Category Archive: Commercial

Building Survey: Would you buy a property without one?

Buying a property is quite possibly the biggest financial investment you will ever make… James Cullen, Head of Building Surveying, explains why you should instruct a full building survey before acquisition.



What is a Basic Valuation Survey?

  • Required by the Mortgage lenders prior to approving a loan;
  • Confirm to the lender whether or not they can recover their investment if the property be repossessed;
  • This survey is not completed to provide detail on key structural and maintenance issues.


Pitfalls of Basic Valuation Surveys…

I have often been reminded that Basic Valuation Surveys are completed in less than 15 minutes… some of which do not incur a site visit or even involve entering the property or the roof space.

Similarly, with the rapid uptake of lump sum pension payments; there are a number of buyers on the market purchasing buildings outright without additional sources of finance. In this case, there is no minimum valuation survey requirement.

Consequently, purchasers are often exposed to a high level of risk. They are liable to commit the funds to maintain and repair the properties under their ownership. More often than not this liability is realised when it is too late to digest and plan for such issues.

Building Survey

Why Instruct a Full Building Survey?

According to research undertaken by consumer group ‘Which’; at a time when a purchaser is already expending funds, a survey can seem like another painful expense.

Typically, 20% of property buyers fail to commission a building survey prior to going ahead with a property transaction. This alarming figure identifies that the majority of property buyers run the risk of buying a property that could present major and costly defects which are unidentifiable to the untrained eye.

It is far better to be aware of any issues before purchasing a property so that informed decisions about how much the property is worth can be made and that the cost of any repair works can be considered at the outset.

This detailed survey can often be used to negotiate the purchase price down with the vendor, or can be set aside as a useful plan to target repairs, budget and recourse in the future.



Why instruct George F. White?

We pride ourselves on offering high quality, detailed and informed Building Surveys to reassure purchasers and identify the clear concerns with any building and where to target resources for repairs in the future.

Only the highest level of RICS compliant building survey is offered to our clients for the very reason that their security and protection is our highest priority. Moreover, this saves the unnecessary expense of revisiting and undertaking further investigation works which are often referred to in surveys such as a homebuyer’s survey.

For more information, a friendly service and advice tailored to meet your requirements, please contact James Cullen.

Commercial Growth for George F. White

We have strengthened our foothold in the North East commercial sector, providing a greater range of services and expanding the team with three recruits into our Newcastle office.

commercial

James Cullen has joined the team as Associate and will lead the Building Surveying team. James joins the team from a previous role at Building Surveyors Ltd and brings with him specialist surveying expertise in commercial building surveying, with a focus on acquisition and investment surveys, dilapidations, asset management and project works.

Speaking about his appointment, James said: “Establishing the building surveying service offering at George F. White represents a fantastic opportunity where Building Surveying aligns perfectly with the needs of its ever diversifying client base. I have always been passionate about building surveying and this role gives me a fantastic opportunity to establish a new team. I am delighted that within the first few weeks we have already established a market presence in Newcastle and the offering has been universally well received, with new work coming in already for private and corporate clients.”

In addition to James, the team has also appointed Victoria Huntley and Rhys Jones as Graduate Surveyors and to expand the team’s Commercial and Planning and Development team capability. Both are based at our Newcastle centre office.

Victoria joins the firm as a Graduate Commercial surveyor and will focus on commercial valuations, landlord and tenant and property management work. Rhys will be based within the our Newcastle planning and development team and his primary role there will be to assist with valuations of development property.

Richard Garland, Head of Tyne and Wear, added: “Since opening our Tyne and Wear offices last year, we have seen a great take up for our services, including the commercial property offering and have attracted a whole new client type. The ongoing evolution of the firm continues and I am delighted to now be able to provide a Building Surveying offering alongside strengthening our Commercial Property and Planning and Development teams. All three have shown fantastic energy and passion for what they do and a dedication to quality and client service which is the core of everything we are about.”

Glendale Paints: on the market after 44 years in business

Glendale Paints, an independent chain of quality paint and DIY shops in Northumberland and the Borders, is now on the market after 44 years in business.

Credit: Paul Driver Photo [BIRA – British Independent Retailers Association]

The family business is being sold as a trading business due to the forthcoming retirement of owners, Harry and Wendy Grant. Glendale Paints is made up of four stores located at Kelso, Berwick, Wooler and Alnwick. Over the years, the brand has become a local household name, supporting the community and the British industry; stocking everything from quality paints and wallpapers through to everyday DIY supplies.

Speaking about the sale of his business, Harry Grant said: “Glendale Paints has been my life and passion for 44 years. The team behind me, comprising my wife and amazing and loyal staff over the years, has made Glendale Paints into a thriving local high street business.”

We are marketing the portfolio of four retail properties as a well-established business and an excellent investment, we are inviting offers to the George F. White Alnwick branch. Three of the trading properties are owned freehold and one is held leasehold. They are available either as freehold or leasehold on terms to be agreed based on new 10-year leases with five yearly rent reviews on FRI (full repairing and insuring) terms.

Credit: Paul Driver Photo [BIRA – British Independent Retailers Association]

Simon Brierley, a commercial consultant at George F. White, said: “This is a rare opportunity to purchase a flourishing and well-established business portfolio with a wide customer base from North Northumberland to the Borders and we are thrilled to have introduced the property to market. Glendale Paints is a household name in the region and sells and stocks an exhaustive range of products. The brand is also used by the trade for supplying larger quantities of product. There is an element of flexibility with the opportunity to lease the four outlets or purchase on a freehold basis. I urge anybody with the intent to find out more to get in touch as we’re confident interest in the properties will be high and they won’t be on the market for too long.” interest will be high.”

To register your interest, please fill out the form below:

Getting the Right Value

We sat down with Andrew Entwistle, partner at George F. White, to discuss the importance of getting a correct valuation on an asset.

I am firm believer that any business or individual cannot make a rational or informed decision without knowing the value of an asset, or the cost consequences of a particular action. In fact, understanding value is the under pinning basis on which professionals advise their clients on a particular course of action.

Value

We have seen, over the last six years, the introduction of Automated Valuation Models (AVMs), particularly into the residential sector. Will we ever see AVM’s being used to value agricultural assets and farmland? I doubt such models could ever achieve even a modest degree of accuracy for farmland. Simply put, rural assets are too diverse for a computer to handle, particularly in the market that we are in. With low supply, demand can be high yet market conditions are showing a distinct patchiness with hot spots where land prices greatly exceed expectations, contrasting with similar quality land in low demand areas struggling to sell at below average guide prices.

I have the perception that most people consider valuations are only needed for either selling or when a bank wishes to take some security for a mortgage. There are many other good reasons to get a written valuation which are often overlooked, or simply guessed at.

The frequent scenario I come across is the case when a farmer dies. In the course of obtaining probate estimates of value are submitted, particularly in the case when Agricultural Property Relief or Business Property Relief applies and there is no inheritance tax to pay. A death forms an important tax point on the value of a farm and subsequently used as a base for future events such as calculating capital gains tax. More often than not, agricultural value is underestimated or simply not recorded.

Dealing with capital gains tax cases, another important relief that is often overlooked in Principle Private Residence Relief, where a main dwelling house can be free of Capital Gains Tax including up to 0.5 Ha of gardens, grounds, and outbuildings. A formal valuation at this point should have some analysis which attaches value to the garden and grounds from the rest of the farm that can minimise a Capital Gains Tax bill.

Another misunderstood concept I come across is Hope Value, where clients attach large values to land on the basis it will developed in the future. Market Value is the standard definition that is used for bank security purposes and reflects the price that the market will pay for an asset at a specific point in time. Research carried out by George F. White shows that developers are unlikely to pay significant sums over existing use value if the land has not got planning consent. A client will view the value of their land with Hope Value differently, taking into the “worth” of the development opportunity in the future them. The “worth” and “Market Value” of land is often significantly different.

Different valuation purposes often have different bases of value, for example tax valuations are have subtlety different valuation base to security valuations that in certain circumstances can give rise to very different values. In the case of matrimonial valuations Market value may not be an appropriate as it would not reflect the existence of a special purchaser.

So will a professional Valuer ever be replaced by an Automated Valuation Model? Only if an AVM can talk to clients and understand their objectives, decide the correct valuation base to use, and work as a team with an accountant and solicitor. I can’t see that happening in my lifetime.

X