Buying, selling and letting - Selling

The worst of the property slump is over as buyers return to the market and house prices show signs of rising again, it has been claimed. 

Two of the UK’s leading estate agencies this week called the bottom of the market, revealing that buyers are returning, the number of house sales is picking up and that, in some areas, prices are even rising again after months of huge drops.

Knight Frank says that “the situation has improved markedly since the turn of the year” and that although prices continue to fall in the first four months of the year, it was at a "much reduced pace".

“We’ve seen drops of between one and two per cent a month as opposed to to the three to four per cent monthly drops we became routinely used to in the run up to the end of 2008,” a spokesperson says.

“And by April our prime central London index even managed to post a positive result, with prices climbing 0.4 per cent – the first rise for 13 months.”

Another high profile agent, Hamptons International, is also feeling much more positive – revealing this week that 13 per cent more buyers registered with it in April year on year, and that sales jumped by 27 per cent over the same period.

“There have been three consistently good months of UK sales activity and although this is not at the boom time levels of 2007, it is certainly better than for some time,” says Jane Jordgensen of Hamptons International.

“In fact, vendors are three times more likely to secure a sale than this time last year. The start of 2009 has definitely gone as well as expected and we are beginning to witness healthy levels of trading.”

The only problem for agents is a shortage of houses to sell – Hamptons says the number of new instructions is down 40 per cent  year on year, while Knight Frank reports properties available for sale down by 28 per cent.

Neither company can say for sure why the market is improving – given continued gloomy headlines in the nation’s papers – but a partial answer lies in mortgage affordability which the Council of Mortgage Lenders says is at its cheapest since 2004.

Nick Leeming of propertyfinder.com says anecdotal evidence from other agents also points to a recovery in the market.

“The past three or four months have definitely been better but some agents report that much of the new activity is among cash-rich buyers investing in property – so they are worried what happens when all this spare money runs out.”

If there is still a recession-proof, high-octane end of the property market then Robert Bailey, a slim 45-year-old with a moderately cut-glass accent, is its undisputed kingpin.

In central London’s classier social circles where the credit crunch means buying a BMW instead of a Bentley, he is referred to as a ‘home finder’. But in practice he is a matchmaker to London’s well-heeled house hunters helping them discreetly locate, haggle over and then buy some of the country’s – and the world's – most expensive property.

So when high-profile industrialists like Lakshmi Mittal or society gals such as Jemima Khan want a home in London's famous postcodes and have tens of millions of pounds to spend, it is Bailey to whom they turn for help.

Consequently Bailey has been described as London’s best-connected property guru, often to be seen scurrying around central London wielding his little black book, packed with familiar names from the Sunday Times Rich List.

“I haven’t got it on me today but in reality most of the important contacts are in my head,” he told me as we talked in his Kings Road office building, which he shares with clothes designer Tom Ford, among others.

Bailey began his career at the age of 19 learning his networking skills in Mayfair but then moved on to doing deals in Knightsbridge both for himself and later working for high profile agents such as Strutt and Parker and Knight Frank.

“I’ve built up a client list of wealthy private individuals who simply don’t have the time or knowledge to complete complicated property deals in areas like this,” he says.

Despite the necessary cloak-and-dagger secrecy of his world, the word-of-mouth property market in central London is a thriving one; Bailey says 70 per cent of purchases are completed via ‘representatives’ like him.

All of them – which number in the dozens – are adept at building trust in the highest social circles – they need the connections to know who lives where, wants what and when they will want to buy (and sell).

“Therefore, I’ve been with clients on holiday, to their weddings and once even spent a week on one of their yachts, which was very jolly,” says Bailey.

“But it’s the local knowledge that impresses them. One US banker I met at a party told me what his house on Cadogan Square looked like and I told him which number it was and the colour of girlfriend’s hair – the only thing I got wrong was that it was his wife.”

Many newspapers yesterday reported that Hazel Blears is unlikely to survive the next cabinet reshuffle after revelations that she utilised a well-worn tax loop to dodge an £18,000 capital gains bill by re-designating her constituency ‘second home’ as her main residence for tax purposes.

The motor-bike riding Communities and Local Government Secretary sold her flat in Kennington, south London, in the summer of 2004 for a £45,000 profit but paid no tax on the windfall even though she had claimed the property as a second home when receiving thousands of tax-payer pounds to do the property up.

But Blears is not the first high-profile politicians to fiddle their paperwork to avoid paying large tax bills. Although like Blears their tax ‘avoidance’ measures did not break any House of Commons rules or laws, several high-profile politicians have slipped their cash through similar loopholes.

For example, work and Pensions Secretary James Purnell was criticised for turning an identical tax trick on his London second home in 2004. On selling this property he re-designated it as his main residence – and avoided paying capital gains tax on the profit. And like Blears, he claimed thousands of pounds in running expenses for this property.

But the first Labour politicians to become unstuck after trying to avoid tax was Peter Mandelson, who in 1998 managed to save nearly £4,000 on the purchase of a £249,000 flat in Notting Hill by doing a clever deal on the property’s fixtures and fittings, helping reduce its saleable value to under the then £250,000 Stamp Duty threshold. At the time friends of Mandelson claimed that he had negotiated a drop in the property’s sale price after it emerged that work would be needed, rather than using ‘fixtures and fittings’ to reduce its value.

Blue boy-band singer Duncan James is selling two of his six-property portfolio. Johnny Turner went to find out why.

I have arrived in St Albans on an overcast Thursday to meet Ex-boy band singer Duncan James, not to talk about his time in Blue, solo career or stint on stage in Chicago but rather his property portfolio.

We meet at his mother’s house in the Park Street area of the city, one of a pair he is selling out of six he owns.He says his mum, Fiona, thinks the house he bought her from his Blue earnings is too large – and that ‘she wants a little two-bed cottage,’ he says.

So what sort of homes do boy band millionaires buy their doting mothers? This house is a family affair, featuring a converted attic that Duncan used as a gym when he lived here.

The kitchen is cosy, the bedrooms large and the garden simple although outside is where you’ll find the home’s one pop-star touch, if you don’t count the gold records on the living room wall: a large Jacuzzi.

Walking around the St Albans house, I get the history – and here again there’s a celebrity angle. ‘Next door were Jack Ryder and Kym Marsh,’ he says. ‘We were like the little celebrity cul-de-sac. In the morning I’d get into my tour bus and Kym would get into hers.’

It’s hard to imagine that, looking at the twin detached new-builds. The area is residential, nice but by no means chic. Somehow, though, it matches his dual persona, regular guy and celebrity in one. ‘It’s very private and quiet here.’

Originally from Bournemouth, Duncan moved to the capital to seek his fortune – and once he found it he migrated to the Home Counties. But now the capital has called him back. ‘I lived here [in St Albans] for about two years,’ he says, suddenly producing a blue duster and knocking an invisible spider’s web off of a lampshade.

 ‘Then I moved down the road to Radlett, to a penthouse apartment in a block.’ This too is for sale; a friend currently rents it from him. Duncan is now ensconced in an ultra-modern warehouse conversion in Maida Vale – and in true celebrity fashion, he says, casually, ‘It was Lynn Franks’ old place.’ Franks was said to be Jennifer Saunders’ inspiration for Edina Monsoon, the fashion victim of Ab Fab.

The apartment in Radlett is a three-bedroom penthouse in a secure gated block, with two underground parking spaces. He has also invested internationally: he owns a house in West Hollywood as well as a flat in Estepona in the Costa del Sol.

Duncan’s penthouse in Radlett is on sale at £475,000 and the four-bedroom detached home in Park Street, St Albans is on the market at £549,950.  Contact Lumley Estates on 01923 853366.

Homeowners at risk of repossession can rest a little easier now after the government announced that it is to roll out a mortgage rescue scheme across England.

The move is part of a £200 million scheme that, the government claims, will ensure that repossession is always a last resort for householders in financial trouble.

Households with incomes under £60,000 a year and which contain vulnerable individuals including those with children and the elderly or disabled, will be eligible for help from the scheme.

Homeowners facing repossession can either sell a share of their home to a housing association, enabling their monthly mortgage payments to be significantly reduced, or they can sell the entire property to a housing association  and remain in the property as tenants – and pay a subsidised rent.

The government says that the scheme will help up to 6,000 households avoid repossession over the next two years, and has been expanded after being trialled by 80 fast-track councils in December.

Also, anyone facing repossession now needs to only wait 13 weeks instead of 39 weeks after losing their job before receiving financial help from the government, and a Homeowner Mortgage Support Scheme is also to be introduced in partnership with lenders to enable borrowers to defer part of their mortgage payments for up to two years after being made redundant.

“We know that some families are worried about their mortgage payments right now, and we are determined to do everything possible to ensure repossession is always a last resort,” says housing minister Margaret Beckett. “Whatever the situation, the clear message for households struggling with their payments is to speak to their lender as soon as possible.”

For a full list of fast track councils offering the mortgage rescue plan visit www.communities.gov.uk/housing/buyingselling/mortgagerescuemeasures/

What next for financial and property markets?

The deepening world financial crisis has continued to hit the banking and insurance sectors, with huge buyouts, bailouts and a general sense of panic. And although the world money markets made a comeback of sorts following a couple of disastrous days marked by the collapse or sale of some of the most high-profile banks, the shock is sure to mean a tightening of lending criteria.

This means those in search of a mortgage, having seen their chances improve in the past few weeks, will again see home loans become dearer and less readily available. The talk is of a quarter-per cent rise in the cost of many fixed mortgages.

In the wake of the Lehman Brothers bankruptcy, HBOS’s absorption into Lloyd’s TSB and the US government’s nationalisation of insurance giant AIG, the mood is decidedly combre. However, a rally in financial markets – partly as a result of the AIG intervention – gave us hope that the scenario may not be as grim as many were predicting.

The Bank of England announced that its special liquidity scheme (SLS), which was to come to a close at the end of October, is to be extended until the end of January.

It remains to be seen whether the cures prescribed by various world governments will have the desired effect: stability rather than panic, and a slow swim to the surface for associated industries, from the property sector to retail, from manufacturing to the credit industry.

Some have questioned whether the Bank is sending out a signal that its policies are too susceptible to momentary upsets, thus undermining the all-important factor of confidence in the state of the country’s finances. However, the Council of Mortgage Lenders (CML) welcomed the Bank of England’s move, with its director general Michael Coogan, saying it had ‘shown a welcome flexibility to respond to difficult market conditions ... we would urge the Bank to continue to show flexibility, given that market conditions will remain challenging next year.’

Neil Young of the Young Group, meanwhile, thinks we should keep in mind that the property market is an elastic one, with the ability to recover from price falls. Property prices, he points, out have only fallen in five of the last 55 years.

The attraction of property investment is not only that it is a tangible asset, appreciating over the long term, but it is also easy to comprehend. Financial institutions have created instruments that many don’t fully understand.’

Expert Ian Rock looks at the best way to handle your conversion

Loft conversions are consistently voted the number one home improvement project, and it’s easy to see why. They use otherwise wasted space, create extra living accommodation and can boost your home's value by over 20 per cent according to the Royal Institution of Chartered Surveyors (RICS). Nevertheless, converting a loft into one or two new rooms can be complex. You could leave it to a builder, but make sure it’s someone you trust to get it 100 per cent right. Many opt to do it themselves – but where do you start? First, know what you should and shouldn’t do:

Do

1 Always check whether you actually need planning permission, as it may not be required. Many loft conversions are classed as a 'permitted development'.

2 Unless you live in a detached house, by law you must comply with the Party Wall Act. This means having to formally notify your neighbours at least two months in advance of any works to the wall that separates you from them. Unless they agree, you may have to appoint a surveyor to draw up an agreement.

3 Make sure that you're actually comparing like with like when comparing quotes from loft conversion firms. Different firms may or may not include things like decoration, supply of sanitary fittings, VAT and the fees for structural engineers' calculations, planning and building regulations applications. Make sure your contractor confirms that all their work will fully comply with planning and building regulations.

4 Programme works to minimise intrusion into family life. Ideally, access to the loft for all the major jobs should be external, via scaffolding, leaving the fitting of the new loft stairs as late as possible to reduce disturbance.

5 Be aware that complying with new fire regulations usually means having to replace most of your existing internal doors throughout the house with new fire doors. If your main reception area is open-plan, you may be required to construct a partition wall to create a fire-resistant hallway.

6 Be sure to obtain your Building Regulations completion certificate before making the final payment to the contractor.

Don’t

1 Be shy of asking your Local Authority building control officers for their technical opinion. They have good local knowledge of potentially complex matters such as complying with fire regulations and provision of loft stairs.

2. Don't underestimate the extent of the finishing works. Complying with Part L of the Building Regs - thermal insulation - is now a major part of the project.

3. Don't be overly optimistic when budgeting. Making unrealistic budget assumptions at the outset is the most common reason for projects coming in over budget.

4. Just pick any builder from Yellow Pages. Try to get a builder via recommendation, check their previous loft conversion projects and talk to former clients.

5. Change your mind about the design once you've accepted a quote or tender. Some builders make nearly half their profits charging for expensive 'extras'

If you’re looking to sell your property quickly there are several things you can do to increase your chances – no matter what the market throws at you.
 
Be patient The market conditions may have changed from the euphoric days of the early naughties, but there is still a steady demand out there. Take into account that buyers are more cautious and want to make sure they are getting the best deal they can. The estimate for how long it takes to sell a house has almost doubled compared to the same time-frame last year, so don’t expect it all to happen in a flash.
 
Savvy up on pricing and be realistic By realistically pricing your property you will significantly increase your chances of a quick sale. Your agent will be the best person to guide you on this but you can also do your own homework. There are a huge number of websites that will allow you to check prices in your area. Don’t dismiss any low offers without thinking them through; a swift sale may save you money in the long run.

Get the basics right Get a HIP and know how to work with your estate agent to get the best from them. HIPs have been legislation for some time now and buyers will expect to see one.
It may pay you to spread the load by having a number of agents looking out for your property. Set your expectations with the agent and ensure you know where and how your house is going to be marketed. If you negotiate your fee with your agent, bear in mind that a lower fee may mean lower service.

Access matters You want as many people as possible to see your house, so give your agents a set of keys. This way, agents can show viewers around you home when you are out at work.
 
Be prepared to negotiate If your home is a perfect first-time buyer pad, offer incentives to potential purchasers. Offering a cash-back offer or including some furniture or soft furnishings can help to secure that sale.
 
First impressions do count Think about the way your house is presented both inside and out. A fresh coat of paint can make all the difference. Tidy the front of your house and clean your front door. If you have a front garden make sure it is well maintained.
The inside of your house should be as free from clutter as possible. The kitchen is always a key selling point, so ensure it is clean and that all dishes are washed and put away. Do all the small jobs you haven’t got around to, such as changing that light bulb and fixing that squeaky door.
If a potential buyer is undecided about your property, these small things could make all the difference.

Nigel Favas, managing director of Reeds Rains estate agents

                                                                                              
It’s a more challenging market at the moment, but people still want to move. Following these tips could well make the difference between buyers choosing your home and someone else’s, says Simon Dunand

1 Make sure your property has kerb appeal by sprucing up your outside space in the front. Tidy beds and put some pretty plants outside the front door, make sure the paintwork is clean and tidy and polish front door furniture.

2 First impressions count when people enter your home. Make sure your home smells appealing, don’t leave cat litter around and air the house before viewings by opening windows.

3 Remove all personal photographs and neutralise decoration. People want to imagine themselves living there, so don’t make it personal.

4 De-clutter any lobby areas overflowing with coats and boots – put them in a cupboard temporarily. Make beds and tidy the floor area, so people are not stepping over your belongings.

5 Improve lighting to enhance ambience and invest a little money in soft furnishings. They can greatly improve the look of your rooms for little outlay.

6 Clean and tidy surfaces in the kitchen and make sure it doesn’t smell of last night’s dinner and don’t leave washing up in the sink! Bathrooms should be de-steamed and all personal belongings removed. People do not want to see evidence of your shaving or showering.

7 If you have a fire, light it to add that warm and welcome feeling.

8 Place some flowers in a vase to make the hallway welcoming.

9 Vacuum before viewings so the carpets look clean and free of debris.

10 Most importantly, be out for viewings if you can. Prospective buyers want to talk about your house with the agent and be relaxed while view the property. Your presence may make them feel uncomfortable and put them off.

Simon Dunand is managing partner at estate agent Gascoigne-Billinghurst.

Winter is upon us and with it comes higher bills and increased energy consumption.

With the recent introduction of HIPs and the need to have an Energy Performance Certificate for all three and four bedroom homes, this issue is more salient than ever.

Do your bit with our energy saving tips:

1. If every household in the UK installed five energy saving lightbulbs, electricity equivalent to the output of a typical power station would be saved each year (according to Energy Saving Trust).

2. Turn your thermostat down. Reducing your room temperature by 1°C could cut your heating bills by up to 10 percent.

3. Is your water too hot? Your cylinder thermostat shouldn't need to be set higher than 60°C/140°F.

4. Close your curtains at dusk to stop heat escaping through the windows.

5. Always turn off the lights when you leave a room.

6. Don't leave appliances on standby and remember not to leave appliances on charge unnecessarily.

7. If you're not filling up the washing machine, tumble dryer or dishwasher, use the half-load or economy programme.

8. Only boil as much water as you need (but remember to cover the elements if you're using an electric kettle).

9. A dripping hot water tap wastes energy and in one week wastes enough hot water to fill half a bath, so fix leaking taps and make sure they're fully turned off!

For more information visit Energysavingtrust.org.uk