London property |
I am sometimes told that I am far too positive about the London property market.
The concern being that I am just another salesperson.
And you’re right to have reservations about buying now.
There are the obvious concerns about higher taxes, tariffs, never-ending political stupidity and average economic conditions. You can add several others.
Indeed, there are always concerns with the noticeable exception of the peak of the market when the world is convinced that prices will only go up. That is certainly not the mood currently and hasn’t been since 2014.
And hopefully, you realise that I have not been blindly optimistic over the years. As I try to highlight, a vast number of properties in London are decidedly average or poor. In a strong market, everything goes up and that hides many a mistake.
Which is why I have invented the worst business model ever and spend the majority of my time advising my clients not to buy. As I repeat ad nauseam “be patient and selective but be in a position to move swiftly when the right opportunity arises”. Because even in a relatively slow market like now, the best properties are still in demand.
For example, I was speaking to a very experienced and respected solicitor yesterday who said she had had two contract races in the last three weeks. One of which involved a large “gazump”.
Admittedly, this is the exception and the good news is that there are some “best in breed” properties that can be acquired for attractive prices, because most buyers registered with the agents are waiting so there is less competition.
It is a typical psychological situation: there are lots of price reductions because a huge number of properties were overpriced. This makes people think that prices will continue to come down and no-one wants to be kicking themselves if they buy and prices go lower. So, they continue to wait.
And waiting would make sense if every property was the same and you just hit a “buy” button when you wanted to transact. But that is not the reality. There will only be a handful of properties that you love. Meanwhile, sellers have different motivations, so there will be opportunities to negotiate a great price.
Admittedly, finding these opportunities is not easy because you have to wade through the higher than average number of mediocre and poor properties that are currently available.
While many think my job is glamorous – visiting fantastic homes – the reality is that a lot of what I do is exceedingly dull, because only a tiny percentage of the properties I inspect meet my “best in breed” standards.
Consequently, I mostly update my clients saying that there is no need to waste their time on viewings as the properties simply aren’t worth considering. Indeed, my clients spend very little time with me (which I am sure is a massive relief for them) as I so rarely recommend they visit a property with me.
Unfortunately, actively looking for opportunities is the only way to find them. I wish this wasn’t true. After all, surely after 24 years the agents know me and should just drop opportunities into my lap?!
And sometimes they do. But the truth is, this only happens because I ensure we stay top of mind by calling over 200 estate agents every week as well as having a list of over 500 off-market contacts. There is no substitute for active research. And as that’s what Warren Buffett recommends, then who am I to argue?
And as he also says: “it’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price”. The same is absolutely true for property and if I can find a wonderful property below fair value then what is happening in the market is of little importance.
So, please remain patient and selective. But remember, being patient doesn’t mean sitting on the sidelines doing nothing. That isn’t being patient, it is being out of the market. You will only find the best opportunities by being in the market, i.e. actively looking, which involves:
- Speaking to all the agents in your target area on a weekly basis
- Sourcing off-market opportunities
- Knowing what makes a property “Best in Breed”
- Having a clear understanding of valuations so that you can spot the opportunities
- Knowing the tested and proven negotiation tactics and strategies that will help you achieve the lowest price possible
- Handling and co-ordinating all parties once the price has been agreed so that the transaction proceeds smoothly to completion.
As you may have realised, what I do isn’t complicated. Yes, there is skill in spotting the opportunities and negotiating well, but much of what I do is boring (and often frustrating) groundwork and research.
It is time-consuming and requires a network of contacts that also takes time to build, but in the big scheme of things it is not complicated. What is complicated is life. It gets in the way.
You have numerous commitments which take time, so you need to be focused on the ones that are most valuable and important to you. But, while trying to find your next home or investment property may be important, is it the best use of your time and skills?
I expect that, if you are like my clients, you will be used to having experts help you achieve goals outside of your field of expertise. And, frankly, now could either be a good or bad time for you to buy. Everyone’s situation is different. So, would it be a waste of time to have a meeting to discuss your plans?
“Jeremy advised us that acquiring another property may not be the best option for us.
We would recommend that you speak to Jeremy if you are planning to acquire a property in London. It is very rare to find someone who will give honest and objective advice especially when it is not in their interest to do so; but Jeremy did just that. We would definitely recommend his services.” Mr. and Mrs. M. Smith (Belgravia)
So, if you are open to meeting to discuss your plans simply respond to this email or call 02034578855 (+442034578855 from outside the UK) now, to arrange a time to meet or have a zoom or telephone call.
