Eagle-eyed

Gary Berendt, Senior Property Consultant at Arlington & Hall takes a look at the property market.

Eagle-eyed property market watchers may have noticed a change. Certainly those in London will have seen a marked difference from a year ago. The market has done an about turn in favour of buyers. Fewer buyers and more properties available have changed the fortunes of purchasers. What does this mean for the market elsewhere? Well, often where London leads other areas follow.

In a buyers' market purchasers have more choice, negotiate harder and have the luxury of taking their time in finding a new home. There is no need for them to be rushed into quick action.
For sellers this new dynamic will create a different set of questions and decisions. Pricing will be key. So too will property presentation and condition. But one of their biggest decisions will be which estate agent to use. Some might not have sold a property for a long time and there have been many changes.  New options are available.
While there was a strong sellers' market low-cost online property listing companies sprang up to cash in when selling property was relatively straightforward. But now things will change. Simply listing a property on a property portal will no longer be enough. Each house or flat will have to be competitively and accurately priced, serious and motivated buyers will have to be found rather than fallen over, and once a sale has been agreed it will take experience and expertise to keep it on track through all the legal, financial and dependent sales complications that are an inevitable part of most property transactions these days. These all take time, tenacity and training - things that the bargain basement operators aren't well equipped for.
Of course one should always look for great value. But sometimes that does not mean the lowest price - or commission in estate agency terms. In estate agency good value means finding the firm that will get the top price from the best buyer, often in the quickest time. Anything else is of no value at all. In fact it is a false economy. It is hoping for the best and that has no place when it comes to selling such a valuable asset.
So if you are selling in what may soon become a buyers' market it is best to shop around and ask your estate agent what he or she will do differently in this different market. Ask what makes one firm better - not cheaper - than another. It is very easy to be the cheapest choice. It takes skill, expertise and sustained performance over many years to be the best choice.

Lucky You

Gary Berendt of Arlington & Hall finds lessons to be learnt from Olympic preparation.

The fabulous Rio Olympics remind us that dedication, natural talent, great coaching, relentless training, self-belief and a total focus on winning are what creates a gold medalist. 

Luck comes last on the list, for Olympians can’t rely on luck. Instead they have to depend on things they have control over. A 16^th century proverb says, ‘Diligence is the mother of good luck’. And it is diligence that wins gold medals. 

If selling houses were an Olympic sport who would you wish to represent you? 

An inexperienced, poorly trained, badly equipped person whose ethos is cutting costs and, in the main, relying on luck?  

Or, would you prefer a professional armed to the teeth with an impressive array of features, benefits, experience and training, all designed to help you get the most from your sale? 

Sadly there are lots of competitors entering the race for your business and offering cheap fees for a cheap service. 

Did the highly successful GB cycling team cut costs? No, it did not. It did not put top riders on their parents’ old bikes and then hope that everyone else in the race would get a puncture. Instead it invested in technology. It invested in training. It invested in people. It invested in success. No stone was left unturned in preparing to come first. 

Winning a gold medal can be a life-changer for the recipient. But it can never be left to luck. Too much is at stake. Winning at selling your property can be a life-changer too as your home is so much a part of your life. It provides shelter, it helps sustain your family and it helps you to build security and wealth. It helps you win in life. 

So, when you are deciding who will represent you in selling your home check out the competitors, weigh up their past successes, their experience, their desire to win and their complete disregard for luck - because the best make their own luck and that will be lucky for you.

Hexit

Arlington & Hall takes a look at the post-Brexit property market and offers some sound advice to those selling their homes over the summer months.

Most but not all home sales occur because the seller is moving on to another property. Yet time and again many sellers become focused on the sale rather than looking ahead to the move. The sale becomes the be-all and end-all when really it is just a part of the whole move.

Estate agents the world over will recall occasions in a declining or static market when a seller refused an offer from a reasonable buyer only to see the value of their property fall further over time, leaving them worse off than ever. In these situations sellers need to take into account the ultimate aim – the move.

In this immediate post-Brexit period it is perhaps too soon to determine exactly where the market is heading. But across the country in all but the hottest locations prices have steadied and in some cases declined.

This is a time for caution not for alarm and certainly not a time for digging one’s heels in over price. The smarter move is to understand that what one may lose on the swings one may gain on the roundabouts. That is, a negotiated sale brings the freedom to negotiate a great purchase, always bearing in mind that the ultimate goal is a life or lifestyle move to somewhere else.

Flexibility and pragmatism make the best selling strategy in this confusing market where there is a great deal of ambiguity. There is low supply but this doesn’t necessarily mean high demand. Interest rates are low but so to a degree is confidence. Also, buy-to-let investors and second home buyers have suffered a setback through rising stamp duty. So if your aim is leaving your home – Hexit – negotiation is the name of the game and, like the UK’s exit negotiations with the EU, there will be plenty of strong argument and posturing but in the end there will be a deal. It’s in everyone’s best interest.

Brexit Special

Arlington & Hall looks at how the referendum result could affect the UK property market.

Well now we know. Britain is leaving the European Union.  All the scaremongering is over and we will learn in the coming years which of the two sides was right after all.

But what will this decision mean for the property market in the UK?  In the short term perhaps not so much as one might imagine.  Those people who put off a house move until after the referendum will in time trickle into the market, driven in the most part by need.  But it might not actually be the referendum which will turn out to have had the greatest effect on the property market this year.  The real game changer might be tax - the extra stamp duty on second homes and buy-to-let properties, and the new tax burden for foreign buyers.

These Treasury measures are profound and have the potential to shift opinion and practice - if they haven't already done so.  It is hard to pinpoint exactly when the UK property market became so driven by overseas investors - many of whom may never set foot in the properties they own - and domestic buy-to-let investors benefiting from low interest rates and rising property values.

But now however there appears to be a slight move away from an investment led property market to one more driven by buyers needing affordable homes for themselves and their families.

We seem to be in a particular period of opinion change in the property market right now.  Tastes are different.  The growing numbers of retirees want youthful urban living with all the convenience it can bring.  New building materials bring cost savings and help the environment so there is an increasing demand for homes made from these materials and fitted with labour-saving technology.  Younger buyers are in general more reluctant to renovate houses than their parents were at the same age, wanting instead ready-to-move-into properties which give them more time to pursue their careers and leisure interests.

Of course our economy is the prime driver of the property market. But all things being equal we may come to see that the European question was not quite so influential on housing in the UK as buyers' desire to buy, builders' desire to build, lenders' desire to lend and - ultimately - politicians', planners' and the public's desire to make available suitable land.  In or out of the EU those desires have always had less to do with Brussels and more to do with us.

This Blessed Plot

Arlington & Hall finds evidence that not a great deal has changed in four hundred years when it comes to property investment.

William Shakespeare, who died 400 years ago last month, knew a thing or two about plots. And not just plots for his plays; he also developed an eye for plots of land and the buildings on them.

Part of Shakespeare’s genius was powerfully and colourfully exploring human nature in all its brutal, funny, frail, tragic and complicated guises. Over the centuries human nature hasn’t changed much so it is easy to imagine that the bard would have handled his property affairs today as he did four centuries ago. Shakespeare, it seems, not only had a way with words but a talent for investing in bricks and mortar.

In this he demonstrated a true understanding of the art of property. For instance he understood about investing in areas he knew well: his birthplace, Stratford upon Avon, and his workplace, London, where he invested in up-and-coming areas such as Bishopsgate, Blackfriars, Southwark, and what we know now as the Barbican.

Shakespeare really appreciated location. Although he did not coin the phrase, location, location, location, he certainly could have done, such was his appreciation for finding the ideal position for a home or a theatre. Shakespeare clearly understood that knowing one's market is key to successful investment in property. 

With his outstanding knowledge of human nature Shakespeare may well have proved a skilled negotiator by identifying strengths, weaknesses, opportunities and threats in people as well as the property market. And although he had a wonderful appreciation of history he must have had a very clear view on the future as well.

There were no estate agents in the early 17th century. They wouldn’t start to appear in the UK for another 250 years. So Shakespeare was on his own. Today you needn’t be. The housing market is so much more complicated now. So if you are moving home, buying to let or wanting that dream holiday home ask a well-established and reputable estate agent like us.  We have the know-how and experience. We will also care about you and your blessed plot.

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.