Since the beginning of the year, there has been rife speculation about what the UK Property Market is going to do. The press has reported some large commercial and residential deals which has created a generally positive opinion, but as ever this is mixed in with a constant flow of both +ive and -ive chit chat and noise.
Due to the fragility of our economy and our apparent emergence from "recession", for some reason the property pundets are out in force using their crystal balls for all manner of star gazing. There is a constant stream of preditions from Tom, Dick, Harry and Sally about which locations are most likely to rise in value, to fall in value, what is the effect of the election, how will house prices react to the end of the recession, comments on the latest mortgage figures, nationwide figures, halifax figures, landregistry figures, Hometrack figures, unemployment figures and interest rates.
But the sorry fact about all of this is that apart from being an interesting destraction, and waste of paper, in my opinion it is all totaly irrelevant. To put it bluntly all of this data is too old or not specific enough to give either the writer or the reader a good enough picture from which to form a prediction or opinion.
For a start there is a generall problem for all the national data, and that is that we have an international city which creates an anomily in the figures. London sales have in this past recession been shown to buck the trend of the national result, for example Winkworth estate agents recently commented that they felt, that at the tale end of last year, prices rose by up to 20%. Now, working in the market I think I can agree with that, however it does not mean that prices in Nottingham have risen in the same manner in fact it could be quite the opposite.
In addition, the land registry sold prices for example, only show data for sales that took place upto 6 months prior, as many sales don't get registerd for months, not to mention the large number of sales especialy in London where prices are not registerd and are bought through off shore companies etc. Also consider this, a price is set often months before the actual sale takes place, but the actual sales process delays these figures showing in any results.
But besides all the inadequacies of the data, the problem is this very basic. Basing your personal property decisions on a reporters analysis of out of date national data is a pretty dreadful idea!
Take for example one of todays headlines "House prices could rise by 10% a year, Nationwide says" Now lets just examine this statement, according to the report this 10% rise is on the back of the latest data from the Nationwide who are telling us that house prices rose by 1.2% in January thus extrapilating this on for the year they come up with a 10% rise (ok this is very basic but you get the idea). Anyway as a result of this report some people will now decide to wait out this rise to capitalise on this predicted increase, and similarly some people will decide that what goes up must come down so, like they always have, will wait for the crash before they decide to buy.
As any sane individual can see, this is not condusive to a happy market, or for that matter a happy life. Imagine putting your life on hold whilst you wait for the perfect time to sell or the perfect time to buy... just wake up, it does not exsist... IT DOES NOT EXSIST
This constant star gazing also applies to those who should know better. Only today, a well educated and bright young agent told me about his own property market woes. He had sold around Christmas 2008 when he felt the market was only heading in one direction, and has since rented for the last year. Sitting out of the market, he and his mrs wait to find the right property. Even by his own admission he realises that in that time his ideal property has moved from being easily affordable to affordable to not affordable.
His justification for this, like many, is that we have not dealt with the mountain of debt and that there is a black cloud on the horrizon etc etc... Well that may be, but by the time this black cloud arrives and casts its 15% drop in price shaddow over the market, the prices will have risen by another 10% and the end result will still be an overall increase.
I hope by now you can see my rather verbose point. When buying or selling you should do so not with an eye on the market but with an eye on your future. Buy for the long term, by which I mean 5-7-10 years or more. This should mean that you can happily sit in your property and hopefuly wait out any adverse fluctuations in the market. But remember if you sell and buy at the same time the values remains the same in comparison to the rest of the market place, so your possition remains the same.
If you alow your property decisions to be influenced by people, the majority of wholm don't work in the market, who are comenting on out of date data, then really it's the tail wagging the dog and nothing more.
So you see there really is no right time to buy or for that matter sell, just get on and make the decision and buy as well as you can when you decide you need to.
Monday 1 February 2010
Monday 25 January 2010
Should You Sell Your House Privately?
With reference to the Telegraph interview with Sarah Beeny this weekend, I am writing to put the record straight regarding private house sales and I will point out not as an estate agent!
I have worked in the central London market for many years now, and nothing infuriates me more than the regular press articles about how home owners have found "great success" etc etc in selling their own homes.
OK so everybody hates estate agents (this is not new) the odd thing is that the reason why this hatred exists is because the hatred is created when they are looking to buy a house... well remember the Estate Agent works for THE SELLER! They are not there to give buyers a "deal" or look after them, or hold the buyers hand. The job of an estate agent is to get the best possible price for a house, and ensure the deal goes through.
Now let me just clarify something very quickly before I go on; in this country we have some of the lowest real estate fees in the developed world. In most European countries both the buyer and the seller will pay a fee to the "Agent" typically 2-3% each, so in total up to 6% give or take. In England and more accurately in central London only the seller pays a fee (unless the buyer by choice is using a buyers agent or home finder) and this fee is a maximum of 3% on a multiple listing (where more than one agent has the instruction). In most cases agents in the UK charge between 1-2% tops. Quite where Sarah Beeny managed to find the example of a homeowner paying a £10,000 fee on a £250,000 sale I do not know! But my point is that actually when considered on a global level the fees charged by estate agents in the UK are very low.
Back to the point... so the fee is cheap in comparison, but is the service worth it? Well obviously this varies from agent to agent, from sale to sale. But in general for the 2% fee (for the sake of argument) you get, a valuation, a brochure, a floor plan, a web listing, a mail out, a magazine / paper listing and a negotiator who will accompany potential buyers around your house (when you are at work) and negotiate on your behalf, not to mention answer the tirade of inane questions that many buyers tend to ask, and that is before the deal is agreed. Afterwards, they will organise the surveyor, produce comparable sales particulars, liaise between you and the buyer, between the buyer and your solicitor, between your solicitor and the buyers solicitor, between the buyer and their solicitor and all the other 3rd parties in between (i.e. plumbers, builders, damp specialists etc etc). So the fee, at least in my opinion is looking pretty good value for money!
But according to Sarah Beeny by 2015 50% of "normal people" will be selling their homes online (of course I might just add that at least 95% of "normal people" are already selling their homes online, just through an agent), thus saving the 2% that the agent might be charging. So that must mean that by 2015 the recession will have got so bad that 50% of people will be jobless and can all carry out viewings during the day as well as answer calls and emails from buyers. They will also be able to value their most prized possession without emotion and rose tinted spectacles, not to mention all the other added bits and pieces.
Now I hear all those potential self sellers out there shouting... oh what do you know, I can do that etc etc... well now I must make my most critical & crucial comment, and I will put it in bold just to make the point.
THE SINGLE WORST PERSON TO SELL A HOUSE IS THE OWNER.
I say this not because I am trying to protect estate agents or buyers agents or anything like that, I say it because I have seen the consequences over a hundred times. Sellers do not shut up... they are desperate, all they do is talk about the view, about the neighbours and how lovely they are, how quiet it is, about how the wood was imported or reclaimed from the highlands of Mongolia, how the house is fully wired with CAT5 cabling and what type of paint they used in the study, the sitting room and the dining room, they go on... and on... and on... and it smacks of desperation. 99.999% of the time it kills any deal stone dead, 100% of the time it is embarrassing for all that have to witness it.
So I suppose in summary
Don't sell your own house if you want to:
Get the right price, have a marketing strategy, ensure the buyer is not a time waster, avoid chasing the deal after the price is agreed, want to go to work and sell your house at the same time and want to sell your house.
Do sell your own house if you want to:
Choose your own fantasy price, rely on unreliable websites, pay out for additional advertising, be hassled by buyers, don't want to go to work, deal with the incompetent, sound like a desperate fool and don't really want to sell your house.
I have worked in the central London market for many years now, and nothing infuriates me more than the regular press articles about how home owners have found "great success" etc etc in selling their own homes.
OK so everybody hates estate agents (this is not new) the odd thing is that the reason why this hatred exists is because the hatred is created when they are looking to buy a house... well remember the Estate Agent works for THE SELLER! They are not there to give buyers a "deal" or look after them, or hold the buyers hand. The job of an estate agent is to get the best possible price for a house, and ensure the deal goes through.
Now let me just clarify something very quickly before I go on; in this country we have some of the lowest real estate fees in the developed world. In most European countries both the buyer and the seller will pay a fee to the "Agent" typically 2-3% each, so in total up to 6% give or take. In England and more accurately in central London only the seller pays a fee (unless the buyer by choice is using a buyers agent or home finder) and this fee is a maximum of 3% on a multiple listing (where more than one agent has the instruction). In most cases agents in the UK charge between 1-2% tops. Quite where Sarah Beeny managed to find the example of a homeowner paying a £10,000 fee on a £250,000 sale I do not know! But my point is that actually when considered on a global level the fees charged by estate agents in the UK are very low.
Back to the point... so the fee is cheap in comparison, but is the service worth it? Well obviously this varies from agent to agent, from sale to sale. But in general for the 2% fee (for the sake of argument) you get, a valuation, a brochure, a floor plan, a web listing, a mail out, a magazine / paper listing and a negotiator who will accompany potential buyers around your house (when you are at work) and negotiate on your behalf, not to mention answer the tirade of inane questions that many buyers tend to ask, and that is before the deal is agreed. Afterwards, they will organise the surveyor, produce comparable sales particulars, liaise between you and the buyer, between the buyer and your solicitor, between your solicitor and the buyers solicitor, between the buyer and their solicitor and all the other 3rd parties in between (i.e. plumbers, builders, damp specialists etc etc). So the fee, at least in my opinion is looking pretty good value for money!
But according to Sarah Beeny by 2015 50% of "normal people" will be selling their homes online (of course I might just add that at least 95% of "normal people" are already selling their homes online, just through an agent), thus saving the 2% that the agent might be charging. So that must mean that by 2015 the recession will have got so bad that 50% of people will be jobless and can all carry out viewings during the day as well as answer calls and emails from buyers. They will also be able to value their most prized possession without emotion and rose tinted spectacles, not to mention all the other added bits and pieces.
Now I hear all those potential self sellers out there shouting... oh what do you know, I can do that etc etc... well now I must make my most critical & crucial comment, and I will put it in bold just to make the point.
THE SINGLE WORST PERSON TO SELL A HOUSE IS THE OWNER.
I say this not because I am trying to protect estate agents or buyers agents or anything like that, I say it because I have seen the consequences over a hundred times. Sellers do not shut up... they are desperate, all they do is talk about the view, about the neighbours and how lovely they are, how quiet it is, about how the wood was imported or reclaimed from the highlands of Mongolia, how the house is fully wired with CAT5 cabling and what type of paint they used in the study, the sitting room and the dining room, they go on... and on... and on... and it smacks of desperation. 99.999% of the time it kills any deal stone dead, 100% of the time it is embarrassing for all that have to witness it.
So I suppose in summary
Don't sell your own house if you want to:
Get the right price, have a marketing strategy, ensure the buyer is not a time waster, avoid chasing the deal after the price is agreed, want to go to work and sell your house at the same time and want to sell your house.
Do sell your own house if you want to:
Choose your own fantasy price, rely on unreliable websites, pay out for additional advertising, be hassled by buyers, don't want to go to work, deal with the incompetent, sound like a desperate fool and don't really want to sell your house.
Thursday 21 January 2010
2010 The Market So Far...
Right straight to the point...
2010; who knows what this year is going to bring here at the end of what is effectively the 3rd week of January little has changed in the central London property market to give us much of an idea of what to expect.
Speaking with many of the agents the same stories seemed to be cropping up... not much interest and not much stock...
However things seem to be changing this week, hear say of deals being done, the odd agent telling me that things are really picking up in the sales market, plenty of buyers scrabbling for the limited stock available... I even heard of a record price being agreed on St Georges Square in Pimlico! (God the buyer must be desperate, to want to live next to that bunker of Pimlico Comp!)
When I hear stories like this I always have to analyse the likely truth factor of the agent telling me this, to be honest most are truthful and honest, especialy with me as they know I know what I am talking about, but then from time to time you get agents acting like an enthusiastic Jack Russel that tell you that the market's flying, as they furiously wag their tail! For some reason these agents never actually manage to sell me anything... Hmmmmm
But overall I think there is a confidence growing at the moment, various residential funds are being set up, deals are being pieced together, and mortgage approvals are on the up. One agent mentioned more valuations taking place so I think the sentiment is there, lets hope it stays.
2010; who knows what this year is going to bring here at the end of what is effectively the 3rd week of January little has changed in the central London property market to give us much of an idea of what to expect.
Speaking with many of the agents the same stories seemed to be cropping up... not much interest and not much stock...
However things seem to be changing this week, hear say of deals being done, the odd agent telling me that things are really picking up in the sales market, plenty of buyers scrabbling for the limited stock available... I even heard of a record price being agreed on St Georges Square in Pimlico! (God the buyer must be desperate, to want to live next to that bunker of Pimlico Comp!)
When I hear stories like this I always have to analyse the likely truth factor of the agent telling me this, to be honest most are truthful and honest, especialy with me as they know I know what I am talking about, but then from time to time you get agents acting like an enthusiastic Jack Russel that tell you that the market's flying, as they furiously wag their tail! For some reason these agents never actually manage to sell me anything... Hmmmmm
But overall I think there is a confidence growing at the moment, various residential funds are being set up, deals are being pieced together, and mortgage approvals are on the up. One agent mentioned more valuations taking place so I think the sentiment is there, lets hope it stays.
Wednesday 20 January 2010
A Little Introduction
Right just a quick start to say, that the aim of this blog is 2 fold, one to give you an insight into the central London property market, and the curiosities that are taking place there from week to week but also as a place where I can air my 2 peneth worth on that same market.
All you need to know about me, is that I am fully absorbed in this market, and who knows you might find some of the hints, tips and gossip that I write of interest... feel free to post and comment as you like.
Also feel free to follow my thoughts on twitter.
All you need to know about me, is that I am fully absorbed in this market, and who knows you might find some of the hints, tips and gossip that I write of interest... feel free to post and comment as you like.
Also feel free to follow my thoughts on twitter.
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