“Our Survey said..”
More often than not, it was “Eh-uhhh” accompanied by a commiserating Bob Monkhouse, Max Bygraves or Les Dennis, who must on occasion have pondered, “Just how bloody thick can people really be?” As one to chuck in when there is a lull in the conversation, Family Fortunes was based on the American game show Family Feuds, which I think to be a far more appropriate (and honest) title as the Jones family from Cwmbran silently seethe all the way back down the M4 because one of their clan revealed the limitations of their shared gene pool by giving a really, really stooooopid answer to a question.
At Cheshire and Co we are prone to answering in similar fashion to Mr Babbage (the name given to the computer on Family Fortunes-the mathematicians amongst you will immediately understand the relevance-those still struggling with Baby’s First Abacus, the answer will be given at the bottom). Post the Brexit hysteria that produced surveys almost as quickly as the political parties changed leader, last week saw the reporting of some actual facts relating to the business of selling houses. Nationwide reported that house prices rose faster in July than for the previous four months and that the annual price increase across the UK was on average 5.2% The Brexit naysayers were adamant that the bottom would fall out of the market and that London would be most severely hit. Well, everything is relative. A property that was on with one of the big hitters had been listed at £24 million and ‘only’ sold for £19 million. A £5 million loss? Er, not quite. The same property had been purchased 5 years ago for £12 million. So the vendor actually ‘only’ made a profit of £7 million. Hardly a property disaster.
London’s sharp boys, Foxtons have reported a dip in profits that has led them to reconsider their branch operation. Note, a dip in profits, not a loss. What did make me choke on my stick of raw carrot (it takes effort to maintain a physique such as mine), was their further reporting that their average sale fee had gone up slightly to £13,552 per sale. Is it any wonder that sellers in London and the South East are tempted to try on line, enquiries answered by a call centre in Wolverhampton, £1500 fee up front agents?
On the subject of fees, a friend of mine this week exchanged on the sale of his property at a price of £1.2 million and his agency fee was a total of £21,600. Yes, you did read that correctly. When he asked me what they had done to justify the figure I was tempted to say that they didn’t have to do anything as means of justification as he had signed the contract agreeing to pay them. My grumbling pal said that he had been tempted to use one of the internet agents who wanted £2000 but that he had not fancied doing any of the work –such as viewings –himself. When I said that I would have done it for £3000, he said, “but look how far way you are”. I replied, “How far away do you think that your online ‘local’ property agent will be?”
Discussion has turned again to ways to stimulate the property market. George/Gideon who used to have the keys to No 11 and now just has a ‘Change of Address’ card came up with Help To Buy et al. Personally, I think that the Government should consider bringing back some form of MIRAS. For those of you who weren’t about when there were only 4 television channels, this is Mortgage Interest Relief At Source. This was actually Labour policy (yes, your lot Jeremy, if you can’t remember, ask Diane), where to help FTB buyers get on the housing ladder, buyers would get tax relief, at their standard rate, on the first £30,000 that they borrowed. I appreciate that such thresholds would be useless today, but how about if a seller is saving on average £5000 in fees by using an online agent, some of the monies saved could be offered to FTB to help with their deposit? This would not be a vendor gifted scheme as it would not affect the true consideration (ie the price) of the property. I’m here Theresea, just give me a ring…
P.S. Charles Babbage was an English mathematician, inventor and mechanical engineer. He originated the concept of a programmable computer. See the link?