Propertynewshound

Editorial Works - Simples

2012-01-24T00:27:00.003Z

Just occasionally something happens to remind journalists that they wield...well, a sort of influence.

If I seem surprised, it's because I am. No matter how much some journos claim otherwise, most of our writing becomes tomorrow's fish and chip wrapper, or survives as a series of unseen URLs in a Google cache, which is the 21st century equivalent of old newspapers.

We like to believe our copy makes the world sit up and take notice but in reality we write our articles, file them and see them printed on paper or posted online. Then it all stops.

The phone goes if there is a problem but (leaving to one side the vicious souls who leave serial-comments at the bottom of online stories) we tend to hear very little after the majority of stories have run. That is, unless someone quoted in a story has had "a result".

Now we really do not write stories to help houses sell, nor to put business the way of those quoted in our pieces. Frankly, most of us write stories simply to earn a living, because we can do nothing else.

But sometimes we discover that our writing has made a difference. In other words, editorial works - at least for those who make the effort to respond to journalists, for those who "give good quote", and those adding value to the stories in which they are cited.

In recent years my pieces have (always indirectly and inadvertently):

* led to a TV chat show host buying his east London home after first seeing it in an article in The Independent;

* helped a buying agent win a new client after her expertise was quoted in a Daily Telegraph article;

* assisted some British buyers, poorly treated by a developer in Spain, having their deposits returned after two years following a series of stories in different papers;

* helped a house doctor get a new client because of being quoted in a story; and

* led to many buyers finding their homes not on property websites but in the pages and online editorial of the Telegraph, FT and Daily Mail.

In the interests of fairness, I should also record that a very few articles have had the opposite effect:

* one story, suggesting that fractional ownership works better in sun-kissed lands rather than the British westcountry, led to an estate agent being disinstructed on a scheme;

* another story led to a buyer pulling out of a deal to purchase a new-build flat after hearing of the developer's treatment of buyers at another scheme.

However, with hand on heart I can say the detrimental consequences of articles have been far, far outweighed by the occasions where estate agents, builders or other property professionals have been helped by being quoted in stories.

So editorial works and that is why - even if you think that journalists colonise only the moral foothills of the world - it is usually worth co-operating with us hacks getting your name in a story.

Now, I must go and earn some money...er, sorry, write that next earth-changing story.

If you would like to to comment on this article, click HERE to e-mail Graham.

Go-Compare Estate Agency Fees

2012-01-17T13:50:00.004Z

I’m not the sort of journalist who goes ‘cut and paste’ (honestly) but I thought I would reproduce in part a press release from one of several new estate agency ‘price comparison’ websites, set up to allow you to go-compare fees and services.

This particular survey was of 250 agents, each covering two London postcodes. The point I’m making is not that estate agents charge too much (or indeed too little) but that in a world of increased transparency over costs, estate agents have so far just about escaped the sort of scrutiny that, say, has applied to car dealers, airline ticket sellers or independent financial advisers.

Maybe that won’t last for much longer. Part of the press release is below - if you don’t want to read it all, the headline is: 'Sellers of an average-priced London home sold for £343,000 could pay agents’ fees ranging from £4,000 to £10,000.'

- “Estate agent fees often lack transparency and there is great variation in the levels of fees that estate agencies across London charge, according to a new survey by property agent comparison website ipostcode.com."

- "Some of the highest average commissions are charged in the SE1 (Bermondsey), NW11 (Golders Green) and W6 (Hammersmith) postcodes, whereas agents in E8 (Dalston), N8 (Crouch End) and SE28 (Thamesmead) offer some of the lowest commission rates."

- “The majority of estate agencies surveyed quoted 1.5% commission, but 15% of agents quoted the lowest fee of 1%. The highest commission level quoted was 2.5%. There were several postcode areas including Islington (N1) and Clerkenwell (EC1) where commission levels spanned the range from 1% - 2.5%, which means that on a property priced at the London average of £342,749 (according to latest Land Registry figures), the seller could be paying anything from £4,113 to £10,282 including VAT to sell the same home."

- “Estate agents’ reputation for being cagey about their fees was borne out, with around 20% of agents refusing to disclose their fees over the phone or via email. Only one agency, Winkworth, which has 43 London offices, disclosed their fees on their website."

- “One in four agents said that their fees are negotiable based on either a realistic valuation of the property or depending on the price range of the property. Many agents stressed that an agency should not be chosen simply on their commission rates but rather on level of service, track record and marketing."

- “The survey also found that estate agent fees in London at an average of 1.7% are more or less in line with the national average of 1.8% - contrary to the perception that London estate agent fees are the highest in the country. Sellers are paying on average almost £7,000 in estate agency fees including VAT (based on the average London property price of £342,749).”

If you would like to to comment on this article, click HERE to e-mail Graham.

Och Aye - The New Way Of Buying A Home?

2012-01-10T19:48:00.003Z

The slim possibility of independence for Scots from the rest of the UK in the short term raises an old chestnut that has not been discussed south of the border for some years - can the Scottish system of buying a home teach the English and Welsh any lessons?

Full details of the Scottish system are far too long for a blog - if you are interested you can see them here - but could the English and Welsh benefit from some elements of how people buy homes north of the border? Namely:

1. ‘Offers Over” - that is, pricing properties at the lowest acceptable price, rather than at a loosely-fixed price as in the rest of the UK. It is not unusual, even in these straitened times, for Scottish prices to end up 20 per cent over the acceptable minimum as a result of the offers over system. Sellers may benefit, but would there be any help in this system for purchasers?

2. Offers Deadlines - this means that on the one hand it’s difficult (almost impossible, in fact) to negotiate on price because offers are made confidentially, by a specific date, and the purpose is to beat rivals to the house by making the largest bid. One side-effect of this is that it obliges prospective buyers to get their finances in order before making an offer;

3. Compensation Threats - once an offer is made and accepted, a purchaser risks having to pay compensation if (s)he pulls out. This is perhaps the most critical difference to the system which operates in England and Wales. Given the number of collapsing chains, sometimes because of buyers not preparing their finances or ‘getting cold feet’, would this system help keep chains stronger?

Lawyers and estate agents will know there are variations to these three key differences outlined above, but for the purposes of broad debate, let's ask the question - can ‘we’ in England and Wales learn anything from ‘them’ in Scotland?

With national differences set to dominate the political stage for the next two years, there is a topical reason to at least consider whether the answer might just be Yes.

If you would like to to comment on this article, click HERE to e-mail Graham.

Property Stories In 2012: That's Entertainment!

2012-01-04T16:54:00.003Z

It’s the start of another year.

For the property journalist that means the winter ski stories are out of the way, previews for the next 12 months are done and published, and we are only days away from pieces about ‘love-nest’ homes just perfect for those buying a pad ahead of Valentine’s Day.

Yes, like any job there is an element of routine. But one thing that has changed from past years is that property section editors - newspaper and online - no longer want stories of housing markets. There will always be a few, usually around the start of the year and then the 'selling season' beginning at Easter, but such stories are now the exception and not the rule.

This is a far cry from the pre-downturn days when rags-to-riches tales of buy-to-let landlords or people who stepped up the housing ladder every few years - making £50,000 each time they moved - were the stock-in-trade of property hacks like myself.

There is good reason for the change. ‘Property’ has, in some ways, outgrown property sections: it is now an asset class like stocks and shares, and a barometer of the well-being of the country like the value of Sterling. And, like the FTSE and the Pound, ‘property’ has fallen in recent years. Newspapers and online services are obliged to report such dry and frequently depressing stuff, but readers are not obliged to read it: instead, there is substantial evidence that readers want more entertainment.

Property's financial power no longer provides entertaining stories, let alone security for home owners, so editors have to look for more interesting angles. Hence their increased fascination with property porn - put simply, beautiful homes - and with themes based on fun: you know what I mean, those stories of the 10 best places to live or retire, or the five sunniest locations, or marvellous houses with gold-plated bathrooms. The eccentric and the eclectic are king this year.

Property does not have to keep us in a wealthy lifestyle any more (and those stories about interest rates, house price indices and mortgage products are now the preserve of the personal finance pages).

But property does have to prove its capacity to give us a fun and interesting lifestyle - and that is what will make a good story in 2012.

If you would like to to comment on this article, click HERE to e-mail Graham.

Five Big Rows For Housing In 2012

2011-12-28T07:24:00.005Z

2012 may look right now as if it will be dominated by Royal anniversaries and Olympic Games but in reality these may be short-lived feel-good spells - in property terms, the year ahead in the UK is much more likely to be dominated by five big issues.

1. House-building volumes: Christmas is always a good time to bury bad news and the Home Builders' Federation figures showing that planning approvals for new homes in Q3 2011 were 10 per cent down on a year earlier were lost in the pre-Yuletide noise. The HBF chose to interpret it as justification for the government's planning reforms, but others may simply say the coalition is failing to deliver after 20 months in power. Next year it has to build more homes...or else Shapps' and Pickles' jobs may be on the line. Flashpoint: every quarter, if the latest batch of start-figures are as bad as those of December 2011.

2. Offices-into-resi: the Corporation of London is leading opposition to the call to turn redundant blocks into homes, arguing that it needs spare capacity to soak up demand when an economic upturn begins. Some other councils agree while more are using that as a smokescreen to disguise their worry that they will lose S106-style windfalls if conversion becomes too easy. Flashpoint - next autumn.

3. Planning reform: the biggest rows have been and gone and the Coalition has forever lost the trust (and PR value) of Middle England organisations like the National Trust, CPRE and the Telegraph. If the government pushes through the changes, it will be expected to deliver an increase in homes almost immediately - but if the government caves in to opponents as some expect, the housebuilders will start giving Shapps and Pickles the cold shoulder and will blame politicians for not increasing housebuilding.

4. London housing: A shortage of affordable new homes in the council... What Boris Johnson called the 'ethnic cleansing' of the capital by limits on housing-related benefits... Planning policies in the boroughs... The prospect of London-specific (and higher than national) S106 and Community Infrastructure Levy payments by developers. There will be talk of all this and more as Johnson and Ken Livingstone slug it out to become London mayor. Housing will be a central plank of campaigning and both major candidates are likely to be radical on the issue in their appeal to voters. Then expect most promises to be abandoned after election day. Flashpoint: May.

5. HS2: This is something of a local issue, but only because it suits the government for it to be seen that way. If the London-Birmingham rail link is either abandoned or 'put underground' for more of the route ('coincidentally' where some Coalition MPs have constituencies), the burden of blight will be lifted from many homes. Yet in later months, if interest rate rises push up repossessions for buy-to-let landlords and ordinary people outside the south east, expect a backlash. The issue will then go national as people ask why house prices and home ownership are bolstered in the affluent Chilterns and not elsewhere. Flashpoint: February for HS2 decision, next winter for interest rise fears.

Happy New Year!

If you would like to to comment on this article, click HERE to e-mail Graham.

Should We Move To Longer Leases?

2011-12-19T07:35:00.004Z

With or without the stricter lending guidelines announced by the Financial Services Authority, the trend within the UK of moving gently away from home ownership towards renting is likely to continue apace.

The stubbornly high cost of houses for sale and now depressed incomes for those working in the private and public sector alike are combining to make property purchase tough. With no capital gains from homes likely in the next few years at least, owning your own home may not even be that desirable.

But one aspect of an increasingly large and attractive lettings sector given little attention is the duration of leases. The UK is dominated by what some call periodic leases, typically short-term of six or 12 months, after which a landlord may easily decide to hike rents to an unexpected degree, or sell the property leaving the tenant high and dry.

Is there not an argument to move to a kind of tenancy-at-will rental sector, with safeguards for tenants and landlords alike, which might just encourage the much longer-term tenancies that would make renting more attractive still to many people?

Imagine a typical 60-year-old individual or couple, perhaps wanting to realise the value of the home they own. They may be drawn to rent but they would no doubt be unwilling to face the prospect of moving from rental accommodation every one or two years in their later lives - yet they might be attracted to the idea if they could have, say, a 10 year tenure.

The ripple effect in the rest of the housing market and wider economy would be obvious as the older couple would release a large home to be purchased and then have substantial equity to use in general spending and rent to a landlord.

Likewise a young couple, now deferring having a family because they live in a rented flat with little guarantee of long-term security, could get on with their lives if they knew they had, say, five or 10 year rented tenures.

There would have to be safeguards, of course, and opt-out provisions. But to gradually shift the rented sector to longer-term tenancies would create some of the security now missing from many individuals‘ and families‘ living choices.

It might upset the most hard-nosed landlords and lettings agents, and cause consternation with hard-pressed estate agents seeing their transaction levels fall further, but the greater good would be more people living the lives they want.

If you would like to to comment on this article, click HERE to e-mail Graham.

Under The Skin of 'Prime Central London'

2011-12-13T07:49:00.002Z

Central London property features disproportionately in coverage of the housing market because PRs, big-name agents and top money are all there, yet the capital’s drawing power for overseas buyers remains fascinating. But what does it mean below the surface?

In recent days I’ve spent a lot of time with top-end central London agents. Get under their skin and you see some fascinating insights into how small (yet incredibly influential) this market is, and what it means - if anything - for the rest of the UK.

For example:

- Reports of large numbers of overseas buyers can easily be exaggerated: many Arab buyers, for example, have ‘runners’ making enquiries for them at multiple estate agents. Therefore one buyer wanting one home can effectively be reported as several buyers enquiring at several agencies;

- Overseas buyers often purchase a home and then effectively take it off the market for a generation or more - typically because many owners pass it to other family members instead of selling after seven to 10 years as is the norm for ‘domestic’ owner occupiers;

- Of those relatively few overseas owners disposing of their properties on the open market, many sell to other foreign purchasers. This means there is much less ‘ripple effect’ of money being realised by domestic sellers who then move to, say, the Home Counties and ‘ripple out’ the central London wealth;

- The consequence of all this is that the supply of homes to buy in prime central London locations is very small - making it highly likely the stellar price rises of recent years will continue;

- Agents are split about whether the UK’s Euro veto will make London appear a safer, or less safe, haven for overseas wealth. Many say foreign purchasers worry the UK parliament does not have the ‘firm government’ one party rule which characterised it for decades until recently and which was an attraction to foreigners fed up with coalitions, civil disturbances and economic uncertainty in their own countries.

If you would like to to comment on this article, click HERE to e-mail Graham.

Renting v Owning: A 2012 Tipping Point?

2011-12-09T00:56:00.004Z

Property journalists and anoraks - er, sorry, I mean analysts - love the figures from surveys 'proving' home ownership to be cheaper or dearer than renting. These stories come up several times a year and inevitably throw in a hackneyed comparison between the UK's previous high level of home ownership and Germany's legendary pro-renting market for good measure too.

So far, so predictable. The problem is, the surveys' results tend to disagree with each other, typically look only at short term comparative costs, and are often skewed to favour the interests of the companies which commission them.

Instead, what are the more influential and independent signs of a real shift from ownership to renting? I am not providing answers but this blog does instead suggests some benchmarks to look out for:

1. Will there be a genuine, large-scale private rented sector 'development and investment' category emerging? If the PRS is expanding permanently as many residential analysts forecast, this 'build to let' industry should begin to appear soon - maybe 2012?

2. Will there be a genuinely totemic 'landmark' statistic showing the PRS not only expanded but serving as a positive choice of tenure for large numbers of people? Perhaps that will be in 2015 when, if Jones Lang LaSalle is correct, there will be more PRS tenants in Greater London than there will be mortgage-holding owner occupiers.

3. Will there be estate agencies not only opening lettings departments - as many previous sales-only operations have done since 2008 - but perhaps closing their sales divisions in order to concentrate on what they regard as the faster-growing, longer term lettings sector? Stand by for an announcement from one agency in the spring - it will make a surprise leap into lettings-only operations.

4. Will the mainstream property press, until now seeking only owner-occupier and buy-to-let investor readers, begin to run rental stories? Will there be pieces on the best places to rent, on how to get the best deal from a landlord and managing agent, or what rent increases (or falls) tenants may see in the future?

Until these tangible and durable signs appear it may be harmless enough to debate the 'which is cheaper?' surveys.

But those surveys may also be missing the point. Young generations may now be deciding to rent not because it's cheaper at one point in time but because renting does not saddle them with a mortgage, maintenance and ownership of an asset which no longer looks like it will make money in the long-term future.

Watch for those signs.

If you would like to to comment on this article, click HERE to e-mail Graham.

The High Speed Route To A Housing Shortage

2011-12-03T17:22:00.003Z

The government’s rethink on HS2, the proposed high speed London-to-Birmingham rail link, could spell bad news for those anticipating more new homes will be built in the future.

The latest delay over HS2 - with the government now looking at a possible £500m tunnel as part of the project (here) - boils down to a desire to avoid a rebellion by Conservative backbenchers. Many of them have constituencies in the Chilterns, through which HS2 would run.

The Campaign to Protect Rural England has quickly seen through this cynical move, noting the £500m would be found by cutting back on environmental work on a different part of the route - at a guess, that may be well away from vociferous Conservative constituencies.

Such is the stuff of politics. Labour has done plenty of this sort of thing in the past, most notably funding large numbers of new schools in its own constituencies in the final four years of its administration. But the ominous effect of this latest HS2 move is that it could give a green light to opponents of new housing developments, too.

Many of the most desirable and largest locations for building new homes are in areas where demand is highest - south east England in particular, where a significant majority of councils and MPs are Conservatives. If they are willing to think short-term about Britain’s transport needs, and sacrifice a modern ‘green’ national rail service in order to secure their next constituency win in 2015, will they think short-term about housing needs too?

In other words, might they threaten a rebellion if their constituencies are ‘forced’ to take new homes just as they threaten a rebellion over HS2? And having got their way once, they may well expect to succeed again.

This only serves to make the tightrope being walked by the government both tauter and higher than before: on the one hand the coalition recognises that Britain needs more homes and more relaxed planning regulations, while on the other hand it has to work hard to keep its two-party administration in one piece, and keep backbench MPs happy.

As we pass the mid-point of this parliament in 2012, so the power of backbench MPs wishing to assert their independence may be felt increasingly often - and on the evidence of HS2, any opposition to new homes may make the government roll over.

If you would like to to comment on this article, click HERE to e-mail Graham.

The Fallacy of Housing's 'Free Market'

2011-11-28T07:53:00.003Z

There are many genuine reasons why people may oppose what current or past governments have done when intervening in the housing market - it’s not enough, it’s too much, the emphasis has been on the wrong sector. But one of the most spurious reasons is that initiatives like underwriting mortgages or providing incentives for the building of first time buyers' properties somehow undermine the sanctity of the ‘free market in homes’.

This is specious. The market is no more free now than it has ever been since governments of any colour imposed taxation related to property deals, set rules over health and safety or energy efficiency, or tried to control the location and appearance of new development.

Indeed many estate agents and pundits - including some now complaining about the coalition government’s latest bid to breathe life into the housing market - actively participate in other forms of ‘intervention’ in the free market.

Three interventions are commonly supported by agents, usually to artificially inflate prices:

1. Planning consent and building regulations. How many times do sellers, egged on by estate agents, seek planning consent for expansion or converting outbuildings to accommodation prior to sale, in order to artificially inflate prices?

2. The liability and payment of stamp duty (which significantly influences pricing of residential property as agents sometimes inflate prices well above a stamp duty threshold and some buyers barter down to the lowest possible threshold);

3. New build homes carry a premium from which, inevitably, selling agents get boosted fees.

There are other regulations, too, which may not have a direct influence on price but certainly ‘distort’ the free market in house sales:

- the legal designation of property as residential, as opposed to commercial;

- rules for buying and selling homes (regulation exists through the Property Misdescriptions Act as well as energy efficiency, money laundering and transparent accounting rules);

- mandatory administrative and legal processes of conveyancing and registration of ownership changes with the Land Registry;

- rules surrounding boundary disputes, between property sales as well as part of the conveyancing process.

Would anyone say all of these should be removed because they distort the market? Would those same hard liners want a complete free for all? Probably not: but when it comes to measures, often to help first time buyers break into the existing club of more affluent homeowners, complaints are raised. That’s a shame - and also just a bit hypocritical.

If you would like to to comment on this article, click HERE to e-mail Graham.

2012: A Final Thought from Chesterton Humberts

2011-11-22T18:32:00.001Z

The last of the large agencies with anything like a research department, Chesterton Humberts, has given its prediction for 2012 - and it goes for a largely static year ahead before price rises and something like ‘recovery’ from 2013 onwards.

Chesterton Humberts is another agency with a huge southern English bias in terms of its offices - although there is a branch in York and a handful around the Midlands and East Anglia, its activities are concentrated very heavily in London and the south. So its ‘national’ forecast is for England only and says there will be neither a rise nor fall next year.

Every constituent region shows a rise or fall of no more than 0.3% in prices, scarcely measurable, with rises across England of an average of 4.7% in 2013, 3.3% in 2014 and 4.2% in 2015 - certainly well below the current level of inflation.

Nick Barnes, head of Chesterton Humberts’ research department and formerly of Knight Frank, says average house prices in England now are “around 11.5% lower than their November 2007 levels”.

If you would like to to comment on this article, click HERE to e-mail Graham.

So Far, So Good. But What SORT Of New Homes?

2011-11-20T14:26:00.006Z

People should do nothing but welcome many aspects of the government’s much-leaked, much-previewed and much-vaunted bid to resuscitate the housing market, to be announced this week (see here).

Freeing up unused public sector land, and creating a stimulus for young people to borrow realistic mortgages and thus become first time purchasers, are two particularly notable initiatives which should genuinely help increase building volumes and buyer numbers.

But one question is unanswered: what kind of homes will be constructed as a result of this windfall of building sites and buyer mortgages? The new sites are likely to be offered to developers at low or no cost, so in theory at least there appears no reason why they could not be used to host a high volume of affordable housing - it would be a genuine disaster if they were instead used for more of the same old expensive ‘new homes’ as before.

TrinityMirror’s Smart New Homes price index - a flakey affair, but one of the few guides to new homes prices that exists - shows that in every region of the country, the average price of a new home is far above the average price of an older home. The cheapest area (according to the latest issue of the index, released back in August) was Wales on £173,000; the dearest area was Greater London on £315,721.

Both are ludicrously out of reach of many first time buyers, even with the help of their parents or with two incomes in a household.

Surely when it comes to any new homes to be built on public land supplied at low, sub-market cost the old ‘affordable housing’ proviso should be reversed - in other words, the significant majority of new homes built on that land should be genuinely low cost, with only a small minority valued at market cost. That would provide a real dividend for the general public and in particular those who look like they face a generation of renting, not owning.

The likelihood of this happening appears low, for two reasons.

Firstly the measures to be announced this week also look likely to include still more right-to-buy discounts so that what relatively little social council housing that remains, will finally be sold off.

Secondly, it is worth remembering what the Daily Telegraph revealed a few weeks ago - that developers and at least one part of the coalition government are closely allied to each other.

Does this suggest that Downing Street may be reluctant to do anything to seriously dent the potential income of its friends in the boardrooms of the volume housebuilders? If so it would be a lost opportunity, and mean that instead of being the people who breathed new life into the market Cameron, Pickles and Shapps instead would go down in history as those who gave away more of the family silver to their allies, with nothing much for first time buyers in return.

If you would like to to comment on this article, click HERE to e-mail Graham.

2012: Jones Lang LaSalle Joins The Pessimists

2011-11-17T10:16:00.004Z

Jones Lang LaSalle, now seen by many within the residential side of property as being at least on a par with Savills and Knight Frank research teams, says mainstream house prices will dip one per cent in 2012 with no increase in transaction volumes, before modest growth resumes in 2013.

It's a familiar forecast - most other agencies have come up with precisely the same conclusions, including the expectation that the Midlands and northern English mainstream markets will perform less well, while prime central London will defy the trend and its average prices will grow in 2012 by some seven per cent. But JLL does explore some parts of the market that other forecasters omit, especially new developments - a JLL specialism.

The firm says 'best new London developments' will grow by three per cent in 2012 and will grow from three to five per cent each year thereafter - outatripping the performance of the rest of the UK market with the exception of prime central London itself.

JLL is gloomy on total transaction numbers, however. Remember that in 2005 there were 1.3m transactions across the UK - JLL says the current 580,000 will continue through next year and after that there will be sluggish growth, with the total not breaking the one million barrier again until 2015.JLL research director Jon Neale - who was an Estates Gazette journalist before working in the research departments of Knight Frank and the Homes and Communities Agency - says: “The Eurozone crisis, combined with a stricter global regulatory environment, suggests that the mortgage market will not rapidly return to the conditions seen for much of the 20 years leading up to the financial crisis.”

The winner out of all this is, of course, the rental sector - or more precisely the landlord. “The rental sector is increasingly becoming the norm with owner-occupation reserved for the wealthy few. In 2009/10, some 58 per cent of all those moving house were becoming tenants, while 70 per cent of new households found their home within the [rental] sector.”

According to Neale, between 2007 and 2010 alone, an additional 664,000 households became tenants. Over the same period, the number of owner-occupiers dropped by 208,000, and the number of people with mortgages dropped by 532,000. JLL says London rents will rise 12 per cent next year while rents across the rest of the UK will go up by five per cent.

It may well be a happy new year for landlords...but not anyone else.

If you would like to to comment on this article, click HERE to e-mail Graham.

Why 'Why?' Is Not The Right Question

2011-11-14T16:18:00.001Z

It’s a sign of our odd housing market that while property journalism is in decline, with fewer papers and websites devoting space to the subject, the number of public relations execs employed by London and top-end property players to get their names mentioned in publications is soaring.

In 11 years of being a full-time property freelance writer I cannot remember a time when:

- top-end national agents like Savills, KnightFrank, Strutt & Parker, Chesterton Humberts, Jackson-Stops & Staff, Cluttons and the rest had more in-house and agency PRs;

- there was anything like the current glut of buying agents with PRs (over 25 to my knowledge, even counting each of the franchises as just one, and almost all operating in central London and top-end country markets);

- so many top-end London estate agents and niche central London developers have PR representatives;

- so many indices exist, each accompanied by press releases - let alone the growing number of ‘confidence measures’, which are the latest devices used to make marketing campaigns look like statistical research.

On the one hand this is good for journos, as we are spoilt for choice when it comes to finding spokespeople...so long as they are speaking about the £1m-plus market in a small corner of England, or the top-end country estate market anywhere across the UK.

On the other hand, it is bad news for journos because PRs are being increasingly pressed by their clients - mostly occupying the same small sector of the market - to have a say in the reducing number of feature articles given over to property.

Take this piece, which I had in the FT on Saturday. Despite it being about a very specialist market, I have had five telephone calls in one day from PRs enquiring why their clients were NOT quoted in it.

Or take this other article in the Daily Telegraph on Saturday. I had over 120 properties submitted but could use, of course, no more than 10. There have been some emails from those left out, asking ‘why?’.

Journalism has always been about selecting the most authoritative voice for a subject or, in the case of photo-features, selecting whatever made the page look ‘good’. These things are subjective and open to constant argument, and people may have their own views as to whether the ‘voices’ selected by journalists are the right ones.

But one thing is clear - with fewer articles given over to the world of property, and increasing numbers of top-end property clients wanting a quote in those articles, there will be more people left out than included in a typical 1,100 word piece.

The most authoritative and the most interesting will win out, as ever. And telephone calls after the event asking ‘why not my client?’ cannot change that simple journalistic truth.

If you would like to to comment on this article, click HERE to e-mail Graham.

2012: Savills Adds To Downbeat Tone

2011-11-10T15:49:00.000Z

For most of the country outside central London, houses prices will fall in 2012 even before inflation is taken into account says Savills - the third agency to make a gloomy forecast for next year and beyond.

Its forecast is split into three broad categories:

1. Mainstream housing market

- UK average mainstream prices now remain 9.5% from peak;
- likely to fall further 2.0% in 2012 before gentle rises until 2016;
- regional falls next year range from 1.0% in SE England to 4.0% in Scotland.

2. 'Prime' housing markets (Savills' natural sales market)

- Prime Central London already up an average of 15.6% from 2007 level;
- PCL to rise 3% next year and a total of 22.7% by 2016;
- PCL to rely increasingly on overseas buyers as UK bonuses and confidence falter;
- Regional prime markets to do less well, falling up to 6.0% next year;
- Even over medium term, prime regions not good...eg, Scotland up only 7% by 2016.

3. Rental markets

- PRS (now about 15% of England/Wales housing stock) to hit 20% by 2016
- Mainstream rental markets to rise 3%-4.5% pa, by total of 20.5% by 2016.

One agency with a large research department still to report its forecast is Jones Lang LaSalle - an eagerly awaited prediction - although there will also be some 'mood music' reports, too, from other agencies and detailed statistical forecasts from business consultancies.

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A Local Anecdote: Who is Right? Who Is Wrong?

2011-11-06T19:43:00.001Z

Stories that begin ‘a friend of mine’ are often about those who tell them, too embarrassed to reveal their own part. But this really is about a friend - honestly.

Her five bedroom listed property (“in need of modernisation” as they say) was valued for sale by four estate agents - two national ‘top end’ chains and two regional chains - a year ago, in the autumn of 2010.

The two national agencies came in at £950,000 and £1.15m. The two regional chains (each with an office in the small town concerned) came in at £1.2m and £1.5m.

Sadly the seller did the obvious, wrong thing: she went for the highest valuation, despite knowing that the agency to which she gave her instruction was renowned for high valuations which all-too-frequently led to acrimonious disputes over disappointingly few viewings, inevitable price reductions and often dis-instruction.

The property went on sale over last winter at £1.5m and was given a frosty reception by would-be buyers: there were only three in the first month, and no offers. Easter came and went, the price fell twice to £1.2m, and eventually a deal was struck at the end of summer 2011....for under £1m.

The result? The vendor feels seriously annoyed with herself that she did not instruct one of the national chains, whose asking prices appeared more realistic in retrospect and may - who knows? - have engendered competition that would have produced a higher sale price.

The vendor also feels aggrieved that the manager of the local agency she instructed has now accused her of lowering the town’s sales values in general by accepting a price that he regards as unrealistically low - although he failed to secure a higher offer in nine months of marketing.

This is not another swipe at estate agents. The house is unusual, one-of-a-kind, and few comparables would have existed - so the diverse range of valuations is perhaps not as startling as it would appear at first sight.But everyone involved in the transaction, except the buyer, appears to be unhappy as a result of the way it was handled.

So who is right and who is wrong in this? I don’t know. Do you? If so, email me or join the debate on Twitter by tweeting @PropertyJourn.

If you would like to to comment on this article, click HERE to e-mail Graham.

2012 - Hamptons Joins In The Pessimism

2011-10-27T16:49:00.005+01:00

“We’re expecting the 2012 property market to be a more conservative re-run of 2011” says Hamptons International’s Marc Goldberg.

When you consider Hamptons operates very largely in the relatively affluent regions of London and southern England - so avoiding the grim price falls and low transaction rates hitting the north with such venom - Goldberg’s pessimism shows how cautious the market may well be across the entire country.

This is what Hamptons, which is now one of several top-end strands of the Countrywide empire, believes will happen next year:

- average sale prices across the UK’s mainstream market will drop 2%;
- in the south of England outside London prices will remain static;
- in London prices will rise by 1% to 4%;
- sales transaction levels across the UK to stay roughly static at circa 550,000;
- average rents will rise by 2% across southern England and up to 5% in London.

Hamptons echoes the predictions made by Knight Frank earlier this week when it says that international demand will continue to bolster prime central London prices although the price increases in the capital’s central area will moderate in 2012. Like other agents, Hamptons says country markets will show no particular movement next year.

But inside the 12 page report that it releases today are some interesting new thoughts:

“Construction starts in London have surged in 2011. These figures are propped up by pre-Olympic Games activity, but are also a reflection of the strength of demand for new build property in London. We would expect this level of supply to be curtailed next year, although the pipeline of new projects is likely to remain healthy”;

“In 2012 the private rented sector will house more people in the UK than the social rented sector for the first time ever”;

“Overseas London development project launches have typically been focussed on Hong Kong, Singapore, and to a lesser extent Kuala Lumpur. Throughout 2011 this has continued, although increasingly buyers are becoming more discerning due to the sheer volume of projects on offer. This may drive developers and agents to consider alternative markets in 2012”.

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2012 - Smiths Gore says farmland up another 7%

2011-10-27T08:59:00.003+01:00

Agricultural land is expected to rise in value in 2012, in England at least, according to one of the leading market analysts, Smiths Gore.

It says farmland values in England rose three per cent from July and September taking the increase since the start of 2011 to 10 per cent. Over the last 12 month period, the rise has been 15 per cent.

“Although the pace of increase has slowed, none of our regional valuers feel that prices have dropped in their regions. Some landowners feel that prices are at their peak and are considering selling to take advantage of the strong market. However, our agents still expect prices to rise in 2012,” insists SG’s farm agency head, Giles Wordsworth.

Specifically, SG says farmland prices will rise seven per cent next year and another seven per cent in 2013, making it one of the few assets likely to outstrip inflation.

Why is this important to those primarily working in or reporting on housing? It is because farmland has for the past two years now been more buoyant than most other land- or property-related sectors, especially residential housing outside the central London bubble.

As a result, it has tempted in many investors who - in years past - may have been investing in residential instead.

For example, the farming division of Strutt & Parker estate agency says that, as recently as late 2010, only six per cent of its land sales were to private or institutional investors. By summer 2011, the figure hit 15 per cent.

One interesting subtext to this, and told to me by a range of land agents, is that farms with large residential farmhouses are selling more slowly because of the perceived weakness of the housing market making such purchases appear less sound in terms of long-term growth.

If you would like to to comment on this article, click HERE to e-mail Graham.

2012 - Knight Frank says housing market set to fall

2011-10-25T11:38:00.007+01:00

Two quotes from Knight Frank's Grainne Gilmore sum up the firm's pessimistic view of the housing market in 2012 and beyond.

"To achieve sales, sellers will have to cut their prices" says Gilmore, head of UK Residential Research for Knight Frank and a former Times economic correspondent. In addition she says: "Real-term prices will not reach their previous (2007) highs until 2028".

Here's a summary of what Knight Frank told property editors and correspondents this morning:

UK MAINSTREAM MARKET

- UK-wide average prices to fall 5.0% next year;
- Outside of central London, the smallest fall will be 3.8% (East Anglia) and the highest will be Wales (6.7%);
- values of mainstream homes will be static in 2013 before small rises in 2014 anf 2015;
- taking into account inflation (now 5.2%) this means further significant falls in the values of homes in the coming two years at least;
- transactions to stay low compared to five years ago, with concentration on older equity-rich owners forming the bulk of the movers.

UK TOP-END COUNTRY HOUSE MARKET

- Across the UK average values will fall 2.8% next year;
- Falls range from 0.7% (south east England) to 4.7% (north east)
- Second home market particularly badly hit in price- and transaction volume-terms.

PRIME CENTRAL LONDON MARKET

- Up 5% next year before staying flat in 2013 and then rises of 4%-plus thereafter
- Geo-political upheavals of recent months seem to have pushed more international buyers to London;
- Few risks to the continuation of this bull-run.

One interesting point made by Knight Frank concerned the coalition government's proposed planning changes. The firm believes they will, eventually, lead to more homes being built - but no more than 200,000 per annum from about five years' time, below the target and well outside the timeframe pledged by Grant Shapps.

I'll be reporting like this from all of the major forecast seminars in the next few weeks. Keep checking back or follow me on Twitter for details.

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Fewer and Fewer, Wealthier and Wealthier

2011-10-17T12:06:00.003+01:00

The imminent demise of the Mail on Sunday’s property pages - so few they were hard to find anyway - may seem to a casual observer like a simple re-organisation of feature sections in one newspaper. But I suspect it has much more significance than that.

Just two years ago, long after the property downturn started but before anyone realised that the word ‘recovery’ had been removed from the housing market dictionary, the Daily Mail property section each Friday and the Mail on Sunday’s property section were relatively healthy. They each had several pages and several features weekly. They were then still getting reasonable advertising from developers in particular, and from the estate agents who used the titles to promote their properties, typically priced up to £500,000.

But in the past 12 months the advertising in that sector of the market has all but dried up, as the mortgage famine and wider uncertainty over the economy led the demographic that makes up typical readers of the Mail titles to sit on their hands rather than move house.

This decline follows similar contractions in the Express and Independent’s property sections, and the end of property coverage in the Observer and Guardian except on a news or personal finance basis.

This contrasts sharply with what is happening at the top end of the market. The Daily Telegraph, Financial Times and, to a lesser extent, The Times and Sunday Times property sections are usually fat, bulging with both editorial pieces and solid advertising. The same applies to the Evening Standard’s Homes & Property.

In other words, just like the housing market as a whole, a disproportionate amount of activity is going on in a heady world dominated by central London and above-£1m homes across the rest of the country. This is territory occupied by buying agents, overseas purchasers, the private client divisions of posh estate agencies, and purchases made through off-shore tax-effective vehicles.

Good luck to all of them for making a living, and for us journalists doing the same thing writing about this small sector of the market - luckily, the papers doing best now have cracking good journalism, in the main. But it’s all a far cry from tales of ordinary people struggling to get on the housing ladder. Property journalism probably needs to be just a little careful that in its rush to report fewer and fewer, wealthier and wealthier buyers and sellers and homes, it doesn’t end up so small it ceases to be relevant to a wider public.

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Labour's New Housing Shadow Will Be Bigger Test For Shapps

2011-10-10T14:30:00.007+01:00

The arrival of Jack Dromey as Labour’s shadow housing minister marks an increase in the political profile of the issue of how many homes are being constructed, where and for whom. After being virtually ignored by Labour since the last election, the subject is now centre stage.

Dromey, 63, has the political credentials of many Labour politicians of his era; much of his working life has been as a trades union official, with involvement in high-profile events like the Grunwick dispute in the 1970s and operating at the highest levels of the Transport and General Workers’ Union in the 1980s and 1990s. He has had his fingerprints on the odd scandal too, especially involving controversial donations to the Labour Party.

But he is a bruiser and an articulate one, albeit with a much posher accent now than the one he used to have two decades or more ago. He is likely to be an effective opponent for Grant Shapps, who had an easy time dispensing with attacks from Dromey’s predecessor, Alison Seabeck.

Some believe he has been angling for the housing portfolio for some months, possibly with encouragement from Ed Miliband. He has made considerable noise in his Birmingham constituency about the impact of housing benefit changes on poorer residents, and on rights for private tenants. As long ago as last April he held meetings with groups - not just opponents - about the Coalition government’s proposed planning reforms.

In other words, Dromey is across the housing brief quickly and - with Hilary Benn as his boss, as Shadow Communities and Local Government secretary - the likelihood is that a new set of policies on planning and housing will soon emerge from Labour.

Most will believe Dromey can only improve on the performance of his predecessors when Labour was in power. One thing is for sure: after the all-embracing concern of the health of the national economy, housing is firmly at the forefront of the two main parties’ political agenda.

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2011: So That's That, Then

2011-10-06T06:26:00.002+01:00

Suddenly, 2011 is over.

This week I have been contacted by four property businesses - two of them amongst the old school top end estate agents, two of them better described as property consultancies even though they also sell some homes - talking about their forthcoming predictions for what the UK housing market will do in 2012.

On the ground it seems the same. Two estate agencies, at different ends of the price spectrum, have had their ‘national open day’ PR events to try to rustle up buyers, mainly for homes that have not shifted since the spring. For different stories I was writing this week, several other agencies came up with reduced-price properties - one calling them ‘end of year offers’.

It must be genuinely difficult for estate agents to keep momentum, even this early in the autumn, when every word from government ministers makes the economic mood music still more sombre and every set of figures from government departments prove them right.

The forecasts for 2012 will therefore be interesting - if, perhaps, a little predictable. From early discussions there will be five themes:

Firstly, struggling transaction numbers: many believe that 2012 will see even fewer sales than 2011, even though transactions this year are about 50 per cent of 2006 levels;

Secondly, the continuing strength of the rental market (if you are a landlord) or the expected crippling rise in rents (if you are a tenant) will be a big story. A sub-text of this story will be the difficulty for individuals in obtaining buy-to-let mortgages - just as the rental market could benefit from an influx of new stock;

Thirdly, the demographic profile of those who do buy, sell and move house will become older, wealthier and more concentrated in the south. Younger, less well off people everywhere, especially in the north, will be too wracked by uncertainty to even think about it;

Fourthly, the Olympic effect. It will be difficult to pick the extravagant claims away from the reality on this. Expect some property hyperbole worthy of David Coleman;

Fifthly, and inevitably, central London will probably continue its extraordinarily strong bull run, although even here there may be fewer transactions than in recent years. The publicity from the posh ‘top table’ estate agents in particular will be skewed to talk more about London - for them, any 2012 preview is about fees rather than ordinary people.

Propertynewshound will cover all the major forecasts, starting later this month. In the past, such predictions were dominated by Savills and Knight Frank; this time, with those big boys increasingly pre-occupied with high net worth purchases at the stellar end of central London and other world cities, expect other agents and consultancies to make more headlines with their forecasts for the mainstream markets.

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Pickles, Shapps and 76.9% of the Adult Population

2011-10-01T14:40:00.003+01:00

All things are relative but, surprising as it may seem, not many people voted Conservative in the last general election in May 2010. Even with Gordon Brown as its main opponent, David Cameron’s party could not win the election outright.

The Conservative party secured 36.1% of the vote. Turnout was 65.1%. That means that only 23.1% of the voting population supported the Tories, which is why Cameron required the help of the Liberal Democrats to secure power.

No one doubts the coalition’s right to hold power, nor the legitimacy of its policies to be described as having the support of a majority of those voting - but a few coalition policies are not ‘coalition’ at all, but are simply one party’s policies. Take the housing strategies of the coalition: they come, without exception, from the Conservative manifesto with no Liberal Democrat influence.

In addition, all the Department of Communities and Local Government ministers in the government with housing responsibilities are Conservatives (Eric Pickles, Grant Shapps, Greg Clark, Bob Neill and Baroness Hanham) while the only DCLG Lib Dem is Andrew Stunell with responsibility for ‘Community Cohesion’.

This Tory skew - more obvious in housing than in any other coalition policy area - means the Conservative Party conference this week is particularly important. Government policies on planning, already leading to a celebrated bust-up with its long-standing Conservative supporters in the Daily Telegraph and middle-class organisations like the National Trust and the Campaign to Protect Rural England, suggests that the party may be trying to push its 23.1% public support too far.

Now Grant Shapps has already promised on Twitter that “there are some exciting housing policies to announce this week. Standby”.

Standby indeed. The Conservative party may have more legitimacy to make policy than any other single party, but so far the rockiest road for the coalition has been created by the utterances of Pickles and Shapps, while the Lib Dems have stood back and said nothing.

If Shapps’ announcements this week are too timid, expect the more traditional pro-developer Conservatives to shout. If they are too shrill, expect the 76.9% of the voting population that does not support the Tory party to bite back.

It could be an interesting few months ahead, all caused by the statements this week at Manchester.

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In Praise Of Douglas & Gordon

2011-09-25T17:07:00.003+01:00

Property professionals have been talking a lot - A LOT - about London estate agent Douglas & Gordon’s highly successful viral marketing campaign called Under Offer. But for industry anoraks of a certain age, we have been here before with D&G.

Back in 1998, D&G used press advertising featuring a model wearing only Gucci knickers to promote a flat being sold in Cadogan Square.

The agency followed that up with an ad of a motor bike to promote a house in Chelsea. Then it ran ads appearing to say ‘All Estate Agents Are Merchant Bankers’.

For over a decade it has had unusual window displays: feather dusters shaped as flowers in one, while another had engine parts sprayed red. Then it had D&G pedal bikes. More recently it painted one of its branches with Banksy-esque sequinned words ‘Kill All Negative People’.

During the past 15 years the firm has scored technology direct hits too, with clever websites (technically clever, not just smart-arse clever) and now apps and its use of social media when some rival agents have been finding excuses not to do these things.

The latest viral campaign suggests the firm deserves credit on three counts.

Firstly, its online films are plain funny. Plenty of estate agents are individually very well-humoured but some corporate identities are... well, let’s be honest, po-faced and stuck up about what they do. Maybe it’s because so many members of the public mock estate agents and developers that, like journalists, they can take themselves too seriously: D&G avoids that pitfall.

Secondly, D&G has shown that a small firm (which in its own words, and in central London terms, operates only in the mid-market) can generate extraordinary publicity like this. That’s a pretty good return on investment.

Thirdly, the agency has demonstrated to a very conservative estate agency and developer industry that viral marketing may well be the future. Many stuffy estate agents and house builders may not have even considered the technique. And I bet quite a few are not even sure what it is, although they may never admit it.

Heaven knows what some crustier quarters of the property establishment will make of an estate agency creating films which can be viewed only on YouTube, in which the brand appears only peripherally, and which pokes fun at the industry.

As for most other people, though...I suspect they find Under Offer rather fun. And they may remember Douglas & Gordon’s name as a result.

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What Can Derail London?

2011-09-21T17:08:00.003+01:00

The top end of the housing market already hogs the limelight and estate agents fighting for a slice of this extremely rich cake want that to continue - hence Savills’ new concentration on research into homes for what it this week called “those ubiquitous billionaires”.

It is not alone. Strutt & Parker has opened two new central London offices and Christies, until now little more than a desk and a telephone in the UK capital, is likely to open a much more significant operation in the new year. Knight Frank’s Private View magazine, described by the firm on Twitter as “full of the best properties available worldwide” actually has details of 32 London homes on sale...and only 24 from the entire rest of the planet.

But what - in the darkest hours of the night when they might find themselves awake - do agents, developers and analysts fear might just possibly cause London to go belly-up? It is not likely, and for sure these property professionals hope it never happens, but what are the risks?

I asked 20 individuals from international and UK sales and letting agencies, and from developers. If there are no major political or economic changes, none of them can see demand dropping significantly and none of them can see supply rising significantly. As one agent put it to me “the same fools who are on the threshold of paying £7,000 a square foot for London will probably be paying £8,000 in a year’s time.” But what if...just what if...something was to happen.

The industry’s worries are simple, and three fold. And most players agree on all of them.

Euro Crisis: “Frankly no one’s worried about Greece defaulting. But if that happens and leads to Italy and then Spain, that’s Armageddon. British exposure is so great, no one from overseas will want to invest here, and no one from here will be able to afford to invest” says one UK sales agency;

Another 9/11: “So much of the London rental market is dependent on American corporate executives, a lot of harm would be done if they stopped flying” says one leading London lettings agency;

More Civil Unrest: “I was in the US when pictures were shown of the London riots. Suddenly the UK became a no-go zone. If that happens again, on a larger scale, where is central London’s buyers and investors?” is the question of a leading developer.

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A New Price High For Central London - But Even Higher Elsewhere

2011-09-16T07:54:00.003+01:00

It comes as no surprise to hear that the top-end of the property market around the world is doing very nicely, thank you. Now, for the first time, there are some figures to show just how extraordinarily well this tiny but uber-lucrative sector is performing.

Christie’s - and yes, it is the auction house that owns this property business - is a loose affiliation of 129 estate agencies in 42 countries and constituting 1,095 offices. Over 90% of the properties these agents sell are valued at $1m or above.

A sample of its agents gave me an insight into their biggest sales of the past year, with rough figures broken down on a per square foot basis to make comparisons easier:

Hong Kong, China: £8,230 per square foot

Paris, France: £4,470 psf (in what was described as a one-off unrepresentative sale)

Marbella, Spain: £965 psf

St Moritz, Switzerland: £3,500 psf

Beverly Hills, US: £2,215 psf (and this was the sale of Jenifer Aniston’s home)

London, UK: £6,500-plus psf

Rio, Brazil: £875 psf

Cape Town, SA: £615 psf

New York, US: £6,300 psf.

There are three things to note from this data.

Firstly, Christie’s is dropping a very clear hint that “a very identifiable new development in prime central London” (which is definitely and beyond doubt the six-apartment Bulgari Residences in Knightsbridge - details here) has secured an off-plan sale that is of a higher price per square foot than the much-vaunted One Hyde Park. Quite a coup for the agency.

Secondly, even with that new figure, Hong Kong’s wildest excesses handsomely beat London on a £/psf basis, and New York can run it close. London is not the soaraway most expensive market in the world that some journalists and developers suggest.

Thirdly, Marbella is now lagging close to the prices of emerging top-end markets like Cape Town and Rio de Janiero. But whereas those two are on the way up, Christie’s admits that Marbella’s market - even at the very top end - is at least 25% down on peak. The pain in Spain now stretches even to the wealthiest property owners.

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Four Ways To Win The Planning Row

2011-09-06T16:13:00.003+01:00

The argument over planning reform is becoming increasingly shrill but anyone with half an eye on Britain's demographics will come down in favour of more homes being built. You want more homes for young people, I bet, and so do I.

So why are the government and housebuilders losing the argument to conservation bodies and some of the media - ironically those people who are, on most other subjects, the natural allies of the main governing party?

Perhaps it's because developers (like journalists) are not trusted, not respected and not believed. If so, how about doing these four things to win over public opinion?

1. Make 'sustainability' mean something. Anything on a brownfield site or including a solar panel is these days labelled 'sustainable', just as every scheme is 'luxury' and 'exclusive'. Peter Bill, former Estates Gazette editor, gets it right when he suggests some believe the government should make ‘sustainable’ mean something like, for example, enforcing Boris Johnson's London-only minimum-size standards on all schemes. It would be a sign to the public that ‘sustainability’ provides something better than we have now.

2. Build homes all around the country, not just in the profitable south. Recent ‘starts’ data from the NHBC shows 6,493 starts in the south east and 8,512 starts in London between May and July 2011. In Wales the figure was 866 and in north east England 973. If you want the public on board, start building houses everywhere else, not just in wealthy areas.

3. Build all types of homes, not just expensive ones. Figures from the New Homes Marketing Board’s www.smartnewhomes.co.uk shows the average price of a new-build is £220,788 - 30% more than the average price of all homes. One reason for the skew is that so many new homes are in the (expensive) south. Trying to win support from local people for a product that will be outside the reach of their sons and daughters trying to buy a first home, is not a smart move.

4. Elevate debate: Housebuilders and estate agents, many of which contribute to the Conservative party, should tell ministers to grow up. Anyone who has accompanied mother-in-law to Castle Drogo will know that National Trust volunteers, in plaid and tweed, may be a lot of things but they are not 'left-wingers' as caricatured by planning minister Greg Clark. For a party that could not beat even Gordon Brown without the help of the Lib Dems, it seems foolhardy to engage in Bullingdon Club-style name-calling against people whose support they need.

It's easy to say all this and harder to do it, of course. But without a change of tactics it is just possible that housebuilders and government will snatch defeat from the jaws of victory - and it will be frustrated first time buyers who will pay the price.

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Obama - Britain's Hope For A Healthy Housing Market?

2011-09-02T07:13:00.004+01:00

It’s not often that a US government is more interventionist in its economy than a UK government, but could forthcoming measures by President Obama to help ‘underwater mortgages’ provoke a call for David Cameron to intervene in the housing market here?

Speculation is now rife in the United States that Obama wants to refinance millions of mortgages held by those in negative equity - Americans call these underwater mortgages and they constitute a startling 25% of all households.

Two ways of helping these homeowners appear to be under consideration:

- for the Federal government to pay lenders to reduce the principal debt on the underwater mortgages, and/or

- to refinance some mortgages through a government body, the Federal Housing Association, which would effectively see the Obama administration offer an additional loan to owners facing negative equity.

In both cases, the US government would benefit in the future when the lender and/or home owner later repays, should the value of the home rise. In theory, if the US market took off, the goverrnment could even share in the profit when house values rose.

The thinking behind this plan, which sounds more European than American, is that the confidence given by a buoyant housing market will encourage higher consumer spending, thus giving growth in the economy before the next US election.

Whether Obama gets Congressional support for such a proposal is his problem, not ours, but as is so often the case, what America considers today, the UK may consider tomorrow.

We have no comparable negative equity problem at the moment, at least until interest rates rise significantly, but the current stagnation in the mainstream UK housing market outside of London and the south east is considered by some to be holding back growth.

The problem for the UK government is that its proposals to loosen planning restrictions and encourage self-building - let alone its more surreal idea to encourage more people to live on houseboats - will take years to produce the larger number of homes it wants.

Even if that happened (and it’s a big if, involving volume house builders deliberately trying to match supply to demand and risking reduced asking prices as a result) it would take us well beyond the 2015 general election, on which the government’s record will be judged.

Little wonder, therefore, that speculation on this side of the Atlantic is that the government may be introducing new measures - perhaps alongside the Localism Act as soon as November - to generate more movement in the UK housing market.

About time too, many will say. And oddly enough, if it happens, we will probably have Obama’s example to thank for putting government housing intervention on the agenda.

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Is Britain's 'Housing Shortage' Real?

2011-08-26T08:54:00.004+01:00

It’s deja vu, all over again. Planning applications for new-build homes show a fall, and the people who submit (or don’t submit) those applications - the house builders - come out with a familiar refrain: it’s all the fault of government and NIMBYs.

The House Builders’ Federation says only 25,000 consents were given in the second quarter of 2011, well under its claim that 60,000 are needed to meet ‘Britain’s needs’.

Leaving aside for a moment the accuracy of the ‘needs’ figure (and there as yet appears to be no growth in homelessness or overcrowding levels to suggest the alleged-shortfall is actually creating additional problems) is the HBF right to blame government and NIMBYs?

 The HBF’s press release says: “What should have been a sensible debate into the most important planning changes since the last war, has been hijacked by sensationalist and inaccurate claims from a number of anti-growth organisations determined to fight all and any development.”

Perhaps - or perhaps not.

Research by the BBC shows that 80% of all applications by house-builders are approved - a high figure, which is perhaps testimony to the considerable effort put in by builders to woo public and councillor support before submitting plans for consent.

Yet if such a high proportion is approved, is the way to meet the apparent ‘needs’ of the country not for those same house builders to submit more plans?

Life isn’t that simple, of course, and the labour-intensiveness of planning means it would not be possible for builders to simply double the number of applications seeking consent.

But there remains a lingering belief amongst many (including estate agents and residential analysts who speak off the record to avoid antagonising fee-paying house builder clients) that developers are intentionally submitting fewer plans than they could, to keep supply down and bolster prices in what is a very difficult market, especially amongst younger buyers.

The HBF, and particularly the large house builders, have highly efficient PR machines to peddle their argument that a ‘shortage’ exists and it is the fault of others; this was seen vividly during the 13-year Labour government which swallowed most of the builders’ views.

The Cameron-Shapps-Pickles administration may be more questioning. Certainly the government’s natural constituencies and supporters - what some call the ‘Cotswold Cosa Nostra’ - are the very people the HBF and individual builders are criticising when they take swipes at groups like the Campaign to Protect Rural England and the National Trust.

Much more of that may force the government may hit back and undertake a robust analysis of the house builders’ argument on ‘housing need’. And that may come as quite a shock to the HBF...

If you would like to to comment on this article, click HERE to e-mail Graham.

Whatever Happened To Fractional Ownership?

2011-08-21T08:47:00.002+01:00

As summer draws to a close - another summer of poor weather in Britain - I‘ve noticed one property business model has almost disappeared from sight: Fractional Ownership.

It’s a shape-shifting model at the best of times, often changing name after a series of mixed reviews from buyers around the world. Now some of its (fairly few) devotees call the principle ‘Destination Clubs’, for example.

But whatever its name it remains based on the principle of properties sold in one-quarter or one-13th shares to different buyers, who then use their allocation, or sub-let it further. On top of often-hefty purchases prices there are frequently large service charges, too.

It’s that allocation system - say three separate months dotted throughout the year for those who buy ‘a quarter’ - which has proven the undoing of the business model in the UK.

The model collapses when applied to poor-weather tourist areas like the south west, Wales and East Anglia, where the attractions close in winter. There have been over 20 FO schemes in these areas, most of which have collapsed for lack of support because:

- if your ‘share’ of the use of the property includes autumn or winter months (which will inevitably be the case) the buyer’s intrinsic enjoyment and frequency of attendance will be low - you simply won’t get good value and you won’t turn up;

- for the cost of a fractional home, a buyer could probably pay at least the deposit on a permanent holiday home in the same area - then let it out and recoup their outgoings;

- there is still uncertainty (and sometimes deliberate obfuscation from experts) over the principles of a resale market. Some fractional homes have to be resold to developers, while others fight it out for buyers in the extremely uncertain open market.

These arguments do not apply in year-round sunny spots like Florida and the Caribbean where FO remains relatively popular. It also works in areas, even in the UK, with year-round tourist facilities whatever the weather (golf courses in Ireland and Scotland, for example, or walking and climbing areas which remain big attractions even in winter).

But even in sunnier climbs, FO is falling in its appeal - there are fewer advertisements for it this year than in the recent past, far less money spent on PR by schemes, and as bricks and mortar generally becomes a less trusted investment, the FO principle is instead being switched to yachts or even private aircraft.

We may just be witnessing the gentle decline of the fractional principle as applied to property. Like the British summer just ending, it may be going out with a whimper.

If you would like to to comment on this article, click HERE to e-mail Graham.

The Camera So Often Lies

2011-08-13T07:54:00.005+01:00

Photographs are becoming increasingly important in property journalism - the word count of articles is dropping, on average, and the use of pics of homes, buyers, sellers and others is increasing. But the camera lies, possibly more insidiously than words.

A few days ago I received pictures of a block of apartments festooned with the developer’s banners - not even a tasteful flag, but a string of banners across one floor of the block. I replied to the PR who sent them, explaining that no paper would use that photograph as it was really a crude advertisement.

The reply? “That’s ok, I can get the studio to retouch them”.

It’s hardly the biggest issue in the debate about accuracy and truth in the media, but is this approach of faking photographs - rife throughout the property world - right and proper?

I’ve written the occasional newspaper story on this in the past (like this one here). We are already used to ‘doctoring’ of shots in property details and in the property press:

- retouching photographs to ‘improve the weather’ by inserting blue skies;

- the use of lens to make rooms look larger or views appear wider-reaching;

- removing wheelie bins or cars left in a photograph of a house;

- clever cropping of pictures to omit the garage or kebab shop next door;

- boosting or suppressing interior colours; and, of course...

- CGIs of properties still completely unbuilt.

Now most agents and developers could put a reasoned argument for all this: “sellers want their homes presented in the most appealing way” or “why penalise chances of a sale just because it was cloudy when a home was photographed?” It’s difficult to argue against this - I would like exactly that approach when I next instruct an agent to sell my home.

But does this actively, now very widely used by (I think) all agents and developers, make it right? More pragmatically, does it backfire by increasing cynicism?

After the exchange of emails with the PR over the banners-on-the-flats, I asked 10 friends - neither journalists nor property people - to give me their views on the general subject of property detail photographs. Two had no view but thought such pictures should be treated with general suspicion; the other eight gave specific examples of what some called “fraudulent”, “downright misleading” or “lies” put across in photographs of homes on sale they had noticed in the past.

Does this matter? Not to sellers, perhaps. But does the cynical attitude of “I can get the studio to retouch them?” do anything to enhance the public’s view of those who sell homes, or those who write about them?

I doubt it.

If you would like to to comment on this article, click HERE to e-mail Graham.

Olympics Hype: In Praise of Lloyds TSB

2011-08-08T08:27:00.004+01:00

Prepare for an imminent onslaught of Olympics hype - not just about the Games (for which the hype may be justifiable) but about the event’s effects on house prices.

My inbox has had many emails over the summer from agents’ and developers’ PRs talking of the potential capital uplift for early buyers, despite a lack of evidence to this effect.

Full credit, therefore, to Lloyds TSB. Despite being a partner (code for sponsor, paying a reported £50m to £80m) of the Games, its most recent survey of prices confirms that while east London homes have risen nearly £60,000 since London was awarded the Olympic Games in July 2005, this is no better than the rest of England and Wales - and much worse than most of London.  

The average house price in the East End has gone from £208,148 in July 2005 to £266,730 in May 2011 - that sounds good until you realise the same index places the average home across London as a whole as being worth £418,487. 

“Looking ahead, the long-term Olympic legacy for East London of improved infrastructure and transport links is likely to help underpin house prices in the area over the coming years” says Lloyds TSB’s economist Suren Thiru.

The bank could have used the word ‘boost’ or ‘accelerate’ but the key word it did use is ‘underpin’. The implicit suggestion is that without such infrastructure improvements the area would fall still further behind the rest of the capital.

Although east London home owners are sitting pretty to some extent (their modest rise in the past six years is rather better than the performance enjoyed by out-of-London home owners, many of which are sitting on homes worth about the same as in 2005), they cannot hope to compete with the rest of the capital.

Countrywide, the UK’s largest estate agency group, is well-placed to assess London. It includes Hamptons and John D Wood in posh parts of the capital, from which it reports that some 74% of buyers are from overseas - the real reason why London’s prices are going through the roof.

So far those overseas buyers - mostly investors - have not been tempted in any great number to buy ‘Olympic view’ homes. There is a reason for this: east London may be a tremendous, diverse and lively place to live but once the four weeks of the Olympics have passed...the area will still be just another suburb, not a life-long investment haven.

If you would like to to comment on this article, click HERE to e-mail Graham.

Guest Blog: My Holiday House Swap: California Dreamin'

2011-08-01T00:12:00.001+01:00

I’m on holiday now but my guest blogger this week is Helena Halme, a bookseller and fiction writer who was born in Finland, has lived in Sweden and 25 years ago moved to the UK. She blogs about her Nordic view on life here. She writes...

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In 1999 the Englishman and I, with our two children (boy of twelve, girl of nine) were looking for a cheap summer holiday. I’d read an article about house swapping. Unusual locations were a bonus, it said.

We lived in a unique place; in the middle of English countryside, two miles from a main road, down a winding single track lane. You had to pass three cattle grids to reach our three bedroom cottage and our neighbours were half a mile away. We had three acres of land, a grass tennis court and a small fish pond. The uninterrupted views across Wiltshire were stunning; cattle grazing under vast oak trees, hazy sunshine revealing hilltops in the distance.

The article recommended two home swapping sites, both of which worked on an annual subscription basis. You had to register for £100 which gave you access to a database of people wanting to swap houses or flats as well as a listing of your property with photos. There was also information on dates and where people would like to go (you had a choice of continents, countries and locations). Very simple idea, really. In a similar vein to today’s eBay, you had a list of testimonials and the number of swaps any house owner had made. Communication was by email. In those days we still used modem connections and checked our mail perhaps once per day (doesn’t that seem so strange?). It took days to hear back from anyone you’d approached for a swap.

Our idea was to find a place in my native Finland, so that instead of travelling around the country visiting my friends and family, we could stay in one place and let them come to us. My dream was to replicate the summers of my childhood – a wooden cabin by the lake with lots of swimming, hunting butterflies, cycling to the nearest village shop and nightly sauna bathing.

In early April 1999 we put up our farm house ad and waited for results. To our disappointed many of those on the database had already firmed up their plans. The annual subscriptions ran from January to December and it seemed the seasoned holiday exchangers had been out early. So we decided to cast a wide net and put as our preferred destination, ‘Anywhere’.

Immediately (the next day) we got attractive offers: an apartment in New York, a wood-clad house in southern Sweden, a house in South Africa and a tiny flat in Stockholm were alternatives. But there was nothing at all from Finland.

We waited a couple of weeks and the US offers kept flooding in. The Englishman spotted one from LA, ‘I’ve never been to the west coast,’ he said.

When the children heard about the LA house and saw the pictures of the kidney-shaped swimming pool in the garden I knew I’d lost the fight for Finland. A few months later, after several emails and pictures had been exchanged, we packed our bags and headed for a three week stay in a stranger’s house in California.

The plan was that we’d meet our hosts-cum-guests at Heathrow. They would drive our car home and we’d hand over our respective keys. I was exhausted; I’d spent the last week scrubbing every nook and cranny in our country cottage. I’d poured over the ‘Do’s and Don’ts’ of the Home Exchange website. With great care we left a list of house rules (‘Please feed the cats once per day’), some suggestions for things to do and see (an Ordnance Survey map of country walks around the area, guides to Bath, Longleat and Cheddar Gorge) and a small gift for the family. I was so concerned they would find our country cottage dirty and small that I was hyperventilating when we waited to meet them at the airport.

We recognised them immediately: a very tall man, overweight, grabbed my hand, followed by two equally tall but slightly less rounded teenage boys. Finally their mother, a slight French woman, appeared. We made quick polite conversation. When the large US family packed their bags and themselves into our six-month-old Volvo (freshly washed and polished), I saw the Englishman’s face fall at the same rate as the suspension of the car.

‘It’ll be alright,’ we assured each other and headed for the departure gate.

No-one feels quite themselves after an eleven hour flight with two children, but I cannot remember ever before, or since, being so beside myself with worry as I was arriving at LAX – Los Angeles International Airport.

After the tenacious immigration controls, clutching the keys and parking ticket given to us by our LA home exchange partners, we headed for the car park and immediately realised why there’d not been a picture of the family’s car. What waited us was a battered old Chevrolet. The Englishman and I glanced at each other but said nothing. He put the key into the ignition and when he turned it the car started with a loud cough. We drove into the LA sunshine, rolled down the windows, and began to navigate the scary multi-lane highways to our temporary home in Claremont.

It was a typical Californian one-storey suburban house – not unlike some of the smaller ones in Desperate Housewives or in the film American Beauty. There were lemon trees in the ‘backyard’. When night fell automatic sprinklers would suddenly start hissing, competing for the airways with the loud cries of the crickets. The pool lights would also come on, giving the backyard the eerie quality of an empty film set.

Inside there were three bedrooms, with an en-suite master and fierce air-conditioning throughout. The open-plan living area had a three-piece suite facing a huge TV set. A large kitchen was well stocked with ready made packet food. ‘But she’s French’, I muttered to no-one in particular.

When we arrived, it was just past midday and the street were empty. The children dived into the pool while I studied the ‘do’s and don’ts’ our exchange family had left for us. Slowly I began to relax, especially as in the garage we found the largest motor vehicle we’d ever set eyes on. The car-cum-caravan-cum-Winnebago (basically a small UK flat on wheels) became known as ‘The Monster Machine’.

We drove it everywhere – Wilshire Boulevard, Santa Monica, Venice Beach. We took it on a five-day-long trip to San Francisco, driving along the Big Sur coastal road, Highway One. En route we visited Hearst Castle and intended to stay overnight in Monterey, but due to a hotel mix-up drove straight to San Francisco. Getting the Monster Machine up and down the famous hills of SF was an experience I’d rather not repeat, as was driving on the double-decker Oakland bridge.

Back in LA we had a family day out at a Lakers baseball match at the new Staples Stadium, spent a wonderful sunny afternoon body-boarding on a nearby beach, had a day in Raging Waters water park, visited Disneyland. I introduced Daughter to some serious retail therapy (something I’ve come to regret) at the many malls and discount warehouses around LA.

For some reason, this three week trip to LA has remained our only holiday home swap experience – I think real life got in the way somehow - but I would not have missed it for the world.

Exchanging homes through a reputable agency is a brilliant way to experience a place, a country, through the eyes of the people who live there. I love staying in hotels but find life there rather artificial and touristy. It feels as if a PR company somewhere has made the decisions of what to see and do, for you.

What I didn’t, however, enjoy was the preparation for the holiday. Instead of just getting yourself and your family ready, you also had to make your home presentable.

A lot of people asked us if we worried that the people we exchanged with were wrecking our home while we were being ultra careful with theirs. Truthfully I didn’t think that at all. Ours was a rambling old cottage anyway; besides the people we exchanged with had a very good reputation with the exchange company – something that I did really trust.

I would definitely do a holiday house swap again and now we’re in London we are seriously considering that for our next big winter break.

If you would like to to comment on this article, click HERE to e-mail Graham.

Guest Blog: PR and Journalism – Mind the Gap

2011-07-25T00:01:00.005+01:00

I’m on holiday right now but my guest blogger this week is Sarah Drane, director of www.purplecakefactory.com and specialist in real estate, marine and travel PR. She writes...

Twitter. How holy art thou. The instant micro-blogging site provides the platform to berate, befriend, beguile and babble with all and sundry from Twitter supremos such as Bieber and Obama to the key protagonists in your chosen industry - in my case overseas real estate PR.

Now whilst this can be hugely satisfying, not to mention humorous, answering pleas for “a case study of a housebuyer in Mallorca” or swapping a bit of banter about “a house that resembles Hitler/Wendolene/Hilary Clinton* (*delete as appropriate)” Twitter should not be without its health warning. Us PRs can come in for a heck of a lot of stick.

Whilst not on Rooney-esque levels (take an example from one of his ‘loyal’ followers: "I’ll smash ya head in with a pitchin wedge") it seems that a few journos use Twitter to vent their spleen and take pot shots at those of us who are perceived to reside lower down the property media food chain. “Stop putting quotes in bold or italics”, “don’t use the words interestingly and leading – it’s misleading”, “yet another so-called survey to prove a point with a sample size of about three”.

Now, maybe I am missing something here, but I always held the belief that a PR exists (in part) to provide an assisting role in the media process. We’re here to ignite ideas, proffer market analysis and opinion from our clients, draw journalists’ attention to phenomena they may otherwise miss and serve up with a side order of 300dpi visual loveliness. We might even save a bit of bacon by finding a last minute case study on the brink of print deadline (all hail Twitter for that one too).

But, I didn’t actually think that the PR was there to write the news. I thought that was called “churnalism” (a news article that is published as journalism, but is essentially a press release without much added) and people don’t very much like that. So why should it matter if my peers use irritating words in releases and overegg the italic – the journalist’s not going to copy-paste anyway – are they!?

I must admit I have been churnalismed (made up word) in the past. I recall a phase when a property writer for a regional paper used to regularly stick his photo and byline at the top of a perfect copy-paste of my work. I wondered if his bosses knew that he was being paid simply for mastering the art of Ctrl C Ctrl V. No point in complaining though as it was a) a sort of compliment and b) conveyed the exact message my client wished – uncut.

Ok, so we’re not all perfect. I was a little surprised to see that according to PR Census the average salary in the UK PR industry is £48,000. I can think of plenty of PRs who aren’t worth that kind of money based on the tenuous-link-clutching-at-straws press releases I see knocking around. But we are human and many of us academically very bright so probably don’t deserve too much Twitter bashing.

Oh, and on that subject, do be careful of this Twitter lark. Use 140 characters to call Labour MEP Michael Cashman an “idiot” for urging Britons to avoid investing in Spain and you could well end up being quoted in The Observer. Now who would have done that to me…Graham?!

If you would like to to comment on this article, click HERE to e-mail Graham.

What Are We Going To Do About A Problem Like Holiday Homes?

2011-07-20T12:55:00.001+01:00

(I'm on holiday next week - stand by for guest blogs from Sarah Drane of www.purplecakefactory.com, a specialist in overseas real estate PR; and from Helena Halme, whose blog www.helenahalme.blogspot.com is one of the best I've read.).

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I am an enthusiast of holiday homes, not only as a means of individuals enjoying their properties but also because they generate and redistribute income in favour of many areas which are not inherently affluent.

The small estuary town in which I live has about 10% of its stock serving as second homes, and they help bring south east-sized spending patterns to the south west, especially at peak tourism periods such as the summer.

But within the context of holiday homes being broadly a good thing, should we make holiday home owners pay more for their properties or at least give local people more choice over whether more houses and apartments can be used this way?

Three things could be done.

Firstly, holiday home owners could be obliged to pay full council tax. Currently, by law, councils in England must offer a second home discount of between 50% and 10% as the owners do not have permanent access to local services - but as that is their choice, why should they receive a rebate that permanent locals cannot receive?

Secondly, should there be an additional purchase tax on second homes? A few have suggested this but the proposal is riven with problems. What if a holiday home became a main home when the owners moved permanently to it? What about holiday home owners renting out their property, bringing income to the area from well-heeled tourists - should they still be taxed?

Thirdly, and an idea with support from surprising quarters, is that under the Coalition government’s Localism agenda, anyone wanting to buy a holiday home (or change an existing property into one) should win planning consent. This would give local authorities and residents a voice on the subject. Interestingly, the overwhelmingly-Conservative Cornwall Council has voiced approval for this concept, although it has no power to introduce such a measure without Westminster approval.

Whatever one’s views on holiday homes, Cornwall’s concerns are unsurprising: that authority, and some others, have suggested that high concentrations of holiday homes indirectly damage local services as schools, doctors’ surgeries and transport services become unviable when the permanent population falls, if more properties are bought by second homers.

Savills and Knight Frank have both undertaken research, often using local authority council tax data to quantify the issue. It appears some 245,384 British properties are holiday homes, while in key areas like Cornwall the proportion of ‘top end’ properties above £500,000 purchased as second homes could be as much as 50%.

They certainly inject money into the communities - but to avoid being seen as a problem for the permanent population, should their owners be made to pay more and do more before they buy?

If you would like to to comment on this article, click HERE to e-mail Graham.

Hackgate: The Property Version

2011-07-11T17:51:00.004+01:00

No journalist - or at least none with any credibility - can feel anything other than shame at the tarnish that News International has bought to the profession.

The revelations, arriving faster than Chris Huhne drives a car, are bad enough. Almost as nauseous is the self-serving nonsense from some journalists who write only salacious gossip and claim it to be a high-principled example of the importance of press freedom.

But there are plenty of blogs about News International’s hacking. You want to know about property journalism’s indiscretions, don’t you? Sadly, they are pretty tame, but after 11 years in the business I can reveal:

- one freelance property journalist (not me, for your information) sent in the same article to the same newspaper, after a gap of two years, merely changing the dates. It was used. This was an example of a new property editor not checking on previous stories;

- another freelance more than once used her partner as a case study in stories, not always declaring the fact to editors or readers. She justified it by saying that he and she were joint owners of the properties about which she was writing .... but then, of course, she did not declare that she had a vested financial interest in the pieces she was penning;

- a Cotswold estate agent, then employed by one of the very best known top end agencies, offered me money to write a favourable story about one of her firm’s estates. I declined but she helpfully told me the name of one of my peers who had, a few weeks earlier, accepted (allegedly);

- one developer coyly asked if I was “in need of a woman” whilst visiting his gleaming new homes. As they used to say on the News of the World, I made my excuses and left. (True in my case, although now who knows about how truthful the NotW journos were when they said that?);

- the head of a small PR firm offered me a bung (a few hundred pounds, monthly, for six months) to mention one of his particularly obscure clients. Again, I declined;

- I and a small number of property journalists have claimed to be prospective buyers of new homes (although giving our real names) in order to find out the reduced prices being offered by developers whose PRs denied any reductions were available;

- of lesser importance, two property hacks once competed to get one particular band’s song titles into the intros of their stories. It was some years ago and was just a two month-long wager. And, dear reader, I have to admit I was one of those two journalists; and I was the more successful of the pair, too. Silly? Of course - but those were innocent times.

There. I told you it would be feeble, at least compared to what we are hearing from News International, and which may now stretch to the Sunday Times as well as the tabloids. But a serious message is clear in all this; there is a lot of money in the property building and sales business, especially compared to the low returns on property journalism. When you then feed in the ‘easy route’ offered by PRs to those wanting to write favourable stories, it is easy to see how corruption starts.

So like a good journalist, you should always be sceptical about what you read, hear and see. And that goes for what journalists print, say and broadcast, too.

If you would like to to comment on this article, click HERE to e-mail Graham.

To Tweet Or Not To Tweet?

2011-07-05T06:20:00.002+01:00

For property twitterati, there was only one show in town on the evening of Monday 4 July - Jon Snow’s Dispatches programme called Landlords From Hell, telling the sordid story of how some landlords abuse both tenants and the system. You can catch it here.

But an interesting story unfolded shortly afterwards, which was a fascinating insight into the way Twitter can provide a sounding board but can also expose those who use it only for marketing.

The property-related stream of Twitter users was abuzz after the programme. Most contributors were shocked by the revelations and a particular talking point was the seemingly-relaxed view of the issues expressed on air by Conservative housing minister Grant Shapps. Watch it and judge for yourself. Many tweeters were highly critical while a much smaller number of more Establishment property figures argued in his defence.

Interestingly and unusually, Shapps’ performance drew criticism from many media experts wholly unrelated to property and not known for criticising any government.

Their views are easy to find on Twitter but Raymond Snoddy, now a freelance BBC current affairs presenter and ex-FT and Times media correspondent, was representative of them when he tweeted: “Well done to Jon Snow for his exposure of ‘Victorian’ landlords but response of Housing minister Grant Shapps conspicuously unimpressive”.

So what? Shapps may or may not have come across well. Either way, he remains an impressively informed housing minister compared with many in recent years.

But what was interesting then was that Shapps - a vocal advocate of social networking as a form of debate and public awareness - came on to Twitter himself.

And his contribution to the fierce debate over the Dispatches programme was...Nothing. Instead, he thanked someone for ‘following’ him; this was merely a form of personal PR about his apparent popularity, rather than any form of contribution to the debate.

This was picked up on by Twitter users, surprised - in some cases dismayed - that Shapps chose to duck the issue and seemingly try to deflect attention. Other organisations who use Twitter to plug rather than debate were criticised, too. The NAEA, NLA, ARLA and other acronym-laden property bodies (some paying large sums to public relations people to tweet on their behalf during working hours) were subject to criticism for staying silent after the programme, despite various examples of ‘good news’ tweeting earlier in the day.

This incident shows how Twitter has come of age and is no longer merely a showcase for the showy-offy. Of course it is perfect for promoting what you do or bolstering your position or view - but if that is all you do with it, you risk being exposed as a mere self-publicist.

Twitter is now considered by many as a legitimate place for debate and those who use it only for self-promotion or to give partisan information to boost their business (especially politicians) are likely to find their cynical use of it bites them back in such circumstances.

It might have been better for the minister not to have tweeted at all than to have done so and then appear so out of tune with many around him.

Perhaps he ought to take the advice of his own party colleague David Cameron. He once coined a phrase about the risk for those who undertook too many tweets...

If you would like to to comment on this article, click HERE to e-mail Graham.

Green Belt: Saying The Un-sayable

2011-06-30T13:40:00.004+01:00

I was very impressed with some thinking by Mark Brinkley - contributing editor to Homebuilding & Renovating magazine and himself a builder - on the vexed subject of building homes on the Green Belt.

Debate around this has normally been very black and white between, on one side, local residents and conservationists (you may call them NIMBYs, but I couldn’t possibly do so) and volume developers on the other side (you may call them identikit house builders, but I...etc, etc). But Brinkley’s view, which is set out in the latest issue of the magazine and deserves wide circulation, is much more nuanced.

He says:

- some farmers are exempted from Green Belt building because of diversification or employment arguments which favour conversions of old barns into homes;

- large tracts have in the past been designated as new towns or urban extensions, so to say the Green Belt is always inviolable is inaccurate.

He then says more controversially:

- villages have often been unable to expand organically in response to local demand, meaning supply has been outpaced, prices have risen, and locals have been forced out;

- the Community Right to Build initiative (exhaustively trailed by the government and in theory giving villages the right to determine applications) may rarely be used because the required referenda will be expensive to organise and perhaps doomed to failure;

- so as a consequence, there should be Individual (not community) Right To Build, allowing individual self-builders to construct on village-edge plots in the Green Belt;

- the ‘development windfall’ produced from each self-builder’s project would go to the community, as in the government scheme, but the human scale of an individual home, or small number of them on a plot, would be more likely to win local community approval.

I am not completely convinced that the Green Belt has, as Brinkley puts it, “strangled the life out of many villages” but undoubtedly the mismatch between demand and supply is causing huge damage and if self-build is to be encouraged (as the government insists it is being) then this is a way forward.

More importantly, perhaps, it makes people look in a more sophisticated way at a staple of British planning - the Green Belt - which has until now been off-limits for serious public debate.

If you would like to to comment on this article, click HERE to e-mail Graham.

Scammers Target Property Professionals

2011-06-26T18:04:00.004+01:00

Scams have always been a part of the property business, unfortunately.

The victims are often inexperienced buyers and investors, and sometimes sellers too whose deals fall through and who may have inadvertently given money to fraudsters. There have been a few stories about this in the press - too few, I believe - mainly looking at those who have lost their savings on fake developments.

These have been in Spain, Bulgaria, Montenegro and even the odd one in Manchester and Leeds. Last week I found out about one on a Greek island, too, where a property built on land with planning permission turned out to be illegal - and had to be demolished. The losers have mostly been individuals (in one case, a property journalist) who put their faith in people without checking even the most basic bona fides.

Now there appears to be a growing number of occasions when even estate agents and developers are being scammed, or at least are victims of attempted scams.

These activities tend to follow one of three patterns:

1. Individuals email agents asking for details of properties on sale (including details of owners). These 'buyers' - typically using Googlemail or AOL email accounts - claim to be senior officers serving in Afghanistan so cannot turn up in person, and write of their interest in the properties in question ahead of their imminent departure from the forces. Many agents selling homes overseas have had these approaches, presumably by scammers who want copies of documents for later fraudulent activity;

2. Some particularly ballsy scammers find busy (and lax) lettings agents who simply lend 'respectable' prospective tenants keys to view a property alone. These 'respectable' people, meanwhile, have used Vivastreet or similar small ads websites to attract genuine but naive tenants to look at the same properties for which they have obtained keys. The dodgy dealers, pretending to be legitimate agents, then pocket the deposits when they persuade the real prospective tenants to ‘take’ the apartment;

3. More simple, and more common, scams involve those people who pretend to be interested in a property they simply cannot afford. Nick Candy (yes, THAT Nick Candy) had a hoax buyer some years ago when selling his £7m London home. The buyer even turned up in a chauffeur-driven limo. "He made four visits in all, some with friends, to get their opinions, and offered me the asking price" says Candy, who was convinced enough to commission solicitors to progress the deal - which they turned out to be false. The scammers do this for kicks or, sometimes, to case a property ahead of a burglary.

Agents say these scams are increasing in number, partly because property deals involve large sums of money and partly because online communications may make fraud easier to perpetrate in some circumstances. Either way, there is a lot of it about - and the industry, as well as the public, seems to be on the receiving end.

If you would like to to comment on this article, click HERE to e-mail Graham.

In Praise Of The National Association Of Realtors

2011-06-16T03:41:00.004+01:00

It’s neither my job nor my intention to tell estate agents how to organise themselves, but I have the opportunity on a few occasions each year to make contact with an agents’ body which never, ever fails to impress - the US National Association of Realtors.

Despite the US housing downturn (longer lasting and deeper running than the UK’s) the NAR - running since 1903 - claims 1,017,362 members as of the end of May 2011, inevitably well down from its August 2007 peak of 1,369,411.

What impresses me most about the NAR is, inevitably, its usefulness for articles I write. For example, it provides 220 local market reports with median prices, one-year trends, contrasts with all-US averages, local employment and demographic data and even specific foreclosure trends (the US is a big country but that still is a relatively fine grain of detail for use by vendors, buyers and the public, let alone the press).

The NAR also has a detailed training structure (often open to the public as well as to property professionals) with 105 courses, many of them online, with a sophisticated online ‘webinar’ system to allow far-flung members to stay connected.

It also has a government affairs lobbying department - that section of the NAR website here shows how much effort it goes to, to inform its members and pursue their interests by advocating policy changes to help all aspects of the industry. An example of how it works is that in 2010 it organised 33,000 calls from realtors of members of the US Congress to oppose a measure limiting mortgage interest relief.

It is media savvy - there are 500,000 digital downloads each month of the NAR’s latest market survey and it produces a radio show, Real Estate Today, available for local radio stations in major cities.

It also holds expos, conferences, technology summits, legal teach-ins - and these are just its public activities. Individual members have a vastly greater array of information, expertise and advocacy which they can access.

Of course grass tends to look greener from a distance - I’m sure NAR members may have many gripes about their organisation - but its services seem impressive when you consider this year’s annual subscription is $80 per member, rising to $120 in 2012.

From my standpoint, the NAR appears to help set the housing market agenda, instead of simply reacting to it. Somehow the NAEA and the RICS appears not to do the same. The NAR produces its own price figures instead of criticising other data; it provides substantial education for members instead of letting the real estate business be described as something ‘anyone can do’; and it makes a huge effort to be on good terms with the public and the media, instead of being at arms length.

Good estate agents in the UK and no doubt elsewhere do that good work all the time, but often do not get recognised by the outside world. What’s impressive about the NAR is that its professionalism means a lot of the US public know about it and believe it.

If you would like to to comment on this article, click HERE to e-mail Graham.

I'm Sorry, I'll Read That Again

2011-06-10T14:30:00.003+01:00

Eagle-eyed readers of the property press will have spotted that The Independent last Friday ran a story also published two days earlier in the Homes and Property supplement of London's free daily, the Evening Standard.

The two papers share the same owner and there will be much more of this property story dual-use to come. The Indie, it seems, will top up 'duplicate' Standard pieces with some original non-London stories but much of its property content will have appeared in London before.

Many journalists will dislike this - they always prefer original content and of course they have a vested interest in maximising the number of new stories published as they would be employed to write them. Journalists also prefer to have complete independence about the properties and themes they write about and not have them as closely dovetailing with advertisers as they often appear in the Evening Standard.

As for others, the initiative has good and bad repurcussions.

The mainstream property industry, aside from its journalists, will probably welcome it. The Standard gives a large amount of its property editorial space to new-build homes (largely ignored by national newspaper property supplements) so if The Independent follows suit, using the same stories, one long-standing grievance of developers will be addressed.

Similarly, property industry chiefs like the fact that the Standard's tone on the housing market is relentlessly upbeat. A senior Barratt Homes executive once told me the Standard's property pages differed from the nationals because it always described the market as developers and estate agents wanted it to be, rather than as it actually was. The Independent will, presumably, now have a similar tone at least in those stories it duplicates.

Those property people involved with, or interested in reading about, less lucrative sectors of the market - social and green housing, for example, always well covered by The Independent in the past - may be less delighted by the change. Inevitably if much of the paper's property space is given to mainstream sectors as in the Standard, these minority sectors will be squeezed.

It is also interesting to speculate how The Independent will combine the ever-optimistic Homes and Property view of the central London market (which of course genuinely is very good right now) with the much more sluggish, gently declining prices across most of the UK outside of the capital. And should London's housing market shift into reverse gear one day, how will The Independent's property pages - until now known for its tell-it-as-it-is approach - cover the change?

Recycling stories is not unheard of. When I wrote a piece for the Mail on Sunday's property pages recently, it also appeared a week later in a local newspaper owned by the same group, Associated Newspapers. This was a one-off and the reason was that I was writing about a property well known in the region covered by the local paper concerned.

But the systematic re-use of stories now underway by The Independent is unusual. As a journalist, of course, I hope it does not catch on - not just because I'd like more work for colleagues and myself, but because we need a multiplicity of views and tones in property journalism.

If you would like to to comment on this article, click HERE to e-mail Graham.

Shapps and Pickles: Never Knowingly Underquoted

2011-06-08T08:31:00.003+01:00

There’s no doubt about it - the coalition’s housing politicos do good PR. Or should that be, they do A LOT of PR?

In May alone, despite the Bank Holidays, there were 29 press releases from the Department of Communities and Local Government.

Of those, Grant Shapps - who also uses Twitter very effectively to let people know when he will be on TV and radio shows to publicise initiatives (although not always ahead of appearances to defend policy) - was the lead politician quoted in nine of those DCLG press releases in May.

His boss Eric Pickles - notionally, at least, more senior than Shapps as he is in the Cabinet - was the lead politician quoted in another nine departmental releases in May.

By contrast, these were some other coalition departmental press releases in May:

- Treasury: 7 (of which two had Chancellor George Osborne as the lead politician quoted);

- Justice: 24 (of which four had Justice Secretary Kenneth Clarke as the lead);

- Education: 14 (of which six had Education Secretary Michael Gove as the lead).

I could go on. You get the point.

On the one hand, the PR offensive by the DCLG (much more extensive than almost any other government department) shows that it is a unit on the move, with business and initiatives to announce - although hardly more active than, say, the Treasury or the departments of Justice or Education, I would have thought.

On the other hand, the determination of Grant Shapps and Eric Pickles (the former still tipped for promotion) to personally dominate and be identified with the activities of their department carries a risk: if those policies do not deliver, the politicians arguably receive the flack more rapidly.

Gordon Brown made a name for himself by announcing initiatives several times. People quickly saw through that and the tactic backfired.

Shapps and Pickles are not there yet (although they have had many press releases trying to launch and then explain the New Homes Bonus since they came to office). But they do need to be seen to deliver, and rapidly, if the large sums and amount of time they spend on their personal promotion is not to backfire, too.

In other words, those who live by the PR sword may just die from it, too.

If you would like to to comment on this article, click HERE to e-mail Graham.

Regrets? I've Had A Few...

2011-06-01T08:18:00.003+01:00

I recently received an email from Mark, a reader, which prompted me to consider the responsibilities of property journalists.

It was this story from the Sydney Morning Herald, about an Australian who had bought a down-at-heel apartment in Detroit - he was shot and later died outside the property. Mark had some weeks earlier contacted me about an article I had written in The Observer (here) saying how some British estate agents were now selling Detroit properties for relatively small sums.

The reader’s correspondence was polite but clear in its suggestion: that by writing about the subject of buying repossessed US properties as investments, I was implicitly approving of it and perhaps unwittingly leading people into situations of debt and even danger.

It may not surprise you that I disagree. I write about almost every aspect of residential property but by doing so I neither personally endorse nor actively encourage readers to follow the course of action in any particular article.

A journalist’s responsibilities probably fall into two categories: firstly to make a story accurate, legal and interesting; secondly to fulfil the journo’s deal with an editor by filing it to the right length and on time. But is there a third? If so is it something rather less tangible and, these days, rather less fashionable - to protect readers from themselves?

Mark’s suggestion was clearly that I should so protect readers - by judging what is ‘good’ for people and what is not. By extension, Mark’s argument also means I should be wary of writing about buy-to-let in the UK in case investors over-extend, and perhaps avoid owner occupation stories in case readers buy a home and find themselves unable to afford the repayments.

But somewhere a little deeper, he may have a point.

With hindsight it is easy to see that all property journalism got a little carried away with some trends five years ago. The extensive and expensive PR employed to promote problematic Spanish developments, and the estate agency spin that led to ‘city centre living’ stories about apartments that even today lie empty in Leeds are two cases in point. In retrospect, I regret not showing more scepticism to both.

Yet the balance we draw has surely to fall on the side of leaving it to readers to draw their own conclusions. We can write about a particular development, sector or country - but only the reader can judge whether that is right for them.

If you would like to to comment on this article, click HERE to e-mail Graham.

The Changing Face Of Property Journalism

2011-05-25T14:48:00.003+01:00

While the world of print and broadcasting considers how to keep up with online journalism and social media (a subtext of this week's super-injunction breach-fest) another, more subtle change is happening in property journalism.

There was a time when - at New Year and Easter, then in September and again towards Christmas - property supplements of heavyweight newspapers would have imposing lead articles on the housing market.

Commentators like Hometrack's Richard Donnell, Savills' Yolande Barnes and Lucian Cook, and Knight Frank's Liam Bailey would be quoted in seminal market pieces in the Times and Sunday Times, Daily and Sunday Telegraph and FT - sometimes other papers too - explaining where to buy or not, and what to expect of the market in coming months.

These articles still exist but you now rarely find them in property supplements - perhaps with the exception of Bricks and Mortar. Instead they are more likely to be found in the personal finance or money supplements of those same papers.

Why? There are three reasons.

Firstly, those old articles are now irrelevent. From 2000 to 2007 people wanted to know about house prices because, in most cases, they were sitting on appreciating assets. Those days have gone. Today the public are aware that house prices outside London have barely remained in positive territory. In the past 12 months, most of the UK's sales market simply has not changed - so a story about it has a struggle to be interesting.

Secondly, the age of mass amateur buy-to-let investors may be over. The rental market is doing very well right now but most people wanting to bolster their pensions just cannot afford BTL deposits and/or mortgages. So there are no more of those market articles citing savvy IT consultants who bought three Barratt flats to let out in Harlow - because most people cannot relate to that any more.

Thirdly, property supplements are far thinner than before because advertising continues to be sluggish. By late May in the 2000 to 2007 period, most supplements would be at full capacity; this year, a few look healthy (and the Independent's property section is even growing in size) but some others are far thinner even than in 2010, and have combined with gardening or other allied subjects to stay afloat.

As a result of these factors, today’s property supplements are given over more to lifestyle issues and (to use the industry jargon) property porn - aspirational stories about homes which most of the readers could not begin to afford, but love to know about.

These stories may not satisfy the property anoraks but they do attract more readers and more advertisers than would detailed market stories of interest only to today’s diminishing numbers of budding landlords or Sarah Beeny types.

That is not to say that well-written and authoritative market information is not routinely available in the press - Ian Cowie in the Telegraph and Tanya Powley in the FT are shining examples. But their work is found in the money pages of their publications, and will stay there until the housing market returns to something like its 2006 appearance.

And no one thinks that is going to happen anytime soon - if ever.

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Who Are Property Details Written For?

2011-05-18T16:27:00.005+01:00

This week I’ve done a minor and completely unscientific survey - and come up with what was, to me, a surprising and unanimous view from property professionals.

I asked 10 trusted contacts who I respect within the business (five estate agents, three lettings agents and two buying agents) one simple question: “Who are property details written for?”

The answer in every single case, usually with very little hesitation, was: “the seller”. No, not the buyer but the seller.

Many property details reach my inbox, often draft details in PDF form of properties going on sale shortly. I have often noticed how some agents spend a lot more effort on them than others, and adopt fiercely contrasting styles.

For example, most central London estate agents put in very little prose (sometimes just a paragraph or two at most) but put in a floorplan, square footage and other core information, plus perhaps one or two (rarely more) photographs. It’s when you see the price tag at £1m or more that you wonder why the details are so minimal - and indeed why the vendor was presumably happy with that.

The majority of agents selling homes outside of the capital have a more balanced approach of prose, details and pictures.

A very few others, again chiefly outside London, put in extraordinarily long descriptions - have a look at the property details created by Fine estate agency (here). In its own words it wants to “truly connect” with potential buyers and the result is, the company says, “far more engaging than traditional agency's uninspiring lists.”

But this discrepancy in approach to the length and thoroughness of the details made me wonder - who are these details for?

Are buyers in central London always happy with one side of A4, which is now often the norm, while those purchasing in the country insist on eight page brochures for a property that may be valued at half the price? I suspect not.

Hence my question to my contacts, and then the answer. As one person put it: “The details are to show the vendor we’re doing something.”

The agents' logic in each case was that prospective buyers shortlist these days on the internet, making judgements on images more than prose, and using Streetview and Google Maps. They pay little attention to the text details, outside of location, bedroom numbers or floorspace, and price.

In which case, why bother with brochures at all?

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Should Estate Agents Relinquish Their Superinjunctions?

2011-05-12T08:07:00.000+01:00

Super-injunctions are at the centre of public debate. The argument rages over whether the wealthy should use the power that accompanies their wealth to prevent others knowing information which, arguably, should be within the public domain.

But what about the housing industry’s own version of super-injunctions? I refer to the highly-arguable ‘privacy’ veil that falls over information when a home is on sale.

In an industry that argues so vehemently against legislative regulation, again even the mildest forms of disclosure advocated by Home Information Packs, and often argues that the general public are “too well informed” about the market thanks to the interent, it is perhaps unlikely that the next few paragraphs will be well-regarded. But here goes.

1. Why should the contents of a structural or lesser survey of a home, not be shared between all prospective buyers, instead of each purchaser having to arrange and fund their own? (After all, an MoT applies to a car beyond three years old, so anyone buying it second hand will have to be aware of it - but will not have to arrange their own).

2. Why not have formal feedback after each viewing, so the potential buyer undertaking the next viewing can see it? (Ridiculous, you say? Well there are public reviews of the quality of almost every other commodity these days - why not homes?)

3. Why not record an offer on a house for sale and let that offer be known, formally, to other prospective buyers? That way, rival bids may develop. These may increase the eventual sale price and income for the seller (and indeed for the estate agent), while removing the lingering belief that many would-be purchasers have that interest in the property is actually just being talked up?

Of course the answer to the ‘why nots?‘ is caveat emptor, Latin for ‘the house sales process must always be defined by estate agents and weighted against the buying public’.

Such is the monopoly that sales agents carry over house sales that their dominance has now created the apparent need for buying agents to counter them. Property thus joins the legal industry in creating such a closed shop of information that only hired hands are allowed access to, or deemed capable of understanding, the essential information.

‘Twas ever thus, perhaps. We used to have to buy books and music only from high street shops until discount websites appeared; we used to be obliged to pay premium prices for air-tickets until ‘bucket’ stores and budget airlines came into play; and we used not to be able to seek compensation from train operators for delays and cancellations until regulators forced it.

Eventually the buyer came out on top in these three areas, forcing those in charge to give up their monopoly on information, distribution and power. Will the same happen one day for those selling homes?

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Spain - Not As Easy As ABC

2011-05-09T07:45:00.003+01:00

My interview questions were almost completely ignored the other day - and it was as easy as ABC.

In fact it was the interview technique known as ABC, beloved by politicians in particular, that did it for me. The interview was with the Spanish housing minister for this piece here.

There was always going to be a clash - I wanted to find out about the cases of thousands of Britons who have fallen victim to three categories of corruption or scams, while the minister wanted to ignore that and concentrate on reforms to make future sales of Spain’s holiday homes safer for foreign purchasers.

So each time I asked a question, the old ABC reply came. It stands for Acknowledge, Bridge, Communicate, with ‘communicate’ referring to the issues that the interviewee wants to get across irrespective of the questions that the interviewer asks.

This tactic is a favourite with professional media trainers who are often employed by politicians. Even if you don’t know of this technique, you have probably heard it many times on TV and radio interviews in particular. It goes like this:

Interviewer: “So will the coalition fall apart after the local election results?”

ABC politician: “That’s the big question. [Acknowledge]. But just a few days after the elections, that’s not the issue as we see it. [Bridge] Instead we’re concentrating on the things that really matter which are blah, blah and blah [Communicate].”

The Spanish housing minister was an expert.

She effectively used the technique to avoid discussing the fate of Britons whose homes were at risk because past corrupt deals meant their homes were retrospectively deemed ‘illegal’ so cannot now easily be sold.

She also used it to steer clear of an explanation as to why the Spanish government would not intervene on behalf of thousands of Britons whose deposits, paid into banks, have not been returned to them even though their homes were not built thanks to developers going bust.

She also refused to say how much Spanish taxpayers were paying for her government’s six-nation ‘roadshow’ to promote the new rules regarding overseas purchase of holiday homes in Spain.

Her hope, of course - as it is with all interviewees who use ABC - is that frustrated journalists use the quotes they have, even though they were for questions that were never asked. Therefore the interviewee sets the agenda, avoids embarrassment, and puts forward only the good news.

You can see for yourself, given the press attention to the Spanish property roadshow, that the ABC technique does not always work...

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One Year On: Same Difference?

2011-05-03T17:42:00.004+01:00

This coming weekend there will be a spate of ‘one year on’ articles in the property press and elsewhere analysing how the Coalition has performed in its first 12 months.

Undeniably, initiatives from Grant Shapps and Eric Pickles have come thick and fast, like screams from a child overdosing on e-numbers.

HIPs and quangos have gone, Localism has arrived, with new rules on Homelessness and Housing Benefits. The New Homes Bonus is here and we have the concept of Flexible Rent and amended tenures for social housing tenants. Meanwhile Self-Build is flavour of the moment, and developers are urged to convert old commercial property into homes.

Full marks for initiative then, and their attendance has been good too - most of us, as estate agents or developers or regeneration experts or property journalists, have bumped into Shapps and/or Pickles at some time during the past 12 months.

This all appears a world away from the previous government. Labour, despite a philosophy of intervention, set new-build targets and density guidelines but otherwise effectively withdraw from housing completely as its ministers came and went within a few months.

Grant Shapps, by contrast, became shadow housing minister in June 2007, while Eric Pickles became shadow DCLG secretary just a month later. So between them they have almost six years working on the policies they are now implementing.

Yet the difficulty is, after the speeches and announcements have been dissected, where is the Coalition beef?

What are the results of the policies so repeatedly announced over the past year? The inability of anyone to show real results explains how - despite the extraordinary difference in style - the Coalition and Labour governments may not be so far apart.

The housing market outside central London is muted; first time buyers and mortgages remain scarce; housing starts and completions are stubbornly low; development funding is still tough; and few property industry insiders believe things will get better, even if some do not want to incur the wrath of politicians by saying so in public.

I could have written that sentence a year ago, commenting on the final year of the Brown administration; yet ironically this is what is being said now, often by those who hope they will be proven wrong and who are willing Shapps and Pickles to succeed.

There may still be four years left of this government, of course - plenty of time for doubters to be proven wrong. But some green shoots will have to appear soon: just the perception of greater mortgage availability, a press release from a developer who actually gives up land to self-build schemes, or a set of figures showing more new homes are being completed would be enough to satisfy most people that progress was being made.

Without that, the so-far muted dissent in the property industry will grow louder. Just as loud, perhaps, as it became in the dying days of the Brown government.

If you would like to to comment on this article, click HERE to e-mail Graham.

Clone Towns - Bad (Or Good) For House Prices?

2011-04-26T10:31:00.002+01:00

Do house prices in areas branded as ‘clone towns’ suffer as a result?

I ask because it seems smaller towns and even villages are undergoing the same process of retail cloning as larger towns and cities.

Over Easter I paid a family visit to Wombourne, a village in the Midlands, to see that of about 20 shops around the picturesque cricket green, five were ‘cloned’ (that is, part of a national or global chain, and not one off local independent shops). Three of the five were Co-Ops (a brand almost as ubiquitous as the much-derided Tesco in much of the UK).

In the south west, small towns like Honiton and Totnes - both once havens of independent shops - are beginning to see what many consider the inevitable arrival of brands like Costa Coffee, W H Smith, Fat Face and the other familiar chains seen across the country. It is likely that the same trend is occuring in damn near every small town and village, too.

The New Economics Foundation, a think-tank which may just have more successful PR than its research ever really justifies, gets a lot of publicity every few years by issuing a league table of clone towns - usually larger cities, in fact. The most recent survey showed:

- 41 per cent of UK towns are ‘cloned’ with over half the stores in the main street branded for national or global chains;

- Cambridge was the most cloned town (in the past Exeter was the most cloned);

- Richmond has the most cloned high street of London’s “villages”;

- Whitstable, Kent was the least cloned in the 117 locations it surveyed.

Popular middle-class perception may have it that charming streets filled with independent shops may denote an affluent area but given the relative house prices and buoyancy in the market of ‘cloned’ areas like Cambridge, Exeter and Richmond, compared to the most ‘un-cloned’ of Whitstable, it may well be that the arrival of a Caffe Nero and a Zara might do more good to the wallets of home owners than we might be led to believe.

Does it actually make a difference? As most brands only open stores after (usually) scrupulous research, are they simply fulfilling a demand and so may be indicative of an area’s rising popularity - not its decline?

If you would like to to comment on this article, click HERE to e-mail Graham.

Is It Christmas, With Sunshine?

2011-04-21T06:27:00.002+01:00

It seems churlish to complain about Britain’s holiday atmosphere - the feel-good factor engendered by unusually good weather and Bank Holidays - but the question has to be asked: is the housing market being damaged by the country’s imminent closedown?

The very top-end of the market around the country and especially in central London, of course, operates to different rules and employs an industry of marketeers to let us know how well things are going. But that is not the experience everywhere else.

“It’s like a Christmas shutdown with sunshine” one buying agent in south west England says. “The weather’s been good for the last 10 days and the next 10 days are preoccupied by holidays and the Royal Wedding. Why would anyone look at houses now?” she says.

“The telephones have been awfully quiet this week. People feel good but they want to go to the park with the kids, not look around semis” admits a north of England estate agent.

On top of that, the (in my mind inexplicable) wariness of estate agents outside London and the south east to open on even ‘ordinary’ Saturday afternoons and Sundays may lead to few opportunities for would-be buyers in the next period anyway.

There are only three working days until early May and Moneypenny, Britain’s largest corporate telephone answering service, reports it has seen a sharp rise in the number of estate agents seeking its help to cover closed days.

It’s different at the top end. Country Life has its annual Easter pagination binge (this week it has 327 pages, many of them carrying rural piles for sale). And however hot it may seem to Brits, the seasonal glut of buyers in central London from the Middle East (compared to which this country is climatically and politically rather cool) will keep agents busy.

But are we in for a chillier time around the rest of the UK when sales figures for this period emerge in weeks and months to come? And will the market then pick up again?

As journalists always say when they pose more questions than answers, time will tell.

If you would like to to comment on this article, click HERE to e-mail Graham.

The US Housing Downturn - four years and counting

2011-04-16T16:29:00.002+01:00

What a difference four years can make.

In 2007 I visited Chicago to see what was supposed to become the world's tallest residential building, the Chicago Spire. It was a project by an Irish developer, designed by a Spanish architect, in a US housing market that was beginning to falter. Destined to fail? In retrospect, yes, although at the time it was merely the latest excess story of the hotter-than-hot global property market.

Savills, my host at the time, ticked me off for writing this story before I visited. It mentioned the US downturn and it was published before the press trip, which meant I was somewhat persona non grata for some of the time there. I was certainly less popular than the British property journalist who delighted the developer and agent, and amazed the rest of us, by putting his name down for a flat in the building on the strength of the tour of the foundations - and against the advice of almost every other hack.

Needless to say, the Chicago Spire has not been built and my trip to the city last week was a more sober affair - and not just because I was buying my own drinks and paid for my own room at the Drake Hotel.

- House and hotel building is largely suspended, with the empty unfinished riverside shell of the ShangriLa in downtown Chicago a vivid example of the downturn;

- Foreclosures across the US rose from 918,376 in 2009 to 1,050,501 in 2010, meaning two million families or individuals have lost their homes in two years;

- A survey by the National Assocition of Realtors and CNN shows median house prices across the US down 29 per cent since their 2006 peak;

- New homes are routinely adverrtised as 30 per cent off in a bid to shift ageing empty stock;

- Meanwhile, in a country largely characterised as still in recession, spending on remodelling (Americanese for improving your existing home rather than buying a different one) is up 9.1 per cent on early 2010.

Downturn? The US housing market is still in the throes of it...with no real sign of an improvement yet.

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The Price Is, er... Right?

2011-04-07T08:19:00.002+01:00

Estate agents operate on behalf of sellers so should be applauded for doing whatever they can - within reason and the law - to get that deal done at the highest possible price.

But are our numerous pricing strategies for homes on sale actually effective?

Currently we have Asking Prices, Guide Prices, Price On Application (POA), Offers In the Region Of (OIRO), and Offers In Excess Of (OIEO). The first is a definitive asking price and the last is a minimum acceptable price, so are clear. But what of the other three?

One estate agent tells me, off the record, that Guide Price is used to placate “uppity sellers” who want more than the agent is willing to recommend, so a compromise is to “add a certain vagueness to keep them happy”. Her words, not mine.

Another agent - and this seems much more thought through - says OIEO creates an “auction mentality.” Buyers are unsure what offer will secure a property, so may be offer more than they otherwise would pay. OIEO also encourages multiple bidders who can, within reason, be played off against each other to get the maximum for the vendor.

Most agents say POA is agreed, against their own instincts, to reflect the wishes of the vendor to keep their finances private. Another - and I suppose one has to credit his candour - says it allows agents to judge the financial veracity of buyers. The figure quoted may vary from interested party to interested party, depending on their circumstances.

So far, so what?

But name another business where the price of an item to be purchased is so vague - if not to those in the business itself, to the customer.

People haggle over prices of new and second hand cars (as they do over house prices) but at least have a transparent unequivocal ‘book price’ when negotiations start. There is no melodramatic ‘secret bidding’ of the kind that the property industry encourages through the (perhaps intentional) vagueness of five different prices.

One way of immediately improving the image of house selling, and all those involved in it, may be just to adopt a single, clear pricing system. Surely it could be Asking Price or Offers In Excess Of - both allow the agent plenty of scope to use her or his skill to get the maximum for the vendor, without arousing any suspicion of opaque pricing.

Is that so hard to accept?

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Should House Builders Have Gone To College?

2011-04-03T18:33:00.002+01:00

Residential developers and volume house builders are often the most astute players in the property world. That relatively few have been lost in the downturn - now in its fourth year - is testimony to that.

But have they missed a trick with the student accommodation sector?

I’m doing a story for Estates Gazette about this market, which performs strongly despite the downturn elsewhere. It strikes me that entering into joint ventures with universities and colleges was an obvious move for house builders wishing to diversify.

In 1999 there were 334,594 accepted applicants for British universities - those were ‘first year’ students in 1999-2000, suggesting 1.1m undergraduate students existed in total (as most courses are three years in duration). Add to that another 75,000 postgraduate students per year - so double that, as most postgrad courses are two years.

By 2009 there was an average 44% rise in all of those figures - remarkable growth. Since then another 5% rise has taken place, despite the introduction of some fees. The largest growth has been in overseas students needing year-round accommodation.

Yields for student accommodation have been very strong during the past decade - from 6% to well over 9% per year according to research by Investment Property Databank. So this sector has rocketed, and has kept rocketing, at precisely the time the mainstream housing market was itself booming - but then dropped off sharply for the downturn.

Of the big residential names only Berkeley Group diversified with its Berkeley First student operation - why did the others choose not to?

After all, they flirted with other sectors when they tried to off-load unsold stock in 2008 to housing associations - why did they not do the same with universities or colleges?

Is it just that house builders have substantial land banks and insist on waiting for the resi market to lift? Are there tax advantages from not building at all, rather than building lower-return properties like student accommodation.

Perhaps. But now it’s too late. The student sector remains strong but there are several specialist developers now dominant and others are unlikely to enter with higher fees and possible caps on foreign student numbers set to make the market tougher in future.

Has this simply been a missed opportunity?

If you would like to to comment on this article, click HERE to e-mail Graham.

The Essential Guide To Property PR-Speak

2011-03-31T17:26:00.003+01:00

The best property PRs do great jobs, essential for journalists and clients alike.

The less good ones (like not-so-good journalists who churn out cut-and-paste press releases) rattle off cliches which have to be decoded by the rest of us.

So for those of you fortunate enough to be neither a journalist nor a public relations professional, enjoying this April Fool’s Day, here is a little help with definitions:

1. PR SPEAK: “My client really wants to meet you”
- REAL SPEAK: The contract is coming up for renewal...I need to wheel out a journalist;

2. “Where is convenient for lunch?”
- Anywhere within a 200 yard radius of my office even if it’s 200 miles from your home;

3. “My client was thrilled to be mentioned in your story”
- I’m telling my client the six word quote was the equivalent of £3,000 of advertising;

4. “It’s an exclusive”
- perhaps... I’ve sent it exclusively to everyone on my 120-journo contact list...
- or... it’s such a turkey of a story, I’ll see if an exclusive tag makes it interesting...
- or, very rarely... it’s a genuinely good story and it really is just for you;

5. “I’ve got a fascinating new client”
- Yes, it’s yet another buying agency dealing in London and the Home Counties;

6. “Luxury development”
- Like most others these days;

7. “Uber-luxury development”
- Like most others these days, with Phillippe Starck taps;

8. “I’ve got the perfect case study”
- Someone who will say nice things about new homes in return for a box of cheap wine;

9. “It’s a long-haul press trip, you’re only there 24 hours, so you must fly business class”
- It’s economy and we’ll tell the journo at check-in that the client wanted to cut costs;

10. “Yes, social media is SO important these days”
- I’m on Twitter occasionally, only within office hours, to make it look like I use it a lot.

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The Pain In Spain - It Just Goes On

2011-03-27T15:40:00.003+01:00

I’m sometimes accused of having a downer on Spain and its apparently never-ending housing slump. In fact, I simply feel its problems are under-reported. By seeing what is happening there, we get at least some comfort that UK problems are really not that bad.

Here are the latest figures, which show the country’s problems are by no means over - and perhaps not even over the worst:

Some 257,443 new homes were completed in 2010, down 33% on 2009 and less than half the number of completions from the ‘boom years’ of 2205 and 2006 - a positive spin on this is that at least the country’s estimated one million over-supply may be dropping;

Eurostat, the EU statistics agency, says Spanish construction output collapsed 43% in January 2011 - across the rest of the EU, the average annual fall was under 5%;

Mark Stucklin, a Barcelona-resident Briton who analyses the Spanish market, says building land sales in Spain hit a record low of 3.9 billion Euros in 2010 - six years earlier the figure was 23 billion Euros;

Land prices are also down heavily, by more than 50% - bad news for the banks, which own an estimated 20 billion Euros of land - much of it repossessed from developers now in administration;

The scandal of Spain’s “illegal homes” continues - it simply does not get much publicity in the UK now. The latest revelation, this month, is that 12,697 homes were declared to have illegal status in the just one area alone, the Almanzora Valley in south east Spain, popular with holiday home buyers. What will happen to them is not yet known.

Depressing? Of course - what is perhaps amazing is that this ongoing housing crash and the concurrent scandals over corruption and allegedly illegal building, receive so little coverage these days.

Apologists issue press releases crammed with euphemistic sentiments promising imminent improvements in the market. Well, like stopped clocks, they turn out to be correct sooner or later.

But for the moment, no matter what is said, the pain in Spain remains firmly in the housing and construction business.

If you would like to to comment on this article, click HERE to e-mail Graham.

Shapps - Is His Work Done?

2011-03-20T21:44:00.003Z

In days of yore - up to about 2007 which seems a century ago given the changes to the economy since then - the spring Budget used to be a tool to influence the housing market. Stamp duty would be tweaked or new schemes for first time buyers announced. Perhaps more social housing funding would come up too.

This week, don’t hold your breath. The coalition government is not only non-interventionist (make that anti-interventionist) but it’s also skint, although you would not know it given its weekend spending spree firing cruise missiles at £300,000 a time.

Therefore the calls of the Home Builders' Federation demanding a new shared equity scheme for first time buyers, a bid to cut council and government taxes on development, and more intervention to guarantee mortgage lending seem like whistling in the wind. Such calls are not going to be answered when there is no money.

Yet this should not be confused with inaction. No one can accuse the coalition of repeating the errors of the last Labour government in having very few housing policies and flakey housing ministers.

There have been at least 15 major housing initiatives in less than 11 months of the coalition, and Grant Shapps has shown that housing ministers can stay in office and actually know about housing - surely a fact, whether or not one agrees with him.

Yet Westminster is alive with speculation that Shapps is soon to leave housing. Rumour has it, at least amongst political journalists schmoozing and quaffing with MPs, that the MP for Welwyn and Hatfield has been deemed a Big Success and is likely to be promoted to a full cabinet position - possibly in charge of Health - in a reshuffle at the end of spring.

If true, this will mean two things.

Firstly that Shapps is seen as a ‘change politician’ who has transformed the government’s involvement in housing (very rapidly) and will be expected to do the same with the NHS.

Secondly that housing’s ‘change agenda’ - from scrapping HIPs, RSSs and HomeBuy Direct to introducing localism, a new homes bonus and the easy conversion of empty offices into homes - is now complete. In other words, Shapps‘ work is done meaning he moves on and a new housing minister is introduced to look after implementation of all those new policies.

This might be completely wrong - but lots of people in Westminster think it is correct. You heard it here first...

If you would like to to comment on this article, click HERE to e-mail Graham.

Figures That Don't Add Up

2011-03-16T06:33:00.002Z

Please don’t get me wrong. I would like to see more new homes built.

But is it time to abandon one of the property industry’s greatest PR triumphs - the never-ending claim that there is a specific overall number of new homes which SHOULD be built, inevitably far greater than the number of homes that actually ARE built?

The Home Builders’ Federation has been highly successful at persuading the public, politicians and journalists that there is a permanent housing shortfall.

Back in 2003 it issued a press release saying “the discrepancy between household growth and housing completions is worsening at a rate of 50,000 a year”.

In 2006 another HBF release said: “The supply of new housing is as a result falling short of needs by some 50,000 each year.”

A few weeks ago, the HBF produced this, in response to the news that 102,570 new homes were completed in 2010: “Household formation projections show that 232,000 new homes need to be built in England each year to 2030 to meet demand.”

The picture is clear. Whatever the party in government, whatever the planning regime in force, whatever the condition of the housing market, whether the wider economy is in boom or bust, there are too few homes being built.

I’m not one to let politicians off the hook but in a free market for homes, with the planning system moving from heavily interventionist to today’s scrapping of regional plans, does some of the responsibility for too few homes being built not lie with builders themselves?

Dare it be said that by developers ensuring the number of homes built perennially drop below the apparent need, prices are kept high?

One suspects the decade-long campaign by the HBF may be backfiring. Genuine homelessness and government figures on overcrowding have risen but are nowhere near the level of the ‘new homes shortfall’ claimed by the HBF.

So therefore most ‘new households’ live somewhere without buying a new home - perhaps with their parents, by sharing with friends or, of course, by renting in existing homes.

Whatever they are doing, they are existing without new homes. Meanwhile developers continue to offer incentives to shift stock which remains unsold, despite the apparent “pent up demand” which we are told exists all around us.

As I say, I’m sure there is a need for more new homes. I’m less sure whether the way to convince everyone else is by reciting a mantra of figures which now appear pickled in aspic, rather than rooted in reality.

If you would like to to comment on this article, click HERE to e-mail Graham.

Southern England high-equity middle-aged owner occupiers rule, OK?

2011-03-09T07:25:00.002Z

It’s of no great surprise that Britain’s residential property wealth is now over £4 trillion but what is surprising - to me at least - is the skew in how that wealth is distributed.

Some interesting facts have just been unveiled on this by Savills’ research department; they will get little publicity in a media world obsessed more with prices than true wealth, so here are some of them. The facts are from Savills - the gratuitous asides are from me:

Net residential wealth, ‘owned’ by individuals rather than mortgage lenders, has risen from £1.4 trillion to £2.9 trillion in 10 years, and accounts for 70% of UK housing stock;

Homes valued at £500,000 or more account for just 5% of the stock volume but about 18% of the stock value;

In 2010, residential property in London and south east England accounted for 25% of the total stock of the UK but 35% of its value;

Housing stock in London is worth £750 billion, more than the combined value of the West Midlands, Greater Manchester, Merseyside, Tyne and Wear, South and West Yorkshire, despite having 30% less stock. (This demonstrates why so many estate and buying agents concentrate on London and almost ignore all other parts of the country);

People under 35 hold just 5% of UK housing equity, those aged 35 to 45 hold 12%, and those aged over 45 hold a whopping 83% of UK’s total residential equity (which would account for why the retirement housing sector is so competitive - and ruthless in parts);

Owner occupied property is typically more valuable than rental property. Across the UK some 70% of homes are owner-occupied but this accounts for 82% of the value.

Anything surprising there in principle? Probably not. But the degree of the skews toward London and the south east, and towards older owners, may raise some eyebrows.

Get used to it - with spending cuts hitting jobs and incomes far more in the Midlands, northern England, Scotland and Wales than in London and the south, this picture is likely to become familiar in the next few years.

If you would like to to comment on this article, click HERE to e-mail Graham.

Why Most Property Scandals Aren't Exposed

2011-03-05T15:53:00.005Z

There’s quite a lot of scandal about the property business in newspapers and on broadcast media these days - but unfortunately far less than ought to be reported.

The retirement housing sector produces plenty of stories of that kind. There was this in The Guardian about retirement community service charges, and the long-running controversy on retirement development exit fees has provoked dozens of stories, most recently on BBC1’s Rip-Off Britain just last week.

Over the weekend there was an excellent piece on Radio 4's Today on another controversial property activity - dividing land into tiny plots, sold at high prices citing the hope value that one day they will be used for residential development.

Congratulations to those journalists behind these revelations but sadly there are far fewer stories of this kind than there should be. Why? It’s mainly down to the reliance on freelance property journalists, and for three reasons.

Firstly freelances - I have been one for a decade - rely on stories being commissioned and published before getting paid. As many property stories pay relatively little (£200 to £500 each, most at the lower) freelances need a high number of stories to make a living.

A complicated tale unravelling activities that property firms do not want revealed, often protected by expensive public relations spin-doctors (some retirement housing firms have particularly aggressive PRs at the moment), can take a long time to reach fruition. The Guardian and the BBC can spend staff time on this activity - and it is for this reason that they are so respected - but freelances find it difficult to justify spending days on a story which may eventually fail to produce enough evidence to get published or broadcast.

Secondly, the property pages are stuffed with pieces by freelances and there are relatively few staff property journalists. Those staffers that exist are usually section editors so, frankly, get out relatively little and are up to their necks with office-based editing and management. Hence the complicated, time-consuming, revelatory stories are rarely touched.

Thirdly, the fear of legal action means even national newspapers are extremely wary of taking on wealthy property companies which they suspect of dodgy practices - and individual freelance journalists are still more cautious.

In December 2009 one of my investigative property stories was the subject of legal action. Thankfully the newspaper in which the story appeared led the defence but the time, effort and worry inevitably surrounding legal action leads most freelances to self-censor - they choose only dead safe stories, nearer to churnalism than journalism.

So true investigative journalism into the more squalid sides of the property industry is regrettably rare, despite writers frequently being approached by individual victims of apparent wrong-doing (and indeed one property journalist herself being the victim of a large property scam).

Hats off to those journalists with the staff time and financial support to consistently reveal such issues: it’s just a pity there aren’t a few more.

If you would like to to comment on this article, click HERE to e-mail Graham.

The Important Housing Figures You May Have Missed

2011-03-01T03:49:00.008Z

It’s an indication of how much the asset value of property dominates our thinking, that this week’s property news has so far been pre-occupied by a survey of “England’s richest streets” rather than far more important rental market data.

For those who missed it - and sadly that will be most who rely on the mainstream media - the government’s annual English Housing Survey (looking just at, er, England) produced startling figures at how quickly the residential landscape is changing:

- the private rented sector has risen from 2.4m households in 2005-6 to 3.4m in 2009-10;

- therefore 15.6% of English households are in the PRS, up from 11.7% five years ago;

- the proportion of homes in owner occupation is down from 70.9% to 67.4% in that time.

Is it just me who finds these figures surprising?

Of course the PRS is booming because it's the last resort of those frustrated by poor mortgage availability. But I thought that surge would be tempered at by a fall in corporate renting, as was feared before the recession. The English Housing Survey shows how wrong I was.

If anyone thinks this is a passing phenomenon, to be reversed when the sales market recovers, look at these EHS figures:

- half of all private renters are under 35 with half a million (15%) between 16 and 24, and 1.2 million (35%) aged 25 to 34;

- 60% of PRS households are in full-time employment, 9% part-time, 7% unemployed, 8% retired, 11% ‘other inactive’.

These figures show, surely, that the PRS is now a way of life for many younger people in particular.

With restricted mortgage availability for most young would-be buyers entering its fourth year, and few lenders breaking cover with high LTV products, renting is set to stay a big part of our landscape. Many forecasters predict the PRS will hit 20% soon.

The EHS data also shows 40.8% of PRS homes as “non-decent” and chronicles how the sector remains less regulated than sales, from membership of the Property Ombudsman Scheme to financial management.

In the light of that final data, it is perhaps not just negligent newspapers which ought to take the private rented sector more seriously.  

If you would like to to comment on this article, click HERE to e-mail Graham.

Putting Your Property In The Frame

2011-02-24T16:54:00.008Z

Here is a warning - before long this blog morphs into a shameless plug for a new publication, with a topical link to the The King's Speech glorious Oscar successes. Until that point, here is at least the veneer of something less self-serving.

Some years ago Savills and Strutt & Parker had 'location experts', trained surveyors and estate agents working in the usual way for 95% of their time, but occasionally helping a home owner whose property was to be used in a film. Typically the help was negotiating a fee and ensuring production crews did not take liberties with the fabric of the property.

In those days, the houses used were large period ones and requests from production companies were rare because camera equipment was clunky, TV plays were often costume dramas, and only fiction programmes were ever shot on location.

Now things are very different. Cameras are tiny so can be used in small rooms in ordinary homes. Period dramas are not the only show in town - despite the success of The King's Speech - so grittier dramas are more likely to use council flats and suburban semis than country piles. Factual TV programmes now also use locations, and hundreds of newspapers and magazines use residential property for photo-shoots.

It's hardly an everyday event but these days thousands of homes each year are used by production companies with home owners earning anything from £250 to £5,000 a day for obliging.

Yet bizarrely those estate agency 'location experts' have gone. The individuals have retired and have not been replaced - selling properties at today's prices, I guess, can be so lucrative that negotiating with a production team on an owner's behalf is simply not cost-efficient.

It would never be a big earner, but it's a missed opportunity for estate agents. However, for any home owner considering using their property in this way, or any estate agency or developer wanting to diversify into this field, there is now the first ever guide to the subject.

'Putting Your Picture In The Frame' explains what homes may be selected and sets out pros and cons of using location agents to bring properties to the attention of photographers, TV and film production teams. It explains the fees you could earn, talks you through how to negotiate with production companies, and explains exactly what happens when the cameras, the catering trucks, the Best Boys and the Key Grips arrive.

There's a forward by the locations manager of The King's Speech (and sumptuous illustrations of the sets used in the film) and the entire publication draws on the experience of Sarah Eastel, Britain's leading locations agent. I have written it with Sarah, and it has been turned into a downloadable PDF, available just in time for the Oscars. Details of how to buy it are here or you can click on the link at the top right of this home page.

There, I told you this blog would become a plug. And I warned you it would be shameless, too.

If you would like to to comment on this article, click HERE to e-mail Graham.

Buying Agents Slog It Out For Central London Exposure

2011-02-20T07:23:00.003Z

I often lament the southern bias of property coverage and how online and print property features concentrate on top-end homes rather than ordinary ones - a necessary evil, to draw in readers who would prefer to see posh homes than basic ones.

An interesting by-product of this is the rivalry between buying agents, or more specifically between PRs representing buying agents. It’s mostly a friendly rivalry but we are at the point where it is getting much tougher for any buying agent to get substantial coverage.

The reason is this.

By my count, 16 full-time active buying agency companies operating in central London have PR-representation. There are also some ‘non-aligned’ individuals with good links to property journalists - from Phil Spencer to estate agents ‘informally’ offering buying advice - pushing the number of ‘buying experts’ available to the press to about 25.

This figure rises to about 40 because larger buying agencies allocate two or three people to speak with us hacks, in order to ring the changes.

On the one hand, 40 ‘voices’ is small compared to the total of buying agencies in central London. The others neither want nor seek press attention. A few simply cannot afford it (exceptional PRs charge £3,500 or more a month, with no guarantee of coverage, although most charge a lot less).

But 25 buying agencies and 40 individuals working within them, all competing for publicity, is very substantial given the few outlets for their comments.

The Times’ Bricks and Mortar and the London Evening Standard are both dominated by central London stories but the others give much less space to the subject.

In the past year most national newspapers and top-end lifestyle mags with property pages have run soft features explaining how buying agents work so these will not be repeated in the near future as editors like to avoid repetition (honestly, they do).

As buying agents rarely provide case studies to humanise stories - their clients are not the sort to pose for press photographers - all that may be left is for these agents to comment on the top-end markets; there are only ever a few such stories running at any one time.

In other words, there are more and more buying agents trying to get a slice of what is a fixed-size media cake - and it’s a tough job for the PRs representing them.

If you would like to to comment on this article, click HERE to e-mail Graham.

Read All About It! (If you're in southern England)

2011-02-14T08:06:00.002Z

News is about the unusual, and readers believe that as much as editors. “No one hurt today” and “No change in Middle East dictatorships” are not the headlines that will sell papers nor set the heart racing amongst people thirsty for something interesting.

But should our national newspapers’ property sections be quite as ‘unusual’ as they are?

I studied the big sections this weekend. Odd property stories pop up in many places but I am talking of the property pages of the Saturday and Sunday Telegraphs, the Friday and Sunday Times, the weekend FT and the Friday issues of the Independent and Daily Mail.

Leaving aside the celebrity tittle-tattle, the interiors and lifestyle pieces and generalised market comment, and of course completely ignoring advertisements, this is what I found:

- There were 45 stories, of which 35 were largely or wholly about properties or trends in the south of England, and only two about the north of England or Wales. The remaining eight were largely or wholly overseas property stories;

- Some 63 individual properties for sale featured in those stories, either because (very rarely) a story was about an individual home or, more typically, the story was about a trend and it used homes to demonstrate the point;

- Of those 63, only six were new-build or very modern and the rest were older - usually much older and typically ‘picture postcard’ type homes;

- Prices of the 63 properties ranged from £60,000 to £6.8m and the average was no less than £1.03m (by way of a benchmark of quite how untypical this is, today’s Academetrics index shows the average price of a home in the UK to be just over £221,000 or about 20% of the average you find in a property supplement).

Now as journalists often believe, but rarely say, these figures actually prove nothing at all. A different weekend’s property sections would produce slightly different results, I am sure. But there are some trends:

- While some papers have Scottish, Irish and Welsh editions (in which a few homes from those areas feature) it is hard to justify the southern English bias of the papers overall - it is far greater than sales of the newspapers in question, for example;

- A popular shout from PRs and developers in the new-build sector is that property sections under-represent their product, but in my analysis they get 9% of the homes featured...in excess of the share of sales taken by new-build homes;

- Homes featured are wildly more aspirational than actually affordable. That voyeuristic approach to how the other half live and buy, makes property an interesting subject to many. But whereas the motoring pages, for example, will test drive a Mini as well as a Bugatti Veyron, the property pages stay resolutely upmarket. In our current times, I'm not sure that's the right thing to do.

If you would like to to comment on this article, click HERE to e-mail Graham.

Remember The Other Side Of The Coin

2011-02-09T08:43:00.003Z

There are two sides to every story, but so often we hear only one - not because of prejudice, but because of influence. We are seeing this now with media coverage of the expected interest rate rise, likely to happen sooner rather than later.

Many estate agencies and mortgage lenders (actually just a few thousands in total) have public relations teams to exert influence on the media, while the amorphous group of people known as ‘savers’ (actually many millions) do not.

Therefore we hacks frequently receive press releases talking up the ‘problem’ and ‘risk’ and ‘fear’ of rising interest rates - which are detrimental to the PRs’ clients - even though those same interest rate rises will presumably be welcomed by savers, who have no press releases to let us know how pleased they will be.

This influence is apparent in all papers, no matter how much they might hope to rise above it. See the headlines in the Mail (here) and in The Independent (here) to see the consensus which this influence creates.

The same principle applies, only more so in my opinion, to the coverage of house prices.

RICS and the NAEA and individual estate agents talk up the market with very effective press releases; developers reassure us that they are in good corporate shape ‘despite’ falls in the prices and volumes of the homes they build. It is all one side of the coin - the side that says rising prices and sales are good news, period.

Don’t get me wrong. As a home owner and a (very) amateur landlord, I hope property values appreciate and interest rates stay low. These would be in my interest. But that in itself does not make it a balanced statement of benefit to everyone.

What if frustrated young people who cannot afford a deposit, or people who just want to rent and never want the hassle of owning, had their own PR machines? We might just see this kind of story...

“The housing market got a boost today from the double whammy of falling prices and rising interest rates. The National Association of First Time Buyers says the 2.1% drop in average house prices announced by the Nationwide meant more single people would consider buying their home, while a spokesman for the Association of Responsible Lenders claims the 1% hike in interest rates would encourage savings and, in turn, allow more funds for mortgages....”

You see - there is another way of looking at things, even if it's not the one which suits those with the publicity budgets.

If you would like to to comment on this article, click HERE to e-mail Graham.

London - Not Quite What It Used To Be

2011-02-06T12:12:00.001Z

There is bad news for the central London estate agents enjoying a post-coital cigarette after the orgy of coverage for One Hyde Park: the property swingers have left Blighty, possibly for good, and are now on the other side of the world.

The Candy brothers’ creation is surely the Deep Throat of Property Porn - an instant provocative hit, highly fashionable to support, but destined to look tame very quickly. The same might soon be said of central London’s residential market if research by Savills is indicative of future change.

The agency has compared and contrasted prime central London with prime areas of three other global cities - New York, discussed in this blog last week, Moscow and Hong Kong.

And guess what? Prime London is neither the most expensive nor the location with the strongest recent growth.

Savills uses a ‘basket’ of seven typical properties and says homes at the very top-end of the market - the sort bought by a global CEO, for example - would typically be £6,353 per square foot in Hong Kong and ‘only’ £2,990 in London. For the record, Moscow is £2,574 and New York bottom on £2,365.

Over the past five years this CEO-style property would have risen in value by 47% in London but 148% in Hong Kong.

The shift from London to Hong Kong is not restricted to this uber-top-end world. Savills also looked at the sort of property a management executive would buy - in prime London it would have appreciated 26% in the past five years, but by 92% in HK.

“As short a time ago as 2005 the costs of accommodation in each of the cities looked broadly similar with Moscow a bit of a bargain. By the end of 2010 Hong Kong and Moscow are considerably more expensive than London and New York is the bargain” says Savills.

Some in Britain may want to turn back the clock - even down to wanting traditional accents for estate agents, if recent reports are accurate - but what if the shift of property price growth from London to the likes of Hong Kong heralds a long-term trend?

Interestingly, Savills refers to London and NY as ‘old world’ and Moscow and HK as ‘new world’. Future analysis, which may include the likes of Mumbai and Rio, may also show London ‘strong but fading’ compared to some of India and Brazil.

In property, as in much else, Britain may have to find a new role in a changing world. And that may well be hard to swallow.

If you would like to to comment on this article, click HERE to e-mail Graham.

What About A TripAdvisor For Estate Agents and Developers?

2011-01-31T07:44:00.006Z

(Even if you don’t agree with everything I write, I hope you enjoy reading this frequently-updated blog. If so, please vote www.propertynewshound.com in this poll promoted by Primelocation here. Thank you)

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There has been a spate of recent stories about social media democratising the process of reviewing and critically analysing everything from prostitutes to theatre plays, and restaurants to hotels.

This story, and this one, give a flavour of how established (and establishment) reviews are being outflanked by people using Twitter and Facebook as well as TripAdvisor and the like.

So as a logical extension of this, why are there no serious online public reviews of the performance of estate agents, developers, buying agents, surveyors (and, yes, even property hacks) in their roles as servants of those selling and purchasing homes?

One or two sites have been tried (market commentator Henry Pryor had a go in 2005 with this one for estate agents, and now there is a rather low-key attempt by another former estate agent with this one here, which perverse;y tries to get agents to pay to be rated).

But there is no industry-wide ratings service, free-of-charge and recognised as a service to the public. Why?

Is it because no one wants it, or because the public is happy with how the residential industry performs? Personally, I wouldn’t put money on the latter.

The creation of such a site would immediately win widespread public attention - often a good thing for an industry as a whole, if not the individuals in the eye of any particular storm. Perhaps best of all, it would at least make the industry LOOK more accountable.

No one suggests it should supplant the role of the Ombudsman, let alone any more powerful arbitration service which may one day exist. But it would make the buying and selling business modern and the give the public a voice where it often feels powerless.

If you would like to to comment on this article, click HERE to e-mail Graham.

Manhattan - A Prime Market, But Not As We Know It

2011-01-27T18:54:00.007Z

You may think New York's residential market, particularly in Manhattan, would have more than a passing resemblance to prime central London. But that is not really the case, as I found out at an interesting briefing by Stribling, the top-end realtor which also operates as the Savills associate in NY.

For a start, 75 per cent of Manhattan households rent (in what is in some cases a highly regulated rental market) and only 25 per cent privately own.

Of that privately owned sector, a meagre one per cent of properties are townhouses, 25 per cent are condos (privately-owned apartments, roughly as we know them in the UK) and a whopping 74 per cent are co-ops. Technically, co-op owners buy not the individual flats but a share in the whole block (the larger their apartment, the bigger their share).

Co-ops are cheaper than condos (an average of $900 per square foot as opposed to $1150) and critically the co-op board must approve buyers, who have to reveal their full financial position and personal details - a lot more transparent than some transactions in the UK. There are also limits on the proportion of a purchase price that can be made with a mortgage, so buyers typically must place big deposits. Many investors do not even try to jump through these hoops and some others who at least try get turned down.

As a result, the number of units effectively open to investors to buy is relatively small, resales are relatively infrequent, and prices are kept under control as a result. There are also far fewer overseas buyers - about 15 per cent of purchases in prime Manhattan, compared to 50 per cent or more in prime central London.

In q1 2008 (the peak of the market pre-Lehman Brothers' collapse) there were 55 sales of properties costing over $10m; in Q4 2009 there were just 18 sales over $10m; in the third and fourth quarters of 2010 combined, there were just 25.

The relatively high regulation of sales, and the fact that most people rent, mean that prices do not move sharply. After Lehman's collapse, average Manhattan prices dropped 25 to 30 per cent, and the very top end luxury sector dropped a shocking 30 to 50 per cent.

But much of tha fall has been recouped now, and US realtors clearly believe the fact that greater regulation and more controls keep their market imore stable than London's.

I suspect London agents would dispute that. After all, prime cental areas have bounced back well from the downturn. But Manhattan realtors clearly think the long term stability and less outrageous prices are ensured by these controls. How interesting, then, that the cultural centre of free enterprise has more regulation in its housing market than does London.

In the month that a flat in One Hyde Park goes on sale for £140m, it does make you wonder whether the UK, and not the US, is now the home of the Wild West.

If you would like to to comment on this article, click HERE to e-mail Graham.

How To Help The Next Rosie Dyer

2011-01-25T08:21:00.004Z

For every buyer of a One Hyde Park footballers’ wives apartment, there will be a hundred others - no, a thousand or possibly tens of thousands - like Rosie Dyer.

Her story is here and shows how, before late 2007, many reasonable people thought house prices were going to rise inexorably to provide a future pension. Journalist may well have encouraged this belief, for even if we never explicitly wrote that sentiment we often joined in the razzamatazz about The Cube and similar schemes.

Her story is not unusual. I’ve done many pieces (like this one) about off-plan buyers' original mortgage offers being sharply scaled down by lenders just as schemes complete and contracts oblige payment. The purchasers are left high, dry and very possibly bankrupt.

Whose side should we be on?

Developers make the entirely reasonable point that in the first half of the last decade, when the values of new schemes rose between off-plan sale and completion, buyers did not offer to share their windfall. So when values move in the other direction, why should developers have to share buyers’ losses?

That seems compelling to me. Tough love, but plain common sense, with the added element that it is what contract law says, too.

But should the buy-to-let phenomenon have been regarded as 'investment' and not mere 'property'? Should it therefore have been regulated, not in the way that house sales are supposedly regulated through the likes of the Property Misdescriptions Act, but in the way that share dealing and ‘pure’ investments are regulated?

Five years ago the more ebullient developers and estate agents, and their publicity machines, were very pleased to describe bricks and mortar as an “asset class” and to compare its performance against pure investments such as FTSE-100 movements. If that era returns, then perhaps future Cube-type schemes - they are basically upmarket Turkey Twizzler flats aimed at landlords - should not be regarded as homes but as investments.

Then, perhaps, discussions about such schemes by agents, developers and journalists alike would have to cover possible losses and not just “inevitable” gains.

If you would like to to comment on this article, click HERE to e-mail Graham.

Hurrah! Are Price Indices On The Ropes?

2011-01-19T18:56:00.006Z

Within a few weeks, house price indices will be in the news.

I am not referring to yet another story about the latest tiny price movement - there will be one of those any minute - but instead, who prepares what indices, when and how.

In the snowy days before Christmas an under-reported 52-page document was issued by the National Statistician, Jill Matheson (it’s here on the NS website). The accompanying press release was interpreted as saying Matheson wanted to merge the Land Registry and Department of Communities and Local Government indices. She did, but her report went much further.

For Matheson’s ambition is not merely to save money by rationalising the ‘state funded’ indices, but to create such an authoritative index in their place that most of the other current 20-plus ‘private’ indices become effectively redundant too.

If she succeeds, many people will cheer - and I will be one of them.

The downturn has shown that the plethora of indices from government, lenders, professional bodies, estate agents and many others are more confusing than enlightening. Vendors and buyers in particular can be misled, thinking the price of every property everywhere moves in line with the last well-publicised index finding.

The blame for the confusion (I would say this, wouldn’t I?) is surely with property industry players who create these rival indices. Many of them are statistically robust but serve little purpose other than concoct publicity for the company sponsoring the index in question.

Interestingly, Matheson’s report specifies only six non-government indices that she clearly regards as the most important - the others do not get even a name-check.

A few national tabloids and lots of local papers (the latter reliant on flattering estate agents to keep their advertising) often create misleading stories based on one set of results, and of course that is daft - but it is equally absurd to blame the press entirely for today’s mess.

Papers will inevitably report figures issued with a fanfare and a big PR budget, even if they do not represent the long-term trend: to suggest papers should do otherwise is like saying they should not print the result of one football match, but only the end-of-season league table.

If agents and developers believe too many indices confuse issues, then stop contributing data to the minor ones and stop producing their own. If they do so now, they may be saved the embarrassment of having their figures being rendered useless by the National Statistician’s new all-embracing index - she promises to give details before Easter.

If you would like to to comment on this article, click HERE to e-mail Graham.

In Praise of Barratt Homes

2011-01-13T07:49:00.004Z

The debate over the loans-link between Barratt Homes and Hitachi has been fascinating.

Some of the criticism of it has come from predictable quarters - look at many of the comments on the Guardian/Observer website here. There are some 'pro' comments, too, but the majority outweigh them.

But on Twitter and Facebook, some enthusiastic free-marketeers who normally embrace any private sector initiative (sometimes it seems without thinking) have been critical or at least sceptical. In a world where Tesco sells homes, Ikea builds them, and Sarah Beeny markets them, why is it strange that a company such as Hitachi, already with diverse interests, should not get into loans? It also seems odd that house-builders with links to 'establishment' mortgage companies are praised, yet one linking up with an unexpected (but respected) name from outside the industry, gets criticised.

I am just a journalist and report all this, but it strikes me as a coup for Barratt Homes. I am not talking about the product itself - it looks rather like an old-style 95% mortgage, with the risks sometimes involved in that, although this is somewhat cheaper and perhaps safer than parents remortgaging their own home to raise a deposit for their offspring.

No, my praise is because Barratt Homes is thinking outside the box.

There is little more depressing each day than receiving, as I do, many press releases from estate agents, builders, brokers and pundits 'demanding' that finance institutions lend more. Few put forward a cogent argument as to why, they just 'demand'.

What marks Barratt Homes out from the rest is that instead of just paying a small fortune to a PR company to issue a press release blaming the banks, the press or the government, it has done something to address the issue.

If you would like to to comment on this article, click HERE to e-mail Graham.

Housing - Coalition? What Coalition?

2011-01-10T16:58:00.006Z

The by-election in Oldham and Saddleworth on Thursday will not mean much in the long-term, but it will be the first short-term public verdict on the performance of the coalition.

I say ‘public’ because in private there seems plenty of verdicts already being drawn up.

Vince Cable and his colleagues made it quite clear what they thought of many Tories in the Daily Telegraph’s sting operation; likewise there are rumblings on Conservative benches about too much ground being given away to Lib Dems on Europe and civil liberties.

But where is the coalition, and where is the comment, when it comes to housing?

It strikes me that Eric Pickles and Grant Shapps, both amongst the more strident of the Conservatives in government, are carrying out their party manifesto to the letter without any apparent concession to the Liberal Democrats. There has been the occasional mutter of concern about housing benefit reform from Lib-Dem deputy leader Simon Hughes, but he has fallen silent since taking a coalition role to market higher fees to poorer students.

This ‘one party, no compromise’ approach to housing contrasts actively with the give and take we are told happens in most other parts of government.

We have had a series of Conservative manifesto housing promises honoured, such as:

- reducing expenditure on housing benefits;
- scrapping of regional planning processes and housing targets;
- relaxation of small-scale planning regulations;
- introducing development incentives and veto powers for communities;
- promoting self-build as a major component of overall house building.

But where are the Liberal Democrat promises? They may have not been to the property industry's tastes but, in every other department, such promises have been at least taken into consideration. I'm talking about ones like:

- keeping Home Information Packs;
- reducing or scrapping Right to Buy;
- a mansion tax on homes worth £2m and above;
- building “tens of thousands of affordable homes to rent”;
- introducing VAT on new homes;
- controlling the numbers of second homes through planning powers.

No doubt Liberal Democrats will say their influence has changed the coalition’s housing policies in the past eight months. But if you read the Conservative manifesto for the 2010 election, it looks very much like the list of initiatives we have seen since May.

Do the Lib Dems not care about the issue, or do they now agree with the Conservatives?

It clearly matters little to Oldham and Saddleworth voters as polls suggest the party most likely to win is Labour - which has said next to nothing about housing since the election. Housing, it seems, is something most parties simply aren’t interested in....

If you would like to to comment on this article, click HERE to e-mail Graham.

Don't Believe Everyone You Read

2011-01-05T17:14:00.006Z

Everyone's got an angle, as Bing Crosby famously once said. And on social media, where increasing numbers of influential public debates are taking place on major issues, that makes for a lively time.

Anyone joining in property-related discussions on Twitter and Facebook, or any of the various property chatrooms and blog forums, will know what I mean.

Growing numbers debate everything from house price indices to the performance of Grant Shapps, from housing market snapshots to the latest sustainability trends in construction; the people who take part range from the interested observers to high-profile industry professionals.

What makes these debates useful is that we know peoples' angles. Much of the criticism of Grant Shapps in recent weeks, for example, has come from professionals keen to see a 'booming' housing market - estate agents, mortgage lenders and the like. We know who they are on social media as they identify themselves, thus allowing the rest of us to judge: 'they know what they're talking about' or 'they would say that, wouldn't they?' That is what makes the social media debate so useful.

However, I am indebted to property PR firm Luchford for this. It is a piece from PR Week reporting how the Office of Fair Trading has criticised a firm for not saying its social media blogs and posts were sponsored.

There are a very few property PRs who use Twitter and Facebook this way, trying to surreptitiously influence debates and polls, claiming to be neutral 'individuals' but actually working for firms whose products they subtly plug through their comments. Over the Christmas, one tried to 'debate' with me - until I discovered she was a PR subtly plugging her firm's activities.

This contrasts with the very professional PR firms like Foundation PR and Edelman, which ensure references to their clients are often accompanied by (client) or some similar way of identifying their background. It is easy for them to do, and it allows us to judge what weight to give to the comments.

I have spotted this problem only twice on Twitter, but the PR Week article suggests this trend may grow. Wouldn’t it be a good idea if everyone using social media to debate major housing and property issues was similarly upfront and straightforward? They could still have their angle but the rest of us would know those views were honestly held, and not put forward just because someone was paying them to plug an opinion or a product.

If you would like to to comment on this article, click HERE to e-mail Graham.

Localism's Design Silver Lining

2011-01-01T18:18:00.003Z

A New Year visit to Cornwall has proven surprisingly uplifting.

The place, people, food and walking were great but most encouraging was a realisation that the government's Localism concept may produce something useful - better design for new homes.

I am not talking of top-end new build houses, constructed by thoughtful niche developers who ensure their homes adopt local vernacular designs with locally-sourced materials. These homes are already looking good.

No, I am talking of identikit designs from many volume builders, looking the same wherever they are in Padstow or Preston, Bodmin or Basingstoke. We all know the names of the culprit companies.

There is little more depressing than driving through Newquay, for example, and seeing new flats (many unsold, by the way) in blocks which look just like those in city centres around the UK. Many Cornish village outskirts are similar - no attempt is made by builders to match local stone, the shape or density of nearby homes, or to give a sense of local 'place'.

Instead it's just more of the Turkey Twizzler school of 'design' thrown up, with excuses like planning constraints or density targets used as a cloak when anyone dares to suggest this Lego approach to house-building is actually selling us all short.

So might Localism do the country a favour, by making communities look closely at house builders' proposals and exercising the critical
judgement on design which our planning committees seem not to have exercised in recent years? If improved design then becomes one of the only ways of a builder getting consent, then design will indeed be improved.

If builders really want to build homes, they might be obliged to use local materials and employ architects to make the homes look like modern versions of the surrounding communities, rather than just one of the standard eight templates that some volume firms have for the entire UK.

If locals are as NIMBYish as most experts predict, this might be an activity where builders are forced to be a little more imaginative. That would be good for Cornwall, and good for everywhere else, too.

It would really put the Local in Localism.

If you would like to to comment on this article, click HERE to e-mail Graham.

Here's To 2011 - Or A Load of Crystal Balls?

2010-12-23T09:42:00.005Z

I try to stick to reporting, not punditry, but as it is the holiday season here are some property-related themes I forecast we should look for in 2011. We have all read the experts’ views on the sales and rentals markets and prospects for interest rates, but I’m talking about broader industry-wide subjects. Here’s to a good year.

LOCALISM
A blog entry by Richard and Graham Cherry on the Countryside Properties website, perhaps lost in the noise and snow just before Christmas, was the clearest sign yet that volume builders are thawing in their opposition to the coalition’s localism line. It is unlikely that developers – historically big Conservative supporters – will keep up their distaste for Pickles and Shapps throughout the next 12 months. But it will be 2012 at least before there is evidence that the government’s policy will produce more new homes (or not).

INDICES
In the latter stages of 2010 there was a lot of criticism of the old indices – the ones from mortgage lenders, websites and assorted bodies which found that a monthly figure about prices proved a low-cost method of getting their names in the papers.
Such criticism will grow further in 2011 and expect some indices to fall by the wayside instead of more localised, nuanced data. A recommendation to merge the DCLG and Land Registry indices was poorly reported just before Christmas, but we should expect this to be implemented before the spring.

NEW THINKING
Two agents tell me they are going to adopt radical new sales techniques in 2011 – one in particular is going to market some top-end houses at show-jumping events, golf tournaments and music festivals. If we have left the era of believing there will be a ‘recovery’ (because the current market may be as good as it’s going to get for some years) these innovative sales techniques may take off, and rapidly.

PARTY POLITICS
The coalition may go one of two ways – or possibly different parts may go in different directions, and not for the first time. Firstly, its leadership may further plans to fight the next general election on a joint ticket; secondly, its back benchers may become troublesome in a fiercely partisan fashion to ensure the parties are separated in the eyes of the public in time for any future national vote. Either way this will put the spotlight on Labour to come up with some (indeed any) clear housing policies.

SOCIAL MEDIA
Expect at least some of the more establishment names in estate agency and house building to get wise to social media in 2011. There are seminars arranged for some big London-based players in the first quarter of the year, to explain what it is and how it works and – critically – what they are missing in brand and marketing terms by continuing to stay aloof. Watch this space.

If you would like to to comment on this article, click HERE to e-mail Graham.

Are Corporate Estate Agents Too Stuffy For Twitter?

2010-12-20T08:06:00.006Z

It is one year this week since I started using Twitter to help with my work as a property journalist and, by coincidence, one of my last stories of 2010 has been a road-test of property apps useful to house buyers.

The connection between these two? Well, both have shown me that many estate agents find it genuinely impossible to exploit Twitter's and apps' communication potential.

Until my apps story is published (in the Sunday Telegraph in the New Year) I cannot give too many details of its contents. But suffice to say that while several estate agents have developed apps which beautifully present their instructed properties, with the odd map and floor plans and that commonly-available clever GPS function, no agent appears able or willing to go any further with content.

Their apps lack the non-advertising information useful to house hunters, like estimated values of nearby houses or recent sale price data or thorough background about locations. All this and much more appears on apps produced by property portals and a few apps created by entrepreneurial individuals cashing in on new technology, so it can be done.

Likewise those big name 'corporate' estate agents on Twitter (usually via a PR or marketing office) operate in what can only be described as a stuff-shirt way, which seems very counter productive. They advertise the odd house or plug their latest research reports, but again do little else.

There are notable exceptions, of course, and I admire the way they as individuals have combined a 'corporate image' with modern-thinking use of Twitter.

But in social media - relying on informality, banter and the occasional exchange of opinions and information - most corporate estate agents simply appear too straight-laced and formal to take part effectively.

All this is unsurprising, perhaps, although no one seems to point it out.

Corporate institutions in long established industries like property tend to be slow to modernise. A wariness of social media and unwillingness to maximise information on apps are both entirely predictable from companies which still think the proper thing to do is to have shop front premises, corporate bases in central London and in most cases heavily male-dominated boards and attitudes.

When I started using Twitter I was very sceptical of it but it has created business for me - and it makes work more interesting, too.

Surely the big corporate agents, with very large marketing and PR budgets, can find a way of maintaining a corporate image but loosening their ties enough to compete with more modern-thinking players in social media and the like?

Perhaps that will be a theme in the year to come. On the other hand, when I joined Twitter a year ago I thought the big agents would have cracked it in 12 months but today they seem as formal and old school as ever.

(PS - before anyone says it, there are very few property journalists on Twitter too...but that's another story, coming up on this blog shortly).

If you would like to to comment on this article, click HERE to e-mail Graham.

Localism: 2014 And All That

2010-12-13T19:28:00.002Z

Distaste for the Localism concept has been well-articulated by many developers and property industry consultants, some politicians, and a lot of councillors and council officers. The same arguments are likely to be repeated now we have a Localism Bill.

Assuming the measures become law, however, how might they look in, say, 2014?

I ask the question and use that timeframe, because if Localism does not achieve one of its key objectives - ensuring more homes are built - it is likely to be radically revised in the year leading up to the next general election, probably in 2015.

So how might Localism look by 2014? A few thoughts:

- Parishes and wards, most now electing one to three councillors to district and county authorities, will likely have created their own ‘community’ or parish councils to initiate, agree or respond to others’ suggestions for new homes. There will be elections and councillors;

- Political parties, which hitherto avoided parish councils to concentrate on more powerful district and county authorities, may do a volte-face and get involved at parish level because that is where the decisions are made and elections are held;

- The newly-empowered and possibly highly-political parishes will want experts to give professional, financial and legal advice when decisions are made. Is it not possible the councillors will then employ their own parish council planning and parish finance officers?;

- There might inevitably be rivalry between parishes, even adjoining ones, so these uber-local councils will be reluctant to share administrative teams or professional officers employed as they become larger and busier;

- The old district and county councils, meanwhile, will probably conform with the old adage that work expands to fill a vacuum. So, without districts and counties being abolished, they may remain in place.

You can see where this is leading, but I suspect you might agree that the scenario I spell out is not an impossible one – and probably not even an unlikely one.

If it all comes to fruition we could end up with the following:

- a local voice through parish councils but with a bureaucracy, a party political edge and a rivalry with neighbouring authorities, just as we have today with districts and counties;

- a total of three levels of local authority (parish-district-county) instead of the two which we currently believe to be duplicating and wasteful;

- empires being built by ambitious parish councillors, leading to slow decision-making and flip-flop policies because representatives are worried about their next election, just as district and county councillors are now.

Am I just a cynical hack in painting this picture, disregarding the undoubted enthusiasm of Grant Shapps and others who insist they are determined to avoid the mistakes of the past?

Well, I probably am. But let’s see what’s happening in 2014.

Oh, and let’s see how many new homes have been built.

If you would like to to comment on this article, click HERE to e-mail Graham.

'Recovery': Is This As Good As It Gets?

2010-12-08T06:54:00.006Z

I’m writing a story about the US real estate market and have thought the unthinkable – that American house prices, now on the floor in many areas, may never recover.

Not many websites well-known to UK readers promote homes in the US – American realtors and developers recognise that these days few people on this side of the Atlantic can afford to buy overseas homes. But if you have a look through www.primelocation.com, www.findaproperty.com and in particular www.propertyshowrooms.com you will see some starting prices.

There are plenty of remarkably expensive homes in prime addresses, of course, but far more are remarkably cheap. Many have 70% reductions on prices expressly stated – and that, presumably, is just a starting point for negotiation. Many homes (apparently in reasonable condition) can be bought for £10,000 or far less.

That, of course, is what a free market does: has homes for tens of millions in the same country as those under £10,000. The latter are in areas with wider issues, such as a sharp loss of industry and/or multiple repossessions in the same streets. But can those cheap homes ever recover to the levels of their 2005 peak prices?

The Lombard Street Research consultancy clearly believes that may be possible – it now says overtly that US house prices may never return to those 2005 levels, the first think-tank to say the unsayable on the subject.

Has the psychology of the US now changed so fundamentally that just as Americans accept there are always homes costing £60m or more in prime waterfront locations, and in the best parts of Manhattan, so there will always be dirt cheap homes too?

Have people simply ‘got used’ to those cheap prices, just as they have to sky high prices for other homes in other locations? If they have, does that sentiment mean such bargain-basement values will never significantly rise again…just as prime property prices may never significantly fall, even in a recession?

Sentiment, so British property wise-heads say, moulds what happens in the market. If so, is there a risk that the UK will do the same?

You will be hard put to find a £10,000 home in the UK but plenty of houses and flats are stubbornly sticking at their 2006 prices, perhaps a little below, and certainly with no sign of rising noticeably higher. A poll by the curiously-named discount website MyVoucherCodes showed that of 1,721 people aged 16 to 21, some 58% believed they would never ever own a home.

Perhaps that sort of market is what we, too, have grown used to. Perhaps there is no appetite for prices of ordinary properties to change.

Psychology is important in the property market. Perhaps we need to stop talking about ‘recovery’. Instead, perhaps we have recovered. This, as they say, may just be as good as it gets.

If you would like to to comment on this article, click HERE to e-mail Graham.

Why The Housing Market May Regret England's Failure

2010-12-02T16:12:00.004Z

There is a silver lining to England's failure to secure the 2018 World Cup: at least there will be no bid to boost the housing market with over-optimistic claims of lettings bonanzas and wild hype about the joys of living near football stadia.

One optimistic estate agent in the west country was already advertising the merits of living “within earshot of Plymouth Argyle” – amazingly, one of the grounds scheduled to host matches had England won its bid.

The Olympics have given us quite enough of that sort of over-promising, surely.

While many people may have bought new east London flats in the (quite plausible) hope of making a rental killing during the 2012 Games, the reality is that afterwards they will be amongst thousands of other buy-to-let landlords striving to find tenants in Stratford. Even £3,000 a week for a chunk of summer 2012 won’t cover the new home premium the buyers will have paid to the developers.

But there is one more sober reason why the property market should regret the 2018 decision – the lack of investment that will occur as a result.

Perhaps the only infrastructure improvement budget left wholly untouched by the coalition’s spending cuts is that of the Olympics; Cameron is honouring the spending pledged originally by Brown.

If the World Cup had come to England, one can imagine comparable levels of spending but – unlike the Olympics – this would have been seen in a number of locations around the country as well as just London and the sailing centre of Weymouth.

There would have been tangible benefits to the transport, hotel and event facilities in Birmingham, Manchester, Bristol, Liverpool and – yes – Plymouth. Those benefits would have been a boost to these local housing markets, too, which are already lagging behind the capital in terms of recovery.

Now those tangible improvements are unlikely to be made and the ‘facilities’ gap between the provinces and London will get wider. That, perhaps, is the real reason why the housing market should feel sorry about the 2018 World Cup decision.

If you would like to to comment on this article, click HERE to e-mail Graham.

Why London Isn't The UK

2010-11-24T22:03:00.003Z

The votes are in and have been verified and the results are ... well, almost unanimous when it comes to the property industry experts whose predictions for 2011 have graced this blog in recent weeks.

Most seem certain 2011 and 2012 will be muted at best, or more likely involve price falls across the mainstream market; almost everyone believes UK-wide transaction numbers will be depressingly low and mortgage availability as bad as today.

There is even stronger agreement that London, especially its prime areas, will see gentle rises next year and more spectacular rises thereafter.

Given that disparity between London and the rest of the UK, is it not time to stop the increasingly implausible claim that some industry insiders make that central London’s housing market fortunes ‘ripple out’ to other parts of the country? They say that what Kensington sees today Cornwall sees in a year’s time, and Kinross a year after that – but is that really the case?

For surely now there is such a unique, atypical market in central London that it operates in an entirely different orbit to that of the rest of the UK?

Unique factors include the high proportion of overseas buyers in much of prime central London, its much higher proportion of cash buyers and concomitant smaller number of mortgaged properties, the City bonus culture, and of course the extremely high prime purchase prices.

These factors are replicated in almost no other part of the UK, except for tiny enclaves of the Home Counties where international or prestigious private schools attract clusters of similar buyers to those who inhabit central London.

If the UK has more unemployment, higher tax, lower spending and therefore fewer housing transactions next year – exacerbated, perhaps, if interest rates move up – then almost every economist suggests these will have much less effect on central London than on Greater London or the rest of the country.

In other words, Planet Prime continues to do well because its drivers are not just different at the moment, but will be different for the foreseeable future. Therefore while it is good news that central London is doing well, it has almost no direct influence on how the rest of the country’s market performs.

The sooner that is accepted – including by those journalists who short-sightedly use central London as a symbol of the wider housing market – the more accurate and relevant our coverage of property issues will appear.

If you would like to to comment on this article, click HERE to e-mail Graham.

2011 And Beyond - Two Years Of Price Falls, Warns Carter Jonas

2010-11-23T14:07:00.003Z

Another estate agency is warning of two years of price falls in the mainstream housing market across the UK.

Carter Jonas, which specializes in mid- to top-end properties in the country and London, says there will be a 5% fall in average prices next year “as job losses intensify”.

Catherine Penman, the firm’s head of research, then says there will be more bad news: “With austerity measures and public sector cutbacks set to firmly take hold over the next year, UK house prices are expected to fall further in the short-term.

Inevitably, isolated bubbles of activity will buck the trend although overall we predict a fall in values of circa 3% in 2012.”

Like several other agencies, Carter Jonas foresees the emergence of a multi-tiered market. The top end generally, especially in London, will continue to do well thanks to a lack of reliance on mortgage lending and at least some overseas buyers.

“’Best in class’ product is currently achieving in excess of 2007 prices although potential purchasers remain very price sensitive and there is a widening price differentiation between the best and the rest. Pricing will become increasingly sensitive as we move into the seasonally busy spring market and we anticipate London house prices to increase circa 5% during 2011” explains Penman.

Carter Jonas has not hitherto been a forceful ‘pundit’ of housing market activity, and this high-profile prediction for the next two years is a welcome move, especially as it is so forthright.

The firm merged with Drewett Neate in May 2009 and is still rationalizing its staff and offices – it has revamped its marketing and PR, and promises further news on new offices next year.

If you would like to to comment on this article, click HERE to e-mail Graham.

2011 And Beyond - Hamptons' North-South Warning

2010-11-21T13:00:00.003Z

An interesting trend of this winter’s property forecasts is that the estate agents and even a few developers are generally more pessimistic than some of the business consultancies – in past years, it has been very much the reverse.

Hamptons International is the latest to fall in line with this trend: it says mainstream house prices will drop 4% across the UK but top end markets will do rather better. So Greater London will be up 3% on average, prime central London up 5%, and the wider south of England (roughly the region where Hamptons operates) will stand still, so at least avoiding the falls which the firm implicitly predicts elsewhere.

Like Savills, it says quite overtly that there will be a North-South divide – London and the Home Counties will be bolstered by £7 billion of City bonuses, while the north will be more vulnerable to the coalition’s austerity measures as it has a large public sector. Hamptons does not specify what will happen in the Midlands, northern England or Scotland, but says the markets there will remain “subdued”

The agency echoes the industry consensus that the private rental market will continue to prosper “although improving yields should encourage investors to increase the supply of rental properties” cautions Hamptons’ new head of research, Adam Challis.

Although he declines to forecast beyond 2011, Challis says wider economic indicators – such as Standard & Poor’s saying Britain is now unlikely to lose its triple-A credit status – suggest the outlook is more optimistic in the longer term.

However, Hamptons refers to continued mortgage constraints preventing the market to return to “a normal level of transactions”. In this regard it deviates from Savills and some other property industry analysts who believe the current level of transactions has now become ‘the new norm’.

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2011 And Beyond - JLL Joins The Doves

2010-11-18T23:05:00.005Z

Jones Lang LaSalle is a familiar name to industry anoraks, less so to mere mortals in the outside world. But that is because many of JLL’s activities are below the fold, helping developers find funds to build homes, advising housing associations or regeneration bodies on residential market prospects.

The firm is therefore a big cheese – it just seems like a small player to the less well-informed.

Its analysis of 2010 is standard enough: it anticipates prices ending the year much as they started, with autumn and winter falls negating spring rises. It also warns that new homes completions are 11.4% down on 2009 levels.

But its forecast for the years ahead bucks the trend amongst property insiders.

Buoyed by a surge in new home starts (up 56.6% on the admittedly-shocking level of this time in 2009) JLL believes house prices across the UK will fall an average of just 1% next year before three successive years of healthy rises. London, almost inevitably, will perform even better all round.

Where JLL does agree with other analysts is in its perception of a north-south divide. Despite the rosy UK-wide picture, northern England and the Midlands will rise only 3% in 2012 and 7% in each of 2013 and 2014. Contrast that with southern England, rising 7% in 2012, 11% in 2013 and another 8% in 2014.

JLL is also working with the The Digital Property Group on mapping sale prices in Greater London on a price per square foot basis. Outer London is routinely about £300 to £500 per square foot while central west London – the Kensington, Chelsea, Notting Hill, Holland Park areas – fetch £1,300 to £1,500 and some exceptional properties up to £1,950 psf.

As ever, when it comes to central London there appears to be little in the way of a downturn.

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2011 And Beyond - Jackson-Stops & Staff Speaks Up

2010-11-17T08:02:00.006Z

The Jackson-Stops & Staff estate agency punches below its weight, in media terms. It rarely gives data on the market, has no real 'centre' because it is a franchised operation (or ‘democratic consortium’ as it describes its structure) and employs low-key PR.

It’s hard to believe it has 40 UK offices, is 100 years old, bravely opened three offices during the current downturn and sells homes in six overseas countries. Yet it is relatively rarely quoted in media pieces on the market.

But its prediction for 2011, especially of the country house market, is interesting.

Most of its sales are at the middle- to top-end. Many agents selling in this country sector say what happens in central London (where most agree the market is strong) ripples out to the rest of the UK but Jackson-Stops & Staff takes a more sober view. Its prediction for next year says:

- “It is no longer possible to see what the London market is doing and anticipate the effects rippling out to the country. Properties at all levels are going to be price sensitive”;

- 2011 will begin as a “mover’s market” with demand and supply roughly in balance;

- A small minority of country houses may attract international interest and these may see 5% price rises. “South east England is no longer the only key hot spot” it says, suggesting a few posh areas Wilmslow may see a London-like price surge;

- But most country houses will not enjoy that rise. “There are some regions and sectors of the market which could still see a drop of 10% in the coming year as a result of the austerity measures”.

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North-South Divide - This Time It's Real

2010-11-14T10:27:00.006Z

It now seems to be universally recognised that public spending cuts will have an effect on the housing market for some time to come.

This will take two forms. Firstly, individuals whose families are largely reliant on breadwinners in the public sectors will be far less inclined to move house given the uncertainty over jobs and pay; secondly, some regions will inevitably suffer more than others.

It’s easy to fall into the glib journalistic cliché of a North-South Divide but, well, that’s what we have.

The figures below, produced by the Office for National Statistics and Oxford Economics, and collated by Savills, tell the story.

The ‘£’ figures are average weekly salaries, and the ‘Public V Private’ column shows where public sector employees earn more, or less, than private sector counterparts.

The '% Public’ column shows the proportion of the workforce employed in the public sector, and arguably therefore more directly vulnerable to spending cuts than those self-employed working for private companies.

But we know that in a relatively small country like the UK, with such a relatively large public sector, many in the private sector will also be reliant on public sector contracts.

In other words, everyone will be squeezed. But as these figures show, some will be squeezed more than others - and it will be those outside London and the south east.

PRIVATE V PUBLIC SALARIES (£/week and %age public v private)

Northern Ireland: 380 v 488 (public pay 128% of private)
(public sector = 29% of workforce)

Wales: £397 v £436 (110%) (24% of workforce)

North East: £406 v £435 (107%) (23%)

Yorks/Humberside: £428 v £427 (100%) (21%)

North West: £442 v £439 (99%) (21%)

West Midlands: £441 v £437 (98%) (21%)

Scotland: £461 v £450 (97%) (23%)

East Midlands: £450 v £430 (95%) (18%)

South West: £441 v £414 (94%) (19%)

East Anglia: £473 v 428 (91%) (18%)

London: £714 v £597 (84%) (18%)

South East: £529 v £437 (83%) (17%)

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2011 And Beyond - Here's A Surprise...

2010-11-10T08:14:00.004Z

These days every almost economist appears to deserve the name ‘Dr Doom’ although many have been accurate in their predictions of the housing market.

The latest forecast for 2011 therefore comes from the Centre for Economics and Business Research – and ironically it is the most optimistic of the predictions released so far, including many covered here from within the housing industry itself.

CEBR says average prices will rise 2.2% in 2011 and will rise 16% in the next four years – enough, probably, to mean that bricks and mortar appreciation will be positive even after taking inflation into account.

“House prices may not move much during 2011 but they are likely to rise significantly in the following three years” says CEBR chief executive Douglas McWilliams (right).

Critically the consultancy believes mortgage approvals will rise – by as much as 50% on current levels – by 2015.

The CEBR says the Bank of England is “highly likely” to follow the US in introducing more quantitative easing, leading to a reduction in the cost of borrowing and an increase in mortgage lending as a result.

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2011 And Beyond - CBRE Keeping It Real

2010-11-07T19:53:00.002Z

CBRE is the latest residential industry player to use its 2011 forecast as an opportunity to break bad news - that the downturn in transactions, building volumes and values is now more like a long term trend than a short term blip.

The company, perhaps little known to casual property observers because it is not a high street agency, is better recognised as a consultancy for developers. But its research department, although small, is well respected. It says for next year:

- transaction levels seem stuck 25 per cent below old long term averages;

- 2010 price growth will dwindle to 0% by Christmas;

- 2011 will see unquantified "moderately declining prices";

- the mortgage shortage will worsen under FSA regulatory changes;

- the private rented sector will grow because of affordability and accessibility issues in the sales market;

- it remains "uncertain" whether the coalition's espousal of market rents in the social sector will indirectly create enough homes to compensate for the £2bn capital cuts it announced last month;

- there remains worry over a double dip recession.

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2011 And Beyond - Savills Changes The Rules Of Forecasting

2010-11-04T14:30:00.004Z

The estate agency Savills has come up with new ways of forecasting the housing market for 2011 and beyond.

Instead of average price movements across the country, separated into 'prime' and 'mainstream' and perhaps with a few regional variations, Savills has introduced a far more nuanced assessment. The agency also paints a picture of a fundamental shift in market structure - it no longer assumes we are in a temporary blip from the 'normality' of 2000 to 2007, but are instead in a permanently slower market.

The details:

- transactions remain low, about 56pc of peak, and will stay that way;
- 53pc of private housing stock is mortgage-free or low-mortgage, and the vast majority of house moves are within this category;
- cuts and unemployment will hit the market harder and for longer than expected;
- mortgage restraint is lasting longer than expected and will never again allow large scale kending of the type that fuelled the market between 2004 and 2007;

- Savills says prices of different property types in different locations will perform in different cycles. The agency uses commercial-style categories of Grade A (best in class houses); Grade B (the mainstream bulk); and Grade C (low-end, possibly best measured by rental yield rather than very low or negative capital appreciation);

- Savills then says examples of the A, B and C homes can be seen in three different types of location, which are Prime, Secondary and Tertiary;

- Although unfamiliar to many residential market onlookers, this presents the kind of fine grain of analysis that estate agents have asked the press to report on. In other words, it stops the illusion of 'one market' and instead factors in location, property type and tenure to a far greater degree than done before. If property journalists pick this up, it will allow a better understanding of the factors that contribute to house values than current 'too broadbrush to be useful' indices;

- Savills says mainstream house prices will not return to their 2007 peak until 2016, making this a decade-long slump. Grade A examples in prime and secondary locations may, of course, appreciate more and sooner, while Grade C may not get back to peak even for years beyond that;

- Prime central London prices will return to peak in 2012 (of course many of those Grade A examples have done so already) while prime properties in the regions, particularly south east and south west England, will be back by 2014;

- There will be a large, and growing, gap between north and south of England.

This has been a long blog but it's an important subject. At the launch of these predictions I sat next to a property editor, fairly new to the business, who said his predecessor had commented that if there was one event in the year to go to, it was the Savills annual forecast seminar. Expect it to set the agenda in the next few months.

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2011 And Beyond - Cluttons' View

2010-10-30T13:11:00.004+01:00

A series of forecasts for next year’s residential market will be made this month – first out of the traps is Cluttons, one of the lower profile estate agencies but with a research department well respected by many who know it.

Its forecast is:

• Mainstream sales market will see small falls in early 2011, then stabilising in the second half. 2011 prices will end just 0.1% off their starting point;

• Average mainstream prices will rise 4% in 2012 and 5% in each of 2013 and 2014.

But (and remember I’m advising people to look beyond headline figures to spot the underlying sober stories about the market) Cluttons also identifies a series of risks which may throw its apparently-cheery statistical forecast off course:

• Spending cuts – “it is possible that the impact has been understated”;

• The ability of the private sector to provide more jobs - “the extent to which this occurs in the short term is questionable”;

• Monetary policy – Cluttons expects more quantitative easing in 2011 and says this may provoke higher-than-expected inflation;

• Lending – this will remain tight and the agency reminds us of why there will be no significant increase in lending shortly, namely “the upcoming need for financial institutions to repay various support schemes”;

• Global issues – another ‘Ireland’ or ‘Greece’ could have severe implications for the UK banking sector and could hit “the central London residential sales and lettings markets which are aligned to the fortunes of the financial sector.”

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Forecasts for 2011: What To Look For

2010-10-28T11:37:00.003+01:00

Next week sees the start of the annual round of property analysts’ forecasts: many big name agents and consultancies will give predictions for 2011 by mid-November.

Their views promise to be the most interesting for several years, although you will have to look behind the headlines to see the really compelling material.

Most stories will ‘only’ be about analysts’ uniform gloom about the national housing market in 2011 (most will say prices will dip a little) and uniform optimism about London and the upper end of the market (where prices are expected to remain roughly stable). But the real interest will lie in analysts’ longer term views.

Look out for these trends – their delivery by agents’ research departments may be rather hidden, as they will be reluctant to be the bearers of bad news:

• Some will hint that we are now in a world of low or no capital appreciation for the indefinite future;

• There will also be hints that forecasting models now assume lending will be no easier in the long term as in the past two;

• Many will suggest that transactions may not ever return to anything more than 60% or 65% of the levels seen in 2006 and 2007;

• There may be new ways of looking at, and measuring changes in, the housing market in future – much more segmented, regional and local.

In other words, although they may be wary of being so forthright, the pundits will really be saying what we have seen since 2007 is not a temporary blip at all but the ‘new norm’.

The property have-lots will continue to have a little more, as they will use their equity to leverage mortgage lending; the property have-littles will probably have slightly less. The property have-nots will stay that way.

So the really, really good times are not only over for now - but over for good. Watch for that message, although you may have to look between the lines to see it.

Propertynewshound will carry the pundits forecasts as they appear.

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Can Germany Teach Us A Lesson?

2010-10-25T11:38:00.002+01:00

I’ve just been on a lightning-quick but highly informative visit to Berlin and the trip prompted two key thoughts about how different the German market is to Britain’s.

Firstly, as has often been written, most German residents rent and do not own their homes. In Berlin the situation is extreme, a result of the city being divided until 1990 and until then spending 30-plus years surrounded by East Germany; therefore only 15% of homes are owner-occupied. However, even after two decades of reunification and capitalism, the O-O total across the whole of Germany is still only 47%.

In recent years many have speculated about whether Germany will “be more like us” in the future but the owner-occupying trend does not seem that popular. As British owner occupation levels dip for the first time in over 30 years and young people are increasingly saddled with university debts – so will be unlikely to buy homes – so perhaps we will become “more like Germany” rather than the other way round.

The second big thought is how Germany has decentralised its wealth and industry, so has avoided one location dominating all others.

The car industry for example (still big business in Germany) is in Munich and Stuttgart; some administration remains in Bonn; media are in Cologne and Hamburg. Berlin is big and enlarging but is not the single area where wealth is concentrated.

Residential wealth reflects that. Look at these contrasting figures:

BERLIN (city population 3.275m)
Average prime resi rent: 11 euros/square metre
Average prime resi sale value: 3,500 euros/square metre

HAMBURG (1.69m)
Average prime resi rent: 13 euros/square metre
Average prime resi sale value: 5,200 euros/square metre

MUNICH (1.19m)
Average prime resi rent: 17 euros/square metre
Average prime resi sale value: 7,000 euros/square metre

COLOGNE (0.97m)
Average prime resi rent: 10 euros/square metre
Average prime resi sale value: 3,500 euros/square metre

FRANKFURT (0.65m)
Average prime resi rent: 15 euros/square metre
Average prime resi sale value: 4,900 euros/square metre

The capital, Berlin, is by no means most expensive for sales or lettings because demand, status and the importance of location are more decentralised. Contrast that with the UK where London dominates every other major city by some margin.

Is the German example good or bad? The answer depends, I suspect, on your viewpoint…and whether you are one of those benefiting from London’s current dominance of the UK market.

But whetever one’s opinion it is interesting to see successful ‘old’ western economies which have different housing models to ours, whether by intent or happenstance. With Britain starting a huge cultural change towards bricks and mortar, driven by a mix of mortgage restrictions and coalition cuts, that provides food for thought.

I was in Berlin to see a very swanky new scheme – YOO Berlin (being marketed in the UK by Cluttons Resorts, 020 7584 3050, www.cluttonresorts.com). Even at the very top end, with prices going from £250,000 to over £2.5m, most early buyers are investors, including some from the UK.

So paying millions for a property doesn’t mean it is going to be owner-occupied: that’s an interesting thought as Britain embarks on a period of housing change.

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Government to Homeowners - Do As We Say, Not As We Do

2010-10-18T11:11:00.006+01:00

I’ve written some daft property stories and the likelihood that such schemes and ideas will disappear thanks to our public spending cuts will be no loss to anyone.

There were the buy-to-let houses near one of Moscow’s ring roads offered to British investors via mortgages with a cool 11% interest rate – and Britons bought them, too.

There was the time when a Dubai developer’s four PRs harassed me (admittedly in a rather swish bar) for saying there may not be enough demand amongst British purchasers for their never-ending construction programme of flats and villas.

In 1994 I was told by a (now moved on) partner in a top-end estate agency that buy-to-let flats at Clarence Dock in Leeds had architecture worthy of “an eighth wonder of the world”. It was described by an architecture expert only this month as “a load of blocks” which sums it up rather more accurately.

Aside from the genuinely rich, very few Britons will have the money – and almost none will have the mortgages – for such indulgent investments in the next few years. The era of the amateur investor taking a punt on a property with a carelessly-researched loan has gone, probably for good. Few will mourn the loss.

Yet the coalition’s relish to protect us from ourselves, financially at least, appears now to include saying even our very ordinary homes, as well as investments, should not be treated as our pensions. Grant Shapps’ words last week - “‘People should think of homes as a place to live rather than a pension” - could not be interpreted any other way. There are pros and cons to such a view and this blog is not talking about that genuine debate.

But is it legitimate for a government which never mentioned this view in the past to do so now, without putting it to the public? Isn’t it ironic that a government minister who is championing ‘popular votes’ on local housing development should now be telling people from the top down to change their attitude to their own homes?

This is not a defence of the indefensible – the speculators and flippers (and sometimes the MPs) happy to make money by doing nothing with a property except see it rise in value, and as a by-product deny first time buyers an affordable home.

But this is a defence of millions of ordinary people who were encouraged by Thatcher, Major, Blair and Brown that they could – if properties value rose – enhance their future prospects this way. More fool the public if they believed prices were always going to rise, but if values did go up…why not use the appreciation to help in later life?

Has anyone seen or heard a speech from a coalition politician, before the election, saying how inappropriate it was for ordinary people to do this?

There was certainly no mention from Chris Huhne (five buy to let properties and counting according to this report) nor from Grant Shapps himself (who has done very nicely from property, thank you, according to this story).

Is it not time for the government, now almost 10% through its term in office, to be more nuanced in its approach to property?

Not everyone is a speculator although almost everyone, with good fortune, lives long enough to be a pensioner.

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Will Labour Be Serious On Housing?

2010-10-13T21:16:00.005+01:00

Is Ed Miliband’s Labour party going to take housing seriously?

It is, of course, some years too early to answer that question definitively. But after 13 years when housing was seen as a trivial matter, there are signs that Miliband’s new generation is taking a different approach.

For a start, the shadow Communities and Local Government team is led by a former housing minister, Caroline Flint. She was hardly in post long enough during the Gordon Brown government to make any significant impression – like so many ministers, she was moved from pillar to post as the dying New Labour tried to refresh itself every few months with a reshuffle.

In addition, she effectively now has two shadow housing ministers working in her team. The first is Alison Seabeck, who carries the formal title Shadow Housing Minister; in the past Seabeck has worked alongside then-Housing Minister Nick Raynsford, and she represents a seat (Plymouth Moor View) with a genuine range of property issues from dreary council estates to affluent pockets of private housing.

The second minister is Jack Dromey (formally called Shadow Minister for Communities and Local Government) whose will also cover housing as part of a broader regeneration brief. Dromey has a gritty constituency, Birmingham Erdington, and is a brand new MP although one with a reputation as a street fighter from his previous decades of trades union and Labour Party activities.

The proof is in the pudding but it is just possible, after effectively dropping housing as an issue of any importance, that the experience of these new personnel means Labour is changing its spots. Housing might be on the agenda again.

If this is the case, it is happening at a critical point.

Not only is the Comprehensive Spending Review and its effects going to influence the housing market for years to come, but the first signs of impatience with the Coalition are appearing from the usually pro-Conservative property industry.

The Home Builders Federation insists it still needs more “clarity” from the government on its planning and local incentives programmes. A prominent London estate agent, Ed Mead of Douglas & Gordon (an agency that has donated to the Conservative Party) has tweeted: “Not sure this coalition has any ideas at all to help housing/property”. Meanwhile a columnist in the Daily Mail calls Grant Shapps "this foolish housing minister" and reveals how much the MP has already made for himself from property - an asset which he now says is not an investment.

All this is a mere aperitif before the housing politics which will follow October 20's spending announcements. It’s clearly going to be an interesting few years – and Labour may have woken up just in time to play a part.

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Let's Not Flash The Cash

2010-10-11T12:56:00.007+01:00

In a free society – well, free-ish – there is nothing anyone should do about stopping people saying how much they earn or what bonuses they receive. But is it not time for the property industry to be a little more sensitive on the subject?

As a country we are undoubtedly in for difficult times and there is no secret being made by government that many people will have sharply reduced standards of living.

Yet one top end estate agent awarded its partners an average of £600,000 each a few weeks ago – up from £169,000 a year ago and announced via press release just before the agency sent out a letter to journalists, amongst others, saying that the country would not be getting any richer in the near future. Great timing.

The firm’s structure meant it had little choice but to announce the bonuses. However, it could have chosen to award smaller bonuses, or none at all, but instead chose to make a statement about its affluence in a time of recession for most others.

Loadsamoney attitudes like this are not restricted to the big agencies. London’s property industry is, in many areas, awash with money and even some small firms appear unafraid of people knowing how well off the industry has become.

A modest Kensington estate agency has sent me a notice saying a maisonette going on sale this week will carry “a £2,000 negotiator bonus” and that the launch breakfast will involve all business cards put into a hat “and one successful negotiator will win a magnum of champagne.”

It’s hardly the scale of the £600k bonuses, let alone the much-hated bankers' bonuses, but the tone is not exactly in tune with Britain’s mood at the moment.

Some property players are more canny: just before last Christmas King Sturge announced that its partners had given up half their remuneration in the year to April 2009 so it could be used as working capital.

Now like all journalists I’ve had my share of gratuitous hospitality but, as always, it is a matter of judgement about what is acceptable and what not. In journalists’ cases, we have to appear neutral and objective despite the schmoozing; do top-end property firms not have to appear at least a little sympathetic to the wider population’s circumstances?

Of course the irony is that most property insiders are extremely hard working, highly skilled and not conspicuously well off - most agents outside of south east England could only dream of £2,000 bonuses let alone £600,000 windfalls.

David Cameron made it clear that the Conservative party conference, for the second year running, should not be ostentatiously celebratory; official champagne receptions were off the agenda, for example.

As October 20 looms, would it not be a good idea for the property industry top brass to follow that sort of advice?

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There's More To Research Than House Prices

2010-10-07T14:15:00.006+01:00

If Countrywide’s John D Wood agency wanted to generate interest in its house price index for prime central London it has succeeded – perhaps not for obvious reasons.

This week I’ve been contacted, off the record, by agents from three rival London agencies about the JDW figures, available here. The trio were all critical of the volatility of JDW’s findings which suggest that, at different points this year, some parts of central London saw average rises of 30%-plus over the preceding 12 months. At other times, some areas saw similarly dramatic year-on-year falls.

Many central London agents say some individual homes did indeed have year-on-year rises of 30% (or even higher in exceptional cases) although most believe these values are now falling back. But of many agents I have spoken with, none believes the average rise or fall is as typical as JDW suggests; in particular they say this ‘switchback’ of big rises and big falls does not seem right.

A good comparison is Knight Frank. The firm never knowingly underselling house prices and even its latest index puts prime central London's average rise at about 15%.

As with any index, the methodology is all. “Our indices use pounds per square foot from the date of exchange and this can be a month or two after terms are agreed” says JDW’s head of valuation, James Wyatt. JDW feeds its data through LSE and Oxford academics and Wyatt is insistent that the end result is “statistically bullet-proof”. He is generally dismissive of other agencies whose more measured results for prime central London merely express “agents’ sentiment rather than real figures”.

Like most journalists – and, I bet, most agents and surveyors – I am not qualified to comment on the appropriateness of the methodology nor the validity of the results. But, as with all things property, there are other things going on behind the scenes.

Hamptons – Countrywide’s recently-acquired agency, seen by many as targeting a similar market as John D Wood – has just appointed a new research person and it may be that JDW wants to be seen as its own boss in this activity, so is choosing a very individualistic approach to its research. This may be just in case Countrywide tries to pool some resources across its many different brand names (as is rumoured to be happening early in 2011).

In any case, research as a discipline is being looked at very closely right now. In some other agencies there are concerns that research departments may produce the ‘wrong’ results in the current mostly-pessimistic market. One top end national estate agency recently decided not to publicise one of its research reports, which showed – in a North Korean-stylee – the ‘wrong’ predictions for the market.

This has not been a worry to Savills’ large research department, nor the more industrial research teams at CBRE and Jones Lang LaSalle, which have all been forthright at publicising the bad news as well as the good news. Journalists have loved them as a result – agents have been less enthusiastic, at least sometimes.

In the meantime, what do we make of the JDW figures? They show a 32% increase in prime central London in the year to the end of September. I don’t know – I’m only a journalist. Do they seem right to you? Or do they just demonstrate that research can mean whatever you want it to mean, so long as you ask the right questions?

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Is Anyone Shouting For Housing?

2010-10-03T10:44:00.003+01:00

Who is arguing the case for more spending – or at least fewer cuts – on housing?

There is no difficulty recognising who is shouting the case for defence. The ‘leaked’ document showing the opposition of Liam Fox to significant cuts plays to the hefty pro-spending lobby in the MoD and tries to create what social scientists call ‘moral panic’ in the country, fearful for our national security.

A similar game is being played by Britain’s police. A series of high profile claims that spending cuts will increase road deaths (through reduced use of speed cameras) and street violence (through fewer of those bobbies-on-the-beat that we hear about) have created sympathetic headlines. Surely we cannot cut the services that keep us safe?

Even Ian Duncan-Smith, charged with bringing down a burgeoning benefits budget, has put up a rearguard action. Despite rumours to the contrary, a deal was hard to reach within Cabinet on the size of benefit cutbacks. It was only days ago that IDS said he “simply doesn’t recognise” savings outlined by Chancellor George Osbourne.

When it comes to money for homes, however, there has been a deafening silence. Who is standing up for this?

Eric Pickles and Grant Shapps may tweet about their latest TV appearances but so far have apparently remained conspicuously quiet about budgets. They undoubtedly know their housing brief extremely well – possibly far better than all 10 housing ministers in the last Labour government combined – but they still remain silent.

Perhaps there have been heroic, unleaked struggles behind closed doors, and we simply have not heard of them.

Perhaps Pickles and Shapps have said they need funds, for quangos or councils, to regenerate secondary town centres. Perhaps they say they need a budget for land for the “army of self builders” that Shapps hopes will defy the economic mood music and construct thousands of new homes. Perhaps they have called for money to be allocated for more low-cost housing built by local authorities or housing associations.

Perhaps, perhaps, perhaps.

Of course, the politicians gathered in Birmingham this week can point to a similar silence from the property industry itself.

The Home Builders’ Federation, a few consultancies and the odd developer have raised eyebrows over the ‘localism’ initiative but few have actually put their heads above the parapet and called for more help for the industry.

The public sector bodies connected with housing are even more trappist. Sir Bob Kerslake of the Homes and Communities Agency was an obvious spokesman to put the case with authority and respect. But guess what? From next month, he will be on the coalition government’s payroll – so let’s not expect waves from him.

So who is there, in government or in the industry, who will stand up in Birmingham and ask the simple question: what is the government doing to provide for a population judged to require two million new homes in the next 15 years?

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Right To Buy At 30: Facts and Figures

2010-09-28T11:12:00.005+01:00

In the next few days we’ll be reading about Right To Buy, the policy allowing council tenants to buy their flats or houses, with a discount. It was introduced by the Thatcher government in October 1980 so its 30th anniversary will spur a lot of press comment.

The policy has fallen in popularity recently because most of the best council homes have long been sold off and, of course, because of the recent mortgage famine. Only 4,600 were sold in the financial year 2009/10, so there will be few changes to the overall figures below, compiled last year by the HSBC bank:

• Since 1980 councils have sold off 50% of their five million flats and houses;

• The sell-off bought in over £85 billion, most of which went to central government because of restrictions on council use of capital receipts;

• Owner-occupation in Britain was 57% in 1980 and is about 68% today - most of that rise is thanks to Right To Buy;

• In 1980 one third of all British households were in council flats and houses – now it is 12% with an additional 7% in other forms of social housing;

• In 1980 the average price of a council property bought by a tenant was just £15,528.

Here is the regional breakdown:

All Britain: 2.35m sold at average discount of 49%

Scotland: 440,000 sold at 55% discount

North west England: 212,000 at 45% discount

North east England: 156,000 at 44% discount

Yorkshire: 204,500 at 44% discount

West Midlands: 215,500 at 45% discount

East Midlands: 163,000 at 45% discount

Wales: 136,000 at 46% discount

Eastern England: 185,000 at 46% discount

London: 290,000 at 45% discount

South east: 204,000 at 47% discount

South west: 139,000 at 48% discount

Thatcher's policies were nothing if not divisive, so inevitably there are different views over Right To Buy.

A study by Maarten van Ham of the Centre for Housing Research at the University of St Andrews shows that RTB owners rarely move and, because their neighbourhoods are no longer council-owned and managed, they may suffer worse social problems than before.

"The right to buy has given many households access to home ownership but not to better places. The buyers were social renters to begin with, and for a reason. They have less money than most people, find it harder to get a mortgage and now cannot attract buyers for ex-council homes which are unpopular," van Ham says.

"The buyers are now trapped. They have too little money to improve their properties and are unhappy where they live. In a downturn this sector – the poorest – is hit badly. Many struggle to even keep their homes from repossession," he adds.

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Will Ed Miliband Make Housing A Labour Issue Again?

2010-09-25T19:32:00.005+01:00

The months and years ahead will show whether Ed Miliband has any real interest in housing. Like all politicians he can speak about it as an issue, but there is little evidence that it is a passion of his.

Perhaps the best insight into what he thinks is in Labour’s (losing) manifesto from the May election – Ed M wrote most of it, although of course its final form did not necessarily reflect personal views. There were two major elements - here and here - and in summary those elements say:

• Labour wants everyone to have “a decent home at a price they can afford”;
• Exempt homes below £250,000 from stamp duty, until at least 2012;
• Continue with Social HomeBuy for “working families” and “working people”;
• Spending £7.5 billion by late 2011 to build new 110,000 houses;
• Allow councils to build up to 10,000 homes a year;
• All new homes to be zero-carbon by 2016;
• Ending rough sleeping by the end of 2012;
• Regenerating “previously neglected communities”.

So far, so uncontroversial. With the possible exception of the council house building programme, those promises might as easily come from Conservatives or LibDems; and, of course, those policies are in any case set in a context of low house building volumes and a deteriorating housing market happening on Labour’s watch, anyway.

But that was then. Now with Ed Miliband as leader, will Labour change its approach to housing or even just show more interest in it as a subject?

If the answer is yes, he will have to get his party’s conference to discuss it first. The omens are poor. There is no formal debate on housing this week in Manchester, although some fringe meetings are about ‘localism’ and ‘housing poverty’.

This is odd given that housing has become a litmus test issue for the Coalition.

It has made everything from self-build to rough-sleeping a high profile issue; even policy fudges, like not revaluing residential property for council tax, has been turned into a positive with the “we want to help the poorer homeowner” mantra. Like them or loathe them, those Coalition politicians cannot be said to ignore homes, housing and property.

With most industry experts predicting housebuilding levels to tumble further as a result of NIMBY protests at local level, and quite a few expecting house prices and transactions to drop when spending cuts and tax rises kick in, property is set to be a major policy issue for the next few years.

Surely Labour cannot allow itself to continue to be outside such a debate. Over to you, Ed Miliband.

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Whatever Happened To Lib-Dem Housing Policies?

2010-09-19T08:04:00.003+01:00

My view of the coalition government is that, for good or bad, it is a one-sided affair. Looking at its announcements in isolation, without reflecting on who is involved, you may reasonably assume it is a ‘pure’ Conservative administration.

But if there is one policy where the Lib Dems have not rolled over completely, it is housing.

Of course the Lib Dem election manifesto housing commitments have been lost, seemingly without trace. Anyway, they were few and they were vague – 1.5m new homes without any substantial explanation how; a desire for more empty homes to come back into use; a call for local people to have more influence on second home numbers in their area; plus the whacky idea of putting VAT on new homes.

We haven’t heard much about these policies now that the Lib Dems say they are ‘in power’ and I doubt we will hear about them in the next four and a half years.

But there has been some Lib Dem sniping at the Conservative housing policies that have formed a surprisingly major part of the Coalition’s work to date. That sniping has been aimed at trying to soften the hard line, especially on social housing, that is beginning to emerge from the government.

Simon Hughes, Lib Dem deputy leader, wants council housing Right to Buy to be abolished in England as it has already in Scotland, and shortly in Wales. That’s not surprising – Hughes’ constituency has more council housing than any other constituency in England, and one of the most severe shortages of homes, too. Housing minister Grant Shapps has dismissed any prospect of even a review, although whether that was window-dressing to placate Tories who regard RTB as a sacred cow remains to be seen.

Likewise Hughes has spoken against David Cameron’s desire to end lifetime tenures for social housing tenants. And some Liberal Democrats at local level, where they know of the scale of housing shortages, have also spoken out loudly against the ‘localism’ planning ideas.

Grant Shapps, one of the Conservatives’ most able ministers today and far more interested in housing than most of his Labour predecessors over the past 13 years, will be at the Lib Dem conference.

It will be interesting to see if this is mere appeasement or whether the Lib Dems – who so far seem much more pleased to be in power than to actually use their power - will be seen to finally have some real influence at the Top Table. If it is the latter, some evidence may appear this week.

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At Last - A Holiday Home Resort That Really Matters

2010-09-15T07:47:00.003+01:00

International second home developments are fun for those who have them and lucrative for those who sell them. But they can scarcely be described as important – until, perhaps, now.

After several false starts, it really does look as if Cuba is going to permit a second home development with properties bought by foreign individuals. A recent real estate reform, reported here, paves the way for it to happen and this scheme – which I saw last year on a visit to Cuba and reported on for the FT – is likely to be the first on the island.

It is ironic that although it will make headlines because of its location, the scheme itself, called the Carbonera Club, is fundamentally no different from a thousand other second home resorts in other sunny destinations.

It has features which, in the usual jargon of property developers, are simultaneously ‘exclusive’ and ‘unique’ yet appear the same as at other locations – golf courses and a marina, flats and villas, club membership, and restaurants, bars and shops.

But what will make it unique is that, at first anyway, owners will be able to see an island in transition – from, I suppose, communism to some form of New Labour ‘third way’ as public services and the wider economy are gradually privatised.

I saw a little flavour of that when I visited the resort. Part of the trip was to see the island's only 18-hole golf course (just the first on many if the holiday home resort spurs future development). The golf-pro there was not only a great golfer but also worked part-time as a taxi driver and every four years - for quite a while, I think - had represented Cuba at the Olympics in various water-sports, too.

For good or for bad, that sort of thing makes Cuba genuinely different from the rest of the world, which usually looks identical from the viewpoint of a wealthy person on a lilo in the pool of a holiday home.

At the current rate of change (accelerating sharply since President Obama came to office and lit a blowtorch to thaw the frosty relations between the US and Cuba) the island of Cuba will, sadly, appear much like any other sunny idyll within a decade.

But until then Cuba will be a genuinely fascinating place for a holiday home – you will be able to view history from your poolside…and the weather and the food will be great too.

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