Could the East provide the boost that UK real estate needs right now?

Could the East provide the boost that UK real estate needs right now?

In light of the challenging market conditions in recent months, many corporate agencies are having to let go of their staff or close their premises. Difficult times make any possibilities of transactions look bleak. However, there is still some movement in the real estate market, for those who are actively involved. Leaving the portal worries and barriers aside, the property market remains attractive for overseas buyers. The primary driver for this has been the weaker Sterling which has been further emphasized with the arrival of the COVID crisis in the UK. This favourable shift in currency combined with attractive funding costs and mortgages available at rates as low as 0.8%1, it’s no wonder that there is an opportunity.

With China on the road to recovery and accounting for less than a tenth of worldwide coronavirus infections and barely any of the new daily cases, life is starting to return to somewhat of a normal. Businesses are gradually getting back to work; Small and medium-sized enterprises nationwide had resumed work at a rate of 76.8% (as of March 292). 

The UK has always been a global target for Chinese buyers, with London being the top destination for Asian outbound capital in 2018, according to CBRE in last year’s report. The fact that Chinese buyers in the UK rose from 2.5% in 2016 to 20%3 in 2019, is a good illustration of this trend. As long-term investors, Chinese buyers are attracted to the UK based on strong fundamentals of the British economy, a well-developed judicial system as well as globally ranking educational institutions amongst other factors. With this outlook in mind, these buyers are less sensitive to any short-term economic or political uncertainty that may arise. Instead, this proves to be an opportunity to secure real estate in areas with strong growth potential.  Again, to illustrate, in 2018, 18% of total outbound investment targeted London, which was increase from 13% in 2017. 

With limited activity in the Asian markets over the last 3 months, they’ve had a lot of time to interest shop, with certain schemes seeing up to a 50 to 60%4 increase in East and West London.  With overseas purchases looking attractive at the current depressed levels, the only barrier is how do you get access to this international demand? XChange by houzen is a prop-tech that emerged to help break those international barriers way before COVID-19 emerged. For the past 3 years, they have been partnering with Independent Agencies to open their horizons and portfolios to international demand. In 2019 alone, 60% of all successful transactions were from international applicants from China. Most of which viewed the property through WeChat or Virtual tours and made the decision all before even landing in the UK.

Megan, XChange’s China Market Lead who works mainly with Chinese applicants based in Chine and in the UK. She says “There’s still a high demand for property viewings, however, we switched in 70% of cases to virtual viewings, by video call and WeChat. Most of the applicants don’t have a problem viewing a property this way and are comfortable making their decision just based on that. In terms of how many people might actually arrive in the UK later in the year, I see a potential for a spike in the number of international students moving to the UK.” Megan adds: “Some universities lowered their required grades for Chinese applicants, so if the situation with coronavirus gets better soon, we might see an even higher number of incoming students later on”

We also spoke to Credo, a leading Chinese relocation agent and asked their views on the outlook of the real estate market. 

“Although we were indeed concerned about Covid-19’s impact on Chinese students and young professional going abroad, once April to May rolled around, it gave us lots of confidence that the demand is still there and even stronger – as for them it’s about international education and a long-term life goal instead of this temporary lockdown situation.

“With positive feedback from our local channels that the number of Chinese who applied for, or have received offers from UK universities has exceeded the same time over the last few years, we believe the renting demand will start to rally later this summer. If the market is so active this year during pandemic time, we could not be more optimistic about the demand from China in the future.”

With the ongoing restrictions on the market, XChange is opening its doors to bigger agencies to support the market during this time. By providing the means to easily connect with the Asian market, there is room for the business to be done. 

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4 tools every estate agent needs to grow their business

Xchange by houzen

With the current limited mobility that is imposed on everyone, it’s normal to see real estate portals like Rightmove and Zoopla become increasingly saturated and flooded with agencies and listings. This makes it harder for your agency to stand out. In order to build a lasting relationship with your customers it is important to provide them with the best experience possible. 

Why face being lost in a swarm of competition when you could be looking for new tools and resources that can help your business stand out. 

Below we’ve curated a list of 4 tools we believe every agent needs to stand out in the competitive real estate market. 

1 – XChange

Of course we had to talk about ourselves first,  XChange is a property trading platform allowing you to quickly match your applicants to relevant properties to close more deals. Simply input all the relevant information and let the matching process do the work for you. 

This gives your agency a competitive advantage, allowing you to maximize potential transactions and reducing lead wastage. It also enables you to broaden your horizon, that is, to be able to source properties outside your operating area, and realistically, enabling you to be able to close deals in all four corners of a city.

2 – HomeViews 

HomeViews offers you a centralised base of reviews, coming from residents and property experts. Having accurate and in depth information about a property is incredibly important to market your stock and highlight it above the rest, to make it stand out in a blur of properties. 

This is why HomeViews aims to provide you with the information, sharing relevant insight on residential developments. HomeViews also offers you opportunities to advertise your business and available properties, making you more visible to the public. The platform is free to read, leave or respond to reviews.

3 – Vaboo

Vaboo is a platform that enables you to entice your clients with benefits, allowing you to stand out. They create a tenant reward platform that gives access to exclusive offers, national discounts and regular prize draws to help agents build trust, stand out and collect insights.

Additionally, by keeping your tenants happy these tenants will eventually become buyers. This customer retention is crucial to help your agency increase brand loyalty. 

4 – CoreLogic

CoreLogic offers 3D virtual property conversions of your listings, allowing you to accurately translate your property to prospective clients, and give them a sense of immersion that’s completely virtual and distanced. 

The affordable 3D virtual tour is a better alternative to traditional photography that helps your properties shine and stand above the rest. 

In times where clients might not be as comfortable organising viewings, this tool builds the bridge between your property and your prospective clients, allowing them to experience the property in an immersive way, at any time from anywhere, in return boosting the engagement with your stock and your sales potential.

Whether we’re talking about our property matching platform, CoreLogic’s enhancement of your virtual ads or HomeViews’s database of free and insightful information, trying out these new tools could be your solution to overcome and overshine your competition. 

Now more than ever is the time to broaden your inventory of tools to help you on your journey to success in this market.

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What Will Happen to Student Accommodation

Xchange by houzen

The post pandemic opening of the lettings market hasn’t shown to be too promising as people were expecting. Knight Frank recorded a 0.9% drop in the prime central London rental market in the past month alone.  

As supply remains constant, and demand is falling short compared to previous years, it seems that student demand has a big implication on the lettings market in the current timeframe. 

The pandemic and its impact

Normally, as universities and colleges start in September, the lettings market sees its sharpest increase in demand for the year, but as most universities have announced a transition to online education, students might be looking to postpone their moving plans until the second university term in January. 

We spoke to Ben at Citian Wharf, who told us that he had seen a decrease in demand from September of last year, but the amount of inquiries for January had been much more than those of 2019. 

Despite not knowing what will happen in September, UCAS published some data last month regarding undergraduate applicants for the forthcoming 2020/21 year.

The data showed a 2% increase in applicants overall including a 10% increase in applicants from Non-EU countries

Additionally:

  • Non-EU applicants are the highest they have ever been
  • 89,000 applicants this year, 58% increase in ten years
  • Chinese applicants made up nearly 25,000 of those
  • Indian applicants made up 7,600.

Are students changing where they want to live?

Citian Wharf saw that graduate students are reorienting towards university halls instead of private accommodation, due to the fact that it is more budget friendly, and that roommates aren’t all back meaning they’re looking more for one bed studios instead of flat shares.

Local students, ie UK nationals seem to be choosing to stay home for the time being, as university life takes a virtual turn. The economic uncertainty is also a factor that plays into this, as it is much easier to stay home in order to save money. 

International students don’t see things that way though. With applications still rolling in, the international community of students still value London as a hub of education, and hence will still need accommodation. 

Appetite from overseas students remains

As the student lettings market takes a sharp turn due to all the unforeseen circumstances, it seems the best thing to do is to reorient your efforts towards where the demand is. 

In this case, it means captivating demand from the east, where it is the most constant and reliable. 

At XChange, we’ve seen an inflow of students that are moving from Asia and will be moving in the end of September, and a larger influx by the start of the new year in January. 

Our expertise in the London market as well as our strong ties with the east has put us in a good position facing this student accommodation problem, and here’s how you can profit from it too. 

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Is your company at risk of being bought out? | Agency Acquisition during a pandemic

Xchange by houzen

Recent news headlines brought up Chesterson’s intent to go on an agency acquisition spree. This came after their recent acquisition of independent agency Morgan Randall last week. 

Chestersons has been on the lookout for smaller agencies to grab for about a year, since they announced that growth is driven by lettings.

With the current pandemic in motion, many smaller independent agencies are experiencing new faced difficulties sourcing properties in order to operate at an optimal level and reach their monthly target. Failing to do so leads their agency to be undervalued and become a prime target for agencies like Chestertons to acquire them.

Agency value driving factors

Whether you’re trying to sell your agency, or on the contrary trying to hold on to it, the value of your agency is a key factor that should be taken into account. Your business is valued based on the amount and value of the transactions that your agency is able to close each quarter. 

This is key when considering selling, is to maximise as many property transactions as you can in the coming term in order to get a valuation that reflects your business’s worth. 

This is also key if you’re trying to avoid being bought out, as by increasing your quarterly performance in the next term, you increase your valuation, deterring any potential hostile takeover or merger. 

Increasing agency value?

The question is, how can you increase performance, transactions and deals in a market that hasn’t been up to par with previous terms?

The pandemic has slowed the real estate market considerably, making it more difficult for agencies to thrive, but here are some good points to note: 

  • Look beyond your postcode, broaden your scope and increase your chance of potential closures.. Since consumers are reacting to the current environment by looking for different boroughs, it’s best to take a broader look at the map in order to accommodate as many clients as you can while simultaneously outperforming your competition. To find out more about expanding your horizon, click here.

 

  • Focus on lead generation. In a downturn it is an important element to focus on. Reaching out to customers is time consuming, especially when you have a reduced workforce. It takes away from the time you need to invest in closing your existing clients. To survive you have to diversify your lead generation methods. Make sure you’re not relying on just one source. Learn more about effective ways to lead generation here.

 

  • If the lettings market is slow, perhaps consider the sales market. Following the announcement of a stamp duty holiday, sales have been ramping up, in some cases even more than lettings. Trying to increase your property sales could be a large factor in a more attractive valuation of your agency. To find out more about how to profit from the stamp duty holiday, click here

Utilise the correct tools to reach your target 

At XChange, we pride ourselves in being able to source you a match property in 48 hours. Our services are all about enhancing your revenue, which could be crucial to your agency in the coming months. XChange also serves you as a platform to source applicants, giving you all the necessary components involved in closing a deal, all while taking the difficult task of sourcing away from you in order for you to focus better on your agency growth.

The bottom line being that, with XChange, you don’t have to get bought out. We are able to provide you everything you need to salvage your business, and if you do choose to sell your business, with us you’ll be able to sell it at a higher price thanks to your boost in performance.

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