A. Very much so. Traditionally, of course, this rather depended on what you were trying to sell. Here in the UK, auction always tended to be reserved for those properties where the normal method of sale by private treaty was less likely to produce the best price: for example, land, or properties requiring substantial renovation or remedial work, short leasehold properties, and houses suitable for conversion.
However, that is changing. There is plenty of evidence around the country that auction has moved forward quite significantly in the last twelve months, and that it is no longer seen as the exclusive preserve of the bargain-hunter or investor.
Of course, traditional lots are still selling well in the sale room. However, in recent months, there has also been a rise in the number of more “normal” properties coming up for sale at auction. This is generally happening in cases where the seller needs either speed or certainty – or both. This can be for a wide variety of reasons: in probate cases, for example, or where sellers may have a deadline to meet, such as a job move or children moving into a new school catchment area. In other words, people who do not necessarily have the luxury of hoping that a sale by private treaty will be concluded within their desired time frame.
And all this, of course, is happening against a background in which the lack of liquidity in the mortgage marketplace has seen a rise in abortive transactions, and new mortgage business is still at an historic low.
Another key factor helping to bring auctions more into the mainstream market is the growth in the number of auction houses offering new-style conditional contracts. As with traditional contracts, these still become legally binding on the fall of the auctioneer’s gavel – thereby offering that all-important certainty. However, they require a much smaller deposit from the successful bidder on the day – and instead of the standard 28 days to completion, they allow anything up to 60 days. By providing more time to secure the necessary finance, this has opened up the auction marketplace to regular buyers as well as investors.
Of course, as always, anyone looking to sell their property should take advice on the best method of sale from their chosen estate agent – but certainly, auction is increasingly becoming a viable option!
Tuesday, 3 April 2012
Friday, 16 March 2012
Q. Are there any rules governing estate agents’ boards and the way they are used?
A. There are indeed – courtesy of the snappily-titled Town and Country Planning (Control of Advertisements) (England) Regulations 2007! These lay down pretty stringent requirements with regard to things like size, content, and location. And while provision is made for a degree of local flexibility - in some conservation areas, for example, boards may require specific planning permission or even be banned altogether – those requirements basically apply pretty much everywhere.
In essence, the rules are founded on the principle that the primary function of a board is to advertise the property, not the agent. So, for instance, boards are only supposed to indicate that a property is for sale or that it is sold, subject to contract – on the entirely logical basis that once money has actually changed and the property concerned has a new owner, there is no longer a valid reason to advertise it at all! For the same reason, all boards must be removed within 14 days of completion.
Instead of “Sold, Subject to Contract” (or “STC”), some agents prefer to use the phrase “Sale Agreed” or even “Under Offer,” which basically mean the same thing.
In terms of size, boards must not exceed 0.5 square metres in area, and only one is permitted for each property (or two, if they are fitted back-to-back on a single pole). This applies even where the seller chooses to instruct several different agents - in which case, the first board to be erected is generally regarded as the legal one. Any seller permitting more than one board could be liable for a fine, along with the firms concerned.
The only real exception to the “one board” rule are blocks of flats, where a number of different agents may legitimately be involved in selling separate properties.
Finally, on the issue of location, agents’ boards are required to be wholly within the boundaries of the property concerned. Where this is impossible (for example, in the case of a terraced house fronting directly onto the street), then the board may be attached to the building itself, as long as it is not more than 4.6 metres above ground level, and does not project from the face of the building by more than 1 metre.
In essence, the rules are founded on the principle that the primary function of a board is to advertise the property, not the agent. So, for instance, boards are only supposed to indicate that a property is for sale or that it is sold, subject to contract – on the entirely logical basis that once money has actually changed and the property concerned has a new owner, there is no longer a valid reason to advertise it at all! For the same reason, all boards must be removed within 14 days of completion.
Instead of “Sold, Subject to Contract” (or “STC”), some agents prefer to use the phrase “Sale Agreed” or even “Under Offer,” which basically mean the same thing.
In terms of size, boards must not exceed 0.5 square metres in area, and only one is permitted for each property (or two, if they are fitted back-to-back on a single pole). This applies even where the seller chooses to instruct several different agents - in which case, the first board to be erected is generally regarded as the legal one. Any seller permitting more than one board could be liable for a fine, along with the firms concerned.
The only real exception to the “one board” rule are blocks of flats, where a number of different agents may legitimately be involved in selling separate properties.
Finally, on the issue of location, agents’ boards are required to be wholly within the boundaries of the property concerned. Where this is impossible (for example, in the case of a terraced house fronting directly onto the street), then the board may be attached to the building itself, as long as it is not more than 4.6 metres above ground level, and does not project from the face of the building by more than 1 metre.
Tuesday, 6 March 2012
Q. What is happening with Energy Performance Certificates?
A. You may well ask! Changes to the rules governing EPCs were supposed to be implemented last July, and then in October. Both dates came and went without any sign of the changes happening – and with precious little explanation of what (if anything) was going on.
Currently, a new version of the EPC, and new rules governing their use, are meant to come into force on 6th April – Good Friday. However, at the time of writing, with only some 5 weeks left to go, the whole thing still seems to be up in the air. Detailed guidance from CLG (the Department of Communities and Local Government) is promised well in advance of the date, but there are currently no clues as to what that guidance might be. It is even rumoured that the new version of the EPC hasn’t even been approved yet!
In practical terms, this is probably more of a worry for us estate agents than it is for the general public, since one of the proposed changes is that in the case of sales, we will become legally responsible for EPCs, and face censure and even have to pay fines if the new rules governing their production and use are broken - yet we are almost completely in the dark about what’s going on!
Ultimately, however, the really big question is whether any of these changes will make EPCs more useful than they have so far proved – and on this, I suppose the fairest thing to say is that the jury is still well and truly out. The official line, of course, is that anything which increases awareness of the energy efficiency and environmental impact of a property has got to be a good idea. But so far, there is precious little evidence to suggest that buyers actually care very much. After all, there is a lot more to choosing a home than the cost of heating it. Very few buyers are showing signs of rejecting properties that they like and can afford, simply because they have a “G” energy rating.
Of course, this may change as we all become – or are forced to become – greener. However, that day is still a long way off.
Currently, a new version of the EPC, and new rules governing their use, are meant to come into force on 6th April – Good Friday. However, at the time of writing, with only some 5 weeks left to go, the whole thing still seems to be up in the air. Detailed guidance from CLG (the Department of Communities and Local Government) is promised well in advance of the date, but there are currently no clues as to what that guidance might be. It is even rumoured that the new version of the EPC hasn’t even been approved yet!
In practical terms, this is probably more of a worry for us estate agents than it is for the general public, since one of the proposed changes is that in the case of sales, we will become legally responsible for EPCs, and face censure and even have to pay fines if the new rules governing their production and use are broken - yet we are almost completely in the dark about what’s going on!
Ultimately, however, the really big question is whether any of these changes will make EPCs more useful than they have so far proved – and on this, I suppose the fairest thing to say is that the jury is still well and truly out. The official line, of course, is that anything which increases awareness of the energy efficiency and environmental impact of a property has got to be a good idea. But so far, there is precious little evidence to suggest that buyers actually care very much. After all, there is a lot more to choosing a home than the cost of heating it. Very few buyers are showing signs of rejecting properties that they like and can afford, simply because they have a “G” energy rating.
Of course, this may change as we all become – or are forced to become – greener. However, that day is still a long way off.
Monday, 27 February 2012
Q. In his will, my late father left me a sizeable lump sum, which I want to put to work. Is buy-to-let a viable option?
A. Absolutely, yes! In fact, after a bit of a slowdown in the immediate aftermath of the credit crunch, the buy-to-let sector is booming once again.
Why? Well, the main reason is that with the continuing national shortage of housing stock, demand for rental property has soared. Research shows that with the size of deposit required by lenders forcing many young people to postpone buying their own home, the majority of newly-formed households are now more likely to be in the private rental sector.
This massive surge in demand, which shows no sign whatsoever of tailing off in the foreseeable future, has in turn driven up rental values right across the country. And this against a background of lacklustre performance by most of the more traditional investment alternatives – a factor highlighted by the turmoil in world stock markets over the last couple of years. In 2011, for example, the yields from buy-to-let property (i.e. rental income as a proportion of the purchase price) averaged 5.4% - the best since 2003. In contrast, the FTSE All-Share Index yields 3.8%, UK Government pay 2% and the Bank rate is just 0.5%!
As a result of all this, lenders have been returning to the market in a big way. A recent article in the national press reported that the average interest rate on a buy-to-let loan dropped from 5.31% to 4.79% over the last two years. During the same period, the number of deals available doubled. The typical deposit required has also fallen back from 35%-plus to 25%. There are even some deals that only ask for 20%.
At the same time, however, lenders have clearly learned some lessons. So, for instance, whereas in the bad old days you could easily secure a B2L mortgage solely on the basis of the expected rental income, lenders now typically require you to be able to prove that you have an additional source of income of at least £25,000 a year. Which, when you think about it, is no bad thing.
Finally, add in the fact that prices are currently the lowest they’ve been for years, and this is arguably the best time ever to invest in property!
Why? Well, the main reason is that with the continuing national shortage of housing stock, demand for rental property has soared. Research shows that with the size of deposit required by lenders forcing many young people to postpone buying their own home, the majority of newly-formed households are now more likely to be in the private rental sector.
This massive surge in demand, which shows no sign whatsoever of tailing off in the foreseeable future, has in turn driven up rental values right across the country. And this against a background of lacklustre performance by most of the more traditional investment alternatives – a factor highlighted by the turmoil in world stock markets over the last couple of years. In 2011, for example, the yields from buy-to-let property (i.e. rental income as a proportion of the purchase price) averaged 5.4% - the best since 2003. In contrast, the FTSE All-Share Index yields 3.8%, UK Government pay 2% and the Bank rate is just 0.5%!
As a result of all this, lenders have been returning to the market in a big way. A recent article in the national press reported that the average interest rate on a buy-to-let loan dropped from 5.31% to 4.79% over the last two years. During the same period, the number of deals available doubled. The typical deposit required has also fallen back from 35%-plus to 25%. There are even some deals that only ask for 20%.
At the same time, however, lenders have clearly learned some lessons. So, for instance, whereas in the bad old days you could easily secure a B2L mortgage solely on the basis of the expected rental income, lenders now typically require you to be able to prove that you have an additional source of income of at least £25,000 a year. Which, when you think about it, is no bad thing.
Finally, add in the fact that prices are currently the lowest they’ve been for years, and this is arguably the best time ever to invest in property!
Friday, 17 February 2012
Q. I’m thinking about selling. Given the state of the market, is it worth running an Open House?
A. Open Houses can be a valuable addition to your armoury, whatever the state of the property market – but probably even more so at the moment, when sellers and their agents are having to work that much harder to generate buyer interest.
And generating buyer interest is what Open Houses are very good at. Unlike the more traditional viewing procedure, where potential buyers first have to register with the agent and then book an appointment to view, they give house-hunters the opportunity to take a really good, long look at a property, both inside and out, without having either the owner or the agent constantly at their elbow. In other words, it’s a bit like visiting a stately home and taking your own time over it, rather than having to take a guided tour!
In addition, research in the USA, where Open Houses have been used for years, shows that when more than one group of buyers look at a property simultaneously, it can help to create a sense of competition – so prices achieved are often actually higher than they might otherwise have been.
Of course, the idea of throwing your home open on a particular day between set times, so that it can be viewed by a whole bunch of complete strangers, can sound a bit scary. But it needn’t be, because a good agent will help you with all the arrangements.
Those arrangements can vary according to your own preferences – so the first thing is to agree a plan of action with your agent. You may, for example, prefer to have the whole thing handled relatively discreetly. Or, you might decide to go for broke, put an “Open House” sign in the window, and hang balloons and bunting all round your front garden, so that no-one is left in any doubt about what is going on! Either way, your agent will ensure that details of the event – which for obvious reasons will normally be scheduled for a weekend - are widely advertised in advance.
Meanwhile, all you need to do is make sure your home is looking its best, and that any items of value are safely locked away. Then, it’s just a mater of waiting to see who turns up on the day, making a note of their names and contact details, and leaving them to look round at their leisure.
Of course, as with anything else, there are no cast-iron guarantees that an Open House will deliver the goods. But particularly in the current market, that extra string to your bow could just make all the difference!
And generating buyer interest is what Open Houses are very good at. Unlike the more traditional viewing procedure, where potential buyers first have to register with the agent and then book an appointment to view, they give house-hunters the opportunity to take a really good, long look at a property, both inside and out, without having either the owner or the agent constantly at their elbow. In other words, it’s a bit like visiting a stately home and taking your own time over it, rather than having to take a guided tour!
In addition, research in the USA, where Open Houses have been used for years, shows that when more than one group of buyers look at a property simultaneously, it can help to create a sense of competition – so prices achieved are often actually higher than they might otherwise have been.
Of course, the idea of throwing your home open on a particular day between set times, so that it can be viewed by a whole bunch of complete strangers, can sound a bit scary. But it needn’t be, because a good agent will help you with all the arrangements.
Those arrangements can vary according to your own preferences – so the first thing is to agree a plan of action with your agent. You may, for example, prefer to have the whole thing handled relatively discreetly. Or, you might decide to go for broke, put an “Open House” sign in the window, and hang balloons and bunting all round your front garden, so that no-one is left in any doubt about what is going on! Either way, your agent will ensure that details of the event – which for obvious reasons will normally be scheduled for a weekend - are widely advertised in advance.
Meanwhile, all you need to do is make sure your home is looking its best, and that any items of value are safely locked away. Then, it’s just a mater of waiting to see who turns up on the day, making a note of their names and contact details, and leaving them to look round at their leisure.
Of course, as with anything else, there are no cast-iron guarantees that an Open House will deliver the goods. But particularly in the current market, that extra string to your bow could just make all the difference!
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