The Seedy Side Of Estate Agency


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Now I do not want to give the wrong impression, the vast  majority of agents are honest hard working people. However the culture of questionable practice does seem to run deep amongst many large corporate agents.

I  think that if people knew how some big brand Estate Agents behaved, they may well think twice about their choice of agent and in turn do some research, not just relying on a known brand because well known and trustworthy are two completely different things.

Malpractice locally is so rife that just in the past two weeks here are three examples, all in our local area of very seedy practice.

Firstly by a large corporate that over values ( a lot.) We hope you understand that we cannot name names as we are the little guy here and have neither the time nor budget for expensive slander cases, however we can and always do tell the truth.

We had a Sole Agency with a client, a week later he naively signed up with said corporate after scamcallmuch pressure and a promise of a higher figure than we were marketing for. They were well aware that he was already on the market Sole Agency with us and did not warn him of his potential liability for two fees. They did not locate a buyer for the property, we did and the matter is proceeding.

 

arfurNow they are claiming that he is in a Sole Agency contract with them and therefore owes them a fee! They have actually phoned me twice to ask who the buyer is. We know that they did not introduce this buyer and the  buyer has confirmed that we were the introducing party. Nonetheless the agent is calling me and asking for the name of the buyer. I will not provide this to them because I fear given their seedy behaviour thus far, they will then ‘find’ a viewing which they allegedly carried out with this person.

Second scenario came a week earlier. We received a call from our buyer on a property saying that sadly they had contracted a life threatening illness and therefore could not proceed with the purchase. We immediately called our Vendor client to explain what had transpired and we promised to call all of our cash buyers and serious buyers with large deposits immediately. Two members of staff proceeded to do this.  Another local corporate called our client and heard the story. They played on our clients frustration and pleaded that they had one cash buyer who had been desperate to get in and purchase the property, not advising our client that as he was a Sole Agent with us, he would be liable for our fees and theirs! Our client was in a vulnerable moment of weakness and agreed to this one cash buyer being introduced, all of course without our knowledge.
dog with piggy bankNext thing we know two of our cash buyers who we had already spoken to called and asked why we said we were the only agents when another agent had just sent them an email saying fancy this? With a link to our particulars. So we phoned our client and explained that clearly the other agent had no buyer, that even if they did, that would make him liable for two fees.

By this stage of course our vendor was not sure who to believe as the other agent had planted the seed of doubt that in some way we may have lied over the reason the original buyer fell through and if indeed we had received calls from our cash buyers.

We produced evidence of this and our vendor, having now realised had been well and truly lied to and misled by the other agent, called them and asked them why they had neglected to advise him of his liability for two fees and asked them never to call again.

The vendor now has complete faith restored in us thanks to this! He discovered that we had called all potential buyers after all and had just as many ( probably more ) contacts than said corporate.

Finally I have just discovered that the another corporate manager in our area has just been sacked for alleged dodgy dealing!

Now there are plenty of great independent agents out there, I hope the above has given you pause for though prior to appointing that big name, merely because they are a big name!

Independent agents like us are members of NAEA, ARLA , SAFEAGENT, Rightmove and Zoopla and we can provide both the coverage and indeed the personal owner in office coverage.

Careful guys it’s a minefield out there!Danger-Minefield

 

 

 

 

 

Brexit A Few Days In And How It Is Looking For The Norbury SW16 Market

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As predicted in our last blog, Mark Carney has said that a cut in interest rates is highly likely very soon.

But wait what does it all mean for the property market ?

 

 

 

 

Property-Auction

The Good News: For those of you with existing buy to let’s out of fixed rates, this is the fist piece of positive news to come out of Brexit.  This will mean lower repayments on your loans, thereby an increase in the yield of your portfolio.

Of the investors I have spoken to over the years, when I ask ( and I usually do ) what are the best deals you have ever done, they tend to have been in turbulent times.

 

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With arguably the biggest financial shock the UK has seen in our lifetime, the buy to let investor may well be one of the ‘winners’ in the short term of our current situation however the stock market bounce back has surprised many ( FTSE 100  is higher as I write than it was prior to Brexit.).

 

So what can we expect over the next few months?

Less property coming onto the market will be an immediate reaction as many see these uncertain times as the wrong time to make a move.

However with interest rates at almost zero and firm indications that they may stay there for a considerable length of time, it is unlikely that we will see a huge number of repossessed properties coming on the market.

The main reason is that it  is still a lot cheaper in London to pay a mortgage than it is to rent, meaning that anyone on the verge of repossession is unlikely to push their own red button and halt mortgage payments unless there is absolutely no alternative. What would be the point? The equivalent property would cost them at least twice the mortgage payments at today’s rates on average.

This is in stark contrast to the last real recession in the late 80’s when property values slumped as interest rates were on average ten times higher, meaning that mortgages were less affordable than rent, values tumbled and in rolled the property recession.

In stark contrast the 2006/2007 recession hardly touched the London and suburbs market. Any losses were quickly regained and more. We all now know that they accelerated beyond most of our expectations.

This was partly because of low interest rates and partly because of the fundamentals of supply and demand.

Buy to let was a small specialist area in the 1990s but by 2006 had grown into a huge industry worth billions.

These investors and now pensioners, free from the old regulations noose are looking to alternative investments but find that most cannot come close to property for security, yield and capital growth.dog with piggy bank

For this reason, some of my larger investors are on the hunt and particularly the overseas property investors. Their currency now buys considerably more pounds, effectively providing a huge discount, They are seeing this time as a huge opportunity to secure some great deals on buy to let investment.

binoculars dog searching looking and observing

This underpinning of the market by the investment side will assist in seeing that prices do not fall but may not be enough to see any house price growth in the short term.

So what? Well if you are a first time buyer, this pause for breath of the market could be an opportunity. to get in. With many unsure of whether the timing is good or bad, there will not be a rush to get in but enough interest together with a lack of supply to ensure that the market doesn’t fall.

What if it goes down? Well two things 1: Medium to longer term, history tells us that property always goes up as suggested above and when confidence returns, albeit in a year or two, the market will press ahead.

In the meantime consider this: If your buy to let investment is providing an income along the lines that you expected, nothing has changed for you ( unless you have a variable rate loan, in which case they just got better! ).

You may not be able to refinance and purchase more from the  gains in property value but  you have lost absolutely nothing and arguably secured your family’s future.

Builders are already indicating that they will slow down or stop some projects in the light of Brexit. Given that even if the ones that they had planned were built, London would still have a huge shortfall of housing stock. They have just amplified this problem, meaning that supply will go down in a market already struggling to provide sufficient housing.

In the end, supply and demand always determine price and that lack of supply coupled with a huge population trying to get into London make zone 3 up & coming areas like Norbury the gold bullion of the day..

Our next prediction? A soft landing for the property market and rents to rise as the lack of supply bites.

I have learnt over the years that property favours the brave, some of the richest clients I have continued to invest through both recessions.

Many are now in an enviable position where Brexit could not affect them anyway due to the sheer size of income over expense.

If you want to follow them, you need to have the courage to do the same.

As Mark Twain famously said, Buy land, they are not making any more

If I can help you in any way with your property choices, do get in touch

Ken

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brexit- What Could It Mean For The SW16 Property Market

An historic day today, a lot of clients have been calling us and asking what the impact of dog reading a newspaper‪#‎Brexit‬ will be on the local property market here in ‪#‎Norbury‬‪ #‎SW16‬ here is our view:

The housing markets rely on the fundamentals of supply vs demand.

The referendum does not change the fact that we have a housing crisis.

Any drop in the value of the pound also makes UK housing a more attractive option when buying in any other currency, international investors will not hesitate to jump in if that gap widens, especially in London and the suburbs.

We expect an interest rate cut: soon.

Confidence may be knocked in the short term but if we were to trip into recession, it is likely that interest rates will be lowered further, this will bolster the housing market.

Many leading developers have said that they may slow down their housing programs and this will lead to an even greater imbalance placing upwards pressure on house prices

In the medium term there is talk of inflation. Inflation has historically lifted house prices as salaries rise to keep pace, so does borrowing capability.

Over the longer term house prices will move upwards as they always have, especially in up and coming areas like #Norbury with the essential mix of good commuting distance to London and relatively ‘affordable’ prices.

Landlords may indeed be the early beneficiaries of #Brexit. With a slowdown, less Landlords will buy to let and demand will grow as
the normal level of supply offered by the huge virtual army of new landlords drops.

The case for the ever growing need for accommodation here in South West London: We may see many more people keen to get into the UK ahead of any perceived ‘closing’ of our borders, many of whom will commute to London for work and only have two choices, rent or buy.

We believe that the most likely outcome is a slowdown in property sales and the predicted rises may now slow but are unlikely to reverse.

People will always need to move. If you already own and wish to sell, provided you have the equity and the house you are selling does not rise in value, the chances are neither does the one you are buying.

If you are thinking of selling and are concerned by #Brexit, give me a call

Ken

Budget Update March 2016

The chancellor has now confirmed that the 3% stamp duty surcharge (SDLT2)  on the purchase of secGeorge_osborne_hiond homes and buy-to-let properties will go ahead from April 1 2016.

He also reversed his former announcement that that larger investors will be exempt from the stamp duty changes – meaning all purchasers of buy-to-let properties and any second home purchasers  will pay the additional tax.

He says the money raised will go towards the  private rented sector via the build to rent sector.

This seems ironic given how he has treated Landlords with such contempt.

He also states that capital gains tax will be reduced BUT not for any gains on property.

The good news is that there are no further anti landlord measures announced.

One of our fabulous local schools goes to the Royal Albert Hall With Former Student

Students past and present from Norbury Manor Business and Enterprise College for Girls lianne-la-havasbrought the audience at the Albert Hall to their feet for a standing ovation on Monday night when the Norbury Manor Business and Enterprise College for Girls special choir “Celeste” accompanied ex Norbury student Lianne la Havas on the two opening nights of her European tour, firstly at Bexhill on Sea  and then at the RoyalAlbert Hall.  The tour is a sellout and the students were thrilled to be asked to sing with Lianne on three songs in the main show but the show stopper was in the encore with an acapella version of “Some where over the rainbow” during which Lianne re joined the choir that had started her passion for singing, and ultimately her career, while at school.  The packed Albert Hall heard Lianne give credit and thanks to Emma Stevens who coached her and to her family for their inspiration and support.

Headteacher, Amanda Compton said “This is a night the girls will never forget, Lianne is an amazing performer and for her to give the students this opportunity was brilliant.  They loved every minute of the performance but also the rehearsals in school and before the show.  She has inspired the next generation of Norbury students to believe that if you have a passion then you should pursue it.”

The show was seen by celebrity guests including Paloma Faith and radio 1 dj Tame Impala who discussed both Lianne’s performance and that of the school choir in her breakfast show on Tuesday morning.

James Alexander Wins Best Estate Agent For Customer Service In SW16 Again !

allagents_hires_2-001We are proud to announce that yet again we have been chosen by the largest estate agency ranking service in the country as the number one estate agent for customer service in SW16.

To receive the gold award yet again really demonstrates how hard the team works for it’s clients and  that we really do go the extra mile for our customers.

You can see what our customers have said here  

Well done to the team for another great year.

We have already had a record breaking start to the year so if you are thinking of renting or selling in or around Norbury, Streatham, Thornton Heath or Croydon, give us a call for a friendly no obligation chat on 020 8679 8601

 

 

Challenge To New Tax Rules By Cherie Blair’s Law Firm

dog on the phone with  a can

dog on the phone with a can

A crowdfunding website has now achieved its initial goal of reaching £50,000 to start a legal challenge against the government’s new rules to reduce the interest payment allowances to buy to let landlords.

The firm acting is Omnia Strategy, owned by Cherie Blair.

Perhaps it is not entirely surprising as the Blairs, with a UK portfolio value of £30,000,000 have a clearly vested interest in ‘helping’ landlords!

The crowdfunding page can be seen here. 

The page now says “UPDATE 2 JAN 2016: This case was fully funded for the initial stage – in a matter of days! We will launch a new funding phase, provided our Judicial Review application is successful.”

They say the reason for their challenge is “We want to bring back a level playing field in the private rented sector to challenge the advantage the government is giving to institutional and corporate investors, overseas property buyers and cash-purchasing landlords, none of whom are affected by Clause 24.”

Prominent Landlords from all over the UK are supporting the challenge.

At James Alexander we think that the are entirely right to make this challenge and wholly support the cause – we will keep you updated.

 

Buy To Let For Beginners

Why be a landlord? For Sale Sign Jasper

One of the great things about being a landlord is that, provided that you have bought a suitable property and you have a good managing agent, the amount of effort required from you is quite limited or indeed virtually nil.

Whatever your occupation, your income is forever limited to the amount of hours that you can work in a day. 

With property, that limitation is not a consideration; some landlords with very large portfolios do very little, yet make more than most hard working individuals that I know. 

The expansion of their property portfolio is often made possible by refinancing one property, which has risen in value, so as to release equity to fund further purchases. In turn the same applies to the newly purchased properties and so the business grows.

So where do you start and what do you look for?

Yield or growth? 

 

There are two ways that Landlords make money from property:

The Yield

The yield, which is the difference between the rent and the outgoings.

At the extremes for example, some towns in the north of England can offer potentially large yield but little or no capital growth. Conversely, central London can offer a very tiny yield, often not covering the rent but potentially large capital growth.

Nevertheless, investors go there in the hope that London house prices will always be jumping up at some point and this has proven a strategy for some.

Capital Growth

The capital growth, is the amount that the property value has increased by. 

Where To Look ?

In my experience, an ideal location should provide a good mix of both income yield and capital growth. The capital growth provides the ability to grow your portfolio.

This is where commuter towns really win as there will always be demand from professionals.

Experience has shown me that professionals are the easiest type of tenant to deal with for a variety of reasons, but that is a discussion for another article.

Negotiation?

My advice is be reasonable, of course if you can get a great deal then you should but in a busy market you may find that there is little room for negotiation. 

Many buyers come to us looking for a property at a price point that is just plain unrealistic.

They often return a year later regretting their earlier heels dug in stance and resigning themselves to buying a similar place at a higher price.

Some unwise investors end up being seduced by a shiny new build flat with amazing potential returns. Often reality starts to hit as they speak to agents and realise that the figures provided by the sales office were at best optimistic and at worst a lie.

When the shiny sales office has gone and no one is achieving anything like what was originally promised, it is too late.

I am not suggesting that all new builds are a bad investment, nor that all salesmen will dupe you. Just understand they or any selling agent is funded by the sellers.

Do your homework

Due diligence is the key. Don’t just take the developer’s or selling agent’s word for it when it comes to rents:

Speak to local and unconnected estate agents, plus use Rightmove or Zoopla to check sale and rental prices.

Get the paperwork right

Lettings legislation is a minefield for a newcomer and constantly changes but with the right advice shouldn’t put you off.

In October alone there were five major changes to legislation !

Take care that you have obtained good advice here. ARLA is the body that any professional managing agent should belong to, any member firm has the necessary acumen to guide you through plus they carry client money protection meaning that your money will be guaranteed to be safe

If you have done your homework and bought wisely, you will be in a great position to invest further and set your future up nicely as values and rents inevitably rise.

Landlords Are The New Most Hated

corbynIn his maiden commons question time speech Jeremy Corbyn asked about housing

“What is the government doing about chronic lack of affordable housing and the extortionate rents charged by some private sector landlords in this country?”

Note the words extortionate and landlords used together, implying unreasonableness.

When there is a political hot potato and no answer, the finger pointing begins, Landlords are fast becoming the supposed ‘problem’ with the housing market and their reputations lay in tatters just like the bankers after the banking crisis.

Until the government wakes up and starts building enough homes, stops selling off its only rental stock without replacing it, landlords are not the problem, they are in fact the only solution for the majority of tenants.

Yes landlords will protect themselves from inflation and help to fund their own pensions or children’s school fees- scandalous? Not really.

We accept that some landlords are unscrupulous but someone needs to stand up and say this:

“Most Landlords are honest, hard working individuals with a day job and really do care about tenant welfare.”

Many rents are way below their potential level due to the fair nature of the vast majority of Landlords. Yes some are unscrupulous but these are a tiny minority , not the majority the government and opposition would have you believe.

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Let us take the extreme position where landlords, fed up with criticism from people who think they are some kind of Rachman like evil character put their hands up and sell.

How could this possibly assist the housing crisis?

A lack of supply is already the reason rents are rising, many landlords are only charging the rents at the market rate due to the fact that they bought the properties at a level which means that they are merely breaking even after expenses.

How can the blame for this be levelled at the individual who wants to protect their family from house price inflation and the poverty trap by investing in bricks and mortar?

When you then add in the new disincentives to invest in the form of tax breaks (no 10% wear and tear and the tapering off of interest payment allowance) It is not surprising that rents will rise as landlords look to protect their assets and raise rents to cope with the new rules. Put on top of this the massive changes to legislation this year ( landlord licensing, new notice for ending tenancies, new fire regulation requirements and new requirement to serve extra documentation prior to commencement to name but a few! ) With all of this you can see why some landlords are selling.

If you wish to make the situation better then you need to stop coming at it from a them and us perspective and work with scrupulous landlords so that we can all make renting safe and fair for both sides.

Well we expect the rhetoric to continue and the honest Landlord to bear the brunt of much finger pointing from both sides of the government as they struggle to justify their own useless ideas to solve the problem.

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If the government wish to point the finger and lay the blame at Landlords feet we would say:

“We see that finger and you know where you can put it?”

 

Landlord Licensing Update On High Court Hearing August 2015

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We have now received the Judgement of Sir Stephen Silber.

Whilst he was satisfied that there were good grounds for a Judicial Review claim, on the evidence before him, he decided that the Council’s level of publicity about the Scheme was sufficient for persons likely to be affected by it (Developers/Landlords) to carry out their own “due diligence” to find out about such details, even if they had not been directly informed.

It is open to our barristers to apply to the Judge for Permission to Appeal, but this needs to be done urgently

We would need to arrange further funds to cover their additional fees.

Please note that the basis for granting permission would be either a review of the evidence heard in court and/or a review of the law applied to that evidence (i.e. what constitutes a “consultation”) and whether or not it would be in the “public interest” for an Appeal to be heard.

We are reasonably confident that the Judge would grant permission with the latter point in mind, given that the decision is likely to set a precedent for other boroughs throughout the country.

Please continue to donate to give the best chance of an appeal

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