Property Gold: How to be an attractive buyer

Property Gold is a monthly column written by independent property consultant, Alex Goldstein. With more than 17 years’ experience, Alex helps his clients to buy and sell residential property in some of the most desirable locations in Yorkshire and beyond. This month, Alex shares his advice on how buyers can put themselves in the best position – and it’s not all about offering the highest price. 

Ask any estate agent how many potential buyers come to them and say they are ‘cash’ and they will usually sigh and roll their eyes. This term is often thrown around quite nonchalantly and buyers need to be wary of their phrasing.

Cash in the eyes of an estate agent, really does mean cash. It is sitting in a UK bank account ready to be transferred to their solicitor. However, to some buyers it can mean part is from their savings account and the rest from their bank – in the form of a mortgage. Why is this a problem? Whilst having a mortgage isn’t an issue per se, it does mean that an agent (and their vendor client) have extra hoops to jump through, which usually creates time delays. This more prominent currently as lenders are being even more cautious, plus staff cutbacks and backlogs don’t help. So in other words, you are deemed to be a higher risk as a buyer.

Another misused phrase is ‘I am sold’. This could mean several things: ‘under offer’, ‘exchanged’ or ‘completed’. This one phrase with three possible interpretations, all of which have different meanings, can damage your reputation if misused. Being under offer (or sold subject to contract) is where you have agreed to accept an offer from a buyer and memorandums of sale have been issued. Having exchanged is the legally binding part and is what property professionals always push for, as there’s rarely any going back after this point. Completed means you are formally over the line and own the property.

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When it comes to being a property buyer in the current market, everything boils down to how risky the agent and vendor perceive you to be. You may be thinking at this point that to secure your dream home, you need to be all cash and offer the most amount of money. Not true.

It is the reliability and security of your offer, versus the monetary amount. In other words, you can offer cloud nine money, but if it is subject to a chain of several people and a high loan to value mortgage, then your risk will be seen as too high. However, if you have a limited or no chain and sensible mortgage borrowing, then you are more likely to transact – which is what actually counts.

Interestingly another element has become more important recently and that is time. If a buyer can offer additional time to a vendor to help them find an onward property, then this can be the ultimate ace card as it takes stress away from the vendor.

The key as a buyer is to get yourself into the best possible position and be prepared to think laterally to overcome any obstacles. Get this and your phrasing right with estate agents and they will judge you in the best possible light.

If you have any comments or questions for Alex, please feel free to contact him at alex@alexgoldstein.co.uk

Property Gold: The Hidden Property Sector

Property Gold is a monthly column written by independent property consultant, Alex Goldstein. With more than 17 years’ experience, Alex helps his clients to buy and sell residential property in some of the most desirable locations in Yorkshire and beyond. This month, Alex discusses ‘off-market’ property sales.

There has been a part of the property market that has been steadily gaining strength and which remains hidden to many – and that is the off-market sector.

To the uninitiated, these are properties that are not available in the public domain. They are not listed on any of your favourite property portals and are on a confidential need-to-know basis only. Gaining access to these properties can be via the estate agents, whereby they are instructed on a low-key basis or directly to the vendors themselves.

In this digital age run by algorithms and online targeting, one could understandably think this was a somewhat backward step? However, this is where there has been a power shift in thinking.

No longer do some vendors want their homes (and names) blurted out online for their information to be available to all and sundry for years to come, with no control over the information released. Owners are ever more mindful of their online footprint and digital presence, where for a number of reasons they may wish to keep this to a minimum.

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On the flip side, agents are finding that by going back to ‘old school’ basics, they are getting better and more profitable transactions over the line. Albeit the one major downside of selling a property off-market, is that you are not strictly testing the entire market. Therefore, is this the best price the market could have achieved? Only you can decide.

Getting access to these properties can be tricky, as often the properties are tightly controlled with information only being given to those known to be in proceedable buying positions. Again, I am seeing that reliability and security of buyers is paramount and often takes precedent over the offer amount.

Therefore, as a buyer if you want access to these properties, you need to be in the best possible buying position and have the right connections to boot. Being ‘Under Offer’ is good, but it doesn’t have the same clout that it once did. This is primarily as legals and lenders take so much longer than several years ago. Bolt these into a small chain and you are already looking high risk in the eyes of vendors and agents. It is therefore vital that you get as close to exchange as possible or ideally over this point, to have the leverage required to gain access to this club. Then the doors start to open…

If you have any comments or questions for Alex, please feel free to contact him on alex@alexgoldstein.co.uk

Property Gold: What next for the phenomenal Yorkshire property market?

Property Gold is a monthly column written by independent property consultant, Alex Goldstein. With more than 17 years’ experience, Alex helps his clients to buy and sell residential property in some of the most desirable locations in Yorkshire and beyond. This month, Alex discusses buoyant Yorkshire property market – and what might happen next. 

There have been moments nothing short of insanity in the Yorkshire market recently, with exceptionally high prices being achieved, sealed bids, jaw-dropping competition and no let up.

As we exited the lockdown earlier in the year, the market very quickly (and as predicted) got instantly back up to speed. We then had the Chancellor’s ‘brain wave’ of overlaying a SDLT holiday – sending market activity through the roof. I have never experienced anything like it during my 19 years in the industry.

However, whilst the SDLT break provided a sharp shock to the market, the pace wasn’t just down to this. A positive from Covid (yes there are some!), was that it forced buyers to really analyse what they wanted. Companies realised that they could make substantial staff savings by having a remote workforce, family-work balance became more prominent and those in the cities realised they could be based further away from the office. As a result, Yorkshire has taken advantage.

Whilst we always had a strong local market, we now have large amounts of money being poured into the area from those relocating from London and the Home Counties, but also those based internationally. As I write, I have clients based in Singapore, the US and France – they are all Yorkshire ex-pats looking to ‘come home’ having been couped up in city environments.

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So with all this recent activity, what do I think the market landscape looks like into the near future? Most importantly, myself and no one I have spoken with is predicting a price crash or correction. I have long said that the gap between the North and South was closing and this is proof. The prices we have seen, now provide a new benchmark for the area and I feel that we will now see a steady and reassured step forward onwards from this.

Currently there is a shortage of stock in the market, however this is down to the school holidays and people quite understandably wanting a break. Come early September I feel the market will be back on and whilst not at the same raucous pace, the outlook only looks positive.

However, in order to secure your next home, everything comes down to your buying position – and being ‘Under Offer’ doesn’t have the same clout it once did. With legals and banks taking ever longer, vendors and estate agents are shying away from the associated risk and delays, to opt for buyers that are ready to go. The only question you need to ask yourself is when you are going to join the foray.

It’s an exciting time to be in the Yorkshire property market and this is the start of the wave!

If you have any comments or questions for Alex, please feel free to contact him on alex@alexgoldstein.co.uk

Property Gold: The empty homes scandal – who’s the fool?

Property Gold is a monthly column written by independent bespoke property consultant, Alex Goldstein. With more than 17 years’ experience, Alex helps his clients to buy and sell residential property in some of the most desirable locations in Yorkshire and beyond. In this month’s column, Alex takes a look at where things have gone wrong to leave the UK with so many empty homes. 

There are 648,114 empty homes – let that sink in for a moment.

That is the number the government published in its report from October last year, on the number of uninhabited homes in the UK. Of this, 225,845 were classed as long-term vacant (empty for longer than six months).

The numbers speak for themselves. However, despite this, why are we continuing to build these mass-volume new-build developments? Why do governments and the media continually report that we aren’t building enough houses to meet demand and there is a housing crisis? Why are youngsters struggling to get on the housing ladder?

If you want my opinion, it all boils down to money, plus governments and councils meddling in a world they just don’t understand, nor are qualified to deal with. Their actions over the past 20+ years have had far-reaching implications for us all and we are now on the brink of yet another scandal to hit the new-build property sector and national economy. Like the tragic events at Grenfell Tower just over four years ago and the subsequent cladding scandal, there doesn’t seem to be any end in sight for ridding ourselves of this greenfield-sucking parasite.

As an example, Harrogate Borough Council didn’t have a Local Plan in place for several years. This resulted in the big PLC developers having an absolute field day, with limited barriers to their proposals. However, these key players can walk away at any point, with limited accountability for the hand they have had in altering the face of the district and UK forever.

Overloaded schools, GP surgeries, roads and infrastructure are problems we all now have to endure, through no fault of our own. In Harrogate district in the same 2020 count, there were 2,208 empty properties. Yet sizeable new-build schemes dotted throughout the area are still going ahead, with more still to come.

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Every new-build home sold adds more financial fuel to the fire, and we will simply continue going around in circles until all our green space is gone – and then what?

We are already seeing that empty homes bring about ghost blocks and areas, attracting crime, hitting local house prices and the economy. My concern is that a housing bubble is being created once more. The powers running the country have opened a Pandora’s Box and I don’t believe they know how to close the lid.

So who are the fools in all of this? The government, councils, PLC developers, the new home buyers, or us  for not taking a stand when it was needed?

If you have any comments or questions for Alex, please feel free to contact him on alex@alexgoldstein.co.uk

Property Gold: The butchered landscapes of PLC developments – who’s to blame?

Property Gold is a monthly column written by independent bespoke property consultant, Alex Goldstein. With over 17 years’ experience, Alex helps his clients to buy and sell residential property in some of the most desirable locations in Yorkshire and beyond. 

This month, Alex examines where the blame lies for the deluge of PLC new homes in the district.  

 

Walking around the open countryside surrounding Harrogate the other weekend, my heart sank when I came over the horizon and saw this butchered landscape, strewn with heavy duty excavators, mountains of rubble and the beginnings of yet more mass-scale new build homes, by another PLC developer.

What was once a small country lane, gently following the contours of the hillside, had now been annihilated forever to incorporate a widened straight carriageway with a monolithic roundabout. Like Japanese Knotweed, these large scale developments are working their way into our open spaces by any means possible, in the relentless pursuit of profit.

This got me thinking – is there really a need for any PLC developer to actually exist?

When one looks at the UK Government’s own data via the Ministry of Housing, Communities & Local Government (MHCLG), the overwhelming evidence speaks for itself. In October 2019, there were 648,114 empty properties with nearly 226,000 of these being classed as long term empty (ie more than 6 months). So why is the media and Government claiming there is a ‘housing crisis’ when it is clear there is more than enough to go around? Could it really be that there is a high octane mix of money, politics and PLC developers going around at the highest levels of Government? Surely not…

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I have long said that the Government needs to stop incentivising developers to build on our green open spaces, when there is no evidence that we need these extra properties. They should be encouraging the rejuvenation of our much loved and dwindling high streets, when they need our help more than ever. What about all these empty commercial units – would we not be better converting these into vibrant new homes and instantly breathing life back into our towns?

So where does the finger of blame lie in this mess that we have got ourselves in to?

Many would say that Government housing policies over the last few decades have done little to get to grips with the market, whilst putting in appropriate incentives and indeed filters that are required to see us right. This hasn’t been helped by the revolving door of endless housing ministers using this role as a brief stepping-stone opportunity, with the vast majority of them having zero property experience.

You could even argue that Harrogate Borough Council, for example, left themselves (and the area) wide open to abuse by not having a formal Local Plan in place for around 5 years.

However there is a key angle which isn’t often mentioned and that is you, the individual hoodwinked buyers of these PLC homes. It all comes back to supply and demand. If there isn’t the demand, only then can we change the tide of our countryside being obliterated for good.

If you have any comments or questions for Alex, please feel free to contact him on alex@alexgoldstein.co.uk.

Property Gold: The hidden time options when selling your home

Property Gold is a monthly column written by independent bespoke property consultant, Alex Goldstein. With over 17 years’ experience, Alex helps his clients to buy and sell residential property in some of the most desirable locations in Yorkshire and beyond. 

This week Alex looks at how you can control the sale of your property if you haven’t yet found your new home. 

 

Time. It is one of the most important factors when trying to buy or sell your home. More often than not, matters do not move at the pace you want. Don’t even get me started on local authority searches and mortgage lenders!

One of the most regular obstacles I come across is when vendors are unsure about selling their home, as they haven’t found a property they wish to move to. Their default thinking tends to be that they will be kicked out on to the streets by their buyer, before they are ready. This is not the case.

Putting transactions together on the right basis is key and there are some lesser known options that sellers (and indeed buyers) need to have up their sleeves when negotiating. Just how do you build in extra time into a transaction and still be in control of it, whilst keeping both sides happy?

Yes going into rented is the ‘go to’ option, however try looking at AirBnB. Many landlords have lost income during the restrictions and therefore if you wish to secure their property for a period of time, have the freedom to pick your own dates and at more favourable market rates, this could be an answer.

The other known strategy is to exchange and then delay completion by a several months, however, suggest completion ‘if not earlier by prior mutual agreement’. This means that both buyer and seller can make completion earlier, should they require, however neither side can go beyond the backstop date.

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The lesser known angles and which are also win-win scenarios for both sides are:

Licence back agreements. This is where the property exchanges and completes, however the ‘former owner’ then rents the property back from the incoming buyer at more favourable rates. This means the vendor can stay in-situ in their home, has more time to find their next home and most importantly are in a top buying position. In contrast, the new owner has secured the property and has a reliable tenant already there.

An alternative angle is that once a seller has found a buyer, is to issue the memorandum of sale to all parties. However you then ask the solicitors to stop working on their respective files. This gives the buyer reassurance that you are taking their offer seriously and means that the vendor is instantly put into a proceedable position, as they can prove their property is now Under Offer.

Yes these options can prove to be useful to break impasses, however they can only be deployed when you know what the buyer and seller are trying to achieve. Indeed I have done transactions where I have used a number of these options all together. The key is to find that key middle ground and think laterally.

Property Gold: why I’d never buy a PLC New Home

Property Gold is a monthly column written by independent bespoke property consultant, Alex Goldstein. With over 17 years’ experience, Alex helps his clients to buy and sell residential property in some of the most desirable locations in Yorkshire and beyond. 

This week Alex highlights some of the problems with New Homes sold by Private Listed Companies – and why he would never buy one. 

 

Apples – sometimes you bite into one and what lies beneath the pristine surface, is nothing but a floury, rotten core. You could say this is like buying a new build home from a PLC developer (i.e. one who is listed on the stock exchange), where their sprawling mass-volume schemes continue to plague Yorkshire. But what exactly is my issue with them and why would I never buy one?

Let’s start with one of my biggest issues – build quality. There are consistent reports in the media about sub-standard practices and corners being cut – all with the sole aim of maximising profit margins. PLC developers are not charities and are there to support their shareholders and to maintain stock position. PLC developers usually want 25-30% profit margin on each unit they sell, but they still need to install the glamorous kitchens and bathrooms as buyers can see and touch these. Therefore areas can be overlooked on items one can’t see behind the scenes such as cavity wall insulation, fire barriers, plumbing, wiring, roofing etc to get the profit. It’s not exactly ethical.

Many buyers then say, don’t worry we have all the guarantees and warranties, so we’re covered if something goes wrong. Well I would turn this around and ask – have you actually tried to make a claim on said warranty? Good luck!

It’s all about secondary and tertiary locations – after all, the only land available for the size of schemes that PLC developers want, lie on the outer fringes of already existing conurbations. So where is the upside when property is all about location? Lack of supporting infrastructure, traffic problems, shortage of school places and GP surgeries – the list goes on.

In these uninspiring, soulless Stepford streets, one can rarely add value as the developer has already maxed out the angles so their profit is amplified. In addition, buyers seem to sleepwalk into paying an excessively high price from the outset due to the glossy marketing and commission hungry sales staff. Therefore new owners are solely relying on the market to increase their home’s value during their time in ownership. So what happens if the market doesn’t go up and/or you fall into negative equity?

With the continued decline of the High Street, isn’t it about time we reinvigorated these areas. I firmly believe there is no need to build on open green space. Instead the Government needs to incentivise PLC developers to refurbish what we have and to help bring communities back together.

In conclusion, I did a quick straw poll of 20 estate agents and solicitors that I work alongside. Not a single one owned a PLC new home. And that’s all you need to know.

If you have any comments or questions for Alex, please feel free to contact him on alex@alexgoldstein.co.uk. 

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