Only four or five years ago, not having High Street presence with expensively kitted offices was a big disadvantage in getting new properties on the books for sales, lettings or management. People wanted to go into a five-star office to be treated as royalty. There was a very unfair pre-judgement that being an Internet-based estate agency meant not providing the best property consultancy.
What a difference a few years make…

Nowadays, the High Street estate agency offices are not the busiest places. Most people start their research through the Internet and many of them tend not to go near, let alone into, and estate agency office. The landlords/tenants and vendors/buyers contact the agents via the Internet, emails and telephone. As this is the most convenient way of doing it now that almost every home in the country has some sort of Internet connection. People do not have time to spend chit-chatting in an office any more.

Also, people are looking for more competitive fees too.

Especially with the current credit crunch, the traditional estate agents are getting less instructions and they are having to provide the same level of service at a lower price now. As a result, we are seeing some traditional estate agencies closing some of the High Street offices due to cost-cutting pressures. They are then trying to cover those areas from other branches.

Of course, there are still some dinosaurs in the industry. Just recently, one new estate agent who opened up a very expensive office in an upper class area told me that only the “boffins” would go and search the Internet for properties. He even went further telling me that he had not heard of most of the main property portals. Luckily, these types of people are on the decline and are no longer giving the true property professionals a bad name anymore.
According to some recent studies, the number of online listings have gone up by 58% in just the last nine months.

Whether or not we will still see the estate agents row in the High Streets in five or seven years time is another discussion but we are experiencing a definite trend towards using the technology to provide more competitive property services.

One of the biggest differentiators behind the Appleton Estates brand has always been providing a better property consultancy by removing all the chains that the traditional estate agency has demanded in this country. And, the biggest drive for us has been being on the leading edge of the technology. Appleton Estates has been one of the first “virtual” estate agencies in the area. We have believed in what we have been offering and our belief is now paying significant dividends.

The EPC will contain information on the property’s energy efficiency rating on a scale of A to G, along with some additional relevant data, such as general recommendations suggesting ways of improving the energy efficiency of the building.
The government claims that the EPCs will enable the potential tenants, owners and occupiers understand the energy efficiency of the property.

It will not be mandatory to obtain an Energy Performance Certificate for existing tenants. An EPC is expected to be valid for 10 years but can be renewed earlier if the landlord wishes to reflect any improvements made. If a valid certificate exists when changing tenants no new certificate will be required.

However, similar to the HIPs, we are very skeptical that the EPCs will improve the rental process but will actually adversely affect the rental market. There are already many legal obligations on the residential landlord.

This was a widely expected move by many analysts. Some experts had predicted even more cuts similar to the US Federal Bank’s move.

However, the Bank signalled that further cuts were not imminent due to inflation concerns.

In its statement, the Bank said: “Inflation at 2.1% in December was close to the 2% target, but higher energy and food prices are expected to raise inflation, possibly quite sharply, in the coming months.”

“The Committee needs to balance the risk that a sharp slowing in activity pulls inflation below target in the medium-term against the risk that elevated inflation expectations keep inflation above target,” it added.

Some key players in the property sector are still not satisfied that this move will be helpful for the UK housing market. They are pointing to the data indicating that market activity is 25% down on a year on year basis in terms of mortgage lending and sales volumes. Most people, however, seem in agreement that in 2008, a potential housing crash is very unlikely.

This demand has not gone unnoticed by the property developers. They have been busily popping up new buildings all over the country almost over night. There have also been an enormous increase in the property investment clubs. Some of them are now even offering free membership, free advice etc.

The director of Appleton Estate Agents Marlow, Adil Akkus, believes neither the property developers nor the investment companies have helped the buy-to-let market in the long term. Mr Akkus personally thinks that these are the 2 main factors behind the unsustainable property price increases in the South East. He continues “there may be better investment opportunities in the older properties compared to the new-builds. Also when you look at how much discount the investment clubs seem to be getting for the same new property, one cannot stop thinking that there is a huge mark-up in the new-builds. Also, with so much money to be earned, the investment clubs seem to offer unbelievable bargains all over the country but in places you have not even heard of before.”

We advise the potential investors to be very careful in buying a property that they have not seen, in an area they do not know, and where they have little idea of rental income and resale values.

Successful property investors should be able to demonstrate a good understanding of the area and the type of tenant they wish to attract.

The old adage “location, location, location” still seems to ring true.

ARLA highlights several potential reasons for the increased tenancy demand including increased levels of immigration, concerns about the housing market, and more people living alone.

The South East of the country is heading the list where there is a shortage of rental properties.

The ARLA survey suggests increased tenancy periods where tenants are preferring to stay in the property well over twelve months. Also the vacant rental property period seems to be well under a month.

Purchasing a property off-plan simply means buying a property before it is built. These properties tend to be mostly flats. For the buyers, one of the biggest advantages is the flexibility to influence the finishing, such as the worktops, carpets, etc.

For the property investors, this scheme has a lot more significance associated though:

The property development companies aim to secure their financial position as quickly as possible. They aim not to get their capital tied up in a development for long periods so that they can start up their next project. Like any other retail trade, they tend to choose discounting as an effective way of luring the buyers in and release their capital as early as possible.

Some of the investors do claim getting up to 15-18% discounts and in some cases even getting their stamp duty paid this way.

The key benefit for the property investor is that typically the prices increase as the development property progresses.

When the development completes, the investor still retains the option to complete the purchase. Investor may prefer to keep the property and rent it out or sell it and realise the capital growth that has been achieved during the build, including any discounts he/she has had. Selling before the completion of the property is called ‘Flipping’ and some developers may have clauses against this if they are offering discounts.Flipping is popular by some investors as they can get their capital out as quickly as possible, similar to the developers and move on to their next project with some profit.

Either way, Off-plan property purchasing is often seen as a very good opportunity.

As Appleton Estate Agents Reading, we encourage our customers who wish to go down this route to ask for financial and professional advice before making any commitments. Not all the discounted off-plan properties should be treated as good rental investment. If you have any queries, feel free to contact us for further consultation.

Initially the HIPs were required for the sales of all properties with 4 or more bedrooms. Since September of this year, the scheme was extended to cover all the properties with 3 or more bedrooms.

Since their introduction, the HIPs have been very controversial as most people claim that they make the sale process more complicated and costly without significant tangible benefits. The average cost of a HIP is around £300-£350.

Following on from the initial expansion of the scheme to cover 3 bedroom properties in September, the Royal Institution of Chartered Surveyors (RICS) has claimed that more than half of its members have recorded a fall in the number of three-bedroom-plus properties coming on the market.

However, the government is still insisting that the HIPs will bring benefit to the consumers. They claim that the packs will especially provide more information for the the first-time buyers.

The vendors were forced to drop their asking prices according to new figures published this week. Leading up to November, the average asking price was reduced by over £1500 in England and Wales. According to Rightmove, the average property prices thus dropped below £240000.

This drop has effectively brought the house prices back to July levels.

Analysts are widely expecting further price reductions before the end of this year and early part of next year. If the financial markets can achieve some stability, the analysts are saying that  small price increases might be possible later in 2008.

However, noone is still expecting a wide recession in the economy; therefore they are ruling out a majot price correction at this stage.

This has been welcome by millions of mortgage payers who have been struggling to keep up with escalating interest rates.

The Bank of England has increased the interest rates 5 times over the past 15 months - peaking at 5.75%.

However, there were also some worrying news in the its quarterly Inflation Report. The Bank forecasts the economy would slow down in 2008 and inflation would increase.

The Bank noted a significant amount of uncertainty over for the economy in the upcoming months, particularly due to the vulnerable world financial systems.

The bank also indicated that there were some signs the house price inflation was softening.