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Friday, 10 January, 2003, 06:22 GMT
Diary of a house buyer
Adrian Plant, a 35 year old Londoner, is looking to buy a house for the first time. During the hunt, he will talk to BBC News Online about his trials and tribulations.
"It is incredible! For what I am facing paying for a two or three bedroom terraced house in London, I could buy a villa near Barcelona with a pool and an acre of land."
But even though the heady days of double-digit price growth in London are said to be over, he has been looking since last November without success.
Adrian, who is unmarried, earns an above average income as a sales director for an American multinational food company but his housing ambitions are modest.
However, the going rate for such a property is between £400,000 and half a million pounds.
"I have some savings to call on but I will still need a hefty mortgage, I am not prepared to over-extend myself."
Predictions of a fall in the London's overheated housing market have been welcomed by Adrian.
"Things have moved in the buyer's favour of late and I think by taking a strict line over price I can now drive a hard bargain."
The asking price for one house Mr Plant was looking at was slashed by £40,000 by a frantic seller but it was not enough to tempt him.
"The market has softened to such an extent that if I was to look a little further afield than Wandsworth I could secure a heavy discount."
However, the shift in the balance of power from seller to buyer has not yet, it seems, been reflected in the attitudes of local estate agents.
"I have been appalled at the level of service I have received - the local agent has a virtual monopoly on the area I am looking in.
"The sales people are pushy, increase your offer to suit them and then do not pass on the offer in a reasonable time to the seller."
'Over a barrel'
In December Adrian was infuriated when an agent failed to follow up on an offer he had placed on a property.
"It was a very negative experience and although the agent said the seller would accept only £5,000 more than I offered I refused to budge.
"My girlfriend just told me get used to it - estate agents think they have buyers over a barrel."
But by boxing clever during the coming weeks and not being pressured, Adrian hopes to turn the tables in his favour.
Do you have advice for Adrian as he starts his quest? How should he deal with pushy agents and what potential pitfalls await?
A few words of advice: be patient, prices are falling and don't be afraid to haggle. Use the net to help you during the initial searches, will help identify the state of the market!
Take your time Adrian. Try not to "fall in love" with a particular property but put very low bids on many. Identify which properties have been on market for some time (look at property photo trees etc). Also, find a seller who really "needs" to move.
Communicate with agent AND seller directly. You are probably better at it than most agents.
Good luck! Do not hurry. Even rent for 6 months to give yourself time to secure the property you want at the right price. It is a buyers market not an agent market!
There really is a two speed Britain on house prices.
Last year we moved to a four bed detached in a desirable area of a desirable Cheshire town (Manchester Stock Broker belt), near all the right schools and in good order.
It cost £170,000. As I work in Berkshire I checked agents prices, and the same house in a very similar location was £500,000.
What worries me is that the government seems to look out of the windows at Westminster, put it's collective digit in the air and decide upon policy to suit their next sound bite in the capital.
Move back to Barcelona and get that house with a pool!
Just remember you're the one with the cash, first time buyer ? Crikey I'd snap you up !
After you view a place - send some mates round to view it and put in much lower offers than yours :-)
I would try and keep the agent in the dark as much as possible!
1. arrange to see the property through the agent.
2. make offer to the agent in writing subject to the outcome of a survey.
3. make contact with the sellers and inform them your offer and that you informed the agent. also leave your contact details with them, try and get theirs.
This way you know for sure that the sellers are aware of your interest and price.
Move back to Barcelona !!, what does Britain offer now? High house prices combined with a high cost of living and don't forget all the pension scandals.
My advice - move to France and commute. The UK is too crowded and prices too high. You will never forgive yourself when you realise how much you've paid for a pokey pad.
Simple solution which as a first time buyer we did in London: After being asked personal questions by agents that have nothing to do with them, like 'what sort of mortgage do you have / how much do you earn etc etc?' - in order to fleece you and see if you are worth bothering with we carried out a private sale. We found property websites and other peoples' personal sites great. Not only does the seller save on commission but you don't have to put up with agents and sometimes their dodgy counterparts...we were showed round some places by an inexperienced 'TV camera operator' and an 'IT recruitment business owner' who wanted to secretly sell us his house! Who needs estate agents - solicitors, mortgage advisors etc can do the legal and important stuff. Get on the NET!!
Are you mad? Get the first plane back to Barcelona.
Stuart McNaughton, Finland, ex-Pat
I'd go back to Spain, get the house with the pool, Spain is way ahead of this backward country in many aspects of life! Otherwise take your time, estate agents can be very pushy.
The best advice I can give to anyone looking to buy a house in London is "Don't buy in London".
I just moved into my first house in East Anglia, three bedrooms and a big garden, which cost less than £120,000. I still work in London, and the £3,500 I pay for an annual rail ticket is far less than the difference I'd have to pay for a mortgage on a similar property in London. Plus, trains from London run much later than the tubes so I can always get home after a night out on the town... unlike some of my London-based friends!
Don't rely on estate agents - make sure your local knowledge of where you want to live is top notch. Do property searches on the internet, get the local paper for the area each week and you'll begin to spot which properties sell quickly and which end up being reduced. The more knowledgeable you are of your subject matter, the stronger your position against the estate agent. He works for the seller (who pays his commission) so you need to be as well informed as possible.
The comparison with an villa outside Barcelona is not fair. Try to compare it with house prices inside the city limits of Barcelona or Madrid. For the house prices in London you can buy a nice villa outside of London too.... believe me as we have just done that!!
Go back to Spain. It's cheaper, more sun and you can always get a low cost airfare back to the UK whenever you want. What about renting in the UK, and having a place in the sun too?
A villa with pool and an acre of land in sunny Barcelona or a tiny Victorian terrace in rainy Wandsworth? Sounds like a simple choice but what are the equivalent wages in Barca? I know exactly what Adrian's going through having bought an astronomically charged, shoe box sized, 2 bed Victorian terrace in St Albans in the past few months (1st time buyer also). The problem is caused by low interest rates and a shortage of houses on the market. Houses are being priced depending on what people can get a mortgage for rather than what the houses are really worth. Plus finding a decent Estate Agents is a huge lottery. Good luck!
Firstly, I have real sympathy for Adrian's current situation, having been there myself in the past. I know it is easier said than done but I would recommend that Adrian tries to purchase his house directly from a seller. I am fortunate that I was able to do this with my flat in 1996. I am originally from Canada and I am appalled at the way the housing market works in this country. The way I look at it ,dealing directly with the seller already eliminates one potential hurdle which is the estate agent. What surprised me when I was flat hunting was that one property can be on numerous estate agents books at the same time, so you get countless conflicting stories
regarding the same property. The stress that people have to go through in England just shouldn't be allowed. The whole process completely suits the solicitors as well because of the lengthy times involved in purchasing a property. My question to Adrian is why leave Barcelona ?
The internet proved a valuable ally in searching for a house. It gave me a more complete picture of the London Market and had the added bonus of keeping interaction with estate agents to a minimal!!
Erwin Saxon, UK
I'm going to keep renting, my rent has dropped by 50% and I live in a beautiful cottage in the New Forest. It's far cheaper for me to pay rent than a mortgage! House prices are going to come tumbling down and I will be there to pick up the pieces. Not stuck with negative equity for the next 25yrs. This is not a good time to invest!
I know one property professional who found his ideal house and cut out agents altogether. He did this by printing letters with details of the kind of property he was seeking and how he could be contacted then he posted these through the letterboxes of all the houses he liked the look of in his target area.
He caught a number of people just before they about to put their houses on the market giving him a good choice. Everyone involved was delighted to dispense with the need for, and expense of, an agent.
Sounds time consuming? Well, yes, you have to post a lot of letters to find your dream home but this need not take more than a few hours if your target area is well defined. Think of all the time saved not being led up various garden paths by those double-talking agents.
Always pay for a good surveyor and solicitor and you will ensure there is no more risk buying in this way.
Remember the place you buy will be your home and you don't want to resent paying over the odds for it. Most importantly of all don't stress out. If you can hold your nerve now you'll be laughing when the estate agents are crying.
If I were you, I'd move back to Barcelona. This country is finished.
Make sure you think how rising water levels and increasingly bad flooding could affect any property you look at - otherwise, you could stand to lose a lot of money.
Listen to your girlfriend, she know what she is talking about. At the end of the day if you want something you have to pay the price for it. To a certain extent you can haggle but the market will dictate what a house is worth!
Why buy now? The market is on a crest, future sentiment favours a static/negative move. So probability is a future purchase will be at today's level or lower. I'd rent for a year.
My husband (a police officer) and I ( a PA) are in our twenties and have a combined income of around 30k. To purchase even the most basic two up, two down terraced house in Southampton we'd need at least 36k per year not to mention a deposit and legal fees.
The housing market is just a beast looking to devour young couples. We can't even think of starting a family in the present financial climate. It's simply unfair.
Wait a while!! On the top right of this page there is a link with title "30% Fall?". In short - Capital Economics think prices will drop by up to 30% over the next few years. Buying a property now (especially in London) would be financial suicide - unless you can haggle about 30% off the current asking price!!
If people are prepared to look at areas outside the ones deemed 'Trendy' there are plenty of great properties out there. You've just got to look a bit harder.
I can totally relate with Adrian's experience. I'm a first time buyer and have been looking to get on the property ladder in London for over a year. I think the tide is slowly moving in favour of the buyer as I've noticed that quite a few vendors are willing to slash the initial offer price by 5% or 10%. My advice is be patient. Buying a house is a big commitment so make sure you stick to your requirements and, most importantly, budget! Good Luck!
As an agent it does concern me when I hear from people like Adrian receiving such a poor service from Estate Agents. The industry has improved immensely over the past decade and most agents are genuine hard working professional people.
You will know when you have found a good agent - they will listen too you and build a good rapport - and if you have proved to be reliable and a genuine buyer (turning up for viewings is always a good start!) then you will get the first call when the long awaited gem hits the market.
You must remember, whilst I am not sticking up for bad customer service, an agent can easily receive many more enquires (a vast number from non-serious time wasting purchasers) than he can realistically deal with. You must make sure you stand out from the crowd - befriend your agent and you will be taken seriously making friends with an estate agent might not be everyone¿s idea of fun but it will work - after all most of us are Human (apparently!)
I think the government should step in and force agents to abandon commission on selling in favour of a flat fee - so that they are more impartial throughout the deal.
Try to talk and deal direct with the seller , I only secured my house by constantly talking to the seller and making sure the relationship was strong, you are a no chain individual and as such sellers will like you a lot. Make them aware of this and your offer could be accepted even though it is lower than a chained individual who has a lot of baggage. Good luck
I'm so pleased to hear that you're ignoring the hype from the estate agents. We've been looking for a year during which time most undesirable properties have remained unsold, whilst the estate agents criticise us for not finding anywhere!!! We've been told that we should snap places up at "last years price", take whatever we can stretch ourselves to buy, etc. Trouble is, there are too many people listening and panic buying - if first time buyers refused to be ripped off by ridiculous prices they would start to return to realistic levels. My advice - leave England!
I've just sold my house but am reluctant to pay my agent a fee when I appear to have done all the chasing myself!
Not all agents are useless. Find one in the area you are looking in. There are no agents in that area that have a monopoly. I have just counted up 26 agents within two miles of the Tonsleys. Find one negotiator if you are truly desperate and retain them with fixed fee to find you a property. £2,000 is not a lot to pay to someone to help guide you through a maze, which you have obviously lost touch with whilst you have been in the less frenetic life in Spain.
Wish you all the luck as you need it in this business. We are in a similar position to you. Having lost two properties due to subsidence, and not wanting to lose our buyer, we have gone ahead and moved into a rented property end of November 2002, and have started looking again, in Woodford Green. So the thing to remember is Don't completely rely on Estate agents, as all they are after is their commission and they are fast talking salesmen. Form a good rapport with your vendor and communicate directly once you have put the deposit. Once again wish you all the very best in the game of house hunting.
I agree with Jeremy - why bother getting yourself in debt to the tune of half a million pounds to buy a modest house in London? Prices aren't going to come down unless buyers finally decide enough is enough, and that 50-year mortgages are the stuff of sheer madness. The whole thing is lunacy. London simply isn't worth this kind of money.
I'm currently renting in London, but when the time comes to buy I will wave farewell to the capital and it's mad property prices and move back to my native North-East, where prices are at least vaguely sensible and I can be sure I'm getting some kind of value for money.
Well done Adrian! If more people stuck to their guns like you we wouldn't have such over inflated house prices. Carry on with what your doing and someone will crack in the end. It's time for buyers to realise that we control the market price and if you think its over priced don't buy and don't panic.
Just remember, all the talk about it being a buyers markets only serves to fuel the recent dips in house prices. This is fine as a buyer in the short run, but remember, that housing prices will continue to fall over the longer term if attitudes / talk / media continue to depress them.
Large mortgage with negative equity - not a great place to be
With the same name as me I can empathise with the other Adrian Plant having recently moved for the seventh time. You need to tell the estate agents what they need to do and if they fail you go direct to the client. They will get the message eventually .The market will turn in your favour so be patient too.
It's a pity you work in London. Living in North East Scotland can be much better. Outside Aberdeen you can get a very good house for £150,000 or less. OK you may have to travel 20 miles to work, but it only takes half an hour, and the weather's not as bad as you may think. Why spend all your money on a house?
Do you really want to live in London??? There are so many nice places around the world where you can spend your money better. Good Luck!
I sympathise with you - as a prospective first time buyer in Edinburgh I am no further forward than I was over a year ago. Everyone tells me it will happen eventually and that "if it's meant for you it will not go by you" so keep trying!
I agree with Jeremy, go back to Spain and avoid overcrowded, over-priced and over-rated London.
Do as thousands of sensible people have done over the past few years - move out of the South East. £200k buys you a decent 4 bedroom family home in far more desirable areas of the country (e.g. Cheshire) than London or its surrounding counties. People in the South East will realise the true "benefits" of their grossly over-inflated house prices (and really how well off they are) when they can't educate their children (no teachers available - even in private schools), can't find a doctor, have long waiting lists for surgery, can't obtain repairs on their houses (no real tradesmen)etc etc Rising house prices are causing real damage to the country and to our citizens standard of living. Estate agents and solicitors are the few genuine benefactors of over inflated prices.
Len Powell (Dr)
Don't believe that prices in London are suddenly going to fall drastically, leaving you and other buyers in a better position. The London situation remains the same...that for the majority of mid-range buyers, there are simply not enough properties to go round. There are simply not enough homes for the number of people joining the property market each year, so modest and mid range properties will continue to sell for inflated prices and we just have to accept it. Trying to 'drive a hard bargain' or 'wait for the market to fall' will only result in disappointment...
I am in the middle of purchasing a property at this moment. It has been a complete nightmare. The thing that has struck me is that if we had the Scottish system of house buying I would have had no problems what so ever. Why can't we adopt their way? I have had to endure people putting in offers not just on my property but others in 'the chain' and then withdraw just before exchange. I have felt powerless and depressed by the whole experience. Someone needs to do something it's a joke. The only people who win at the end are the solicitors who get paid even if there is no sale. Enough is enough, if I move I will never put myself through this again.
Don't think it's over when you finally find a house and have an offer accepted- then the fun really begins with the chain dilemmas! We made an offer in on a house in April, it was accepted the next day but seven months later the chain of nine buyers/sellers hadn't been complete. The chain feel through 3 times. Just as it began to look promising, our vendor then upped the price by £15, 000! Needless to say we, withdrew, found another house and made a conditional offer based on it being chain free. Good Luck
Bide your time and don't over-commit yourself. In most areas of England today, house prices are running way ahead of average salaries, making a mockery of the property market vested interest view that housing is still "affordable". When interest rates eventually go up, today¿s buyers who have stretched themselves will suffer. Buyer beware is sound advice in today¿s property market.
Consider the possibility of a company transfer to America. My house was $85,000. For that I got 2,500 square feet (3 times the size of my parents house in England), basement, 2 car garage.
I have just come back from London, and what you get for £400,000 is rubbish. In Wales you can get a nice house for £90,000, good job, and a lot less traffic. I cannot see why people tie themselves down to a tiny flat costing nearly half a million pounds. The rest of the country is laughing at Londoners, the place is rubbish, traffic nearly worst in the world, high prices everywhere. I would never live there, even if prices of homes were £20,000.
I'm in same situation as Adrian as a first time buyer looking in Greater London since September. I have viewed countless properties but my gut feeling is they are simply not worth the hefty price tag despite the agent's best sales pitch. I have now taken the decision to continue renting for another year and only buy if and when some sensibility returns to the market. If not I will simply relocate to somewhere that gives me real value for money.
Build yourself a new home instead. One in 10 new homes are self-built and for a fraction of the cost. You don't have to deal with pesky estate agents and you get to design the house of your dreams.
The insane house price bubble is about to burst. I currently rent and after reading many articles suggesting that 'buy-to-rent' people are now struggling to find tenants I asked for a £200/month reduction in my rent for the coming year, the agency agreed immediately!!! I think I'll just sit tight in my cheap but very well appointed rented accommodation for now and buy a nice house in 18 months or so when house prices massively correct themselves.
As a first time buyer who moved to Scotland for the cheaper house prices, I must say I recommend Adrian move here. You can get a superb house in Glasgow for £150,000. The buying and selling system is vastly superior and the cost of living is around 25% cheaper. This more than makes up for the lower wages. We are planning to buy a 2 bed terrace flat and do it up, and I don¿t think it will cost us more than £70k. Now that¿s what I call a realistic starter home price.
Living in London has very few benefits! For some time I commuted from Hertford shire. I believed that moving to London would give me more time to myself. However, all the time saved on commuting is now spent stuck in traffic ¿ or avoiding tube closures. Even a night out is infact more difficult now the tubes stop running at a ridiculously early hour and the night bus is not a comfortable journey. Compared to cities such as Paris, Sydney and of course Barcelona out capital is a complete shambles! What scares me is that we all know how awful transport and living costs are ¿ but we also know that it seems to be getting worse rather than better.
Adrian, If you are looking to own your property long-term (i.e.5-10 years) then might I suggest pay a bit extra for a house that can be improved and extended to your own needs. There will be a slight drop in London by as much as 10% to 20% but that would be it in the next 2-3 years. Thereafter it will resort to increase in growth. The possibility of going into negative equity does depend on how much cash you put in but again that will only be for 2-3 years. By 2020 (a long way a way) there will be an extra 5 million people so your property will always be a wise long term investment. Be realistic and always keep some money aside for a rainy day for the mortgage (say six months worth).Good Luck.
Make a written offer to the vendor via the agent, subject to survey and contract. Ask the agent to forward your offer to the vendor with his recommendation/opinion on your offer in writing offer and provide you with a copy of his letter to the vendor. Remember if it's not written down it might not have happened. Make sure the agent works for his fee and the vendor is aware of your interest in the property. Best of luck.
Will people stop bashing solicitors ? They do far more work for far lower fees than estate agents and most high street lawyers earn less than plumbers or electricians yet work longer hours. A good solicitor will save you far more than he costs you.
How much is your time worth? I mean, how much do you really value your personal time? Do you enjoy the delays and congestion on public transport? Can you suffer the long daily commute, just for the chance to own your own slice of the ¿country¿? Long walks home from remote stations (return trip). The decision to purchase a property should be made with the view of how you value your life(style) present and future. The whinge on London price increases is as old as the properties in the capital. Better to accept it, take a modest leap and be happy. You're worth it.
My advice to Adrian would be to rent for a while, I think everyone is talking down the market, and being realistic. The wages in London just do not allow the average person a chance of getting on the ladder on their own. As the need for single occupant dwellings is increasing, it makes getting the first step of the ladder even harder, if your on your own. This is going to lead to a shortage of skilled professionals and the infrastructure of London and the South East is suffering.
House price inflation has been greater in Spain than in the UK over the last few years. You aren't going to get value for money in Barcelona or Madrid relative to local wages either, so ignore the "go back to Spain" posters. They don't know what they are talking about.
I sympathise. I moved back to the UK at the end of October 2002 after 18 years in Asia to work in East Anglia. I will rent while it looks like property prices are likely to fall. Luckily I have the option of waiting as my family won't move here for some time due to school issues.
As a first time buyer you have to be cautious, but don't be under any illusions that prices will 'crash' in London. Interest rates are low and the amount of good property actually available will always sustain the market to a certain degree. Furthermore, if prices dropped 10%-20%, speculators, etc. would possibly move in. The key in uncertain times is to purchase in a 'good area', this should help protect you in the long run.
I can fully empathise with Adrian's situation - canny estate agents, gazumping and the costs of hunting around etc etc. We solved the problem by using a homesearch/aquisition agent - there are plenty in your part of the world - a relatively new industry but takes the pain away, that's for sure, look in your yellow pages/internet or under 'relocation agents' or homesearch. We did and have never looked back.
A few words of advice: be patient, prices are falling and don't be afraid to haggle. Use the net to help you during the initial searches, will help identify the state of the market!
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