Do catchment areas really matter?

Schools out for summer, yet many parents will be thinking about where their little darlings will be going to school in September. Looking through many school websites in the UK, the recurring message is that living in a catchment area does not guarantee a place at that school. This is repeatedly emphasised, and yet parents will go to extreme measures, even moving home, to get their child into their preferred school.

Whether this is the motive behind the move, or some more legitimate reason, it is beneficial if the estate agent can show suitable properties in the catchment area of choice, as it will still give the buyer an edge as an appeal can be raised. Most schools have a tie breaker where priority is still given to applicants living nearest.

Sheffield’s local authority website states “If no exceptional circumstances are present; admissions are prioritised by the straight line distance from the centre of the home to the centre of the school building.” Usually the measuring system is an integral part of the admission software, and uses Ordnance Survey maps and the Local Land Property Gazetteer so is accurate to 1 metre. Yes, you read that correctly, 1 meter can make a difference.


Each Local Authority has its own set of admissions policies. The school may already be oversubscribed with children from the attached infant school, those with an SEN, siblings at the school, or the children of staff members, all of whom have priority. The admissions criteria is set by the LEA and can change annually, so it is vital to use up to date information. Brent’s Authority website states: “New housing developments in Brent mean that catchment areas may change slightly.” So the flat your buyer was checking out last year might not get them the priority they think if a new block is raised closer to the school.”

When the downside is the upside

It gets crazier than this, the Kensington admissions appeal guide states that: “If applicants share the same address point … priority will be given to those who live closest to the ground floor and then by ascending flat number order. Routes will be measured to four decimal places.” So that basement flat might be worth more than the penthouse!

Horizon is continuously updated to ensure that the estate agent gives both client and buyer the most accurate information. The interactive reports that can be emailed through our app contain the most recent catchment information possible. Distances to nearby schools, the type of school and other contributing factors, such as transport links are all detailed.

Alternative Schools

From the buyers point of view sometimes being outside the catchment area of a popular local school has its advantages. Parents choosing a school based on their religious beliefs, a private school or specialised field can be shown properties further away. Foundation, voluntary aided and academy schools tend not to use catchment area as part of their admissions criteria. This means that the buyer can get more square meters for their round pound.

“As a Foundation School Governor of 7 years standing, I often saw parents suddenly discovering religion, attending the local church and even getting their children baptised in order to get priority admission to the church school”

We have looked at the school catchment areas through the eyes of parents buying a house, but those without children, young and old alike, benefit from the lower price distance brings. For the client it is always good to know the most current catchment areas as this will affect the sales price that they are likely achieve on their property and help the estate agent to clinch the deal.


For more information on Horizon contact: info@houseprice.ai 


Acknowledgements:
https://www.brent.gov.uk/services-for-residents/education-and-schools/information-about-admissions/school-catchment-areas/
https://www.rbkc.gov.uk/children-and-education/schools/join-school/admissions/appeals
https://www.sheffield.gov.uk/home/schools-childcare/apply-school-place

The Importance of Social Media in the Residential Property Market

Having a well polished web site is all well and good, but how much better is it for your client and their network, to receive regular reminders via social media apps that showcase your properties, drive them to your site and ultimately secure more sales?

Lets look at some stats. Every second, on average, around 6,000 tweets are tweeted on Twitter, corresponding to over 500 million tweets per day? On Facebook there were 1.94 billion monthly active users as of March 2017, 32 million user accounts just in the UK.

Social media apps such as Twitter, Facebook, Instagram and Linkedin are of increasing importance in the residential property market, having the advantage of allowing notifications without ad blocking. When a user follows your page your posts are seen by people in their network, an easy way to get your latest featured property to a wider audience. Additionally, if linked correctly, your post takes the user to your website without the client needing to use a search engine, or your company needing a dedicated app.


Traditional Email versus Social Media Channels

So what does this mean for your e-mailed mailshots, will they fall out of fashion as much as big shoulder pads and the glossy A4 fliers of the 1980s? Deloitte’s 2016 Consumer Survey shows the reach of e-mail and apps are rising in parallel. Every smartphone comes with an email app, hence its popularity. It is a simple way to communicate, however, blanket group e-mails are both impersonal and counterproductive. Posting to your own Social Media page drives clients towards you and gives much wider and more targeted coverage.

The best of both worlds

The future lies in combining these tools, for example personalised mailshots, which link to fully interactive, cross platform compliant reports. Here at Houseprice.AI, our property app, Horizon, includes cutting edge interactive reports that can be e-mailed to your clients and also posted to social media for other followers to read, combining the best of both worlds. Horizon also has a smart feature that enables you to chat directly with your potential clients from the interactive report, whether they click on the e-mail link or the social media post. In fact these conversations are not only with clients that were e-mailed the report, but with any interested buyer who clicks on that post.

When To Post or Not To Post

It is important to establish the perfect balance of social media posts – just enough to keep people engaged, but not so much as to irritate them. Automatic and poorly scheduled posts that tweet the same post on the hour every hour quickly become tedious and a turn off. You can use Facebook and Twitter Analytics tools to make your posts more effective. For example Twitter statistics show that the most popular time to tweet is 12-1pm, the most read are first thing, and the most liked in the evening. Use the tools to help you decide what works best for your business.

There is no doubt that social media channels will play an increasingly important role in the marketing of property sales and lettings. These need to be quickly embraced and adapted as the powerful marketing and business generating vehicles they can be, and as forward thinking 21st century estate agents become hybrid agencies, with a presence in both virtual highways and local high streets.

For more information on Horizon contact: info@houseprice.ai 

Acknowledgements:
https://www.ons.gov.uk/businessindustryandtrade/itandinternetindustry/bulletins/internetusers/2017
http://www.internetlivestats.com/twitter-statistics/
https://newsroom.fb.com/company-info/
https://www.deloitte.co.uk/mobileuk

Factoids and Snippets about Property Valuation Methods

Marie-Esprit-Léon Walras (1834 –1910)

While delving into the history behind the development of AVMs, we came across this interesting pioneer. Léon Walras was a French economist who formulated the marginal theory of value (independently of William Jevons and Carl Menger) and pioneered development of general equilibrium theory.

“I say that things are useful whenever they can be put to any use at all” - Léon Walras

In the early 1870s the theory of marginal utility started a brand new microeconomics. The main impact on future development of AVMs was the theory of value. Before these bright sparks, the classical thought was that exchange value was based on building costs, particularly labour. Marginalist theory linked value with use and demand. So, if you flood the market with new property, the demand is diluted and the cost becomes almost irrelevant.

Initially Walras enrolled at the School of Mines in Paris but didn’t like engineering and quit. He tried several diverse careers. These include, but are not limited to: a journalist, a railway clerk, a bank director, and even a published romantic novelist! He applied for economics posts in France but was under qualified, and complained that the orthodox French economists passed on their chairs to their relatives. Finally he obtained tenure at the University of Lausanne in Switzerland.

Whilst Jevons was lauded in England, just as Menger was in Austria, poor Walras was in Switzerland where the academic appreciation of economics did not have a major role. However, Walras continued his dedication to his theories, and simulated an artificial market process that would get the system to equilibrium, a process he called “tâtonnement” (French for “groping”). He hypothesised that tâtonnements in the markets for productive services and for consumer goods are interrelated.

In 1895 Walras’s successor to the chair of economics at Lausanne, Pareto, presented Walras’s ideas in his own books, and finally began their widespread dissemination.

In 1904, Walras wrote to old friends about his future:
“I have not the least doubt about the future of my method and even of my doctrine; but I know that success of this sort does not become clearly apparent until after the death of the author”. then in 1909 a celebration of his jubilee was held by the University of Lausanne. He was honoured as the first economist to establish the conditions of general equilibrium, thus founding the School of Lausanne.

Walras's prediction of success proved accurate. His theory of general equilibrium has been developed further in the 20th century and these have become an integral part of mainstream modern economics.

For sheer genius, and intuitive power in divining the underlying structure of fundamental economic relationships and their extensive interdependencies and consequences, Walras has been surpassed by no one.


Acknowledgements: The Concise History of Economics 2nd Edition, Léon Walras: The life of Léon Walras and perspectives on his thought edited by John Cunningham Wood, Advances in Automated Valuation Modelling edited by Maurizio d'Amato, Tom Kauko,

The Remains of the Day

Kazuo Ishiguro’s Booker-winning story of unspoken love for anyone who’s ever held their true feelings back, seems to sum up the experience of many Remainers, where these voters were forced into a stubborn silence. Feeling bullied by the Government’s increasingly priapic rush to a Hard Brexit and vilified as Saboteurs and Remoaners; the 48% had their revenge through the ballot box by overturning Theresa May’s majority and returning a well hung parliament. This, it would seem, is the most frequently voiced synopsis of last week’s election; the Remains had their day, but is this really the explanation?


Whilst the Labour Party did pick up a huge number of seats, which had voted to stay in the EU, from the Conservatives, this would not explain the reason for the Phoenix like rise of the Conservatives in Scotland; a part of the UK that had voted to remain in the EU by a very significant margin. Labour too has been crowing about its results in England, but they are also particularly taciturn about their performance in Scotland. It wasn’t just about Brexit.

What then might also have been a significant factor in the election?
Could Big Data help us we asked ourselves? So, we decided we would put our resident boffins to work, to see if HOUSEPRICE.AI could come up with something that might explain these unexpected electoral results. Across England & Wales there were 28 swings to Labour from the Conservatives, the average swing for those parliamentary constituencies was 12.14%, which is historically very large.

CONSTITUENCY MAJORITY SWING
Battersea45.99.1
Bedford46.96.7
Brighton, Kemptown58.319.2
Bristol North West50.616.3
Bury North53.64
Canterbury4520.5
Cardiff North50.111.9
Colne Valley47.712.7
Crewe and Nantwich47.19.4
Croydon Central 52.39.7
Derby North48.512
Enfield, Southgate 51.712.7
Gower49.912.8
High Peak49.714.3
Ipswich47.410.3
Keighley46.58.4
Kensington42.211.1
Lincoln47.98.3
Peterborough 48.1 12.5
Plymouth, Sutton and Devonport 53.4 16.7
Portsmouth South4121.5
Reading East4916
Stockton South48.511.5
Stroud479.3
Vale of Clwyd50.211.9
Warrington South48.49.3
Warwick and Leamington46.711.8
Weaver Vale51.510.1
But this simple table does not tell us much about the 2017 election, what kind of correlations are there between the housing market and the electoral results? £20.77 billion of residential home sales were transacted in these 28 new MP’s constituencies over the last year, with incredibly just two, Battersea and Kensington accounting for more than 30% of that total. There were a total of 62,602 transactions, with an average value of £325,629 and with an average price per square meter of £3,412.60 The chart below shows the percentage swing to Labour from Conservative, vs the price paid per square meter and also showing the aggregate size of transactions in all residential property in that constituency over the last year.
So what can we conclude from this quick analysis?

Battersea also stands out in having many more property transactions than the other constituencies, transacting over 74% more than the average of 2236.

Firstly, overall no surprises that there is no correlation between house prices and political outlook in this sample. The value of a home does not determine its owners political outlook. This will be a boon to pollsters and Labour political canvassers, who can legitimately door knock in Kensington and North Bury with equal hope.
Secondly, Estate Agents in Battersea must be worried about the rise of Internet Agents, 1.5% fees on an average Battersea property of £936,187, equate to fees of over £14,000 and with such a high number of transactions, that looks a sitting duckhouse.

Factoids and Snippets about Property Valuation Methods

Alfred Marshall (1842-1924) was the first major economist to consider the techniques of valuing property, and is credited with the creation of Neo Classical Synthesis. If you haven’t heard of it before, well it’s a theoretical way of determining market value by analysing supply and demand separately then combining them.




Back at the very end of the 19th century this was pretty revolutionary stuff. Marshall addressed the question of what influences market price. Most economists were using either Marginal Utility theory, or Classical theory. Put simply, the Classic economists attributed it to cost of production whilst the Marginalists ascribed it to demand. Marshall synthesized the two theories. In addition he put forward the idea of rational consumer choice blended with the law of diminishing marginal utility – ‘the amount demanded increases with a fall in price and decreases with a rise in price.’ Makes sense, eh?

Marshall’s Principles of Economics (1890), was the dominant economic textbook in England for many years. His theories form the starting point of the three traditional forms of valuation that we use today, sales comparison, income and cost. This makes Marshall a forgotten hero of economic theory. His Neoclassical Synthesis theory still forms much of the basis of the conventional approach towards property valuation in current use, including AVMs.

Acknowledgements:
Advances in Automated Valuation Modelling - edited by Maurizio d'Amato & Tom Kauko
Internationales Forum Historische Buerowelt e.V.