British estate agents gloomy as even the bankers are selling (Feature)

By Anna Tomforde Oct 21, 2008, 5:07 GMT

London - It is the job of David Smith to keep on top of his box of index cards marked 'serious buyers.'

But as tight loans and tumbling prices keep a stranglehold on Britain's once buoyant property market, hardly any of his clients bother to ring back.

Estate agents like Smith are nostalgic about the days of the property boom when interested viewers would rush to compete for appointments to see the best properties as soon as they were advertised.

Britain's obsession with home ownership in a market distorted and overheated by a drastic disproportion between supply and demand has come to a sudden stop with the credit crunch.

Just a year ago, his work schedule would have been hectic, says Smith. But this year after the summer holidays, things just did not pick up again.

After calling up everyone in his box of cards, and getting no satisfactory response, he said: 'It's not down to the work you put in at the moment.'

Estate agents, condemned by many forced to deal with them as 'ruthless sharks' keen to earn a hefty commission on pricey sales, are dispirited, says Chris Brown, president of the National Association of Estate Agents (NAEA).

'The optimism and upbeat nature of most estate agents has been kicked out of them,' says Brown.

Drastic job cuts are already reported by agencies from a sector that is, like many others in the service industries, likely to emerge heavily streamlined from the current crisis.

Figures released recently show that estate agents in Britain sold an average of just 12.7 properties each in the last three months - which is about one a week - the lowest level of sales in 30 years.

They were selling more than double that amount over the same period last year, and 5.25 properties a week during the boom.

Meanwhile, the market is creating its own rules.

Buyers lucky enough to have the means to access the market are becoming adapt at playing the game of 'gazundering,' - driving down the price in the last minute citing market developments.

In London, men in suits have been seen waving their Financial Times at hard-pressed sellers on the doorstep demanding to cut their price in line with the house price fall in the area.

'There is a stand-off in many parts of the country between people who have got a house to sell and people who have got mortgage credit, and they cannot agree on a price,' said Dave Miles of London's Imperial College.

People's expectations of what house prices would do was now a 'dominant factor' in the market, probably even more important than the availability of mortgage finance, said Miles.

Analysis of homes on the market shows that 20-per-cent reductions from original asking prices are typical, taking them back to levels seen in 2005 and 2006.

Actual completion prices are even lower because of an epidemic of gazundering that affects 'practically every deal,' said Charles Puxley of Jackson Stops & Staff.

Most buyers had 50-per-cent plus deposits and were from 'established money backgrounds' or had professional jobs like lawyers, he said.

Only the bankers, once among the top clients for estate agents, are no longer buying, he explained.

'Bankers are selling. We haven't had an applicant looking to buy who works in a bank for months.'