An upside to upsizing

As a rule, John Thorogood resists the urge to predict the market. But six months ago, when I last wrote for The Word, I noted that we needn’t look any further afield than stamp duty as the main factor keeping a lid on prices. I argued that, contrary to public opinion, it was a better time to upsize in the capital than it had been for some time. One or two eyebrows were raised. But now statistics are emerging to back up my theory. I could say “I hate to say I told you so”, but that would be a little white lie. And honesty, or giving honest advice – even when it flies in the face of a popular viewpoint – has always been the John Thorogood way.

In any case, perhaps I could be forgiven a little professional satisfaction when I read this week’s industry headlines. Data now confirms that slower house price growth over the past two years (especially for London’s high-value property) may have offset extra stamp duty charges. In short, you pay less overall to buy a bigger property then you did before, as prices have come down by more than stamp duty has gone up. Eureka! So, with mortgage rates attractively low (even on a five-year fixed) and the affordability of property at its highest for many years, what is (or was) holding buyers back? A reluctance to pay the taxman?  Do buyers really care whether they pay a vendor, as part of a rising purchase price, or the Government in the form of tax? Some do, yes but we sense the tide is turning…

Between and around the commons, stamp duty has well and truly bed itself into prices. It takes a while for that to happen, particularly when the market is confronted with changes as significant as those introduced in December 2014. But 30 months is ample in my opinion; and with those 30 months comes pent-up demand, especially with spring in full swing. Stamp duty won’t stop people needing to move, although it may make them search more carefully, so we have many qualified buyers quietly waiting in the wings for the right property to come up.

We’re finding vendors are reacting too. Keen for their homes not to be over-exposed in what some describe as an uncertain market, many are returning to old-fashioned methods of discreet, word-of-mouth, off-market selling to ensure privacy, the best price and the appropriate “serious” buyers.

In essence, neither party wants their time wasted. So, where or to whom do they turn for that? Not to Rightmove or Zoopla I assure you (where the world knows your inside-leg measurement); but to an experienced local agent who understands buyers’ requirements, has unparalleled knowledge of the area’s housing stock and a long list of established relationships. The larger houses in our area, despite what multi-office agents try telling you, most frequently sell to local buyers we know, who’ve had their eye on a location for a while – in some cases, years.

Any agent can list properties online but matching the right people to them is what we do best. This kind of inconspicuous sale is gaining in popularity and even as I write, John Thorogood are concluding the sale of three houses that never needed to appear on the open market at all, one of them at a record price for the street. Perhaps we do have something to thank Mr. Osborne for after all…

Break the chain…

Right from the beginning of January, many people’s thoughts begin to turn to moving house either in the short or long term. Whether they’re up-sizing or downsizing, there’s nothing like the dawn of a New Year (perhaps it’s Christmas with the family) to inspire or force us to consider changing the space we live in. The spike in the numbers of people looking at online property over the Christmas period is testament to this, even if many of those are just fantasising…

The timing of your sale is all important and doing your research is vital. Many people planning to move house often choose not to put their own property on the market until they’ve found a suitable property to buy – it feels more comfortable that way and they’re usually made to feel confident that their own home will sell fast anyway.

But in our experience (that’s several decades’ worth), we’ve seen very few people succeed at this. Sometimes their house may not sell as fast as they/we think it will (despite the assurances or all the estate agents) meaning they often lose out on that house of their dreams. But even if your own property does get interest quickly, the other one you are after is often snapped up by someone in a better position (already under offer for example). If you’ve already set your heart on a particular property, it’ll also be very stressful selling under pressure which goes against our efforts to maximise your selling price.

Better options may be either of the following and these are particularly true if you’re moving out of London but also hold for up-sizing or down-sizing locally.

1. Bite the bullet – sell up and commit to renting in your new chosen area initially. Yes, it means moving twice but it negates the problems highlighted above and is something which may help you find your preferred location before committing to a purchase.
Or
2. Market your house for sale first – get the buyer in position and then start looking in earnest for a house to purchase (having done groundwork/research on the web in advance). Be clear from the outset to your agent (who in turn should inform all potential buyers up front) that you will not move until you find somewhere yourself – when the local market is short of stock (which it generally is) most buyers are happy to give that a chance and wait for a reasonable time period. This makes you a strong candidate with the agents you’re looking through and they are more likely consider you more seriously as a purchaser.

If you’d like any more detailed advice or a free valuation of your property to get you started, please follow the link here http://www.john-thorogood.co.uk/value or contact Austin Thorogood on 020 7228 7474.

Move or improve?

To move or improve?” What a very 21st-Century, first-world dilemma! But for Wandsworth home-movers needing space, the predicament of whether to dig and “make do” or buy bigger is a common one. Across London, planning applications for basements have doubled in two years, “Grand Designs” is a TV favourite and unmodernised properties are fought over. Everyone, it seems, wants to build.

And it’s easy to see why. Mr Osborne’s legacy means colossal stamp duty bills for trading terraced homes for something more substantial. So the question, ‘should I dig?’ regularly greets us on the doorstep as we arrive on valuations, closing the front door before answering so the neighbours don’t hear that awful ‘B-word’ (that’s ‘basement’ not ‘Brexit’ by the way).

But do the numbers stack up? In a flash, out comes the spreadsheet and calculator (theirs not mine). ‘If we add “X” square feet multiplied by the average SW11 £-per-square-foot-rate, we can figure out exactly what a buyer will pay us afterwards. It’s just science, right?’

Sure – if you just want a “Zoopla” valuation. But for an accurate idea of your home’s value, once the stress and mess are gone, you need to understand subjective factors too. What are buyers really looking for? That’s where we come in. We know their expected finish, their desired layout and their street-specific demand. We even recommend reliable contractors. Good advice – to buyers, sellers and would-be builders – is integral to our service and something which, with three decades of local knowledge and statistics, John Thorogood is uniquely equipped to give.

So is the slog worth it or are you better off moving? Recent sales ‘Between the Commons’ of houses dug ‘front-to back’ have not always recovered the expenditure. Cutting-edge basements are impressive, no doubt, but subterranean living is not for everyone – and while some folk spend wisely in the right locations, others overdevelop in the wrong places. Many owners who lived through the “hell”, still moved on – to greener, better or wider pastures (more garden, side access and parking, please?)

Compounding this, basement costs are spiralling; £300k…£400k…plus the fit-out, oh…and the interior designer’s bill… and there’s that ‘must-have’ 80” screen for the cinema …and while we’re at it shall we update the kitchen too?

You may feel you’re saving money. But reconsider the alternative. Different price brackets move up (and down) at different rates; gaps between those brackets widen and narrow. Lately, the dreaded stamp duty has kept a lid on prices at the top of the market, making naturally larger houses more attainable now than at any point since the financial crisis. Historically, that sort of opportunity hasn’t hung around. We should know – we’ve been here long enough!

Buyers seem to be catching on. Contrary to predictions, SDLT revenues are up 11% in London, according to the latest HMRC data (2015-16). After pausing for breath, people are moving again, realising that hefty moving costs might be a better investment after all…

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