PrimeResi Q&A: Andrew Perratt, Head of Residential, Savills UK

Your new role as Head of Residential for Savills UK incorporates both London and Country divisions; is the much-publicised "race for space" still shaping both markets, or have some other buyer trends now come to the fore?

In short, yes.?I believe the desire for more space is going to prove a lasting legacy of the pandemic, both in urban and country markets.?

We’re seeing greater focus on transport links again, with a realisation that agile working still requires access to the office, but families are still prioritising space and quality of life, with many achieving work-life balance life with a city centre pied-a-terre if finances permit.

This means we’re in a market where empty nesters can sell well, allowing a return to the city – London in particular – releasing equity to enjoy all that a city offers and, in many cases, help children on to the ladder.

You have been working at Savills for over two decades now; which have been the most seismic market shifts in your career, and how do the events of the last three years compare?

Working for Savills has allowed me to work across different sectors of the residential market, starting in country house agency in Scotland, moving across to development, ultimately heading the residential development team in Scotland, before moving back into agency after the GFC.

The best, but also the biggest and toughest decision I’ve made to date was to relocate my desk life from Glasgow to London in 2018. This was a huge decision, involving some personal sacrifices – particularly given the age of my children at the time. It also involved leaving a business I started 20 years ago and loved, but it has opened up so many opportunities to grow and influence the strategy of our UK business.

More widely, I’d say the most fundamental change has been the arrival of accurate market data.?Gut instinct and intuition are still invaluable tools in our industry, but we now have robust data tools to support our advice to clients and decision making as a business.

As head of the country division, you steered the business through the pandemic lockdowns and property boom to achieve record results and increased market share; what are the biggest challenges facing Savills in 2023, and what do you see as the big opportunities?

History tells us that there is a flight to quality in more challenging markets.?We see this as a real opportunity to increase our market share, taking a bigger portion of a smaller market place.?

Saying that, the market is faring better than most commentators anticipated.?While realistic pricing remains key, new buyer demand continues to exceed supply in our market, creating a real opportunity for vendors over the spring and early summer selling season.?

Are there plans for a further expansion of the business across the UK, and if so, which areas are of interest?

I would never discuss specifics, but suffice it to say we always have an eye on new opportunities.?Our new office in Teddington and lettings offer in Hyde Park in H2 2022 are evidence of this.?It’s fair to say that good lettings books would be of particular interest at this point.

The business of estate agency is shifting, embracing new technologies and adapting to new working practices; which have been the biggest changes that you’ve seen in your career, and do you have any predictions for the future of estate agency?

Our customer experience feedback tells us we offer a best in class human experience and that will remain a key focus.?

But no agent is currently providing its clients a best in class digital experience. We are investing heavily in a digital transformation programme, focused on providing efficiencies and improving the new digital customer experience, offering greater convenient for existing customers and prolonging the relationship after a sale or let.

The agents that win in the future will not be those that replace humans with digital, but those that embrace digital alongside the very highest levels of human service.

Some economists are predicting a property market crash, while most property pundits think the UK market is now slowing down after years of heady growth through the pandemic; are there any areas of the market - or types of stock - you are now expecting to outperform?

The market is certainly slowing and becoming more price sensitive, but we expect the prime markets in which we operate to be the most resilient given far less reliant on mortgage finance than the mainstream.

In terms of specific markets, we’ve seen a short term blip in second home searches, but demand is already ticking up.?And we’ve been saying for a long time that prime central London looks good value, which was borne out by record levels of ￡5m+ sales last year and a strong start to this.

Data points to a significant rise in off-market activity in recent years; how effective is discreet marketing proving right now, and roughly what proportion of vendors are specifying their homes are kept off the portals and open listings? What are you advising clients who are unsure as to whether to test the market at the moment?

Across our whole market the percentage of vendors electing an off-market launch is very small, except at the top end, often for reasons of client privacy.?We would therefore always advise buyers to make contact with agents – their dream home could well not be on a portal.

Personally, I’m a great advocate of testing the water on the open market.?We sold our family home last year and were persuaded by a colleague to launch on the open market.?Without doubt, we achieved a higher price than would have been the case offline.

Sentiment surveys also show an increasing preference for energy efficient homes; is this something you are seeing on the ground and how do you think it will impact the market in the years to come?

There is no question that buyers are more focused than ever before on energy efficiency and now prepared to pay a premium.?But this is far from the death knell of the period home, although buyers are increasingly thinking about ways to make improvements.

If you were in charge for the day, what one policy change would you make to improve the way the residential market works?

I am all for further regulation of estate agents and a great supporter of the recommendations made by the Regulation of Property Agents Working Group.?Compliance is difficult and time-consuming when done properly, but that’s a non-negotiable as far as we’re concerned.

How important are property portals, such as Rightmove, Zoopla and OnTheMarket, to a firm such as Savills, and how do you foresee the agency/portal relationship evolving?

Portals were a game changer for property searches and still play an important role.?But we continue to invest in our own digital offering, with our website attracting record traffic and enquiry levels, reaching local as well as national and international audiences 24/7.

The relationship between the portals and our agency business has also evolved, with the sharing of data now a key part of our market intelligence.

Which key skills are required to become a top agent, in your opinion?

Whatever sector of the market they operate in, an agent must be trustworthy and act with utmost integrity, the bedrock for building lasting client relationships.?

Our top agents have found the right balance between use of their gut instinct and personal relationships, and a keen understanding of the data and science behind their business, as combined levers for growth and exceptional client service.

What’s the best piece of advice you’ve ever been given?

My mother was an exceptional agent in her day.?Her two pieces of advice were: ‘always do what’s right’ and ‘don’t move’, by which she meant, make sure you know your area and are well known in your area.?And she was right – the very best agents have worked the same patch for many years and will know the best homes, the best addresses and the most committed buyers.