Do you believe everything that you read in the paper…and on the internet…?

That is of course assuming that people can read…but this isn’t the forum to question the education system of modern Britain.  Last night as I finished measuring up a property at half past seven (is that a tiny violin that I see you playing?), I did wonder whether the old fashioned practice of wearing out my shoe leather should be replaced by the e-movement of estate agency. That is, is the old style of building relationships with potential customers – admittedly something that can be a futile exercise – should be consigned to the past  and  instead I should embrace the new style where by everything is done through the internet; contact is made through email, payment is made via the internet and then a return email is sent confirming that ‘a representative’ from the company will be ringing within the next few days to organise a time to come and view the property and take some photos. There has been much coverage recently of ‘online, low cost estate agency’.  There is no office, but a call centre – ‘local call rates will apply’ – and someone – after your money is in their bank – will be dispatched.  This individual may well have the remit of covering Wales – that is all of Wales – not specific to Cwmbran, or Usk or Newtown.  He or she is sent to take the photos, and that is it; not advise you on a sensible asking price, the marketing of the property or to discuss any other issues specific to you and the sale of your property.  The days of the an estate agent having to be based in a town to maximise the chance of selling a property are gone. Just look at how many have moved out of Cwmbran centre to Pontnewydd.  This is due to the power of the internet and more specifically, Rightmove.  But once the initial enquiry comes in after someone has searched on their iPad or Smartphone (other electronic devices are available), the contact needs to be personal and must continue to be personal.  Every estate agent will recount how having taken what they deem to be a great set of photos of a property and asked the vendor to have a look at them, finds themselves having to go out and re-photograph the dining room because the vendor doesn’t like the position of the flower vase on the table.  Not a problem, a decent estate agent should go back out to take another photo; irritating and time-consuming, yes, but it is part of the customer service.  On that note, we are aware of a local estate agent who doesn’t quite strive to meet the high standards of customer service expected; he usually meets the request for another photo to be taken with, “tell them to £&%* off”.  There is a prize for anyone who can name the individual.  One has to ask if you choose to use an online estate agent, will they – via their call centre – organise for someone to be dispatched to take another photo – and if they do – is it included in the initial payment or do you have fork out again for the privilege?  Bearing in mind that no photo shoot was planned previously until your money was in their account.

The clue is in the title: ‘Low cost’ and ‘online’ are rather obvious combat indicators (see, there’s my military training again) of what you are getting and to put it bluntly, you get what you pay for. It is rather like certain ‘budget’ airlines where the flight for £1 doesn’t actually exist other than in the initial online enquiry.  From there on in, you pay for everything at a premium, including if a recent online Twitter discussion is to be believed, the right to breathe.  Those who take more breaths will be charged more than those who manage to minimise their inhaling and exhaling.   Disingenuous? Exaggerating? Taking the &%£$?  Of course, but someone will believe it and will pay for it.  Perhaps we should all breathe a huge sigh of relief (at no further cost) that a certain gentleman with a predilection for shamrocks isn’t yet running a budget estate agency.

A bit of a pickle…

The recent announcement by Eric Pickles, the Secretary of State for Communities and Local Government, that the government proposes to introduce a “tenants’ charter”, has elicited a very vocal response and has raised many questions; and on this particular occasion, it isn’t, “who ate all the pies?”  The official-and publicly promulgated-reasoning behind the charter is to improve standards in the rental sector and protect tenants, conferring new rights upon them, including the ability to demand longer tenancies.  The idea of the new measures is that they will provide stability for tenants and enable them to avoid hidden fees when renting a property, which in turn will assist in rooting out rogue operators in the rental market sector.  I hear the rationale and concur with what the proposals are trying to achieve but as always, there is a trade off.  Firstly, the proposals mean that landlords will face significant barriers, not least in the minefield of obtaining mortgages.  Most buy-to-let mortgages only allow a maximum of a 12-month tenancy.  Lenders prefer shorter terms as it make it far easier to repossess a property in the event of a default.  Only a tiny proportion of lending institutions permit landlords – under the terms of the loan – to offer tenancies of two years or more.  If they do allow them, they are subject to more risk, therefore they increase the rate they charge the borrower (the landlord) who in turn will reflect this in the increased rental that he/she charges the tenant.  I fail to see how this is assisting those looking to rent.  Secondly, longer tenancies will almost inevitably lead to higher rental fees.  Landlords and many agents will try to predict future rent levels and include these in the initial agreement.  People will invariably overestimate potential rent increases, creating rent inflation, thereby reducing the choice and quality of accommodation available to tenants who themselves have financial restraints as to what property they can afford to rent.

The government is pushing to remove, “cowboys and rogue operators”, from the market as, “all tenants deserve a good and transparent service from the landlords and letting agents”.  Quite.  But for every rogue operating as a landlord/letting agent, there is a rogue operating as a tenant.  Many have no official education qualification, but have an unofficial degree (usually masters or PhD) in playing the system and knowing exactly which stunt to employ for maximum effect.  Of course there is credence in the adage that, ‘you get the tenant that you deserve’ but thirty years experience has taught me the hard way that there are a number of people out there who, despite the best efforts and practice of landlord and agent, have no intention of fulfilling their side of the agreement.  I see no charter being proposed to protect the interests of the landlord.

Mr Pickles stated that, “The private rented sector is a vital asset to this country, and plays an important role providing flexible accommodation for those who do not want to buy, or are saving up for a deposit.”[sic].  It is; but I do not believe that increased costs and uncertainty will help incentivise landlords or potential landlords to invest further in the rental sector when the odds are stacked against them.

 

There are some decent people about..

Continuing today’s theme of ologies, it is human nature to indulge in paraxeology; and it is often with a negative undertone.  This morning however, I have had some of my faith in human nature restored.  A gentleman rang the office to say that he had found a house key- with the office details on the keying- on platform 1 Newport Station.  Upon checking our securitised key system we identified the property to which it belonged and rang the tenant to ask how he planned to get in tonight… 

Name that ology…

In the pursuit of alethiology (look it up), I have to say that if I hear one more thing about the bubble about to be caused by this week’s early launch of Phase 2 of the Government’s Help-To-Buy scheme, I may choose to discover that the life of a Trappist monk has its advantages (sorry Tatiana). Whilst it is admirable that banks are staying open -to much fanfare and self-congratulation – to deal with the huge influx of applications, I think that the media are missing the point somewhat.  The true measure of success will be how many of these applications turn into actual mortgages.  I am reminded of the 4000 people who earlier this year applied for a job at Costa Coffee (other coffee outlets are available), but only one job was available and therefore only one person would be successful.  I am not saying that only one person will be successful in obtaining a mortgage, but having worked for many years for a banking organisation that likes to, ‘give a little extra help’,  I am more than aware that the slightest tweak to the underwriting criteria negates 95% of applications.  If a bank doesn’t want to lend, they won’t.  Banks love the pursuit of plutology and are very keen on argyrothecology (you have the internet-use it) but wholly on their terms.  If anywhere in the underwriting process a hint of ptochology (you don’t pronounce the ‘p’) is attributed to the applicant, it is game over.  Whilst we all subscribe to pisteology, time will tell whether this is just a political stunt or a genuine stimulant injected into the veins of the housing market.

A different world…

It may only be 150 miles up the road, but I can now categorically confirm that London is a world apart from the rest of the British Isles (and Wales in particular).  Having picked up a copy of the London Evening Standard and settled down in my rather grubby train seat, (actually I had to stand all the way back), I started to peruse the Wednesday night property section – without using my glasses.  My initial reaction was that £575 per month for a 1-bedroom flat in London wasn’t actually too bad;  prices in Varteg aren’t too different.  It was only when I put my glasses on that I realised that it was £575 per week.  I was stunned that anyone could afford this, until I further read that the current redevelopment of Battersea Power Station has led to 35% of the units being sold off-plan, all to foreign buyers. History will recount that eventually, every trend migrates down the M4 and manifests itself in a lesser form in all parts of Wales.  On this occasion though, I think that I may have left this earth (to take up my new position as management consultant positioned to the right hand side of the Lord), before any Russian oligarch or Arabian Sheikh is buying a bijou maisonette in Ringland.