Click the link – National Homes Network conferences.
Click the link – National Homes Network conferences.
House prices in Prime Central London have increased by approximately 8-9% over the first half of this year according to Prime Central London independent estate agency W A Ellis.
In its latest Prime Central London property market comment, the firm says a Knightsbridge parking space can now cost in excess of the average UK house price.
70% of W A Ellis’ buyers are from overseas – a year-on-year increase of 15% whilst ‘Gazumping’ is becoming increasingly common in its lettings market.
The firm also reports a 50% increase in tenancy agreements during June due to student renters and some landlords are already adapting tenancy agreements in anticipation of next year’s Olympic games.
Daniel Wiggin, a partner at W A Ellis, comments: “The property market in Prime Central London is extremely resilient and continues to buck the trend for house price increases. At W A Ellis, we have seen a very busy spring market with price per square foot values in prime areas far exceeding the 2007 peaks. The Office for National Statistics state that the average UK house price has reduced by 0.3% over the first quarter of this year, but in our market, we’ve seen increases in the region of 8% – 9%.
“The average house price throughout the country is £204,439, which in Knightsbridge, will buy just a small two bedroom flat with one bathroom and a 4.25 year lease – and the premium for a lease extension of 90 years will be in excess of £1 million. This shows the enormous difference between our particular area and the UK nationally. In fact, it is true to say that underground car parking spaces of approximately 19 ft x 8ft, in the recognised Knightsbridge blocks are often sold for prices in excess of the national average house price.
“Recently, we marketed a flat in Knightsbridge which had been in the same ownership for over 35 years and needed modernisation. We had 30 viewings in the first two days and through careful management, we went through an informal tender and managed to achieve the very highest price possible for our client together with many backup bids. This example clearly denotes the strength of the Prime Central London market. For the longer term, it is predicted that residential property values in Prime Central London could increase by 33.4% in the next four years.
“We have been complaining for some years that stock is too low to meet demand; most thought this would be a temporary scenario and the market would return to normal in the near future, however, I think that a return to more typical market conditions is unlikely. We must accept that the severe shortage of good quality flats and houses within the market is here to stay.
“One explanation for the low levels of properties coming on to the sales market could be that people are increasingly viewing Prime Central London property as a long-term investment. For example, foreign investment has outstripped domestic purchases – in the first quarter of 2011, 70% of our buyers were from overseas; this is an increase of 15% from the same period last year. Foreign investors do not need to sell, and in many cases, their investments here are seen as the equivalent of a high interest bank account.
“This means that domestic interest rates are now not as influential in the market as foreign exchange rates, and so we look closely at political posturing in other counties and international markets in order to predict what will happen in the market. The dollar remains relatively weak against the pound which does not help us, however, sterling continues to be relatively weak against the euro, which is attracting European buyers.”
Lucy Morton, senior partner and head of lettings at W A Ellis, comments: “The lettings market in Prime Central London continues to go from strength to strength – in June, we completed 50% more tenancy agreements than our usual monthly average. This increase is largely thanks to an influx of students and families who are keen to finalise their accommodation arrangements ahead of the start of the new academic year in September. Also, because there is a shortage of studio flats and one bedroom apartments on the lettings market, those that are available are hugely sought after by students and therefore, rents have increased by as much as 10% since the beginning of the year.
“Another feature which exemplifies the strength of the rental market in Prime Central London is the increase in ‘gazumping’ which we are experiencing. Gazumping – where a vendor / landlord accepts an offer only to pull out later on in the deal after receiving a better offer – is a phenomenon which, until now, was usually only seen on the sales market, but is becoming increasingly common on the rental market. Our 19 strong team all experienced a degree of gazumping, sealed bids or bidding wars in June.
“For example, we were recently in a bidding war on an apartment in Chelsea, which was being marketed at £595 per week. Our applicant offered £600 per week initially in a bid to secure the flat but eventually, the flat achieved considerably in excess of this figure, such is the demand for good quality one bedroom properties.
“Moving up in value, we had two asking price offers on a stunning apartment in Lowndes Square, Belgravia, at the start of marketing at £2,750 per week. Bids started to escalate, ending in ‘best and finals’ being taken and the landlord secured a tenancy in excess of £3,000 per week for a two year tenancy with the first year paid up front, such was the strength of the bidder.
“This is obviously an excellent market place for landlords, and a clear indication of the significant shortage of good quality stock available at the moment. Any savvy tenant is well advised to offer quickly and sensibly on their chosen property and not bargain or they run the risk of being out bid and disappointed.
“The short term let market is also extremely active and I expect this to continue over the summer because historically, people come to the capital for various events such as Ascot, The Henley Festival and Goodwood, as well as, Ramadan which has fallen early this year. Next year, the Olympics will be in town and demand for short term lets is expected to be high – in anticipation of this, many landlords are already adapting their tenancy agreements to include break clauses so that they can benefit from the games – it may be possible to achieve up to six times the usual weekly rent during the three weeks of the Olympics, but possible void periods before and after the games could have a significant impact on potential financial gain.”
There’s little doubt, you have to be a brave or foolhardy business owner to get involved with a show like Mary Portas’ Secret Shopper. That said, the doubters on EAT who are criticising last night’s episode as an attempted hatchet job have missed the point for me.
The simple statistic that 79% of people don’t trust estate agents (and I think that’s probably fair overall), shows that there is massive room for improvement. Rather than focusing on the bits that Mary got wrong through not knowing the industry inside out, I wanted to focus on what she got right.
- Wasted viewings are a big frustration for vendors. Better that it’s not your fault because something important about the property was spun or hidden and/or the buyer’s requirements were not fully understood..
- .. So qualify buyers for what’s really important and where their red lines are drawn!
- Constantly being interrupted by callers is rude, as is not standing to meet walk-in visitors.
- Lying and applying pressure damages everyone’s trust in you. 47 ‘appointments’ at ten minutes each with no travelling time is nearly 8 hours straight. Even if that’s true, it’s not believable.
- Being armed with answers to obvious local questions is basic service, but still impresses. Research the nearest schools, transport links, etc. or better yet – take factsheets with you.
- Sometimes the seller knows best – how do you collect and include their knowledge, experience and opinions?
- Properties do sell themselves, but you are the local expert there to point out the bits that might get missed. Do your research on the direction the house faces, the year it was built, the boiler, the windows, the square footage, the storage, the possibility to extend, the other houses in the road, etc. See a property through the buyer’s eyes.
- Cliches are poorly understood, add nothing and best avoided.
- An hour of “one mouth, two ears” training isn’t very impressive.
- A USP of “you have to use an agent to get on the portals” doesn’t put you ahead of the competition.
- Trophies on display are not cool!
Although your customer is the seller and their needs should be top priority, let’s not forget that the buyer is a potential future customer – why waste the opportunity? First impressions count, so if you nail the experience this time and provide an excellent viewing and follow-up, your firm will be in pole position when they come to move in a few years.
Well done to Martyn Gerrard for turning the programme around and coming out of it reasonably well. “People before property” is how this business should be done.
If you missed the episode, you can see it on 4OD here.
Don’t forget to look back over 27 things the public want from the perfect estate agent if you don’t believe what Mary had to say!
I liked this article first time round, and now that I’m arranging two training days for estate agents (one in the north, and one in the south) I thought it was time to revisit it and share it!
I was very proud and very pleased to get great feedback from the delegates who attended the Partners Day Conference I organised on behalf of NHN (National Homes Network) this month.
“The best conference I’ve attended for 3 years” was one comment!
There will be another conference in the autumn for property professionals, so stay tuned for further news on that if you don’t want to miss out next time!
MANAGEMENT BY WALKING AROUND
Some years ago THE business guru was Tom Peters, through his books such as “In Search of Excellence” and “A Passion of Excellence”. One of his ideas was the concept of “Management by Walking About”.
How often do you spot something that needs doing and then forget about it? How often do you put something right yourself?
How often do you delegate by telling a colleague precisely what needs to be done?
How about a different approach? Look at your premises, outside and in, with a fresh eye. What needs to be done? If a light bulb is out, tell the manager, or whoever is senior in the office that a light bulb is out. If a window card needs changing say “A window card needs changing”. Don’t say which one and don’t fix it yourself. The aim is to get others to look with a fresh eye too. Note down when you say something and record how long it takes to be put right. Later, comment on the time taken.
It is right to lead from the front, but the trick is to ensure that everyone on your team shares the passion to be the best and strive for it just as you do.
Get a friend to look at your premises and comment frankly on the good and the bad. People who work in a place every day don’t notice gradual change. Familiarity breeds apathy.
In front of the negotiators’ desks do your guest chairs have arms or not? No arms on chairs cause people to fold their arms and put up psychological barriers to discussions. Arms on chairs help people to relax and be more receptive.
With the closures of businesses the secondhand furniture places have bargains available. Is it time for a freshen up?
When did you last change your Fluorescent light tubes. You know that they lose brightness with age, don’t you? Has the change been so gradual you haven’t noticed? They should be changed after a year. Change a couple and see the difference!
Could this principle apply to your housing stock too?
How about a drive around to see what could be done to enhance the properties you have for sale? Are all the “For Sale” boards in the best location and as visible as they can be? Are the gardens tidy, hedges trimmed and paths swept? Are your photographs up to date with the season? Are your clients sharing your commitment to present the “product” to best advantage?
Or are you telling potential customers that you are sloppy about detail and houses take months to sell? If so, why would they instruct you?
Try walking about and looking at the details, then get them right. When all the details are right, the business will be right and all your colleagues will share your passion for excellence.
Acknowledgement: Nick Marsh FRICS, FAAV. Partner, Frank Marshall Chartered Surveyors, Auctioneers & Estate Agents. (National Homes Network Member Estate Agent).
Have you thought about using video (with or without Youtube) to advertise your business, or one of your products or services perhaps?
Most likely you have.
But dare you go to the extremes that NEO PROPERTY have done (for a second time now) in advertising one of their properties?!
Admittedly the production quality is very high, and can’t be argued with, but is this kind of promotional video a step too far?
What are your thoughts? Comments please!
Neo Property, Australia. Vido follows.
(We are not responsible for any video that may show here on Youtube after the intended video from Neo Property).