Most certainly at an auction. I read with a wry smile of the challenge of Mr Mehmet Koch whose most recent venture into property acquisition was reported in many of this weeks’ papers. The aforementioned Mr Koch (stop smirking at the back), recently attended an auction and purchased a property located in Finsbury Park, in the process parting with £450,000 cash. This was done without having viewed the interior of the property, reportedly because the elderly couple living there would not allow access to Mr Koch and his business partner brother. With a prescience befitting the Delphic Oracle, most of us reading the article could have scripted the next instalment in the story of Mr Koch’s property empire (he already has a substantial number of houses). Having handed over the cash and having in return been handed the keys he discovered that internally the property was a combination of bomb site, refuse tip and a leading contender for an episode of ‘Hoarders’ Homes From Hell’, or some other made-on-the-cheap, voyeuristic reality-TV show shown on an obscure satellite channel at 3 in the morning. To compound his misery, Mr Koch has now fallen foul of the local police; in jettisoning the accumulated junk onto the lawn to the front of the property he has been cautioned for not treating the contents “with respect”. Really. This almost lends itself to a Richard Littlejohn “you couldn’t make it up” entry. Unfortunately for Mr Koch the scenario is all too true. If ever there was a case of fallaces sunt rerum species (look it up) this is it. But really, to purchase a property unseen when you have tried and failed to view it internally? Would alarm bells not be ringing, even faintly? We have all bought something ‘blind’ or in haste without giving it our full consideration. Take my ‘bold’ checked, luridly coloured golfing trousers bought for a discounted price at Bicester Village. Actually, I wore those, much to the dismay of the genteel members of Edgbaston Golf Club; but one accepts the possible short-sightedness and inherent risk of such decision-making. However, to part with £450,000 cash takes some doing (and a large pair of….bags in which to put the money). In the current climate, the popularity of property auctions continues to increase and they often provide a great opportunity for people to either get rid of or acquire a property quickly and at value. Not a month goes by without the media reporting on the activity at such auctions and very frequently the gentleman whose opinion is sought and quoted is my fellow media star, Mr Paul Fosh, (South Wales hasn’t just got the fat opera singer in the Go Compare advertisements). As Mr Fosh would I am sure concur, there are great opportunities out there but non teneas aurum totum quod splendet ut aurum (look in the same place as before). Not bad for Fairwater Comprehensive…
Tuesday’s Today programme on Radio 4 featured a gentleman from the Building Society Association to talk about the latest BSA report and how it reflected the current housing market. It was interesting to hear that mortgage transaction levels are increasing but I was slightly concerned that the phrases of, “the worst is over” and “confidence is back” were used in conjunction with the Help-To-Buy Scheme. This only has a three year life span and one does have to ask what happens when it finishes. Will confidence have fully retuned by then or will a false bubble have been created that cannot be sustained? I don’t want to seem to be the next Victor Meldrew but I do think that a note of caution should be sounded; particularly as people tend to exhibit a sheep-like mentality with spectacularly short memories. Also touched upon in the discussion was the use of regional figures to determine the national average rise in house prices. We all appreciate how an average figure is obtained but as was pointed out by the interviewer, the statistics for London and the South East are not reflective of the rest of the country and contribute to a false average reading. The interviewee further commented that it was Russian money invested in the quality end of the market that was driving up house prices in the London area. I have been looking hard recently but I haven’t found any Russian money in Northville, Southville or Ringland.
It will come as no surprise to our regular followers that yet again Cheshire and Co have their finger on the pulse of the media. By that I mean that en route to an appointment yesterday I was listening to the Jeremy Vine Show on Radio 2. The lead item was the malfeasance of letting agents; primarily the various fees charged to tenants, that incidentally have been banned in Scotland. The housing charity Shelter are launching a campaign to have the same ban implemented in England and Wales. At the outset, let us just say that as always there are two sides to this story. On the one hand we have the belief that housing is a social right and should be provided free of cost to the whole of society. On the other side of the argument we have the capitalist pigs who try to mug off everyone and make as much money as possible. As Eric Arthur Blair wrote, “all animals are equal, but some animals are more equal than others..” (sic). Answers on a postcard to the Cheshire and Co office if you can identify the pen name of the aforementioned Mr Blair.
A lettings agency is a service business – a point that was acknowledged by all parties in yesterday’s radio debate – even begrudgingly by the charity’s representative. As a result, everyone expects all businesses to turn a profit. Even the most socialist members of our society would agree that buying or using a service has a cost. But, there is a limit as to what can be charged for providing the said service. Yesterday’s debate raised some horror stories that we as reputable letting agents found abhorrent. One particular example was of an agency charging a new referencing fee to the same existing tenant on three separate occasions. Whichever way you look at it, that is a total rip-off. Another example was of agents charging check in and check out fees. Again, this is taking the proverbial. Just because the market is on fire and an agent can name their fee, it doesn’t mean that they should and thereby smother the golden goose. One of the individuals interviewed was a private landlord who managed his properties himself, but readily acknowledged that self-management is not for everyone. Another agent interviewed also commented that she and her colleagues acted primarily in the interests of the landlord but also were mindful of the interests of the tenant and in doing so were available 24/7. Round-the-clock service has a price. We also charge an application fee to the tenant but this is not simply filling in a form and ringing up their boss for a reference. It is always about matching the right tenant to the right landlord. On occasion, this is after they have ‘failed’ a referencing procedure. This is not because we ignore the hard facts but because we discover the whole situation, interview them and can then put forward a case to the landlord that this individual may actually be suitable as a tenant. Of course, if the landlord says no, their decision is final as they are our client. Do the housing charities expect us to carry out this professional work for nothing? I think that you will find that your independent agent will charge clear transparent fees and not attempt to extract a bodily fluid, unlike some or our corporate brethren who will charge you for just entering the office.
“In a time of deceit, telling the truth is a revolutionary act”. (sic) Mr Blair again. Well said.
The power and reach of the internet and the world wide web knows no bounds. For that we have to thank Sir Tim Berners-Lee. Just imagine being introduced to a gentleman at The Priory Hotel (the go-to place for the movers and shakers of Monmouthshire) and asking what he does for a living, to receive the reply, “I invented the world wide web”. Oh. “This week, according to Rightmove, I’m Cwmbran’s third-rated estate agent”. Terrific. Your junior G-man badge is in the post. In all seriousness, without the internet and the world wide web, estate agents as well as most other industries would still think a rolodex was cutting edge. As has been proven, newspaper adverts don’t sell houses; nearly everyone looks on the internet for their next home. Property portals – such as Rightmove – are the default for people looking to either buy, sell or rent a property. As a result, someone can ring from Glasgow about a house in Pontypool that they have just seen on Rightmove . The last time that I checked, the Argus didn’t deliver in Govan. As fantastic and as instant as this is, to be used to best effect, it should be used in conjunction with boots on the ground (another throwback to my military career). Recently I have been contacted by several London based asset management companies, to discuss average prices in various postcodes in Gwent. I soon discovered that their comparables were done purely by an individual in a office-somewhere-who had probably never even heard of Cwmbran, let alone be able to spell it if asked. I had great difficulty trying to convince individuals that because one house in the postcode was worth £600,000 and another was worth £300,000, the average price for four-bedroomed houses in that postcode was not £450,000. Similarly, a period property – however beautifully finished – in an unpopular postcode can sometimes be worth less than an ex-local authority property in a more desirable postcode. I asked these companies whether I could at least go and have a look at the nominated property; even though I have lived here all my life, I wanted to go and look at it, in the flesh, not on a computer screen, at another agent’s carefully selected, beautifully photoshopped pictures. If I could have gone to look at it, I could have told them that this very cheap, ‘bargain’ price that they thought that they were paying was in fact market value. We have all – especially me – been dragged kicking and screaming into the technological era but should not forget that the old-fashioned ways still have a place and are an essential part of the property business.