Nick Taylor's Blog

December 2011

Thursday, 01 December 2011

How did bricks and mortar really perform in 2011?

At the end of each year it is always interesting to see how property has fared compared to other popular investment vehicles. With inflation running at about 5% one needs to invest prudently just to stand still these days.

In East Anglia property prices rose by about half of one percent. Not much to write home about I know but let’s compare this with other investments. Gold was the front runner in 2011 increasing in value by 14% but gold is a very volatile commodity and who’s to say what will happen to gold prices next year.

If one had played it safe and gone for a bank savings account the return would have been about 3% at the very best which is safe but in reality, not even keeping up with inflation. If one had opted for a FTSE 100 based investment one would have fared very badly. The FTSE 100 lost 8% of its value in 2011 and investors are still licking their wounds.

The other benefit of property is that you can live in it unlike stocks, shares, gold or bank deposits. Property as an investment is where the shrewd investor should look. Terrace houses in the Golden Triangle return about 5% gross, one bedroom flats and garages up to 8% and with a buoyant rental market there is no shortage of tenants.

So whilst gold has been the clear winner in 2011, property has fared very favourably too.

November 2011

Tuesday, 01 November 2011

What is the future for new build?

With our population growing at about a quarter of a million people every year there is enormous pressure on housing in the UK and this is one factor that underpins and supports house prices. But how sustainable is it to keep building new houses in the way that we do?

Now there’s nothing wrong with modern houses – in fact we sell them all the time. What makes them so unsustainable is where and how they’re built. New houses tend to be on estates on green field sites on the outskirts of towns and cities. They are neither in town nor in the country. To live in them you need at least two cars per household in order to transport everybody to work, school and play. Each property has at least two flushing toilets and two power showers which have to be supplied by our dwindling water resource and there isn’t a doctor’s surgery, nursery school or shop for miles around. They tend to be built far too near low lying land and water courses because let’s face it the good sites have been developed already and this often makes them difficult to insure against flood.

One wonders who contrived this style of living in the first place and more to the point which bright spark in government gave it the seal of approval.

Very few new homes are built close to amenities within an established community because not only are brown field sites scarce, they are more costly to develop and seeing as profit is the key driver in new housing development that really wouldn’t do would it?

On this tiny island there really isn’t an easy solution to the problem other than the blindingly obvious which is for government to decide that we’re not going to increase our population by 250,000 every year and keep our land green and pleasant.

September 2011

Thursday, 01 September 2011

This rather appalling state of affairs is not due to large volumes of sales but rather because the department responsible for turning around search results is “under resourced”. This is local government speak for “blame the government cuts” as if the microscopic reductions in public spending that we have seen thus far should make any difference at all.

August 2011

Monday, 01 August 2011

When it comes to choosing an Estate Agents is the cheapest the bestest?

Estate Agents come and go in Norwich and at the moment there are about 50 agents selling property in the Golden Triangle area of Norwich.

New agents come along from time to time and some of these are successful and some are not. New agents either offer something different, something better or something cheaper.In the absence of something better or something different most start-ups offer a cut rate deal when they open for business. So book early and you might be one of the lucky sellers to take advantage of a cut rate commission.

Now in life, as in business, I have learnt that there’s no such thing as a free lunch and one always gets what one pays for. In other words a cut rate deal usually means a cut rate service from a cut rate individual and whilst our commission rate at Hadley Taylor is very competitive our clients know that achieving the best possible price for one’s most valuable asset is far more important than using the cheapest estate agent in town.

June 2011

Wednesday, 01 June 2011

How should I select my Estate Agent?

One question I am often asked by would be sellers is how should I decide which estate agent to use? Now I’m bound to say that sellers should choose me but if one is to be more objective let’s look at some more sensible selection criteria.

There are many good estate agents in Norwich and many of them can be found within the ranks of the Norwich and District Association of Estate Agents. What might be more useful is to point out reasons why you shouldn’t use a particular agent. Agents that follow poor practice will almost certainly do a poor job and fail to sell your house or sell it for less than it’s worth.

For example, sellers should never use estate agents who knock on your door asking if they can sell your house. This is a particularly nauseating practice that preys on the elderly, the infirm or the inexperienced. If it happens to you report it to the NAEA or the Ombudsman but most importantly don’t use that particular agent.

Never use an agent that asks for an up front fee. Good estate agents with the required expertise and local knowledge to sell your house at an advantageous price will charge you once they’ve done the job and not before. Volume agents who charge an up front fee rely on banking the income from hundreds of houses they don’t actually sell.

Don’t use an agent who values your house at a higher price that anyone else unless they can prove to your satisfaction how they will achieve the price quoted.

Don’t use an unlicensed agent. Most agents are members of the National Association of Estate Agents but not all of these meet the required criteria to be a licensed agent. Ask the agent if they are licensed when they call to do their market appraisal.

Beware of agents that want you to commit to a sole agency agreement for more than a few weeks. This is because if the agent is not successful at selling your house you need to be able to employ a different agent as easily as possible. Believe it or not some agent’s contracts tie you in for 13, 16 or even 22 weeks but you’ll only discover this when you read the small print in their contract.

Don’t use agents who also sell mortgages or conveyancing. These agents have unwittingly introduced a conflict of interest into their business for the sake of making more profit. These agents may be more focused on earning commissions from mortgage and conveyancing work than the job in hand which is to sell your house. Ethical estate agents have only one objective and that is to get you the best price for your most valuable asset.

Beware of estate agents who suggest selling your home at auction. Very few properties are suited to an auction sale. The vast majority of properties sold at auction are sold for less than their true value.

Most important of all do be assured that estate agents in this country are more ethical, more regulated and offer better value for money than realtors in virtually any other country on the planet.

May 2011

Monday, 02 May 2011

How do Estate Agents work in other countries?

I’ve just got back from my annual holiday and many of you may also have been away over the Easter break or will be planning your holiday for later in the year.

When I’m on holiday abroad I can’t resist the temptation to check out the property prices in whichever country I’m in at the time. I guess it’s an obsession that goes with the territory when one is an estate agent. What I find is that property abroad is increasingly expensive compared to the UK due in part to the weakness of the pound and those destinations offering bargain homes in the sun are becoming increasingly few and far between.

What is also quite interesting is to see how estate agents in other countries work and to learn what they charge their clients. In fact I’m often quite envious at the rather eye watering commission rates estate agents enjoy in other countries. For example it will cost about twice as much to sell a house in the US or in Australia as it will here whilst in France agents charge about 4% and in South Africa agents charge up to 7%. In Italy they really have a laugh because agents charge both the seller and the buyer.

Here in the UK estate agents fees are often the subject of endless column inches and media spin but in reality the cost of selling a house here is less than in virtually any other country on the planet. Regulation of estate agents is also much more rigorous here than in most other countries where in many cases redress is non-existent.

So if you’re back from your Easter holiday and considering putting your house on the market you can expect great value for money from your local property professional and expect him or her to work within a strict code of conduct rather like the one we have within the Norwich and District Association of Estate Agents.