UMM-trees-June-2016
So, in the short term, almost everything that was described by the Leave camp as the Remain camp’s scare-mongering in the EU referendum appears to be coming true: a falling pound, a falling stock market, property funds suspended, property sales falling through and general all-round chaos. But is it bad?

Well, that depends on your point of view. London buyers can finally smell the chance of a bargain after years of a seller’s market, and are making some rather cheeky offers. That doesn’t mean they’re being accepted, but there is definitely a change of attitude.

However, the falling pound has given foreign buyers something of a bonus. Anyone who was already buying a property and sending their money from abroad will have saved upwards of 10% on the purchase price because of the exchange rate. Imagine if your money was held in US Dollars and you were buying a property for £800,000 cash; not particularly extravagant for London. Since the referendum your dollar requirement will have dropped from about $1,175,000 to around $1,035,000 – a saving of $140,000, or £107,000; not bad for doing nothing.

This has massively increased interest from foreign purchasers wanting to buy into London. The city retains a certain snobbery value and is still seen as a fairly safe haven (despite the occasional wobble). So it’s possible that domestic buyers could well end up shooting themselves in the foot by making offers too low to secure the property they want, while foreign buyers snap up all the goodies and bask in the warm rays of a favourable exchange rate.

It’s funny how those complaints from domestic buyers about new build properties being marketed first to foreign buyers have been superseded by domestic buyers allowing those very same foreign buyers into the resale market by driving too hard a bargain. We suspect the current aggressive offering by London buyers will soften into something more realistic once they get tired of viewings and of having their offers refused on the properties they love. We shall see.

Elsewhere, it’s all guesswork. Will corporation tax be cut? Will interest rates go down even further? And will stamp duty be reduced to stimulate the market amid all the drama? Only time will tell. Or maybe it won’t.

The market above £2million was already quiet long before Brexit, although the result of the referendum may give that particular price bracket the stimulus it needs from overseas purchasers, negating the need for stamp duty intervention from the chancellor. But the bottom to middle range, say £700,000 to £1,500,000, could certainly do with an encouraging tickle.

More next month!

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dinosaur-bones
High street estate agency has taken a long time to feel the pinch of online competition, but the world of property is moving away from traditional firms.

There have been countless arguments about why high street agency will survive, but one by one, year by year, those arguments have fallen away as online and specialist estate agents have eroded the monopoly of conventional businesses.

The strongest argument was always that online agencies didn’t offer local expertise, as though they were located somewhere in outer space, rather than at a desk. This was the sell; how can a digital operation in a cloud sell your house in Clapham? It worked for a while, until people worked out that online agents could also be working locally.

The rise of the specialist agent has also had an effect, with owners of unusual, unique or architecturally interesting properties preferring to use someone with a true understanding of their home. In this market, no one cares about your office: it’s your online presence, your brand and your knowledge that count.

The most recent nail in the coffin has been in the suburbs, always the last places to leap into the future and those most concerned with being able to pop in for a chat, see their picture in the window and tell their friends about it. But the suburbs are also where people want the lowest fees. In a land where all the houses are the same, estate agents are seen that way too. Why pay a higher fee when all the agents are in the same location, share the same audience, and do the same marketing? There’s not much call for difference.

Large corporate agencies are taking more than their share in these suburban districts, waging fee wars on the competition and using their buying power with newspapers and magazines to woo vendors with impressive double page spreads in local publications (a total waste of time in terms of selling property, but an effective way to seduce homeowners into using their services). With no property to sell, you can’t do any business, no matter how good an agent you are.

This leaves little room for anything but the most ground-breaking and driven of local agents – something they’re not really known for. Squeezed on fees for their bread and butter business by the bigger firms, and squeezed out of the more interesting properties by specialist agents, it’s likely that most small independent chains will consolidate their operation into one larger office covering several districts, while those with just the one branch will, in the main, simply disappear.

We have proved for well over 20 years that specialist expertise trumps a high street presence every day. If we had a shop front, our expenses would go up, our business would immediately become associated with the postcode where it sat, and we’d lose countless clients in other parts of London and the UK.

In short, high street agency as we know it is breathing its last breath.

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UMM-November-2015
With World War III just around the corner according to the Prime Minister and 76 million Turkish people about to show up on the next flight according to London’s former mayor, it’s no wonder the property market took a back seat in May. I suppose we should be grateful it held on so long given the onslaught and distractions it’s faced this year.

One thing that has gone up is the level of enquiries. Given the frightening prospect of going home and watching the news, perhaps looking around property – even when you’re not sure you’re gong to buy – is something of a blessed relief. Everyone but everyone we meet is sick of the drama and seeming inability of both sides of the referendum debate to deliver real, factual information (probably because, when it comes to the future, there isn’t any).

Another thing on the rise is our list of secret instructions. Because of all the current uncertainty, homeowners looking to sell are unwilling to have their property seen to be sitting on the market for months. With the deluge of information now available on the search portals around when a property was first listed and at what price, we have to find new ways to get properties available for viewing now without damaging their future online reputation.

And so we have a slightly bizarre situation of having a list of properties that we can only tell very serious buyers about when, until the 23rd June at least, it’s unlikely that anyone is going to be very serious about buying. Still, it does give us something of a dry run when it comes to the concept of Secret Properties, a service we’ll be rolling out in the coming months for people who, for whatever reason, would like some more discretion around the marketing of their home. More on that later.

We’re also nearly ready to launch our new website which is looking particularly beautiful. It’s a complete and radical overhaul of our current site and we are sure you’re going to enjoy browsing it as much as we’ve enjoyed the process of designing and creating it.

That’s about it for this month. Our next Monthly Musings will come just over a week after the result of the referendum on the UK’s membership of the EU. Assuming we haven’t all gone up in smoke or drowned in a sea of Raki, we’ll see you then.

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broken-heart
Getting on London’s property ladder today is, for most people, an absolute nightmare. On paper, mortgages are readily available, even up to 100% of a property’s value, but actually getting a bank to lend requires most people to have attained a level of monetary perfection way beyond those of the financial institutions they’re trying to borrow from.

On top of that, the UK’s stamp duty structure has moved from the previously simple-yet-unfair system that attacked people buying just over the £250k threshold (where purchases up to £250,000 were taxed at 1%, with those at and above £250,001 taxed at 3% on the entire amount) to an extraordinarily complicated system that has people reaching for Google and online calculators, and then for the whiskey when they see what it’s going to cost.

Effectively we’re in a place where first-time buyers are priced out of the bottom of the market; where second time buyers are shut out of the middle by failing to meet banks’ criteria to borrow again; and where buyers towards the top are put off moving altogether (or prevented from doing so) by the prospect of a stamp duty bill in the hundreds of thousands of pounds.

Many people in London have become property millionaires through the rise in house prices, but this doesn’t necessarily mean they’ve got untold riches. Nor does it make buying their next home necessarily easier. Unless someone is going to cash in and leave London, their princely equity will disappear straight into the next purchase before we even talk about moving costs.

Take a typical 4-bedroom family house in Islington, now selling for an eye-watering £2.5million. Anyone wanting to buy one of those can look forward to a stamp duty bill exceeding £200,000. That rises to an astronomical £288,000 if that buyer also happened to own a second property (hardly out of the question in a couple where each may have bought their own home before getting together).

We’re now quite regularly meeting people who, rather than give a few hundred grand to the taxman, are simply staying put and modifying their existing home, often for less than the stamp duty on the next one. Not a bad move for them, but it does upset the natural run of things, takes more property out of the market, puts more pressure on supply and further increases prices and costs.

There is a point where enough is enough. London’s young people are dismayed at the prospect of purchasing a property; thirty-somethings are only just thinking about moving out of their childhood bedroom; and people elsewhere are losing interest in buying because of exorbitant taxes. Hardly the proud nation of homeowners we’re all told we’re supposed to be.

Prosperity shouldn’t be primarily based on property, and it’s a good thing for people to stop obsessing about the price of their home and instead to concentrate on enjoying it, but we can’t help thinking the only option we’re ever given with stamp duty legislation is one that makes life difficult.

How long before someone in power wakes up?

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UMM-JULY-2015
Brexit is beginning to take a seriously frustrating hold on the marketplace. As estate agents we’re not really supposed to talk about anything other than positive news, but perhaps it’s time to break the silence.

It’s as though someone has pressed the mother of all hold buttons across every price range in the sales and rental markets in London. A few people are putting their property on the market, a few (but not many) are viewing, but hardly anyone is actually committing to anything.

Around any general election, this isn’t particularly unusual, but the referendum over Britain’s future in or out of the EU is having a greater effect than any other voting time we’ve experienced.

So why do people put their lives on hold when these things happen? Is there a tangible security in buying a property when there isn’t an election? Does the absence of voting ensure your property price will rise and that no recession will come along and stuff things up for you? Not really. And let’s be honest, there is so such thing as actual certainty in the property market; only hunches, feelings and hopes.

Whatever side of the debate you find yourself on, one thing is for sure; neither you nor anyone else has any idea what will actually happen after the referendum. That is why our esteemed leaders can speak so confidently about their own point of view; nothing that hasn’t happened yet can be proven wrong. So it’s simply fear tactics on both sides. Fear that we stay, or fear that we go. But mainly fear about property prices. It’s a shame it’s so hard to get a reasoned commentary out of either side.

If things go well then property prices may not rise, but if things go bad it’s quite possible they will fall. Our view is that, whatever happens, the aftermath in terms of economics and trade will be far less dramatic than anyone is threatening. Deals will be done, agreements will be reached, and it’ll all take years to know whether the right decision was made, by which time a whole series of as yet unimagined world events will have likely taken place. A cynic might say the whole thing is a total waste of time.

So we have a beautiful distraction that comes on top of new tax rules for landlords, increased stamp duty for buyers, the London mayoral elections and, if that wasn’t enough, Peggy Mitchell’s impending funeral.

No wonder London feels upside down.

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