Greedy landlords? Surely not.

All of us can as individuals be guilty of avarice, even me; and I am as close to perfection as anyone…stop sniggering at the back.  I am still (having been around almost as long as Terry Wogan’s toupee), somewhat surprised, nay, shocked at how seemingly sensible, reasonable, sapient landlords who when the tenant moves in are happy for the letting agent to prepare a full inventory with pictures and then carry out regular inspections, but on the tenant moving out, wish to inspect the property themselves using their memory of several years ago as to how the property ‘should look’ and then quibble over returning the tenant’s deposit.  In fact, the landlord’s inspection is often accompanied by the comment, “I don’t need your inventory, I know what it looks like”.  Correct, sir/madam, you do know what it looks like from the regular inspection reports and accompanying photographic evidence that we provide you with, which you have happily accepted. These may well note some minor ‘wear and tear’ (as expected from any abode actually being occupied by living, breathing people), but these should not now be discarded or ignored because you have a photographic memory of the property from four years ago and have an unrealistic belief that the house should be pristine with no evidence whatsoever of human occupation.

Let me present the incontrovertible facts:

  • The tenant has paid £500 pcm for four years, so that is now £24,000 that the landlord has earned from the property.
  • The tenant has kept the property safe and watertight, whilst it increases in value.  Thus income and capital growth for the landlord have been paid for by the tenant.
  • The tenant has never once missed the payment date for the rent.
  • In order to retain the deposit, the landlord will have to make the case that the damage is wilful and not ‘wear and tear’.

I know Gordon Gekko proclaimed that ‘greed is good’, but for £500?  Incidentally, for all those trivia nerds; Gekko never actually uttered the exact words ‘Greed is good’ in the original film; the trailers for Wall Street featured a montage of edited scenes that resulted in the phrase being heard as such. That’s one to throw water on the bonfire of the next smart a£$& who thinks that he is being the sharpest, smoothest dude in town.

 

 

 

“Bring it All Back”

My week took a sudden upturn when I heard that S Club 7 are getting back together for Children In Need (as opposed to “Former Bubblegum Popstars in Need… of a  few quid”-not quite as catchy nor politically correct).  I challenge anyone not to bop along to “Don’t Stop Movin'” although  few could match me on throwing a few shapes on the dance floor akin to Bradley and the gang.  The breaking news on the pop front generated a wave of nostalgia and took me back to my stellar career in the music business.  Way back in 1980 – when I had hair – I was working on the rebuild of the famous Enfield Rolling Mills and living in Palmers Green.  Every Sunday after work we would go to the local café on the Hereford Road owned by Mr Panayiotou.  The food was great and we were frequently served by Mr P’ son, Georgio Kyriacos.  Nice lad, something of a spotty chubster and frankly, a crap waiter.  One particular day I offered him the benefit of my worldly experience and said, “George, you need to find something that you are good at, because waiting tables is not for you”.  I rather fancied myself as a prototype Alan Sugar.  I am glad that he heeded my sage advice as otherwise the music world would never have witnessed George and Andrew in their tight white shorts, nor would Georgio have made the Billboard Hot 100 Top All-Time Artists List.  During the same period, having embraced the local community (and one female in particular), I went to a local hostelry where bands were being given the chance to showcase their ‘talents’.  One of them was pretty good, but offering my talisman-like advice I told the lead singer that they weren’t bad at all, but would never get anywhere if they kept the stupendously naff name, “Curiosity Killed the Cat”… Simon Cowell, your job is safe.

Why such reminiscing?  Well a recent survey commissioned by the online estate agency, eMoov.co.uk reports that since 1974 house prices have risen 1,879%. Goodness gracious me. And houses are only the 5th biggest riser on the list. No 1: cigarettes, up by 4,370% and a first class stamp has risen by 2,067%.  Incidentally, the chance of your letter arriving on time has fallen in similar dramatic fashion, but that is for another blog.  What does it all mean?  Well nothing but the blindingly obvious; we are 40 years down the line and the world continues to turn with all the associated inflationary risks and returns.  As has always been the case since homo sapiens first inhabited this earth in a ‘compact one bedroom ground floor flat with many original features’, the drivers in the property business are:

  • Marriage/falling in love
  • Divorce/falling out of love
  • Death (all those millennia ago being eaten by a woolly mammoth)

All these drivers are still doing fine and will continue to do so as long as the human race continues to exist.  The property cruise liner sales along  – sometimes with a following wind, sometimes relatively becalmed – and we embark and disembark at various ports.  Is it genuinely life changing that the Halifax price index shows that over the past 12 months, prices have risen 9.5%, and over three years it is a not insubstantial 16.1%?  One has to observe that these figures don’t quite justify the wretchedness of the Greek chorus led by Vince, Ed and Ed (different one – hates the first one and wants his job).

As Socrates (the philosopher, not the all-time great Brazilian defender who was blessed with more attributes than any man has a right to be), said, “Life is to be lived looking forward but is spent looking back”.  Heeding his school of epistemology, I am off to tune into Capital Gold/Absolute 80’s and to look at photos of a time when I genuinely needed the services of a barber.

 

Hope the ground is not too hard

images[10]

Now come now Ms B…

The wrath of the Chesh (sequel to ‘Revenge of the Sith’ – you know where to find me George), was incurred by none other this week than the fragrant Sarah Beeny.  Let me say that I have met Ms B and am the first in the queue to appreciate her astute business sense, perspicacity and substantial portfolio (she has some great houses as well….).  She has made a very successful career from applying and utilising all the skills and attributes available to her, including those of the countless estate agents whom she has worked with over the years.  It would seem that she now wishes to discard the aforementioned agents and is encouraging everyone looking to sell their property to go on line as she opined on various media outlets this week that, “traditional estate agents can work really well but they are expensive”.  As Ms B would concur from the property TV show that rivalled her own, it is all about location; so was her comment pitched at the London market where to sell a £2 million property will cost £40k or the less affluent localities where to sell a £150k house will cost £1000?  Do not listen to any of the sharp-suited agents from the NP44 postcodes who on a Friday night in their local hostelry claim that they won’t get out of bed for less than 1.5% or a minimum £1500 fee. They would run over their grandmother’s dog  – and probably their grandmother as well – for a bag of sand.

Let me be frank; selling a house is like flying a jumbo jet on auto pilot; you do not need the living, breathing version until something goes wrong  and then he or she is embraced with open arms.  Every estate agent has a wall crammed with thank you cards for doing a job that Ms B says can now be done quite easily on line.  Her new company, Tepilo offers three options for facilitating the sale of  your property.  I looked at the ‘bundle’ package that costs £795 for 6 months.  The company will send an agent to ‘verify’ you and the property to ensure that it complies with the Property Misdiscriptions Act and that all anti-money laundering requirements have been satisfied.  They do not value the property or offer any advice as to how best to present it, but they do put up a board, load the property onto Rightmove and offer the services of a ‘professional photographer’.  This is all inclusive in the £795 fee.  After that, you are on your own.  This year, we have listed 120 properties and I worked out that if I could get the home owners of Torfaen to buy into a similar scheme, then I would gross £95,400 with no premises or office staff…I am with Ms B all the way in that an agent does not have to be based right in the middle of the town centre, but they need to be based some where in the locality to be able and willing to deal with any of the myriad  problems that rear their ugly heads throughout the process of selling a property.  When it all goes smoothly, our job is easy and a trained monkey could do it (something that I am sure Ms B has capitalised on in the past), but when a vendor encounters a problem (gas safety certificates, irascible purchasers, Japanese knot weed, solicitors who disappear to play golf by 10am on a Friday morning when you are due to exchange, to name but a few), you need a good estate agent-not a verification agent- who is doing their best to work for their client, the vendor.

Spot the estate agent

DSC00337

“All sentiment is right…

…because sentiment has a reference to nothing beyond itself…” David Hume; Of The Standard of Taste and other Essays Eruditely expressed by the 18th century Scottish philosopher, essayist and economist.  Before the woes (dependent upon your political blood type), of Clacton and Manchester triumphed in forcing Ebola, ISIS and other matters of genuine world-changing import off the front pages, the lot at George’s mate Mark’s bank produced another survey relating to the property market.  The central bank’s Credit Conditions Survey reported the biggest fall in the amount of credit that lenders felt able to suppll since those naughty boys the Lehman Brothers made off for the hills with everyone’s’ money in 2008.   This  glossy survey – complete with several very pretty graphs – showed that the ‘sentiment’ for lending had plummeted on a par with Labour’s majority in the safe seat of Heywood and Middleton.  The report did conclude that the sentiment for lending would improve within the next three months.  One does have to ask what thought process was behind commissioning such a survey, why and what did it cost?  Continuing the sentimental theme, is it now policy that when earnest first time buyers are looking for approval for a mortgage in principle, instead of a letter declining their request they are handed a packet of love heart sweets emblazoned with amongst other messages, “Bye Bye”, “Grow Up” and “Dream On”?

Speaking of Scottish sages with their finger on the political pulse of the nation, (or in this particular case, the jugular), I note that oil prices are this week down to $90.00 a barrel, their lowest in 2 years and 20% lower than at their peak.  You had a lucky escape there, Alex.

I also this week received another reminder that it is all about location, location, location.  Having to deal with a fellow estate agent in North Yorkshire – genuinely God’s Own Country (only just beating Varteg.) I was informed that unfortunately he could not speak with me as he had gone fishing to try and catch some of the first salmon making their way back up stream to Scotland.  In Cwmbran, the only salmon I get to see is courtesy of Mr John West and my time relaxing away from the office is the burger van at B&Q where in the past 6 months, I have met 3 estate agents, 2 mortgage brokers and various members of the legal profession.  There is a story there…

I’ll have a P (for price) please Bob…

Whilst waiting last Sunday for the Ryder Cup to begin its final exertions and to unbeknownst to us all (not least the PGA in America), for Phil Mickelson to be the living embodiment of “There is no ‘I’ in team ,but there is a ‘Me'”, I read an article in The Sunday Times, ‘Home Section’ penned by Graham Norwood, entitled, “The Hard Sell”. The article highlighted 6 different ways to find a buyer for a property. It opened with the statement that Rightmove (what did the property world do before the launch of such property portals and the myriad of data available to quote ad nauseum?) had admitted that, “120,000 of its 800,000 homes have been on the market for at least 6 months” and in some cases, “much longer”.  I have never had the physical or mental acumen to enrol on the NASA astronaut programme, but any knowledge of rocket science here is wasted; reduce the f”£$*&ng price then.  In the same article, Howard Elston, associate director at Aylesford and Quay, a Chelsea based agency, says,” The claptrap about the smell of coffee, first impressions and great presentation is window dressing.  If you want to sell by half term, you probably need to discount” [sic] No probable about it Howard, but elegantly put.

I was rather shocked to read the advice of Andrew Phillips, Head of London Sales at Hamptons International who opined, “Remove your home from all websites and relaunch it as, ‘property of the week’ on Rightmove and Zoopla” [sic]  This will apparently increase enquiries twofold and indicate to the market that you are serious about selling. Clearly, you were not that fussed beforehand; putting your property on the market was merely the behaviour of a bored dilettante… Any new potential purchasers will automatically assume that your house is a new addition to the site and thereby a new instruction.  Wrong.  Firstly, only agents can list on these sites, so the implication from the article that an individual vendor would be able to do this was disingenuous and factually and legally inaccurate.  Allowing for journalistic ambiguity, more importantly, these portals have automated compliance software and relisting the same property three times will initiate the flagging system, and the agent will receive a three strikes and you are out warning.  Admittedly, the ferocity of the reprimand is akin to being savaged by a broken mouthed ewe, but wilfully and consciously breaking the site rules is not to be advocated.

An agent earning their fee should keep their vendors informed at all times as to what is being done to try and sell the latter’s property.  If all other plans of action have been tried with no movement (i.e. someone walking through the door to sign a contract of sale), then it is the agent’s responsibility to advise the vendor – their client – that a price reduction is advisable. This should not come as a shock to the vendor as the agent should have had a constant dialogue with the home owner.  If an agent is happy for the property-that all the indications show is over priced- to sit on their books, price unchanged, and they are not willing to lower the price, then the vendor should change their agent.  I accept that some agencies tie a vendor into a lifetime contract that requires giving up their first born in order to be released; but they should still change their agent.

The final point from Mr Norwood’s article was the discussion of marketing tricks including the one much favoured and indeed the norm in the USA, Australia and Canada, the open viewing. Jo Charlton, a negotiator at Strutt and Parker is quoted, “Sellers have nothing to lose and everything to gain” [sic]  Not quite Joseph.  Sellers do have lots of things to lose, namely jewellery, precious items, the gerbil, the kids.  The concept of a block or open viewing developed in this country following the example of our cousins across the pond, when a house was that popular, due to price, location and demand in that area, that everyone and his dog was desperate to see it.  In America, the realtor (who for those vendors bemoaning a 1% fee takes between 7-10% of the sale price-don’t choke on that coffee), will take as many staff as possible to occupy the house to ensure a constant supply of bagels, coffee and most importantly, security.  Taking priority on the nominal roll is a conveyancing lawyer who will be responsible for the contract and the deal will usually get done there and then.  It is exceedingly efficient, but the hybrid form in England does not reach the same level of efficiency and certainty and only then in specific geographical areas.  An article earlier this year in the London Evening Standard, (I do believe that the clue is in the title), heralded that “Mass house viewings are the only way to buy and sell in London” Emily Jupp, London Evening Standard, 8 April 2014   Possibly, but as her article detailed, the process is not without its pitfalls.  The London postcodes are seeing a huge increase in the number of open or block viewings where demand for property is off the scale in comparison to the rest of the country.  In such areas, open viewings further fuel the sense of demand by the “sheer number of people piling into the property” [sic] The example is cited of a £4 million Chelsea property that saw 40 people through the door in one afternoon and the property exceeding its asking price by some way in a sealed bid scenario.  Firstly a house in that location in the top bracket of stamp duty always would be attractive to a certain demographic and would invariably reach, if not exceed its asking price.  Ms Jupp quotes Jo Eccles, managing director of the house finding company, Sourcing Property who acknowledges that many open house viewings generate excessive interest by putting forward a very low asking price in order to create, “a frenzy of interest and an almost sealed bid situation” [sic]  Whereas the practice in the states involves a lawyer being in situ and a binding agreement there and then, the scenario on this side of the water has a high drop out ratio.  Panic- driven potential buyers often put down sealed bids for enormous sums of money having only seen the property for fifteen minutes.  A few days later, having given it more measured consideration, they realise what they have done and withdraw the bid.  Closed viewings have a place, but it is more suited to the capital than Trevethin.

GC pension plan

Sparkle Ohara growing into a big girl now