NOW & THEN: The changing face of the mechanics behind prime London's sales market
6 March 2017
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The Docklands were a far and distant land and commission splits were done over a drink in the pub. London's property market has come a long way in the past 30 years.
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AB – Welcome to you both. There’s been more than a few changes over the years in the way that agents working in London sell property. William, when did you begin your career in the prime London housing market?
WGC – I started work here in the mid-1980s. In fact collectively, Anthony (Payne) and I have more than 60 years’ experience in the sector.
AB – and Chris?
CW – I started back in 2001 where my first job was in the City and Docklands.
AB – William – did the Docklands even exist as a residential area when you began working?
WGC – no, it was very early days. I remember Savills being one of the first agents to take a look at the area back in the 1990s and everyone asking - where is it?! In fact it was referred to at the time as the Deadlands!
AB – it sounds as though you were firmly rooted in the more traditional areas of London?
WGC – yes my first office was at 138 Sloane Street, next to Savills – who are still there today – and where Hackett is now. When the lease expired we moved to 26A Cadogan Square where we had a ground floor office. The rest of the building was leased out to George Harrison’s company, Handmade Films.
CW - what was the market like then?
WGC – It was an extraordinarily busy market until 1989 when the market pretty much came to an absolute halt and just died – almost overnight.
CW – this is when those long periods of sole agency we’ve heard about, came into being?
WGC - yes exactly. Back then it was the norm to take on an instruction - sole agency- for a year.
CW – unheard of today! Where did you get your instructions from?
WGC – well it was pre-internet days, so we were totally reliant on advertising and spent so much money on it. The number one publication was the Portrait magazine where you’d be expected to pay £1,200 a page, absolutely no discounts and beholden to 12 month contracts.
CW – so this was before the agents set up the London Magazine? /…
WGC – yes. But actually most of our business was done in the pub. ‘The Surprise’ in Chelsea on a Friday night was when all the agents would get together. We’d talk about properties we had for sale - and if anyone had a buyer to match, we’d offer a commission split. On a handshake we would give a percentage of our 2.5% sole agency fee.
CW – a pre-cursor to LonRes! And who were your buyers?
WGC – prime central London was all about the domestic market then.
CW – and international buyers?
WGC – well the French have always been interested in South Kensington; we had an influx of Italian buyers to the capital. Arabs of course, and the occasional American banker too. The Russians started to come into the market in about 1995. The small independent agents really came into their own during this period, becoming specialists in what overseas buyers were looking for and where they wanted to live.
CW – what strikes me is that as agents you really knew one another well and understood each other’s markets. Some of the core values that lie behind LonRes today.
WGC – yes I think that’s true. Back then as agents we worked hard to give a personalised service. We would for example, send introductory letters to homeowners, but rather than send a generic letter, I can remember pouring over the electoral register to match names to properties. We’d top and tail our letters, add in relevant brochures, and if anyone wrote back with a letter of complaint, we’d actually go round to their home to apologise! Unheard of today. Today, the whole system is automated and far less personal.
CW – it’s interesting, the online agents offering couldn’t be further away from the world you began your career in.
AB – Can you see the attraction of online agents though?
CW – yes at a certain price level, I can see why sellers might decide to give them a go. Local market knowledge basically becomes secondary to costings. There’s a whole generation coming through who turn to the internet to help with so many aspects of their life, you can see why they might just decide to give an online agent a go. It’s familiar territory for them. That said, on more expensive properties, the margins are much bigger – so any mistake could cost the seller dear.
WGC – but even with online agents, sellers need local know-how – generally from an agent working in an area – to be able to advise on price.
CW – I think what you’re saying is that’s still a place for the traditional agent.
WGC – yes and they’ll always be a place for good service. Not everyone has the time or inclination to sell their own home.
AB – and prices – I think they may have gone up over the years?!
WGC – they certainly have. Back in the late 1980s a property priced at £500,000 was quite something! It’s interesting to see how the prime market has got bigger over the years. And it’s no longer one market, we’ve broken it down into distinct categories too. Prime, super prime and prime fringe are all terms that we’re now very familiar with.
AB – Chris, I know you began your career in letting homes in the City fringes and Docklands. How did you go about finding landlords?
CW – well believe it or not, we’d trawl through Gumtree and/or Loot putting in calls to landlords offering to help. It was a tactic employed by lots of agents at the time. Two or three years down the line, landlords got a bit fed up of taking cold calls and as a means of drumming up business, it ceased to work.
WGC – the days before the portals had come onto the scene? Prime Location was one of the first property portal. Set up by agents, it was a cost effective way to advertise properties to a wider audience. As I remember, it didn’t actually make any money for the agent/owners until it was sold. Interesting there seem to be real parallels to be had here with the online agents of today.
CW - Technology is so much a part of our everyday lives that it stands to reason that the way we do business is constantly changing too.
WGC – I’d agree with that. However, I’d add that those companies who will do best are the same companies that understand and listen to their users and evolve with them. It’s definitely what we aim to do here at LonRes.
AB – thanks both!
William Carrington, Chairman, LonRes (WGC)
Chris Welch, Senior Sales Executive, LonRes (CW)
And taking notes – Alison Blease, PR Director, LonRes (AB)