Thursday, 15 January 2009

Market Karma

When I first moved to London seven years ago Foxtons were operating at full tilt. They seamed to be the agents for almost every rental property we looked at. I remember been flabbergasted that they could get away with charging prospective tenants to find a property as well as the landlords to full their properties. Foxtons seemed to treat everyone like they were idiots looking to be squeezed for cash.

After two years of working for London's biggest handyman service we were approached by Foxtons to undertake maintenance jobs in the properties they managed on behalf of landlords. They dictated to us what our hourly charge should be, which was almost the same as we were charging anyway, but then deducted 20% as a commission after the landlord had paid the full invoice amount for themselves. They would also charge the landlords a fee for managing their properties for them. Once again they were using their market position to squeeze anyone they could.

So when I read this article, Foxtons stuck in housing market slump, I felt a great sense of satisfaction, as if justice had been served. I'm sure there are thousands of Londoners out there who would be happy to see Foxtons fall on their faces. Like gluttons they grabbed as much as they could in the boom and now many will be smirking as they suffer in the gloom.

I am a firm believer in market karma or economic justice. If you treat your customers badly or turn your back on business ethics the market will one day exact its revenge. The founder of Foxtons, John Hunt, obviously saw this moment of reckoning coming and just like a Banana Republic Dictator he escaped just in time with all the loot before the whole thing collapsed.

I'm just glad I'm not trying to sell a mini motorcar, because the second hand market is about to be flooded with them.

No comments: