Almost half – 45% – of homes taken off the market last year across the UK were not sold but withdrawn.
In London, the withdrawal ratio was an astonishing 61%. If you took London out of the equation, the withdrawal rate across England and Wales was 40%.
Even more astonishingly, 38% of the withdrawn properties had actually received an offer.
The potential fee income lost to agents was over £4bn.
The statistics are in a new joint report by Reapit and Dataloft.
The research was made possible by the introduction by Reapit of a management information dashboard monitoring properties withdrawn from sale.
Introducing the new report, called Lost Potential, Reapit CEO Gary Barker said that during testing of this feature, it became apparent that agents had not been measuring withdrawn properties effectively, and many thousands of pounds of agency commission were being lost.
Reapit decided to look more closely at the data, based on over 100,000 properties that were taken off the market last year because they were either sold or withdrawn.
It also commissioned Dataloft, an independent market intelligence business, to establish a benchmark by which agents could assess their own performance.
Barker says: “The findings are quite simply staggering.”
One finding is that withdrawals peaked in July and November last year; another is that higher priced homes were far more likely to be withdrawn.
Below £500,000, sales outweighed withdrawals; above that, withdrawals outweighed sales.
For example, in homes costing between £500,000 and £750,000, just 43% sold and 57% were withdrawn. In the £1m to £2m price bracket, 38% of homes taken off the market were sold, with 62% withdrawn.
The report does point out that the mood of the nation was generally unsettled last year, with a snap election and Brexit dominating the news.
The year could have been exceptional – or typical.
Nationally, London’s high withdrawal rate was followed by withdrawal rates of 47% in the east of England and 44% in the south east.
The withdrawal rate for Wales was 35%, and in Scotland 17%.
The report also offers insight into how quickly properties were withdrawn – an average of 5.5 months. Surprisingly, almost 40% of withdrawals occurred within three months of being listed. However, the report does not spell out whether the withdrawn properties went on to be listed with other agents; nor does it go into detail as to the reason for the withdrawals – although vendor impatience, problems with sales progression, and with chains are all mentioned.
The report points out that such high withdrawal rates do mean that vendors who pay upfront “have a high chance of disappointment”.
There is to be a webinar this Thursday presenting the findings.
Comments (12)
Here we go again… supposed ‘industry experts’ spouting MDT that some will swallow and some others will simply regurgitate because it suits their purpose.
A certain Mr Pryor never once attempted to respond to my questions on this thorny subject back in the days when Frau Renshaw was Landlady down the other pub, and he was spouting the “50% of properties that go to market don’t sell” ********. It’s a subject he likes to roll back out fairly regularly – and this year is no exception from what I can see on a quick rummage4 such *********** (credit: Jonnie).
Here’s just one example – an article carried by Rightmove in 2013 – where he whacks it out in the direction of every fan:
rightmove.co.uk/news/articles/industry-news/lies-of-house-price-statistics/
What’s that phrase about porkie pies and statistics? Coincidence that Mr Pryor’s ‘other love’ is the domestic variant of the even-toed ungulate family Suidae?
Thing is – it is not impossible to work out the true percentage of properties that are ‘withdrawn’ that are actually just that.
It is not impossible to work out what percentage of those properties were ‘withdrawn’ due to being sold by another Agent, as is the case of multi-listings. If one property is marketed by five Agents and it sells, then 80% of them were unsuccessful. That doesn’t mean that only 20% of listings sell – but headline-grabbers like Mr P lead you merrily down that path with a smile and a whistle.
It is not impossible. But of course the results wouldn’t sound anywhere near as sensational as those of the current headlines – so none of these headline makers want to bother.
No-one publishes news that isn’t newsworthy. And the headline-grabbers need to grab their headlines.
I’d REALLY like some answers on this – so I’ve Tweeted Mr Barker as follows:
Mr .@Barkergary Could you please advise what percentage of the “withdrawals” your report refers to WERE ACTUALLY SOLD – but through a) other Agencies using your software or b) Agencies that do not use your software rather than those you quote? Thanks.
Be interesting to see whether I get a response – but I’m confident that it will be far more interesting if I do…
Once again, Reapit trawling through their customers private data and this time sharing it with third parties – great!
And this is championed as an Eye Newsflash, seriously?!!
Reapit’s private equity company must be getting desperate now me thinks.
Is ReapIt mainly used by the countrywide group?
As much an advert for Reapit as a reliable piece of research, as it only takes into account their clients and does not factor in those who swap agents, as mentioned by others.
Taken as part of an overall picture, it goes to show that agents who over-value houses to win the business often don’t keep the client long enough in order to get paid.
Clients will always be seduced by higher valuations. This report does not say that they take their houses off the market and never move, thus wasting agents money. It would be interesting to know what proportion of asking prices are reduced before being marked as sale agreed.
The article does point out that agents who use Reapit are only any good half of the time.
I think its important to clarify if properties were removed from the market altogether OR did they come to the end of a tie in period and simply switch agents?
Without this information its a pretty useless report.
Interesting that i was speaking to a well versed individual who pointed out a well know London agent only sells 13% of their stock – I was shocked at that figure.
If what we are told is true and the call centre brigade have between 7-8% market share and if we assume that their typical fee including add ons penalty fees etc are probably half (ish) what a proper estate agent charges, it wouldn’t be unreasonable for the headline to read.
In one year, £160,000,000 is paid to centre estate agents by vendors who did not move and were not offered a refund!
Please note I am not able to take into account those that were offered part refunds once a complaint was lodged on the basis they leave a nice review.
Also if my facts are wrong, please let one of the official call centre type correct me and I will amend my opinion.
But of course… if you pay our fair fixed fee you’ll save thousands…
really thou?
Interestingly ties in with what many have been saying about call-centre ‘pay-upfront models’ including Jefferies. Time to fess-up or put-up Mr Bruce.
Interesting …… Does not say if the properties that were withdrawn went on to list with another agent?
We weren’t able to make that distinction reliably from this data, but whether the properties were relisted with another agent or not, there is a very significant abortive cost being absorbed by agents.
We do have “Disinstructed” as a separate status to “Withdrawn” in Reapit, but that is not always accurately recorded.
Okay makes a bit more sense. i would expect most agents have a 50 / 50 list to sale ratio.
I think most people in this market switch agents after a tie in period, certainly if its their ‘first agent’