|You are in: Business|
Monday, 6 December, 1999, 20:02 GMT
Homes - a working divide
House prices are rising at their fastest rate in a decade in London and the South, as the gap with the rest of the UK widens.
Yet Prime Minister Tony Blair has been around Britain to try to deny a straight-forward north-south divide exists.
Mr Blair is trying to promote the message that the picture of wealth and prosperity is far more complex.
In aspects such as industrial growth he may be right, but housing could be the exception.
Who better to show this than estate agents?
While those in the south are able to sit back and wait for buyers to walk into the office, to earn them quick commission, their northern counterparts have to invest much more time and energy into sales, which bring lower returns.
Cheap and cheerful
In the summer, one housing estate in Newcastle upon Tyne made headlines because flats were sold for 50p - with a £25,000 improvement grant thrown in. In some spots across the North of England, prices have struggled to rise since then.
Terraced homes in Middlesborough, in the North East, sell for about £20,000, but for £85,000 in Wantage, Oxfordshire.
Michael Poole, who runs his own estate agency in the northern town, says: "If you want to be successful, you have to be very pro-active in the market in this area."
With average selling fees of only 1%, compared with anything up to 2.5% in the South, he and his team have to work twice as hard to make the same money.
And they have the extra burden of a high proportion of older housing stock. Properties more than about 40 years old often show up structural defects in the survey, and Mr Poole says this stage of negotiations is one of the most time-consuming.
"We have a lot of Victorian or 1930s' housing stock around here. The surveys often show the need for rewiring, re-roofing and damp-proofing - which means you have to keep the buyer sweet, persuade them not to pull out. They might refuse to buy, but in many cases you can talk them round and keep the sale," says Mr Poole.
"If you don't work hard round here, either you make no money or you fall flat on your face."
Promoting the business
The relatively slow market in the North also means his sales negotiators spend at least an hour a day ringing round their "priority" buyers - those who are ready or nearly ready to move.
Agents also need to actively promote their business, as well as the properties on their books, in order to attract new business.
"If you sit back and wait for buyers and sellers to come, you won't make much money. But if people know your name and see 'sold' boards up, they're more likely to come to you, so we have to pay attention to our image, too."
With the average time taken to sell a property at between four and eight weeks, the business can be very labour-intensive.
Selling no problem
Estate agents in London and the outskirts, by contrast, have no trouble attracting or keeping buyers.
They don't exactly put their feet up and wait for money to roll in, but they are so busy selling houses and competing for business that they rarely find the time they would like to ring round potential buyers.
Cuan Ryan, an independent agent in Wantage, says he and his partners have been "outrageously busy" in the past couple of years, during which time prices have soared by 60%.
Mr Ryan, of Buckell & Ballard says he would like to spend more time contacting buyers - but in practical terms it's impossible.
With average selling times of only two weeks and more buyers than sellers, agents such as Mr Ryan have found their jobs have changed dramatically since the recession.
"In the past year, it's not been the selling that's been the hard work, but competing to get the instruction in the first place."
And although things are slowing down now for Christmas, he is still confident that a five- or six-bedroomed house with a few acres of land would be snapped up the day it came on the market.
"People whose limit is £150,000 are constrained by money, but those in the heady heights of £1m or so won't quibble about the last £150,000 if the right property comes up."
In leafy Oxfordshire, buyers become suspicious of any house that remains unsold for more than four weeks.
So, by selling fewer homes, Buckell & Ballard can sell properties to the same total value as Mr Poole - and without having to chase a single buyer.
30 Nov 99 | Business
House prices rise strongly
13 Oct 99 | The Economy
London house prices streets ahead
02 Sep 99 | The Economy
House price rises hit 10-year high
24 Nov 99 | Business
House prices continue rising
22 Oct 99 | The Economy
Houses selling in record time
The BBC is not responsible for the content of external internet sites
Top Business stories now:
Links to more Business stories are at the foot of the page.
Links to more Business stories
|^^ Back to top
News Front Page | World | UK | UK Politics | Business | Sci/Tech | Health | Education | Entertainment | Talking Point | In Depth | AudioVideo
To BBC Sport>> | To BBC Weather>>
© MMIII | News Sources | Privacy