Yesterday I spent the day visiting estate agents on behalf of clients and I detected the first signs of real optimism returning to the market. One agent actually secured five sales during the day- something which would have been unheard of a few months ago. In recent weeks the media have reported an increase in the number of buyer inquiries and a narrowing of the gap between asking and sale prices across the country — so it’s not surprising that some analysts suggest that the worst may be behind us.

However the wider economic picture is still uncertain. Interest rates will go up eventually so overextending yourself to buy a property which is not going to be your home for many years to come is  definitely to be avoided. However as reported in the Times this week, there are ways in which you can take advantage of this new mood of optimism and survive a situation where prices may take longer to rise. Here’s my take on what they had to say.

• Buy off plan.

Buying a property before it has been built is one potential way of buying an appreciating asset but don’t forget prices go down as well as up. As a long term investment however it’s a sensible move. They are not as easy to find in the current market however. Make sure that the developer is covered by the National Housebuilding Council and go for a family home and not a city centre flat.

• Buy land

Land prices have fallen more sharply than property prices on the whole and there are more plots available than there were. You could speculate on land without planning permission in the hope that it would be granted eventually. Less risky is buying land with planning permission and taking advantage of the availability of cheaper skilled labour whilst developers are less busy. But be prepared to pay more for land which is a likely development in the future (up to twice the asking price for plots in villages which do not yet have planning permission, in my recent experience.) You can always sit on the land and off load it in the future when prices have risen again.

• Buy near improving transport links

This is relevant only in areas where there is huge investment in new infrastructure. If you live in my patch, face facts…. you’ll  need a car.  But some villages and towns are better connected and have better facilities. It’s all about location.

• Buy at auction

If you have the means to buy at auction you can pick up a property requiring work for less than you would from a high street agent and you have the opportunity to add value. But gointo it with your eyes open. 

• Get planning permission

This is a sensible option if your property is looking a bit tired or in need of renovation as it helps prospective buyers visualise what they could do and they don’t need to go through the hassle of applying for planning permission themselves. If your property is in tip top condition it simply isn’t worth it unless you have a garden large enough to build a house on.

• Extend your lease or buy the freehold

Now is the time to do this because the amount you pay to extend a lease is determined by the value of the property. Lower house prices means it’s cheaper to extend the lease. This can increase marketability even if it doesn’t increase the value of your property all that much. Buying the freehold of the building where your leasehold property is located will allow you more flexibility to improve the look of the common parts and potentially improve your own property.

Whatever you decide to do in the current market thinking long term is the most sensible option.

For relocation help and advice click here.

Recently I heard from a lady who had made an enforced move from the heart of the country to a market town. Like me she is a country girl at heart and had found the whole process somewhat stressful. The decision wasn’t really hers. It was to allow her husband an easier commute to work, to find more affordable property and for the sake of her growing children who wanted to be where the action was. I sympathised………having been in a similar position a few years ago. It made me think about the way I advise clients who come to me yearning for the country life but who may not be prepared for the reality. For downshifters in particular it’s important to identify the reasons behind a desire to move to the country. Clients almost always mention living a simpler life, consuming less and a sense of community among their reasons. Many of these can be served equally well (if not better) in a market town rather than at the bottom of a muddy lane. So I thought I’d give you  ten reasons why moving to a market town may be a very good thing.

• Market towns were the ancient hubs of rural life and many occupy a beautiful setting, close to a river or perched on a hill. If you want to live in a pretty place, look no further.
• Inevitably market towns have developed and expanded over time and often as a result of one particular trade. In the case of my own town of Bradford on Avon it was the cloth trade. As a result there is a greater variety of period housing from large merchant’s villas to artisan’s cottages. On the whole you get more choice for your money than you would buying in a village.
• Usually they are well served by specialist shops and markets - and you can walk there. How great is that?
• Your children can get to a good school, take part in any number of extra-curricular activities and see their friends without you spending your life in the car.
• Not only are market towns full of numerous opportunities to take part in leisure activities, you’ll have the time to do them because you won’t be commuting for hours every week.
• Public transport links are usually good so getting anywhere is easier.
• Many market towns still have a great sense of community so if this is important to you, don’t worry that you’ll become anonymous once you’re surrounded by larger numbers.
• You may not be in the middle of a field but you are still close to countryside. My walk to the shops is through a wood two minutes away from my front door and in fifteen minutes I can be in splendid isolation.
• You’ll be surrounded by a sense of history.
• Most facilities are easily accessible - doctor, vet, dentist - which is great, however old you are and really cuts down on stress.

Of course every market town has its own distinctive character. Some have been eroded by ill-considered development or the town centre may resemble that of any number of others but there are still hundreds of gems out there. My friend has settled rather well to town life. As she says herself  “we may like to think that our heart resides in the country. It doesn’t mean that our body has to accompany it”.

For relocation help and advice click here

When it comes to choosing property we could learn a thing or two from ants. My children were fascinated to hear an item on the local news this week about research which has been carried out at nearby Bristol University into the way ants go about finding a new home. “It says they are like estate agents Mum” said the thoughtful one “but actually they do what you do!”

It does seem to be the case that when a colony needs to move they send out scouts who instinctively know what makes a nest a suitable home for the colony. (Clients, take note!)These ant relocation agents then report back, show the nest to the rest of the colony and when a sizeable number are in agreement the move occurs. Genius. Apparently in making the decision they also “survey” the potential new nest, checking dimensions and cleanliness.

Unlike us however, ants do not have to visit umpteen nests in order to decide on which offers the best option. If the first one they visit ticks all the boxes then that’s the one they go for. Wouldn’t life be simple if only we would do the same.

Last week we headed West for a visit to family in Wales. In Pembrokeshire, construction work was as brisk as ever with several seaside conversions, renovations and developments going ahead despite the downturn in the market. “Do you think they’ll sell them?” asked one of my companions as we ambled along the seafront to the accompaniment of angle grinders and hammers galore.

It reminded me of similar market conditions some years ago when my parents were desperate to move to a newer property and couldn’t sell. After some considerable negotiation we managed to ’swap’ the family home for a house they’d set their hearts on and everyone ended up happy. And it seems that this practice might be making a comeback in an attempt to bypass the gridlocked market. (The Times 18th April).

Of course now you can advertise your house swapping aspirations to the world online. There are a number of websites where you can register. Why not try this one or this ? Then there’s this or this or even this if you want to go overseas. Some sites allow you to register for free whilst others can cost up to £70 for six months. You’ll need to provide details of your property and of the location, price range and size of property you’re looking for. Thereafter you can browse available properties or wait for matches to be sent to you. Then you can go on to arrange viewings and if you’re happy to proceed organise a survey and contact your solicitor.

Remember

• You’ll still need to provide a HIP for your property (cost approx £300).
• It’s advisable to have a survey to determine the condition of the property you’ll be taking on and also to check on its market value.
• You will need to speak to your current mortgage provider. They may be happy to transfer your mortgage to the new property but do check as technically you would have to redeem the mortgage on your old house.
• You will need legal representation to sort out the paperwork and this may be more expensive than a straightforward buy and sell. Talk to a solicitor beforehand.
• Once the exchange has been completed both parties will need to pay stamp duty on the value of the property acquired and register the swap with the land registry.
• You will need to pay any difference in the cost of the property you buy if you are trading up,  so ensure you have funds available.

There are obvious advantages to using this method of finding your new home - avoiding estate agents fees and the stress of being stuck in a chain being two of the biggest. Swapping also allows you to ‘try before you buy’ and there is usually far less risk of arrangements falling through.

But it’s still early days. The sites that I looked at over the weekend are full of developers’ properties which they are having difficulty selling so for ‘house swap’ read good old fashioned ‘part exchange offered’. There is still a shortage of other properties available on these sites so if you’re looking for a Georgian villa, a Victorian terrace or a country cottage with a large garden you are far more likely to find it by using a more conventional route. Although there’s nothing to stop you mentioning to your agent that you’d consider a house swap and hope that they’ll do some active matchmaking rather than letting your property languish on their books indefinitely. In fact some agents are advertising their properties on swapping websites already where vendors have expressed such an interest.

The latest addition to the HIP (Home Information Pack) is due to become mandatory on April 6th. This is the Property Information Questionnaire (PIQ)  HIPS themselves have never been very well received - and essentially were too watered down to be meaningful to buyers. The information they really wanted to know about a prospective home was not a compulsory part of the pack, like the Home Condition Report for instance. But from April 6th every house which comes to the market will need to have a HIP (including the PIQ) from the first day of marketing.

There continues to be a lot of wingeing in the industry about the HIP but the feeling now is that the HCR would have been a positive thing! The PIQ is designed to be completed by vendors without the need for professional help however. You can download a sample here. It will provide useful information for prospective purchasers about such things as utility providers, council tax bands, history of flooding, building and maintenance work carried out and parking arrangements.  Much of this information is already available but the PIQ will provide an easy reference guide and, one hopes, a level of protection where there is a question mark over the quality of building work (eg loft conversion), where there has been flood damage or where neighbourhood parking wars are a common occurence.

In the current climate purchasers need to be as well informed as possible before committing to a property. As such the PIQ can only be a good thing.

Are you looking for a clear way forward in your property search? Can’t see the wood for the trees? Tempted to call in a homefinder? STOP. With the recent news that even TV property guru Phil Spencer’s company Garrington is not immune from the effects of the credit crunch (sadly, it’s in administration!), are we to think that the property bubble has finally burst?

Nationwide’s figures reported a continued fall in house prices in February and yet, houses are still selling. All but one property at a local  auction attended recently more than reached its reserve price. Two years ago the call was to move, improve and move on swiftly, having made a quick profit. Last year we debated whether improving was better than moving in the bid to add value to your property. Now, for sure, buyers are in it for the longer term, looking for homes rather than investment potential and so getting it right is especially important.

So how do the likes of me (and formerly Phil)  make a difference? Most people are capable of deciding where they want to live aren’t they? Here’s a quick summary of what you get for your money for those of you who are looking to move and save every penny you can at the same time.

• You don’t have time to search thoroughly yourself

Anyone who has ever moved house will tell you that searching for a suitable property can take weeks and sometimes months of frustration and wild goose chases. It’s rare to find the one straight away. Equally if you buy in haste you may not have accumulated enough information to make the best decision. So  get someone else to do the legwork for you. 

FACT - You can do this yourself . You are paying for three things - less stress, the costs of travelling to all the properties which seem suitable on paper and the opportunity to have a sniff at a property which may not have come to the market yet or which will fly off the shelf when it does.

• You want to get the best possible price

In the current market where supply outstrips demand there is choice and a deal to be done. But how do you know whether you are still paying too much? How long has a property been for sale? Why are some areas cheaper than others? Is it a fair price? Home finders have local knowledge that can help you avoid the pitfalls and can negotiate on an equal basis with estate agents on your behalf.

FACT - You may be equally knowledgeable and a great negotiator. In which case why pay someone else to do it for you?

• You don’t know the area

Most home finders live and work in your search area. Thus, they can interpret your search brief efficiently and save you time and money in drawing up a short list of suitable properties. These days, school catchment area, journey to work, availability of leisure activities and shops are all really important. Any homefinder worth their salt will assist you in deciding what is really important to you, where the compromises have to be made and what the consequences of your decisions will be. Yes. It is a bit like therapy in the early days.

FACT - You already know the area, have researched the local market thoroughly and have a plan of action. That’s great and if this is the only reason you’d employ a homefinder, you’d be wasting your money.

• You want someone independant on your side

Many estate agents are professional and helpful. But it is their job to sell their client’s house to you. That’s how they earn their money. Don’t assume that they will also act in your best interests. Home finders work for you and only you. Their job is to find you the best property at the best price regardless of who is selling and without being influenced by commissions.

FACT - Apart from the initial registration fee (in my case £300 for a period of up to six months searching) you do not pay a homefinder a penny unless they successfully find you a house that proceeds to exchange of contracts. By this time you can expect to have found a house you can be confident in, often at a reduced price.

So there you are - home finders……..disposable luxury or a cost effective way to ensure that the house you’re stuck with for the next few years is worth what you paid for it and is the best of what was available. It’s up to you.

According to recent reports from the Council of Mortgage Lenders repossessions are set to hit 75,000 by the end of this year. Usually these properties are then resold at auction as mortgage providers seek to recoup as much money as they can swiftly and efficiently. Properties make it into the auction catalogue for a number of reasons - repossession, probate…but the common factors are that they are properties which haven’t or are unlikely to sell quickly via more conventional routes. But beware, not all properties which come under the hammer are bargains.

If you are thinking of trying to pick up a bargain at auction here are a few tips to help you on your way.

• Keep on your toes  Most auctions are advertised only about a month in advance in the local, national and trade press. Check out the Essential Information Group for a one stop shop of all listings.

• Don’t stay local  If you’re looking for a real bargain, look outside your local area but make sure you’ve done your homework and researched the area and the selling prices of properties there. Similarly some properties in your locality will be auctioned by auction houses in London or elsewhere and there may be less interest as a result.

• Call in the professionals  Although you will get a lot of information from the auction catalogue you do need to appoint a solicitor to check the document pack for the lot you’re interested in (cost around £25). Similarly when you visit the property take a surveyor or a builder with you.

• Look before you leap  I would never buy a property without looking at it. Viewing times are set by the auction house and are a good opportunity to check out the competition as well as having a good look at what you’re spending your money on. A full survey is not always necessary - except for the very nervous or where you are really stretching yourself to afford a property. You will have to pay upwards of £500 even before you know the property might be yours. A ‘walk through’ by a surveyor or builder you trust is cheaper.

• Remember the guide price is only a guide  Expect to pay over the guide price. If you are tempted to make an offer before the auction in an attempt to secure the property, forget it. This can drive up the price. Far better to express interest in writing and ask to be kept informed if the property is about to sell before auction.

• Cash is king.  You have to have your finance in place before the auction and you may not get a mortgage offer for an auction property.10% of the selling price is due to be paid on the day of the auction with the balance up to 28 days later. Check that your mortgage lender can meet these criteria before you bid. 

• Keep your wits about you  Once you’re in the sale room, everything happens very quickly. Take someone with you - either solicitor or friend. Make sure you listen to all announcements about procedure, what’s been sold or withdrawn and read the addendum sheet which revels any omissions or errors in the catalogue. I’d suggest going to a few auctions beforehand to get some pre-match experience and learn some tactics about when to bid from seasoned pros.

• Don’t fall in love  Know your limits and stick to them. You are buying an asset not choosing a life partner. If you lose out on this one something else will come along. This is business not marriage.

• A friend in need  Don’t underestimate the importance of having an extra pair of eyes, ears (and potentially hands if you feel you can’t do the bidding yourself!) to rely on.

• It’s not over till it’s over  Some properties do not sell at auction. With the sellers on the back foot, you may be able to negotiate a post-auction bargain.

(more…)

I see that Nest not invest has reappeared as the current exhortation to anyone thinking about climbing on to the property ladder. I haven’t seen it in the press since the last recession but it seems to have taken over from last year’s favourite make do and mend.

Irrespective of its popularity with the media, it is sensible advice. Houses have a nasty tendency to go down in price as well as up, a fact that we seemed to have forgotten.  Yet this only really matters if you have to sell and are not trading up. For first time buyers who have nothing to sell there are bargains to be had right now.

So is it the right time to buy? The answer is overwhelmingly yes if you have a reasonably large deposit and can get a mortgage…oh, and you’re not thinking of selling for a while. The best deals seem to be for buyers who have accumulated a deposit of at least 30% of the purchase price and can sit tight on the property for 2 to 3 years, according to Jon Cooke, director of the Guild of Profesional Estate Agents. He goes one step further and says that he would advise a son or daughter to buy their first property in the current market.

If you are currently weighing up the buy now/rent for a while options then here are some tips to help you decide.

• Do your homework. Know your chosen area well and view as much as you can to get a feel for what’s available and what’s selling. Try to locate up and coming areas and those with good transport links and well respected schools.
• Negotiate hard. You can expect to pay at least around 20% less for a property now than you could for the same property in summer 2007. 
• Choose something which will hold its value rather than taking your chances on a risky property. Ground floor period conversions with gardens are a good bet as are family houses with gardens in the catchment area of a well regarded school.
• As a first time buyer, buy bigger than you need if you can afford to. Then you have enough space to expand and can take in a lodger if times get hard.
• Aim to have at least 30% of the value of the property as a deposit to be sure of securing a good mortgage deal.

A new year is upon us and like so many of you, for me it is a time to take stock. Several of our country rambles over the holiday period (like the one pictured above) provided ample opportunity for reflection and planning for the business in 2009.

The latter part of 2008 saw continued anxiety in the housing market. Sellers remained somewhat unrealistic about sellling prices and buyers struggled to obtain mortgages or were concerned not to overpay for properties which would not hold their value. Everyone is more optimistic at the start of this year and whilst I do not expect there to be a recovery in the market for some time, sales are being completed successfully.

Buyers are still nervous and the whole process, stressful at the best of times, can be overwhelming. The extra help we have been able to offer clients has made a huge difference - whether that’s finding a  removal company at short notice, checking out the local school and nursery provision or finding reliable local tradesmen for all those jobs which need doing as soon as you’ve moved in. In a number of  cases over the last few months these ‘extras’ has been more important to clients than the job of finding a suitable home. This has  been the easy bit after all!

All in all it has been a hectic couple of years at Country Gate and things are not likely to settle down for a while as we are on the brink of taking on an exciting new project. Keep an eye out for full details of the direction Country Gate will be taking in 2009.

Yesterday’s downpour involved a trip up into the loft to check for signs of water ingress around the chimney, which we know is a potential problem. It showed up in the survey we comissioned prior to purchasing the house.

A question I am frequently asked by clients is “Do I really need a survey?” On the one hand this is a ludicrous question when for a fraction of 1% of the cost of the property, you could have real peace of mind and confidence that your investment is safe. On the other hand, press reports about nightmare property purchases are not uncommon, where the surveyor has not been held liable for items missed in the report. It’s true that surveyor’s reports are only a snapshot in time and are full of caveats and disclaimers. So are they worth the money and what line should you take when purchasing property?

Currently only 1 in 5 purchasers opt for a more detailed survey than the basic valuation  which is insisted on by the morgage lender. Although you pay for this type of survey it is intended for the benefit of your lender to ensure that their investment is safe. They instruct the surveyor and you are unlikely to have any contact with him or her. He or she may never visit the property. Drive by or desk top valuations are commonplace. 4 out of 5 purchasers rely on this when deciding whether to invest hundreds of thousands of pounds in a property. Frightening isn’t it!

If you opt for the next level of survey (the Homebuyer’s Report) bear in mind that if this is booked by your morgage lender you may be paying extra for the privilege. My advice would be to get the basic valuation and then to commission your own survey from an independantly recommended surveyor. By taking this course of action you can set up a dialogue with the surveyor and determine the scope of the survey.

If you have owned a string of similar properties in the past then an opportunity to have a close look around may be enough to set your mind at rest but for most people a survey from an expert is the way to go. My advice is this:-

• Decide on the level of survey you need which for more modern properties may well be a Homebuyer’s Report
• Approach a smaller practice for flexibility. You  may then be able to opt for a purely verbal report (cheaper) or meet the surveyor to decide the scope or discuss the findings.
• For older properties a full structural survey is advisable but choose a surveyor who has experience of the kind of property you’re thinking of buying. Remember if you intend carrying out extensive work on the property, the surveyor may well prove useful to you in the future and starting to build an effective working relationship with someone you can trust is important.
• Remember that despite their bad press, surveyors are impartial, do operate under a strict professional code of conduct, are required to have insurance and  a clearly defined complaints procedure. So you do have some protection.
• Make sure that the following areas are within the scope of the survey for these are the most revealing and potentially the most expensive to put right…

           Structual soundness eg look for signs of subsidence and settlement.

           Condition of roof, particularly effectiveness in channelling away rainwater.

           Management of damp eg inspect the render, plaster, wall coverings and  damp  proof course.

           Condition of brickwork and pointing including chimney structure.

           Condition of woodwork eg doors, windows, roof timbers, floorboards.

           Condition of electrics and boiler.

           Condition of drains

I’m not in favour of taking on a property with the crossed fingers approach to the future but it is important to take control and be sensible about the scope of the survey you require. Know what you’re paying for and pay for what’s important.

Until next week.

Cally