As we celebrate many years of collective experience in the Buying Agent Partnership, we’ve been looking back on the UK’s property market history. Without doubt, the most significant change has come courtesy of the internet. Buyers and sellers alike can use the internet to hunt down the best deals and search for properties across a wide area. However, a wealth of online information is no substitute for years of local experience. That’s why property finders and their services are more popular now than they ever have been. We’re here to do the time-consuming yet crucial legwork of finding and viewing properties in person, and handling the human interaction of negotiating the price.
Browsing Online: Changing Property Market History
Clearly, the biggest change in the past 30 years of property market history has been the ability to search for properties online. Scrolling through online listings has simplified the process to such an extent that people do it almost out of habit. It is not uncommon for individuals to regularly search websites even if they have little active interest in moving home. In fact, Direct Line estimates that 63% of us Brits do so, with 2.6 million people browsing at least once a day. Property browsing has well and truly become a national hobby.
Interestingly, research by Strata Homes indicates that 43% of us knowingly search for properties out of our price range. For many, they simply enjoy it as a hobby but for others, such browsing acts as a motivation to work harder. Whatever the reasoning, it is far easier to casually search for properties online than go to all the effort of visiting an estate agent or waiting for the next week’s paper.
Rise In Hybrid and Online Agencies
In the last few years, online and hybrid agencies have risen to far greater prominence. Attracting customers with promises of cheaper fees and greater convenience, they typically take a more hands off approach than a traditional estate agent. Whereas a high street estate agent would normally calculate their fee at approximately 1.5% of the property’s final sale price, online agents charge a flat fee of as little as £500. This fee is paid upfront and is non-refundable, meaning that you pay even if the house doesn’t sell. Since it is a fixed fee, you stand to make a greater saving the more expensive your property is.
Aside from the finances, the greatest point of difference between online and traditional estate agents is the level of professional advice and input. For that initial fee of £500 you are unlikely to receive professionally shot photos, detailed floorplans or a ‘for sale’ sign. Unless you choose to pay extra, you may also have to handle all house viewings and take the lead on negotiations. From a buyer’s perspective, it can be somewhat disconcerting to deal with the seller themselves rather than an intermediary. A property finder can take that weight off your shoulders and handle everything.
Choosing A Mortgage
Thanks to the rise of internet price comparison websites, change is afoot in the world of mortgage brokering. Previously, comparison websites simply ranked mortgages by their rate, their APR and the associated fees, and couldn’t definitively tell you what you’re eligible for. New artificial intelligence technologies from digital brokers are beginning to add that crucial element of personalisation, allowing you to generate a more accurate estimation of what you’re likely to be able to borrow.
Several lenders now allow borrowers to complete sections of the actual application process online, and more extensive technology is in development.
Mortgages themselves have changed a lot in the past 30 years. Back when Buying Agent Partnership was founded in 1988, endowment mortgages (a form of interest-only mortgage) were at the peak of their popularity. Theoretically, once matured the investments made as part of this monthly arrangement would be enough to pay off the loan, possibly even with some money left over enjoy. However, for many people that proved not to be the case thanks to overly-optimistic predictions, and they were left with a significant shortfall.
In the intervening decades, there has been a move away from interest-only mortgages. Endowment mortgages specifically have fallen from an estimated peak of 1 million agreements in one year, to just 27 in 2011-12. The vast majority of new borrowers will choose a form of repayment mortgages, fixed or variable. Burnt by various housing crashes, we are now more adverse to taking financial risks and some lenders have even stopped offering interest-only mortgages.
Buying Agent Partnership have extensive experience in the UK property market, with local specialists. Contact us to discuss how we can help you.