Tag Archive: market
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.
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.
The buy-to-let sector is a thriving industry. Becoming involved in the private rented sector is a serious business. Landlords need to ensure that they’re able to find and retain good quality tenants and handle maintenance and repairs issues efficiently. Choosing the right agent to guide, advise and support them in a way that helps them to best manage such situations, and create a profitable property portfolio, is therefore vital.
There are so many inadequate and, at best mediocre, agents out there. They’ll agree to market and manage properties on behalf of landlords but don’t provide the service behind this, which is the most important aspect. Agents will simply put a property on the market with no plan, or even discussion with the landlord, about how it would market better and, essentially, be leased much quicker at a rate the landlord desires. Questions every landlord should ask themselves include:
- Has your property been on the rental market for more than a few weeks?
- Has your agent discussed how your property could be more attractive to potential tenants?
- Have they had an honest discussion with you about the wear and tear of your investment and whether it’s time to make some improvements, so that it can be tenanted quicker and potentially let out at a higher rate?
- Are you an out of area landlord who has rarely or never seen your investment?
Honesty is the best policy
Being honest with landlords and upfront about the improvements they need to make in their properties, to secure tenants and a good return on investment, is something all agents need to do but many simply don’t. A rental property needs some TLC every now and then and we recommend a landlord budgets for allocating 10% of their annual rental income back into the property for its upkeep such as decorating, new flooring, and furnishings where required.
Unsatisfied landlords often get in touch with us to appraise their properties that have been on the market a while. When appraising them, we have discovered some very basic issues that can be fixed easily. For instance, some are dirty, or need painting, or are overpriced for the current market. I recall one visit to an apartment recently which had been on the market for three months with no interest from viewers.
Following our assessment of the property, we advised the landlord to complete a deep clean and carry out some minor decoration work, which all cost less than £200. Within two weeks, after we had put it back on the market, we secured tenants on a 12-month lease. This landlord lost over £2000 due to no occupancy, which could have been avoided if the right agent advice was given from the outset.
If an agent is not honest with you about current market trends, the condition of your property, or the correct rental amount, then they are costing you money in terms of a void period and the monthly outlay of Council Tax on your vacant property.
At George F. White, we are focused on providing a professional, friendly but ultimately honest service, ensuring landlords are given the best advice to let out their property, even if it involves spending some money upfront, so that their property stands out among the rest in a fast moving, highly competitive sector.
For an honest conversation about your property contact Leanne Emerson on 01833 690390 or email email@example.com
With winter catching up with us, some sellers consider delaying selling their property until the spring, and historically most agents would agree with that tactic. It is certainly not our advice, and necessity sometimes dictates that moving over the coming months is essential. Here we look at several pointers for those still trying to sell their property or looking to go to the market in the next few months:
General garden maintenance
Giving lawns their last cut and edging the borders together with clearing fallen leaves is an easy and cheap fix. This can transform a garden with very little expenditure, something that will last through to early spring.
Clear away garden furniture
A crisp autumn day will give the perfect opportunity to stain wooden furniture prior to storing it in order to protect it from the weather. It is also worth tidying away children’s outdoor toys which all helps to present the garden in its best light.
Dress your property
Have the fire blazing and central heating warming the place through together with candles lit, lamps and lights switched on in all rooms prior to a viewing to make your home as appealing and welcoming as possible.
Hold off with seasonal decorations
Whilst we appreciate people more often than not live in the property they are selling, we advise our clients to leave festive decorations until the last minute. Decoration free homes often look more spacious and less cluttered enabling viewers to clearly see the property and appreciate the full potential.
Clear all guttering
A sometimes tricky or taxing job but also highly important. Clearing the moss or fallen leaves that have gathered in guttering or roof valleys together with checking all round for general leaks or drips will prevent issues with the drainage of rain water that can sometimes cause damp or water ingress.
Outside lights will guide people to your door safely and depending on the style can be very effective in presenting the property now the nights are drawing in. We do however, advise staying away from extravagant Christmas lighting displays if at all possible.
Be safety conscious
Deal with slippy paths and decking by using a pressure washer and/or installing non slip matting. Clearly mark or identify any high ledges or steps to help when conducting viewings at the end of the day when light is limited.
Contrary to many reports we are still experiencing strong activity in the market and urge vendors to come to the market at the time that suits them rather than delaying the process until things are greener in the spring and according to some agents the market turns for the better.
There are undoubtedly properties that will benefit from launching during better weather months however in general if the property is well presented and correctly priced it will sell without undue delay. With the autumn/winter period being our most successful of the year for the last 2 years running we say that now is as good a time as any, be settled in your new home or booking removals before the first daffodils of spring break through!
If you are thinking about selling or letting your property, feel free to contact our friendly and professional team at George F. White.
Alnwick: 01665 603581
Barnard Castle: 01833 690390
Bedale: 01677 425301
Duns: 01361 883488
Shiptonthorpe: 01430 876010
Wolsingham: 01388 529579
Victoria Linsley, Branch Manager at our Barnard Castle office, looks into the best recipe for success when entering your property onto the Housing Market.
Most businesses strive to do things differently, or will certainly profess to, but often it is about achieving the perfect blend of an old and new approach that really writes the success stories.
I wholeheartedly stand by the theory that the initial launch to the housing market is the best one. It is the exposure of a fresh new property to buyers who are out there looking, that will, in the majority of cases, achieve the best price in the most reasonable time frame. This is because there are no preconceived ideas about the length of time it has been advertised or assumptions about why a sale may have fallen through and people buying with their hearts are excited by a new offering and the competition this may generate. However, on occasion, a niche property will require a ‘few and far between’ buyer. A cheaper price for a quicker sale is not necessarily the right advice.
Reading through extensive research however, we understand that the modern day buyer will shortlist many properties online before even picking up the phone to a human being (are estate agent’s human I hear you ask!?) in one of our offices. Therefore an effective combination of an ‘old fashioned agent’ making outward bound telephone calls to a ‘hot box’ of people we know are looking in the area together with a state of the art approach to photography and an appealing, informative and interesting listing on a website or property portal will make all of the difference to a client trying to sell or let their home.
A driven and proactive team of people who care about the service they provide, together with the technology behind them to make sure a property is seen in the housing market is absolutely key in delivering the task set by a Seller or Landlord.
With this in mind even properties which have gone unsold with an agent can have the marketing regenerated and be pushed out to a new audience and a sale or let achieved by just using an agent with a fresh and enthusiastic approach following tailored advice to the client.
A blog I read recently quoted that nearly half of the properties advertised will go unsold and sell with a second agent. Therefore, your choice of agent is vital from the outset and it is always good to examine the ratio of properties they list to that of those they have under offer and also to question their means of keeping the property listing and sales approach rejuvenated and fresh.
If you are thinking about selling or letting your property or would like to chat through a new approach feel free to speak to one of our team at Barnard Castle on 01833 690390 with no obligation.