The Office Of Fair Trading reported “Quick house sales can be beneficial to home sellers who want a quick, guaranteed and hassle-free sale. Our study has shown this to be a dynamic and innovative sector where some businesses have modified their business models to try to offer a better service to home sellers.“
The Office Of Fair Trading, Quick House Sales Market Study, 2013, http://webarchive.nationalarchives.gov.uk/20140402173245/http://oft.gov.uk/shared_oft/market-studies/oft1499.pdf
Market Conditions That Led To The Rise of Quick House Sales Companies
Due in part to a housing shortage caused by a rise in demand for buy to let homes, more accessible mortgages with smaller deposits required and increased life expectancy together with a surge of demand as people rushed to get on the housing market before the were priced out of the market, the UK housing prices saw a sharp rise between 2001 – 2006 reaching approximately 9 x the average salary by 2007.
Overstretched finances coupled by wage freezes and increased homeowner costs led to record breaking levels of repossession during 2008, 2009 & 2010. Against the backdrop of the US housing market collapse and the banking bailouts, the economic environment lead to a dramatic fall in UK house prices and a lack of confidence in the housing market.
By early 2009, the average UK house price had fallen by over 19% and the housing market was at an all time slow with sellers achieving on average only of 88% of the asking price after months of waiting.
Business innovators responded by providing a new fast way to sell houses for similar returns but within days not months with the rise of companies that either bought the property directly or brokered a sale to professional buyers including property developers and buy-to-let landlords.
Companies Providing A Bad Quick House Sales Service
Quick House Sale companies offered an option to sell a house fast that was particularly beneficial to people who NEEDED to sell a house fast.
People who wanted to avoid repossession through a fast house sale to raise money to pay off debts; people who wanted a fast house sale to avoid a delay in the sale of their property causing a housing chain collapse; people who wanted to sell an inherited property fast to avoid prolonged running costs; people who wanted to sell a house fast to move to a smaller property; people who wanted to sell their house fast to avoid the huge additional cost bankruptcy adds to a debt; people who experienced a sudden change in circumstances like redundancy, divorce or ill health and needed to react quickly by selling their house fast so they could adapt to their new circumstances as quickly as possible; – they ALL benefited from the additional property sales option to sell a house fast.
Unfortunately, due to some sellers’ unfortunate circumstances, some ‘companies’ (a loose description that includes individuals trading as a company and scam organisations) with no interest in creating sustainable business plans believed they could take advantage of people’s desperation and chose to provide an unscrupulous service by not delivering the services promised and/or changing the terms of business and/or hiding costs so that the money sellers received was significantly less than the money they expected to receive leaving them feeling cheated.
Examples of bad practice in the Quick House Sales industry listed in The Office of Fair Trading report includes companies:
- reducing the price offered at the last minute after the seller is financially committed to the transaction
- making misleading claims about the value of the property or the level of discount to be applied to the sale
- falsely claiming to be a cash buyer
- unclear fee structures, for example, imposing an unexpected fee following an initial valuation, as a condition for progressing the service
- inducing home sellers to enter into agreements that prevent them from selling to other buyers, with severe penalties for breach of contract.
Creating A Code of Practice For Quick House Sales Companies
The Property Ombudsman (TPO) scheme has been providing consumers and property agents with an alternative dispute resolution service for 27 years and provides consumers with a free, impartial and independent alternative dispute resolution service for all types of property sales.
Following the report on Quick House Sales conducted by The Office of Fair Trading in 2013 and working with a select number of Quick House Sales business owners including Dave Coughlin Managing Director of National Residential, The Property Ombudsman created a Code of Practice for Residential Property Buying Companies .
The code became effective in 2016 and ensures consumers can expect a fair and transparent service when selling their home to a property buying company.
For more information see https://www.tpos.co.uk
National Association of Property Buyers (NAPB)
The consultation group involved in the preparation of the TPO code of practice for property buying companies formed an association to promote and uphold the values defined by the code.
Membership of the organisation is voluntary and the regulations apply specifically to buying residential property.
All members must agree to The Property Ombudsman Code of Practice Residential For Property Buying Companies
The NAPB website includes the advice given by Graham Norwood (Property Journalist), The Sunday Times 5/3/17:
“Only use National Association of Property Buyers members in the TPO’s scheme”
For more information see https://napb.co.uk
Comment From Dave Coughlin, Managing Director of National Residential and founding member of NAPB
“The fast sale market is split into two types: those that buy properties and those that broker sales. The practices of companies that broker sales were already covered by the Estate Agents regulations however there were no such regulations for those companies that only buy houses.
As part of The Property Ombudsman’s consultation with myself and other members of the round table group, the idea of self regulation was discussed which led to us setting up the NAPB in 2013.
We have always known the only way for the Quick House Sales industry to survive in all market conditions is to provide a service that is fair to all parties. By offering an option to buy property directly and two options to sell property to buyers, National Residential have a bigger range of solutions to choose from. We can tailor our service to suit our clients’ needs and schedules. As such, National Residential is regulated by the current Estate Agents regulations and committed to TPO’s code of conduct through membership of the NAPB.
The Quick House Sales industry was borne out of a difficult time in the UK housing market but due to the strength of our options and quality of our customer service, we have made sure our quick house sale business is valuable in any market condition. We recently celebrated our 10th birthday and are looking forward to our next decade helping thousands more property owners sell houses fast.
We have already kept our promise to thousands of homeowners across the UK, ensuring our houses always sell Fast and always sell for the Right Price which works for you: no last minute price drops, and no surprises.
Choose a Quick House Sale company you can trust – phone National Residential, leaders in the regulating the Quick House Sales industry on 01244 757152 now.