After the Gold Rush

Arlington & Hall take a look at the property market now the rush to avoid a higher stamp duty is over.

It happens after every major budget change where extra tax costs are involved when buying a home. There is a stampede to complete purchases before the tax axe falls. Most notable was when double tax relieve (MIRAS - Mortgage Interest Relief At Source) was removed on mortgages for unmarried couples in August 1988. This resulted in an average of two years’ worth of transactions being squeezed into a twelve month period - and a sharp rise in house prices. Sadly it also heralded a slump in activity the following year with all the negative knock-on effects to allied areas of the economy. Governments should see these things coming, but they never seem to.

We have just witnessed a mini-stampede from buyers of second and buy-to-let homes pushing through their purchases before the April 1^st deadline when higher rates of Stamp Duty Land Tax (SDLT) were imposed - a hefty rise when one hadn’t really factored it in before the last budget or even if they had.

Of course, everyone in the industry could have anticipated this rush to complete purchases. In this area, at least, tax avoidance doesn’t appear to have the stigma that many other areas of this now-frowned-upon activity have.

But now comes the aftershock. Once again we can predict the outcome. Those who were serious about buying will have finalised their purchases. That leaves those who were not so serious. This group will take a little time to take stock and get used to the extra cost of buying - while some will decide not to purchase at all. This will leave a vacuum in the market for some months.

Nature and the property market don’t like a vacuum so a number of things will happen. There will be fewer motivated buyers and certain asking prices will come under pressure because of the extra cost of purchase. But the best bit is that for the first time in years first-time buyers should have a window of opportunity when there may not be so much competition from cash and/or professional property buyers. Given the low interest rates this then is the perfect time to enter the market for those with a deposit and an in-principle mortgage in place.

Every cloud has a silver lining. After the last gold rush this is the time for first-time buyers to strike it rich.

Not in the National Interest

Arlington & Hall goes beyond the hype and looks at what is really important in buying and selling a property this spring.

The property market is never static. But it is perhaps now at a unique juncture. It is hard to think of a time when the market was so politicised. Following on from last year's general election and the Scottish referendum in 2014 we now face the UK European referendum in June. No market likes uncertainty and on top of various recent tax changes - especially in the buy-to-let and second home sectors - these political events are certainly making some buyers and sellers wonder if they should wait for the dust to settle before moving.

But what if future events prevent the dust from settling? Perhaps after the referendum there will be something else to think about – a possible interest rate change, the US general election in November or some fresh global, economic or humanitarian crisis. The point is that our lives, although influenced by politicians, do not march to the drum of politics; they have their own rhythms - governed by personal events like leaving school or college, partnering or marriage, births, jobs, income changes, relocation, retirement, and - underlying it all - individual ambitions.

Some say there is never a perfect time to move home. But of course there is: it’s the time that is dictated by life. In or out of the European Union or despite what future events are in store we all have personal agendas that largely ignore national and international affairs as we seek to provide for our families and ourselves. We don’t move home in the national interest. We move home in our own interest - to fulfil our own ambitions. Despite what politicians may have us believe our own houses are rather more significant to us as individuals than either the Houses of Parliament in London or the European Commission in Brussels. So perhaps it’s best to forget politicians when it comes to moving home and listen instead to our hearts – and our financial advisors.

Budget 2016

Arlington & Hall takes a look at this year's spring Budget and wonders how it may affect the property market.

I suppose that the 2016 Budget was never going to be too contentious or radical in view of the upcoming European referendum in June. Certainly there was little mention of housing in the Budget. Perhaps the Chancellor felt he had done enough recently by additional tax to buy-to-let and second homes - creating the current storm of activity in the property market from those attempting to beat the tax axe and complete purchases before 1st April.

But other areas of the Budget do remind us of the effects that economy and infrastructure have on the housing market. For instance by creating better road and rail networks local housing receives a boost in demand. But major rail schemes like High Speed 2 and 3 in the Midlands and the North and Cross Rail 2 in London, and road route improvements such as a Pennine tunnel are very long term, and the beneficial effects on house prices will take a great deal of time to make themselves felt.

Yet we don't need these huge projects to influence housing at local levels. House owners and buyers should always keep a close eye on smaller local schemes and improvements. Changes for the better in transport, jobs, education, business and health have an immediate and positive influence on the demand for local housing both in the rental and sales sectors - evidence  a good state school has on housing within its catchment area.

As a well-established estate agency business with its roots in the local community and with long-held local knowledge and deep understanding of regional affairs, we can always point buyers in the direction of those areas due to benefit from modernisation and improvement. This knowledge makes property investment in these areas potentially more beneficial as an appreciating asset than other long established, popular and sought after locations.

The Chancellor may not have done much directly to or for housing in this Budget. But other measures he has made will have a significant effect over time.

In or Out?

Arlington & Hall looks at whether it will be best to opt to stay in the market or to come out.

Should we stay or should we go? It is a very difficult question to answer. There are so many factors to take into account. What will happen if we stay where we are? What new opportunities might there be if we move? But if we stay put at least we know where we are. We have become used to it. Of course there are faults - many of which need to be fixed over time.

The neighbours are reasonably friendly and do look after us a bit. We are secure here and they do keep out some not-so-welcome guests. But the neighbours can also be taxing, do not always see things our way and often try and tell us what to do. Next door are always good for a fine meal and a great bottle of wine. But they grumble a lot and never seem to be happy. Next door but two are in a huge place, run things like clockwork, and often seem to bail out our more cash-strapped neighbours which is nice of them. But over the years we have on occasion not always seen eye-to-eye and have had some major arguments.

Of course if we do move it doesn't mean our neighbours won't move away themselves over time. So the old place may not stay the same whether we leave or not.

Then there are others in our own family to consider. If we do move some might not want to move with us, but would rather go in their own directions making our family smaller. Do we want that?

Moving could mean finding ourselves in an isolated place. We would have to make new friends, many of whom could live a long way away.

Online or High Street estate agent - a viewpoint illustrated by my LinkedIn newsfeed!

Whilst scrolling through my LinkedIn posts this morning, two caught my eye. They are at the bottom of the page. 

Originally, it made me smile because of the placing of the two updates on my 'newsfeed'. In case my screenshot skills are somewhat sub-par, and for ease of reference, the first of the two updates is an 'online' agent posting that they 'SOLD' a property (sale agreed? Sold?) at 21.13 'tonight' (Sunday night) when all other high street estate agents are closed. Fantastic no? Yes - but I'll come to that later. Closed, but should still be working, so a moot point. 

The second of the two updates, immediately following this, showed a traditional, high-street agent agreeing three properties before being released to the open market. Also brilliant, undoubtedly.

However, high street agencies can perform both of these accolades, but not online agencies.

Let me expand. We have done both examples recently, and I'm not blowing my own trumpet. Poole, BH13 AND BH14 is filled with several very good estate agents and I'm sure many of my contemporaries have similar examples.

On the top example, agreeing a sale out of working hours really shouldn't be shouted from the rooftops as much as it is. Why? Because, the way I see it, that's my job. I've agreed sales before on Sundays, Bank Holidays, and even on New Year's Eve (an asking price offer a couple of years ago!). And, as I said above, this isn't an 'I'm so great at my job' post. Any decent high-street agent you invite to value your home should be able to give good examples of when they went above and beyond to sell your home. That's simply part-and-parcel of agency; we work harder to sell your home, estate agents have to work for their fee, especially in the face of competition. We're not idiots, we know that, but equally, the 'competition' really does not work as hard as a good high-street agent will in selling your home. But it's a complicated job, and don't believe otherwise. You really do get the service you pay for; I'm afraid that's just how market forces and economics work. But, I digress. On to the bottom example!

The bottom example is a high-street agency, represented across the UK, selling 'all three properties' (perhaps a new development?) before being exposed to the market. Again, well done, unnamed agent. Again, ultimately what we're all in the industry to do, so no great shakes there, but it's nice when it happens, isn't it?

Well, I say we're all in the industry to do it, but would high-street agencies struggle at this?

To give a relevant example - I recently agreed a sale that fell into both camps. It was a property that had not been released onto the open market, and agreed on a Sunday evening. It doesn't matter that our agency office was 'closed', it really didn't. I'd formed a rapport with our potential purchasers, known to us, and led them on a journey in the local market, showing them suitable properties that fit their criteria. They also had my mobile number (again, it's just part of the job). So when I originally made the call to them out of working hours about a property (this one!) that hadn't yet come onto the open market, they were pleasantly surprised, and I mentioned it fit their criteria and what they were looking for well. Therefore, when they returned my call after viewing it on a weekend evening, I was understandably pleased but not overly surprised!

A call then went out to my vendor-client, and after some to-ing and fro-ing, as often happens in the situation, a satisfactory figure was reached that both sides were happy with. The property hadn't yet been released onto the open market, and was agreed out of working hours on a weekend. So we had fallen into both camps.

Now, think about it. We can sell your property out-of-hours. We know the local market innately, know the properties on the market, how they compare to each other, know our buyers, motives, reasons for purchase and for sale, can match up buyers with suitable properties, can suggest off-market sales to suitable buyers, and any good agent worth their salt can 'create' business by putting together someone potentially moving house with their dream property that has just become available. Not to mention dealing out of office hours. We do all of this as a matter of course (and as said, most GOOD agents in BH13/BH14 should do the same).

Would an online estate agent do the same?

We are liking the increasingly light evenings inviting us out on the water for a quick sunset paddle board!

With sunset around 6 pm and increasingly light evenings we are looking forward to being able to fit in a quick sunset session of paddle boarding aft

Augustin Hadelich playing Tchaikovsky at the Lighthouse in Poole Wednesday 17th February

Don't miss 2016 Best Classical Instrumental Solo Grammy winner Augustin Hadelich playing Tchaikovsky's Violin Concerto at the Lighthouse in Poole tomorrow evening!

http://lighthousepoole.co.uk/3077//3312