For hire…

Hackney carriage drivers, barristers at law, ladies (and gentlemen of the night-note how PC I am…) and estate agents. Which two of these professions share similarities in their conduct? Brownie points and the last Rolo if you correctly selected estate agents and those from the Cynthia Payne Finishing School. Why? Because under current legislation we do not have to accept a fare or brief. Before anyone starts, just to clarify: in Great Britain (England, Wales and Scotland), prostitution itself (the exchange of sexual services for money) is legal, but a number of related activities, including soliciting in a public place and owning or managing a brothel are classified as criminal activity. There you go. In simple terms, as an estate agent, we can say, ‘Thank you, but no thank you’ and walk away. Does this happen often one may ask and why so?  In the world of highly targeted corporate agency, probably not, but in the sector of independents, whilst not common, it does happen; and not without good reason. Last week I was invited to value a property in a popular and established area of Cwmbran. It was without doubt in the top three of the worst properties that I have ever visited. The kitchen would have scored -5 on the 1-5 hygiene raring as supplied by Torfaen Council. Having taken a deep breath and ventured upstairs, I was met by the sight of the owner’s paramour asleep on the bed-naked. “Don’t worry about her, she’s been working nights”, I was told. “Not as a fricking cleaner” I thought to myself. The owner was very eager to establish the property’s value and what Cheshire & Co could do to market the property. After another deep breath, I suggested that firstly, in order to show the propriety to best effect,a general declutter and tidy up would be a good idea.  This was met with an unequivocal “No”. I tried another angle of explaining that a property that photographs well attracts far more people. Again, a manifest refusal to do anything (and that anything could have been as basic as clearing all the c”£p off the floor so that one could actually see whether it was carpet/ tiles/laminate/concrete). At this point, I took yet another deep breath, girded my loins (calm down ladies), and informed Mr Vendor that on this occasion Cheshire & Co would not be able to help him and suggested that he may like to get a second opinion from a fellow agent whose tetanus and life insurance policy were up to date. Mr Vendor then told me that I had to market the house if he wanted me to do so. Having pointed out that I did not choose to take him up on his offer, he asked me of which redress scheme was I a member and for my membership number, as he wished to make a compliant about Cheshire & Co refusing to market his property. I always carry a copy of The Property Ombudsman’s Code of Practice and having produced the said copy I asked him to highlight which section would cover his alleged complaint. Leaving him to consider his options, I exited the property.

All joking aside, I would not expose my employees or members of the public to such squalid conditions. It is a fair bet that many of Cwmbran’s other property agents would not do so either; although some would, as at the very least it would boost their already manufactured Rightmove figures…

Carry on Stampeding…

Further to last week’s ‘word of the week’ that was in vogue with the popular press, we have been amused to read that the stampeding continues (everyone must be exhausted). At the forefront, was a company called Oldbury Residential, who, it is reported, have completed the purchase of four properties in Manchester and succeeded in doing so before the stamp duty deadline. In the process they saved themselves more than £10,000 in tax.  Well done Oldbury Residential, or more specifically, Ms Cherie Booth QC and her son, Euan.  I was delighted to see that they took the advice of Cheshire & Co and bought them all through a limited company. Quite how this sits with the Labour MP who complained about the “Tory scum landlords” I’m not sure; possibly in the same echoing ‘no comment’ chasm that dealt with the revelation that Margaret Hodge-that fierce critic of tax avoidance and the former head of Britain’s parliamentary public accounts committee -had been the beneficiary of shares in a family company from a foundation based in a tax haven. What odds that Jeremy won’t be standing up at the next PMQ’s and saying, “I have a letter here from Margaret in Islington…”?

It would appear the Gideon’s apparent intention to ‘”cool” the buy to let market has been somewhat underwhelming.  The rush to buy before 1 April has led to-yes, you are ahead of me on this one-an increase in the number of buy to let landlords. Mmmm, well played there G-man.  Seguing in rather tidily with the ‘stampede’ is the move of the major high street banks to “slash” (this week’s ‘word of the week’) interest rates on their buy to let products.  This was allegedly prompted by a concern that the market would cool (as No 11 claims was the Chancellor’s intent), and the major banks will lose their market share and more importantly profits and senior management’s bonuses will take a clobbering.  Yes, cynical is my middle name.

Cynicism has not been misplaced this week as yet another miracle of  selling proved.  Having been to list a property whose owners had given their current agent notice within the correct time frame, I was less than surprised to be told that the soon to be agent without portfolio now had a prospective purchaser who was ‘desperate’ to find a house that was coming to view the said property on the very last day of the notice period; which happened to be on a Sunday, at 4pm, unaccompanied by the agent. Well I never. Cue Surprise Number 2 when on the Monday, the vendors were told that the full asking price had been offered and that the purchasers were immediately proceedable. All hail those ace agents (who hadn’t even conjured up their granny to look at the property in the preceding 6 months). Alas, in a subsequent exchange with the agent, they were told that the purchasing process of the immediately proceedable, ‘desperate’ purchasers would take at least 12 weeks. Right. Really.  The vendor agreed that we would keep in touch on a weekly basis to see how things are progressing.  In the meantime, I have nipped round to William Hil to see what price they will give me on the sale falling through.  If it does, not only will I have enough to pay for the Cheshire & Co Christmas Party (they have a 2 for 1 deal going at the local’ Spoons if I book now), but I might give Cherie a call to see if she wants to add the property to the Oldbury Residential/El Tone’s Retirement Fund portfolio.

 

 

 

 

“… we should move expeditiously but not in a stampede..”

So said the 15 times re-elected Republican senator, Henry Hyde.  Judicious words, as one would expect,or at least hope from someone who chaired the Judiciary Committee and the International Relations Committee at the time of 9/11. Considered and measured behaviour has been in short supply over the past few days, whereby everyone’s favoured course of action has been to err on the side of hysteria as opposed to caution.  Word of the week has been ‘stampede’ (Scrabble value 13 if you are interested), which has been bandied about at a gallop. As we approached 1 March, the press breathlessly told everyone that there was a stampede to get property sales completed before the stamp duty changes kicked in and the buy to let world ended the following day (obviously). Countrywide has now reported that there was a stampede of people aiming to complete before 1 April.  For those of you who may be interested, (at least try and pretend that you care…) completions were up 17% on the equivalent period in 2015.

The press continued with their favourite word this past weekend as according to various reports, the Labour Party were involved in their very own stampede (no, not the one on 8 May last year when everyone tried to distance themselves from having had anything to do with Ed M), to condemn David Cameron.  It has been widely, if begrudgingly acknowledged that he has not broken any laws, but is guilty of being rich.  As one commentator described it, 50% of the people say that he is rich and well done, whilst the other 50% are saying that he is rich so therefore automatically qualifies for getting the sack.

Cheshire & Co experienced Cwmbran’s own version of the Calgary Stampede this weekend and it had nothing to do with tax returns and offshore trusts and everything to do with a bath. Bear with me on this one.  We look after a property where the tenants have had a few problems with the rent (finding it) but the landlord has been very understanding and has allowed them to pay off the arrears monthly.  On Friday, the tenant reported a bow in the kitchen ceiling because the lavatory above was leaking and, “had been for some time”, which they had not chosen to report “some time” ago. We arranged to visit the property the next day-Saturday- at 0900hrs.  Upon reaching the office the following morning, I discovered that our answering service had had a nervous breakdown as a result of innumerable increasingly hysterical and irate messages informing us that the said ceiling had now collapsed.  We immediately went to the property and established that the leak had actually originated from the bath where the tenant had decided to take off the side panel, “some time ago” but had chosen not to replace it for practical, plumbing or aesthetic purposes.  As we set to rectifying the situation, our and the contractors’ efforts were somewhat impeded by the stampede-bigger than the cast of extras in any John Wayne film- of family, friends, some one that they met in Alicante ten years ago and the neighbour that they loathe, who were all demanding that the tenants were put up in the Celtic Manor, had an entire new bathroom suite fitted and/or were given a new house to live in (and potentially flood).  I would point out that the tenants themselves were very happy with the arrangements made.

I did note with a wry smile that none of these concerned, stampeding citizens who were morally outraged at the circumstances that their friends/family members found themselves in were on the scene or beating a path to our door to help them with the repeated, late monthly rental payments.  Nor had they stampeded to help with the alleged leak in the bathroom.  They did though continually refer to the rich landlord who was making money out of people who could not afford to buy a house.  This would be the same landlord who was allowing the tenants to discharge the arrears month by month when he was wholly within his rights to show them the door.

Rather appropriately as I listen to PMQ’s and the teeth-sucking, hand-wringing of Jeremy’s lot, I rather think that -as with many things-Winston Churchill was spot on when he said, “Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery”. But not the sharing of the necessary equipment to replace a bath panel.

Carry on as you were…

Yesterday was either April Fools’ Day if following the Gregorian calendar, or the first day of the New Year if stuck in a 1582 time warp and clinging to the Julian calendar. Either way, 1 April ushered in a “whole new world” according to various parts of the popular press, as Chancellor Gideon saw the first day of his “draconian measures” being implemented that cover the buying and selling of property. The Big G (him, not me), has actually been rather sneaky (some may read it as ‘cute’ and I don’t mean that in the sense of fluffy bunnies/puppies/kittens/cheerleaders); as the new rates of SDLT and the ’15 house’ rule are for those buying 15 houses in the same transaction, not as was initially announced, for anyone owning 15 or more properties.  So who, in practical terms, is exempt? Statistically, no one. When the Chancellor announced the proposed changes last year together with reduction in higher rate tax allowance for buy to let, he gave every large higher rate tax payer notice to get their affairs in order; i.e. get all properties into a limited company.  As we have said before, any higher rate taxpayer with a substantial portfolio who had not gone down the limited route should have been looking for a new accountant. If such tax payers adapted their affairs prior to 1 April 2016, then yes, of course there would be some stamp duty to pay, but considerably less than the rates in force from 1 April. Also, corporation tax is now 20% – very attractive to higher rate taxpayers – and of course should the limited company dispose of one of its assets there are a myriad of allowances/off setting/delaying tactics that can be employed before a penny of corporation tax is handed over.  In our opinion, no harm done by G to any of the big hitters.  Well played there my friend.

As was to be expected, the trade press is wallowing in misery because of the “end” of buy to let and industry professionals having to put the brochure for the high end sports car/holiday/girlfriend back in the drawer. The diary at Cheshire & Co is as full this week as it has been all year.  The ‘effect’ of the new changes was in evidence when a buyer who had agreed to buy a property some time ago chose very recently to change lender. He will not complete until this week, thereby incurring additional stamp duty to that which he would have paid had he completed prior to 1 April. When asking him how he felt about the additional cost (£2250),  he said that he viewed it as, “an interest free loan over the next 3 years.” Having sought further explanation of his rather sanguine response, he said, “I will simply charge £15 a week more in rent and the tenant will pay the stamp duty”. Fair enough. So G, how exactly do you see the reforms bringing control to the housing market and thus helping those renting to get on the housing ladder? Nothing changes. Not even if one chooses to believe the results of a recent poll in the International Business Times that reported earnestly that almost a fifth of landlords in London ‘planned’ to sell up because of G’s tax hikes on the buy to let sector. For those of you who may be interested, I am planning to give Miss Minogue a call tonight…

Whilst some reports have indicated that some landlords plan to sell up, several data reports show an increase in activity in the buy to let sector ahead of April 2016 as investors rushed to beat the stamp duty rise.  Should a report be published at the end of 2016, here at Cheshire & Co we predict that there will be no dramatic drop in the number of buy to let properties. Firstly, because of the activity prior to 1 April and secondly, because if any buy to let properties do come on the market, have a guess who will be circulating like vultures? Correct: other buy to let investors.

For all the furore, there does not appear to be-from where we are sitting-any major changes to the dynamic of the buy to let market. Neither is there any substantial additional  help for those tenants wanting to purchase a property. Nothing changes then… Does anyone have the dialing code for Australia?