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Entries in July 2010
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Continuing with our series of summer interviews, we're delighted to have had the opportunity to chat with Merryn Somerset-Webb, editor-in-chief of Moneyweek, author, radio and TV commentator, and always a lively, interesting voice on the economy in general, and property in particular. Here, Merryn discusses who knows what, how our obsession with property damages the UK economy, and the worst financial decision of her life.
I’ve been doing a little research into your professional background (nothing stalker-ish… just a Google) and noticed you were a broker before you were a writer. Could you describe that period… what you were doing and why you moved into journalism? Do you think having a practical investment background gives you a better perspective as a financial journalist?
Yes. The one thing I know that not all financial journalists know is just how little most of the City knows…
You were early to warn of the impending property price bust in 2007, having been bearish on property – against the tide of opinion – for a while. Indeed, didn’t you sell at the beginning of the year and rent? What were the (most compelling) warning signs?
 We were recently looking through old editor’s letters and I'd say that back in 2001 I was incredibly bullish on property. I was really pleased to see it as it reminded me that I am not bearish just for the sake of it. That said, I was too early – I turned bearish in 2004-ish I think and even tried to sell my flat in 2005. Luckily no one would buy it and I was then able to sell in 2007. The warning signs then? Massive overvaluation, low and falling yields, whole city centres full of empty flats, ludicrous over-confidence, the signs of the beginning of the sub prime crisis in the UK…. We rented until last week when we moved into our new house. We have bought purely for family reasons – we want a longterm base. But I fully expect it to be the worst financial decision I have ever made.
Do we – as a nation – have a problem when it comes to property? Sometimes it seems as if we define our personal success by the entire false measure of how much our houses are worth. Is it time we separated our sense of home from our sense of wealth?
Read more, after the jump.
Technorati Tags: property, real estate
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Hamish Beeston, a film-maker with an impressive documentary TV background, spotted (in fact, helped establish) the market for “movie particulars”. And with experience in the wildlife documentary arena, he was well equipped to cope with the movers & shakers of the property market. Now running Beaston Media, he produces creative, big budget property films, using the high-end equipment normally associated with broadcast television. He chats with the Rat and Mouse about the advantages, challenges, nuts & bolts of the property film.
You’ve a proper TV background, I believe. Could you describe your work prior to getting involved in property?
 I was in TV for 13 years. As a producer/director, I made everything from primetime BBC1 shows such as Vets in Practice, Life of Grime and DIY SOS to big budget history and wildlife documentaries. Towards the end of my broadcast career, I started actually doing the filming as well directing, and found that I really enjoyed the hands-on craft element of filmmaking.
What motivated you to make the move? Did you always have an interest in the mechanics of the property market?
In 2005 I worked on a series for Discovery Channel called Superhomes, in which we travelled the world filming amazing multi-million pound properties. It struck me just how well video captured the light, space and spirit of a house, compared to a traditional printed brochure, particularly when filmed with high quality broadcast cameras and edited with a clear storyline.
At this point, several paths drew me away from broadcast TV. Firstly, I had become increasingly uncomfortable with editorial pressure to manipulate contributors for the sake of ‘drama’. Phrases such as ‘casting for conflict’ were heard everyday in programme meetings. By nature I like to celebrate a subject, not stitch it up. Secondly, at 35, I had an itch to start a business of my own. And thirdly, I’m naturally nosy (some might say obsessive...) when it comes to checking out cool houses and architecture. Being 6’4”, it annoys my 5’5” wife hugely that I can peer over walls to discover things that she is oblivious to!
So, in October 2005, the business was born, to produce primetime TV quality property marketing videos.
TV industry vs property industry. Which has the most sharks?
Read more, after the jump.
Technorati Tags: property, real estate
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Kicking off this series of summer interviews... Lucy Searle, property-obsessive-in-chief at Channel 4's 4homes website, on the crash, Brits and their homes, and a vacuum-stealing landlord.
4homes certainly gives the impression of being one of Channel 4’s busiest and most energetic offshoots. How long have you been working for them? How separate does it feel to the rest of the company?
 Wow, big question to start with! Despite its big presence and ever changing, informative and up to date content(!), we’re actually a tiny team. Jackie (Hillsdon) deals with the Channel 4 end – sponsorship, deal making and other stuff business-oriented - and I take care of the editorial – which is no mean task considering how many pages we have. Rich (Payne) and Emma (Jones) more than ably support me and also do all the On TV pages. And what I lack in technical wizardry, they more than make up for. I’ve been editing the site for about three years – before that I launched 4Homes magazine for Channel 4. As for how connected we feel to the rest of the company, we’re a tight knit team, but we certainly esteem those ladies and gents at on the 4Food and 4Beauty websites – and of course, we worship the ground that the 4Homes talent (Kevin McC, Kirstie, Phil, George, Sarah B and so on) walks upon.
Are you all property fanatics?
Well, I can’t speak for the others, but it’s the only industry I’ve ever worked in. Over the years, I’ve bought, renovated and sold lots of flats and houses, been a landlady and own a property abroad. So, yes, guilty as charged.
Describe a typical day.
I tend to start off with emails from the night before. We get a fair few from viewers asking anything from where Kirstie bought her tights to where in the country they should house hunt. Rich and I try to answer all of them – and I particularly love it when someone asks me for decorating advice. I give it and then sometimes they follow up with pics of their new room a few days later. After emails I’ll have a think about what I want to put up on the home page – I try to get a spread of subjects across the week and of course the lead feature is subject to seasonality and topicality, but often I just put up a feature that I’ve found really interesting and want people to see. After that, I’ll put up more new features, update old ones, edit copy, commission new features, speak to freelancers and occasionally get out to see PRs to spread the word about the site.
There’s been a sense that some of the 4homes shows didn’t just reflect the property price boom of the 2000s, but encouraged, perhaps even caused, it too. Is that fair?
Read the rest of the interview... including 4homes' reaction to the crash - after the jump.
Technorati Tags: property, real estate
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The Rat and Mouse is officially on holiday. (I can tell, because I've a burnt ankle, where I "missed a bit".) But that doesn't mean there won't be anything to read. Encouraged by good feedback from last summer's experiment, I've arranged another series of interviews. We'll be chatting with an entrepreneur setting out to prove there's never a bad time to launch a good property-related business; a top name at Channel 4's 4homes; an expert in the area where new media meets the property business; a property film-maker, no less; and one of the country's most controversial and compelling economics journalists and more. Stay tuned.
Technorati Tags: property, real estate
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No heating, no hot water in Elephant & Castle's Heygate Estate, as it approaches demolition... just 40 residents, including a man recently returned from hospital after a leg amputation. The man has apparently been begging the council to move him (it's a split-level flat), but he's been getting nowhere. More here.
Ferrier Estate - "hellhole" [May 31, 2006]
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Hats off to estate agents Marsh & Parsons for this innovative marketing initiative. Downloadable from the M&P website: three walking tours in the SWs (Balham, Clapham and Battersea), PDFs combing a map with interesting historical facts and illustrations, designed to take about an hour each. Drop into a the local branch to pick-up a free frisbee, and into partner cafes for a free cuppa. The tours are designed for potential buyers interested in the area... but probably work best for families looking for something to do at the weekend. Either way, Marsh & Parsons come away looking cool. "Love the area," they say. "We do." Download them here.
Technorati Tags: property, real estate
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MoneyMarketing has gathered a number of mortgage industry names who are concerned by the number of foreign cash buyers jumping on exchange-rate discounts and pricing Londoners out of homes. A spokesperson for Barclays:
I have heard about Japanese buyers viewing the London property market as down by 70 per cent on its value because of the price fall and the strength of the yen.
A number of interviewees also express concerns about money laundering... inherent in the nature of the cash transaction.
Technorati Tags: property, real estate
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A Sutton couple is in a war with Benson for Beds over a series of four mattresses that have apparently "collapsed" in a space of less than three years. Go here to read about how 18-stone ian and his cuddly wife Susan can't understand why the mattresses won't last longer.
Technorati Tags: property, real estate
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Starting with... what it actually is. A new survey by Reallymoving.com really suggests Brits are really ignorant about the realities of the property exchange. Thirty-seven per cent didn't know what "conveyancing" meant; 54% thought conveyancers organised the survey; 16% thought the conveyancer negotiated the price of the property on their behalf. Amazingly, that 37% who had no idea what conveyancing was only dropped to 23% when the poll was narrowed to include homeowners who've been through the process themselves. Reallymoving have published a guide in response... here.
Technorati Tags: property, real estate
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What? This is turning into counter-intuitive news day. But - according to the National Landlords Association - a fifth of landlords report having tenants three or more months in arrears during the last quarter which, while not a picnic, is an improvement on almost 25%, which was the figure in the first quarter of the year. And this despite average rents rising for the last five months, according to LSL Property Services.
Technorati Tags: property, real estate
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According to HMRC, 86,000 homes were sold in June, up 21% on the month and 15% on the year. We'd expect - seasonally - a busy month. We'd also expect sales to be up on the year, after 2009's very severe liquidity problems. Hold the cigar.
Technorati Tags: property, real estate
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More than 40 percent of homeowners seeking help from the Obama administration's flagship effort to rescue those at risk of foreclosure have dropped out of the program.
What does 40% translate to? More than half a million borrowers, apparently; and Mark Oracle (link above) has a good old laugh at the reason why. Apparently, the Government "pressured banks to sign up borrowers without insisting first on proof of their income"; and when the banks finally got around to the necessary diligence, they found they were dealing with sub, sub, sub-prime loans, in which borrowers weren't barely missing payments... they simply didn't have any money. The danger now, according MO, is a giant wave of foreclosures in the second half of 2010.
Technorati Tags: property, real estate
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Word is that Russell Brand's shifted his Hampstead Village home. No details as to the deal, yet. Meanwhile, Britney Spears' face looks like being a permanent feature in the giant wealth wet dream that is One Hyde Park. She's apparently bought an apartment there so she can reach out to her fans. For (an estimated) £20m she might have reached out and touched them more effectively by buying each of them a house. More here.
Technorati Tags: property, real estate
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A report commissioned under Labour but prudently swept under the carpet predicts worst-case repossession rates of up to 175,000 a year. Grant Shapps, releasing the report (no doubt panicked by the prospect of public sector job cuts pushing repo-rates under the Coalition toward that worst-case scenario) in an attempt to take take some of the taint off the current administration and hand it back to the opposition, assures us that they'll do everything they can to keep interest rates as low as possible for as long as possible. More here.
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There was, according to the OFT report, around £800 (or 0.4%) of wiggle room on the commission when selling a £200,000 property. That £800 wiggle room is almost the entire commission on a property sold via Spicerhaart/Tesco. Why would anyone choose to pay 1.5% (£3,000 on that same property), instead?One answer might lie in that OFT report.
Dissatisfaction with agents had been higher during the stronger market, when agents needed to do much less. An agent represents the vendor, but – on a practical level – serves each potential buyer. In the current economic climate, perhaps vendors feel more comfortable with a local “face”, in a local office, who’ll meet a potential buyer on a rainy Saturday afternoon and – if that’s what it takes – throw his coat over the puddle outside the doorstep to get the buyer inside and admiring the Jacuzzi.
Our publisher looks at estate agents' fees and asks whether it's time to negotiate, in his guest column for Citywire.
Technorati Tags: property, real estate
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According to Rightmove, asking prices have dropped for the first time this year - a sign, they say, of more than 30,000 homes hitting the market each week, but with supply failing to be met by either demand or mortgage credit. Asking prices fell 0.6% in the month. According to Rightmove's Miles Shipside, it's a buyers' market, and more falls are likely through the second half of the year.
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Mindful of how flames had destroyed a third of the largely wooden city, building with timber frames was banned in the years after Sir Christopher Wren's 1667 Building Act.
The story sounds remarkable. BRE had performed safety tests via a controlled conflagration in an aircraft hanger. The fire was contained, and a BRE apparently wrote a report saying so, which was seized upon by the UK Timber Frame Assocation. According to the BBC, however, the fire reignited in the early hours of the morning, fire-fighters returned, but couldn't contain the blaze, and were evacuated. What's astonishing is that while there were just hours between the initial blaze and the second, it sounds as if there were four years between the report and news leaking out of the second fire. There have been a handful of fires in timber-framed council blocks in recent years, and no-one appears to know how many remain.
South east London flat owners receive surprise New Year's gift [January 6, 2010]
How fire-retardent is your tower block? [October 2, 2009]
Technorati Tags: property, real estate
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So Lord Davenport's swimming pool - in his five-storey Portland Place mansion - gets filled with cocktails for guests to row across... in a Courvoisier-sponsored giant punchbowl party... and everyone gets excited. Call that hedonism? Hah, you're all invited to the next Rat and Mouse party, where the bath's filled with Thunderbird.
Technorati Tags: property, real estate
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According to the National Association of Estate Agents, the budget's put the scares on potential buyers, with the average number of property sold per agent dropping from eight to six during June. Vendors, too, are putting off decisions... with stock falling very slightly, from an average of 62 properties to 59.
Technorati Tags: property, real estate
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The bears might be vindicated... it could still be a while before house prices regain their 2007 peak levels. On the verge of the second dip, here's Zoopla with data showing that after 16 months of gains, the average house is still £20,358 off its November 2007 peak. Even in London (which is surprising to me) the Zoopla data shows house prices 16.1% of their peak. More here.
Technorati Tags: property, real estate
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Or, rather, they've bought Cainea Analytics, the company behind the Land Registry completion price data analysis site Mouseprice. This makes Mouseprice stablemates with Primelocation and FindaProperty. Congratulations, Selwyn. More here.
Technorati Tags: property, real estate
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A rise in supply and a dip in new buyer registration has knocked RICS members' confidence in the market, leaving a balance of just +9% reporting prices rises in June (compared to +21% in May). Expectations for the rest of the year slipped into the negative. More here.
Technorati Tags: property, real estate
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Once (part of) the home of John Adams, first UK ambassador to London and later the second president of the US, this Grosvenor Square three bedroom house includes Adams' music room (now the first floor reception room). Its central Mayfair location, its high-quality refurbishment, its courtyard garden and its special history make this a unique opportunity. The guide price reflects that... £8.5m, with Wetherells, particulars here.
If these walls could talk... chick lit edition [June 23, 2010]
Technorati Tags: property, real estate
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Second viewing with the kids on a house in the country my clients are dying to buy. I am not hopeful. It came on eight weeks ago at £3m, has been dropped to £2.85m, but my clients' piggy bank "only" holds £2.5m. "So, how are you finding the market?" I ask the fairly mainstream estate agent, who I know quite well. "You doing many valuations? Is stuff coming on?" "Yes," she tells me, "loads of vals and stock levels are looking much better than they have been." "Great?" I say, but she's not looking at all upbeat. "Well it would be but buyers just don't want to make a decision. The buyers are sitting on their hands... Truth is," she tells me sotto voce, "we can't flaming sell anything." I shall start negotiations at £2.3m.
Tracy Kellett runs leading buying agents BDI Homefinders. Follow her on Twitter, here.
Technorati Tags: property, real estate
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Apart from, of course, the violence in South Africa, yesterday's news was all about the Somalian asylum seekers daring to live in Notting Hill, in an £8,000 a month five-bedroom property near Stella McCartney. I'm naturally suspicious of this kind of a story - particularly when it's set against the background of tough economic times (which naturally breed resentment, jealousy) - but the details appear extraordinary. According to this, the family had been living in Kensal Rise, but didn't like the neighbourhood, so took advantage of housing rules that allowed them to go to the authorities with details of an available and more "suitable" property. Very sensibly, they chose a £2m property in Notting Hill. The landlord? Apparently a friend of a friend. So what will happen when the Government's £400 a week cap is introduced next financial year? Will they have to move again?
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Gumtree's been in and out of the news over the years as a Mecca for rental scam. This Is London highlights three groups who've paid two and half grand, each, to conmen who "rented" them a two-bedroom West Hampstead garden flat they didn't own. The conmen are said to be two brothers named Kahn; Land Registry data suggests he owner lives in France and has no idea about the scam. More here.
Technorati Tags: property, real estate
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A 15-year ban on estate agents' boards in some posh west London conservation areas has come to an end, and the boards have begun to reappear. The results? "Fury." Heritage groups are now apparently seeking a total ban across London. Interestingly, Douglas & Gordon's Ed Mead appears to agree, describing the boards as a £6-a-pop anachronism in the Internet age. But I don't know... aren't there still some movers inspired to hit the market when they pass a house they've always admired and notice a board outside?
Technorati Tags: property, real estate
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HBOS data suggests the market cooling. June is showing house prices down 0.6% on the month, following a 0.5% fall in May, bringing the second quarter into the red, at -0.1%. Accompanying literature blames the increasing switchover from low supply, high demand to high supply, low demand. More here.
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... another MPC vote to keep interest rates at their record low of 0.5%. This, incidentally, is the 16th consecutive month.
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Well, up on the decade, by a factor of five (from 27,000 homes worth a million or more to 132,000) but down since the credit crunch (w/o the crunch, there be a further 43,000). Eighty per cent are in London. The SW postcode seems to have done best, multiplying its million-plus homes by 23 in the last ten years, and accounting for almost a third of the country's total. The research was by Santander.
Technorati Tags: property, real estate
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A survey by the the FSA's new Consumer Financial Education Body suggests that three-quarters of borrowers have no idea what an increase of 1% in interest rates would mean to their monthly mortgage repayments. Fifteen per cent didn't know what type of mortgage they had (and so wouldn't know whether they'd be affected); a further 15% didn't know when their mortgage term was due to end. And that, despite more than half believing rates would rise in the next nine months. More here.
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And the results... Somalians, British tax payers, a housing charity, a £1m London townhouse... read like a sweaty Daily Mail nightmare.
The family had just arrived in London from Somalia. It didn't take long for them to decide they'd seen enough. They didn't speak much English but they made it clear they weren't happy with the bedrooms on the top floor - apparently they didn't like the sloping eaves... Anyway, this family had brought with them a 'slim fit' dishwasher. But the space we'd left was for a standard-sized unit. Believe it or not, they wanted us to come back, take the kitchen out and refit it with units that matched their dishwasher.
There's plenty more where that came from. Go here for a great read.
Technorati Tags: property, real estate
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Outlook for rents good [Homemove.co.uk]
Rate their bedrooms [4homes]
Mortgage worries turn homeowners bearish [Myintroducer.com]
In America: cute little houses [DesignSquish]
The Rat and Mouse - London's property blog, since 2005
Technorati Tags: property, real estate
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They do things differently in Germany.
We have a building for sale in probably Berlin's number one property hot spot, where rents are very much on the rise. The last time we had an apartment in the same street, 40 people turned up to the viewing. But the building has a brothel and strip club as the two commercial tenants. They've been in the building for 15 years and are quite discreet. The current net yield of the building is over 9%. It's on the market for €1m but we feel the owner will take €950,000-ish. The net rent is just under €90,000 pa. The brothel's paying at pre agreed historic rent levels (when they moved in the area was not so great… now, it's one of the hottest areas to live in Berlin with huge demand for apartments, as it's very close to the canal and parks, and has some really unique and funky bars).
The brothel and strip club have only three years left on their lease and when they move out it may be possible to get the net yield up to around 13%. We just rented a bar across from the brothel for about 40% more than the brothel currently pays, and apartments in the same building for 30% more than apartments in the brothel building, so great potential for May 2013 when the brothel lease ends. The property's in good condition, has balconies and the loft has already been converted into penthouses. It looks like a normal Berlin building, there are no red lights in the brothel or strip club, they just look like a late-night cafe and bar (typical for Berlin).
There are many well know brothels in Berlin, many in very residential areas. It's completely legal and as a landlord it's a good business to have as a commercial tenant as they have excellent cash-flow and no matter how the economy is doing it remains busy (although in the recession two well know Berlin brothels decided to make customers some interesting offers: one "Green madam" gave anyone who turned up on a push bike a discount, the other offered a monthly membership for what is known in Germany as a "flat rate" of around €70 per month for unlimited visits… perhaps she was hoping the punters would follow the gym membership pattern… signing up in January for the year, but rarely using the facilities come August.
So, the question is… do we advise any potential new owner to allow the brothel and strip club to stay in the property by granting them a lease at the new much higher current open market rent (or the rent in May 2013, which could be much higher) or do we advise them to find new commercial tenants? We'd be interested in people's opinions, but please note brothels are completely legitimate businesses in Germany, even in the commercial parts of residential buildings...
Feel free to comment. View the building, and dig that funky music, here.
Guest post courtesy of Berlin investment property search agents, Nilreb.
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Let's start the week by giving thanks... a big "thank you" to our sponsor, Primelocation.com. Remember, Primelocation.com isn't just about searching properties listed by 4,000 leading estate agents, the website's a mine of useful advice, information and links. An example? Go here to search up-to-date real life completion prices for UK property. Snoop on your neighbours. Do the maths before making an offer. It's useful, it's free... you need to register, but it's quick and easy. If you've feedback, let us know and we'll pass it on with pleasure.
And don't forget Primelocation's very popular iPad app, which offers just about the most fun it's possible to have searching for a property with your clothes on.
If you want to know more about advertising opportunities on the Rat and Mouse, drop me a line. Or if you just want to chat with the Rat, we're on Twitter here, or email us tips here.
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Relief that the recent Budget didn't, in fact, hit second home-owners and landlords with a 40% top rate is leading - according to brokers - to a surge in interest in buy-to-let. Heck, 28%? Bring it on, they say. More here.
Technorati Tags: , property, real estate
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An interesting tale, here, from a vendor (with both large agency and private for-sale-by-owner boards outside the property) who has been targeted by iSold, the new(ish) joint venture by Spicerhaart and Tesco (here for more on that) with a fake handwritten note and then a more formal letter. If you're an agent with offices in Reading, you might be interested to see what's likely to follow your board.
Technorati Tags: , property, real estate
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Okay... 21... that's how many minutes it takes, according to research by ING Direct, for the average UK housebuyer to spend viewing a property before making an offer. It's a fourteenth of the time they'd spend choosing a TV, and around tenth of the time spent choosing a coffee table. Pressure from competition - whether real or fabricated by an agent or vendor - appears to be a significant reason for the rush. More here.
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There's nothing like news that a Bank of England Monitory Policy Committee member has "laid awake a number of nights" worrying about the economy. It's a quote from Adam Posen, and what - specifically - he's lying awake worrying about is whether the UK economy is the verge of the mother of all double dips. I've been finding it tough, getting to sleep on these muggy nights, too. I recommend any of these. A recent Bank of England survey suggests tough times ahead for wannabe mortgage borrowers. Elsewhere, recent house price survey data feeds into double-dip fears.
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