Wednesday, 27 March 2013

London's bargain basket, surely not.

Recently during an interview with an Asian based investment magazine we were asked the following question: 
"Do the property developers just come to Asia to market all the properties the locals don't want?"
As a 12 year old music fanatic, every Monday I'd make a detour on the way home to visit Andy's Records (remember them?). At the back of the store in a dark corner sat the bargain basket, which was filled with all the music which obviously hadn't done too well in the charts that week. Everything was no more than 50 pence and I used to fish out a bargain once the hype of a particular release had died down. 

Why is this relevant you ask? Well, in the same sense, it would appear that some Asian investors are under the assumption they are the bargain basement customers for London property once the hype has died down. However, this is simply not so. Firstly, there aren't really that many bargains to be had, and secondly, they are often the first to be offered the chance to buy in a particular development. 

There are a number of drivers behind this, but a main factor is the changing way large developments are being financed. Before global finance markets took a tumble, development finance was readily available, if not also cheap, and developers took full advantage of this. It was therefore possible to build on a fully speculative basis and worry about sales later in the process. However, this all changed as finance markets contracted and debt became much harder to come by. If you did get offered debt, the interest rates and terms made your project near enough unprofitable. 

This is where the off plan sales became more prevalent. If a UK developer can secure a sale off plan to an Asian buyer, this is essentially a source of finance or the security needed to gain finance and allow the development to be built. No one likes risk, especially banks, so having a buyer already committed before a brick is laid reduces risk significantly. 

Therefore the Asian market is playing a much more important role than they probably realise. One would guess that has got to be a good bargaining position when buying, no?

See for regular updates and our future press. 

On a different note, it's great to see how our relationships develop with some clients as we go through the buying process. Last Tuesday evening, I received a text message from a highly valued client asking if I wanted to go for dinner. I politely declined as I was already at dinner with another client, and he promptly text back saying, "glad you are busy, that was actually meant for my girlfriend!" I hope she's not the jealous type. 

Wednesday, 20 March 2013

So much information, so little time.

Technology has moved on leaps and bounds in the last 10 years and access to free information for buyers is overwhelming. As a result, many homebuyers are able to use the internet to do their homework on their target area and arm themselves with an abundance of information in the comfort of their own home (or from the office...I won't tell anyone).

The crux of this is that every search engine user is a buying adviser. But are they? Can you really replace the human element and real relationships with a database to achieve the same goal? Many would argue that you can. Look at HMV, Comet, Woolworths: all victims of shifting consumer buying habits towards purchasing products online (amongst other things).

But property is different. No one property is really exactly the same as the next. As a result we are not always comparing like with like. Therefore each comparable piece of sales information should be evaluated on its merits, something which is not a simple process and it can be argued, one that needs human input.

We live in an age where information is power, however, with so much information available, how do we understand which information is 'good' and which is 'bad'? Internet based search engines for property are only as good as the information put into them at a certain point in time,  therefore a buying decision could be based on relevant or irrelevant information. It's a bit of a gamble. Information can also be selective. There is no obligation to disclose all positive and negative traits of a property on an internet listing, therefore are we truly comparing like with like?

How many hours do you think the average home buyer will spend on a property search engine before they purchase a property? Using conservative numbers: people will probably start looking 3 months before they buy and say they spend an hour a day (more like 2 hours), 4 days a week on a website (more like 7 days), and also continue this once they've found a property to make sure it's been removed and that nothing better comes on. Essentially you're talking about a minimum of 48 hours of your time (or your company's time) over a 3 month period before you've even done viewings, negotiations, sorted contracts and, even more importantly, sold your current house!

Some people just don't have this time to speculate and that is where a buying adviser provides value (shameless plug - sorry). Access to off market opportunities is also another element where internet databases won't give you an advantage in today's market. As a good historian will tell you with any research, it's always key to assess the credibility of sources and the relevance to your situation.

On another 'non-property note', one of the interesting elements of doing international business is always "the introduction". To kiss or not to kiss? After how many meetings is a handshake replaced with a kiss? Should it ever be replaced? If so, how many? In the UK, we have no real etiquette (ironically): it can be one or two. In Holland it's three, in Mauritius it's four. Then there's the dreaded awkwardness of the handshakekiss, one party goes for the handshake, the other for the cheek and you end up in some sort of Freemason like embrace. Needless to say, there is a lot more to learn when visiting other countries across the globe, so in this sense Google and Youtube can be your friend!

Wednesday, 13 March 2013

Who am I?

Welcome to the inaugural blog, your portal into the fascinating world of property search. 

Who am I? (mimics Henry Kelly at the start of a 'Going for Gold' question). Property buying agent, property buyer's agent, property finder, relocation agent, buying advisor, buyer's us what you want, our industry has somewhat of an identity crisis. We're not estate agents as we don't sell or market property, but we are regulated by the Estate Agents Act 1979 and have to comply with the Anti Money Laundering regulations set out by the Office of Fair Trading. For the purposes of Professional Indemnity insurance we are also covered as estate agents to a large degree, but we still don't sell property. Confused? That's just the start of it. 

In the UK, we often don't consider using an agent or representative when buying property. Essentially estate agents marketing property are paid by the seller and thus have no contractual obligation to provide a buyer with a service. If they did have, there would obviously be a huge conflict of interest. Just as an estate agent will advise a seller on the right price and method to market their property, surely a buyer should also be advised the best price to pay for their new home or investment? An agent acting for the seller ultimately wants to get the best price for their client, so is that in the buyer's best interest?

Estate agents get a bad press more often than not, but there are more good ones than there are bad. Our bad experiences are often borne out of not having aligned interests, very common when you want an estate agent to do something for you as a buyer, when they are contracted to someone else, namely the vendor. Maybe it's worth considering having someone looking out for you? 

Perhaps that is where we come in, but who are we exactly? See to learn more about us and the markets we work in.

Now for something away from property. One message that was reinforced to me this week in discussion with one of our clients is that successful people will often surround themselves with people who are better than them in an array of fields in order to keep on learning and evolving. Sounds simple, but often our own insecurities and/or egos can make us feel threatened by those who know more and thus we place a ceiling on what we can achieve. Kjell Nordstrom (, talks about the need for businesses to constantly evolve just to stand still and maintain success, so surrounding yourself with the best is not a bad way to achieve this.