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Property Tips

  • Property expert Alex Goldstein discusses how to manage a buyer in a hurry when you are not sure you’ll be ready. It is this months’s property hospital question from listener James for the Alex Goldstein Property Show.

     

    How to Manage a Buyer in a Hurry

    Full transcript below:

    Alex: The property hospital is all about me answering your property concerns and demystifying the process. Now this week I’m answering a question from James, who’s got this to say.

    James: Hi Alex, my house sale is under offer and going well and we’re moving quickly in the right direction and the purchasers in a great position, chain free and cash and it’s put me under pressure to exchange and only leave me a couple of weeks until completion. How do I manage this situation and how can I pack up my home in the mean time?

    Alex: James, appreciate the question. Now if you’ve got a buyer that is clearly in a strong position and enthusiastic about exchanging, then it is well worth keeping them onside. Shake their hand gleefully and honestly, run for the hills, in other words get them signed up ASAP so you’ve got the security that you’re deal has gone through. Up until the point of exchange transaction is virtually meaningless. Now if you’re worried about the relatively tight timeframe and packing up your home, don’t worry. Many home removal companies offer a home packing service, you literally don’t need to do anything, and their team come in, wrap, pack your entire house and you can even ask them to unpack at your new home. Surprisingly I have to say it really isn’t a huge amount more money and really worth outsourcing this fairly tedious task. I hope this helps.

    How To Manage A Buyer In A Hurry

    July 2020
  • Property Expert Alex Goldstein discusses the importance of transparency and integrity in business, and how accepting incentives from business acquaintances will hamper rather than enhance your reputation and the growth of genuine referrals.

     

    The importance of transparency and integrity in the property business

    Full transcript below:

    This month it’s all about client service. Now something I value incredibly highly in business is integrity. The yardstick I use to measure this is the transparency with which people operate and I’ve long said that if you put your clients at the forefront of everything you do the clients are going to come your way.

    Yet let’s face it client service can be used incessantly as one of those buzzwords on company websites and many claim to care for their clients but do they really? In my mind it’s a case of going back to basics, looking in a client’s best interests putting them at the absolute centre of everything. I ask myself most days, look if the client was a member of my family how would I advise them. I’m constantly amazed how many referral fees go on behind the scenes and this isn’t just in the property sector whilst our third company may be good at what they offer, soon as a monetary incentive is introduced into the mix you’ve instantly got a bias. I’m regularly approached by businesses offering some kind of incentive to gain access to my clients, but I always turn them to the emplacement I have to say of some of them.

    Now I have been in the business for nearly 20 years building relationships with people I trust and yes, I’ve got a bank of solid dependable contacts. I suggest their products and services to my clients, however it’s safe in the knowledge that they’re the right one for each client and full confidence they’re going to do a good job. None of them ever ask for kickbacks when they send people my way and neither do I seek anything of them. We’re looking at the bigger picture you might say. So, to put this in context, for example, Robert the Decorator I suggest, he’s been in business for over 17 years and he’s of the old school. I say he’s the only decorator I know who listens to Classic FM while he works and that sums him up perfectly. He always does a great job at a fair price and sometimes even offers my clients a discount as he knows they come from me and they’re going to be easy to deal with because I’ve guided the client prior to his visit.

    It’s a win-win situation for all involved. Robert gets a decoration job on the right basis, my client has a home presented to a great standard which in turn makes mine and the appointed agents job much easier. The property is then sold at the best price. The payback for me is way more valuable than any below the counter monetary backhander and that is word-of-mouth repeat business and I want people to talk about me to each other and that simply happened by putting them first and doing a great job. As I mentioned in my recent Yorkshire Post column, 92% of my business came from word-of-mouth recommendations last year and that probably tells you all you need to know.

    The Importance Of Transparency And Integrity In The Property Business

    July 2020
  • Property Guide Price & Estate Agent Fees

    June 2020
      The time has come to tackle two of the most talked about points in estate agency – property guide price and estate agent fees. Some may say these topics are rather taboo, but get them wrong and your sale…
    Read this article
  • Knowing the inside track on the property market and how to differentiate between estate agents will be critical to selling your home in a post-Covid market. Listen to my live talk on how to choose an estate agent now!

     

    How to Choose an Estate Agent

    Full transcript below:

    So thank you for joining me and this is very much a talk on how to choose an estate agent in what is a tougher market, potentially what will be a different market and very much in conjunction with agents here to help. So really appreciate their support as always. So as everyone knows yeah sure we’re in uncharted times but there are a lot of reasons I have to say to still stay positive. It was predicted in the property industry that we would see a surge in market activity following the general election and the Brexit result and sure enough, in February, this was just prior to lockdown, the UK had the highest number of mortgage approvals since January 2014. It was shy of about 74, 000, so a proven surge then and i predicted, along with a lot of other commentators that the same was going to happen again in a post-Covid market and when it was slightly more behind us. Now this was proven on Wednesday when the property sector was more released and the right move reported, again, these figures are incredible right? We’ve reported a 45% increase in website activity. 70% increase in inquiries and over 2 000 properties were newly launched within five hours of trading. So that is quite some staggering figures and some real positive news out there. But look, don’t get me wrong, the market is of course going to be different. It’s likely to be tougher and there’s going to be a bit of turbulence along the way, however, as I sit here, there are some key areas that you’ve got to get right. If your sale is going to go with a bang. We’ve had a tougher market now for a while it’s likely to continue and this afternoon in a pretty short, sharp and to the point discussion I just wanted to outline what I feel are the key criteria to look at when deciding to choose an agent to sell your home. How to differentiate between them what the vendor needs to know and how to ensure that you’ve got the best team around you. So prior to this and even more so now, many of the frontline values and estate agency practices were under a huge amount of pressure to perform and I used to be that side of the fence and it means sometimes that you’re incentivized to list a property rather than to necessarily sell it. The agents are motivated rightly or wrongly by targets, KPIs and spreadsheets and this can sometimes cause a conflict between giving what is the right advice and getting the instruction, and it’s a very, very fine line. And I’m not saying for a moment that this is a bad thing I’m merely saying that it’s something to be mindful of. So, look, who am I? Very briefly. A why do I feel that I can make these points?

    So, as I’ve alluded to, I am a former estate agent myself, but I used to be with some of the biggest names in the country and other consultancy practices for about 18 years. I’ve now got my own business and I give them the inside track on the estate agency and property sector when it comes to buying and selling their homes. Bit more unusual, I’ve actually got a footing in London and the London home county markets and the current consensus I feel is that the vast majority of buyers and indeed sellers just want to get on with it. Lives have been put on hold and yeah sure the market is a bit mixed. We’ve seen a huge surge at the moment but there are some key agency cornerstones that you need to master to ensure that your sale is going to go with a bang and then make sure you’re ready for these, so as I see it, the key points. The first one and the moment is experience because as with any business sector out there, yeah of course there are always the rogues out there but you need to ensure that your agent has earned their time working at the agency, coalface if you will, for a good number of years selling property. It’s bizarre speaking with the clients first thing this morning it’s just not the same as insurance and it’s one if not the only emotional purchase we ever make. And rarely is it with more money or more associated emotion. So, look if you haven’t been there before as an agent, you’re never going to be able to gauge a situation and more importantly, actually nip situations in the bud before they actually occur. The best thing is to check out your agent on LinkedIn to get a true feel for their experience. If they’ve hopped across numerous sectors, over the week, over the years. They’re just not going to have the battle-hardened skills to deal with a given situation nor get the best figure from a would-be purchaser. And I do mean battle hardened. We’ve been through a lot in property in recent times, recession, Brexit and all of that you need to have been there and done it and got the t-shirt in order to give the best possible advice and get the very best out of any given situation. So that’s the first point.

    Second point, again a lot of people overlook this and I’m at a loss as to why but, the front of house team. So, these are the key individuals back in the estate agency office and they should be your primary focus when choosing your agent not the valuer who’s pitching for your business, sat in your sitting room. Those are the salespeople but equally so is the front of house team because they are the first individuals to speak with interested parties, deal with walk-in inquiries, telephone inquiries. They need to be able to talk fluently enthusiastically and knowledgeably about your home. It’s be more likely therefore that you’re going to secure viewings and it gives viewers confidence in the agent as well so that they in turn can get the best out of them. Make sure that you ask those on the front end, the front of house team, to see your home themselves. Even if it’s virtually, of course at the moment, before it goes onto the market because if they’ve seen it, as with everything in sales, if you’ve seen it you can talk about it more confidently and from a position of strength.

    Next point on the front of house team is just to also ask how is your sale going to be handled once you go under offer. And to be clear, selling a property is actually the easy bit. You’ve got to keep that window from going under offer to exchange as tight as you possibly can. You need a designated sales progressor as they’re called and again one who’s got the experience. I like to think of these people like little Yorkshire terriers because they go after all the parties, they push them very hard to get the deals over the line and they never give up. They constantly nip away, and they really are amazing people, but they are worth their weight in gold. And again, make sure you’ve got a good one on your side.

    The next point is viewings. So of course, we’re in uncharted times. It’s still a moveable face on how best to conduct these and currently agents um they’re not necessarily allowed to accompany unless there’s very strict guidelines in place and the doors need to be all opened up and social distancing in place so again it’s not what it was. However, prior to lockdown and we will eventually come back to this. Is that I’d always say be wary of agents who can ask you to conduct the vast majority of the viewings because as I see it it’s slightly a lazy estate agency and it’s not necessarily again in your best interest as vendor. Showing potential buyers around a property is an art and the most experienced agents know exactly what the viewers are looking for and how to get the best out of them. So one of the little tricks I used to do is that you’re showing someone a property and they make an enthused comment about, I don’t know the breakfast kitchen so what do you do you finish the viewing in the breakfast kitchen. So, the last thing they actually remember is the breakfast kitchen. It’s little things like that you don’t want. Just a simple door opener so it’s a key but important point you as the vendor. Again, it’s different at the moment sure but make sure you’re not in the background. You can’t be in ear shot because you want the genuine feedback and that is so valuable um and important. And yep I agree virtual viewings are in place and I am going to come back to these in a moment. As I mentioned at the start, I’ve had a very good question in advance about this and the virtual viewings. Again, we just need to talk through.

    The next point is marketing so look before you choose an agent mystery. Shop them. Always, always investigate their marketing collateral. How well are you treated as a buyer? For example, do the front of house team know their stuff do they ask you the right questions? Because an instant fail for me is when you call them up and the agent says I’ll just get the brochure and check. You’ve already got the brochure so what’s the point. Look through the brochure examples. Check they’re all well designed presented and outstanding photography and I do mean outstanding. Brief descriptions, floor plans and site plans as well where relevant. Game check for typos. Are all the descriptions amazingly similar because if it’s a copy and paste job, you may just want to part ways with them. Take of course a look at their web portal presence, right move and on the market social media activity, videos editorial and PR coverage. It all counts, and it really is not just about online presence. Check and ask your agent how many proceedable cash buyers could they instantly pick up the phone to. It’s a good sort of test as to how straight talking your agent is because as I said, if they say any more than about a dozen. Um yeah, they may be uh wishful thinking.

    Perhaps the next point, again guide price. Common tactic as I think we’re all aware, but you don’t necessarily appreciate it when the agent is around your home is a common tactic shown by, I have to say the less scrupulous agents to secure your business is to suggest a guide price where it’s got you planning your next holiday in the Bahamas. Go with your gut feel. If it sounds too good to be true what do you know, it usually is. Buyers are very well researched nowadays, and your guide price needs to be realistic and, on the fence, because if it is, you’re going to get the interest. If you don’t and you over pitch it, you’re going to be one of those properties that languishes in the market too long and you’re going to have to regularly reduce your price and it just sends the whole wrong message to the market and the whole thing becomes stagnant. I think a lot of people don’t fully appreciate this creates a far greater problem because it unnecessarily adds to your digital footprint. Your online history, all these websites record your market activity and you can never delete it and it’s something just to be aware of. You need to critically trust the agent who gives you a realistic guide price but please never ever instruct an agent who just quotes the highest price. It’s much more than that.

    The next point on how to choose an estate agent, the last point actually will be slightly taboo, it’s commission. It’s fees. It’s a bit of a false economy to strong-arm the agent into a low fee or just to go with a cheap agent because you might congratulate and high-five yourself for securing a better fee than anyone else but here’s the important thing, ask yourself if the agent is on a low fee, how incentivised are they going to be to put in the effort to sell your home? Not a lot because the small percentage that you might pay in addition for a better agent is a small drop in the ocean compared to the extra thousands. They’re motivated now to secure you at the negotiation stage. You need to remember estate agents are often rewarded by their commission. That is their reward and if you take that and you whip the carpet from under their feet. They’re instantly disincentivized and they’d much rather look after another property that they’re going to get rewarded for it. Makes sense? I’m not saying go drastically overpay for your agent but again it comes to the guide price element. On the fence you know what the standard market rate is that’s what you should be aiming to pay um as well.

    So, look, overall, from this talk how to choose an estate agent it’s experience, it’s the front of house team, it’s viewings, marketing guide price and fees but they’ve all got their respective roles to play. It’s how they all merge together with the appointed agent that is critical. In today’s very rapidly changing market and look personally for me my highlights are it’s got to be attention to detail. And experience that’s that word has just cropped up in so many of the points that i’ve gone through. Experience and again the front of house team. Those are the things that are actually going to pay dividends.

    So I hope that’s been of use and that’s my take on estate agents. I mentioned at the beginning a very good question about the whole virtual viewing arrangements at the moment. And my take on it um as I see it, and this is new territory. I think for everyone it’s a great tool don’t get me wrong. But I don’t see it as an advantage to have them freely available by putting them on Rightmove and everywhere else because as I see it, have you thought about the security risk they pose? You’ve got potential high value items and you’ve got a very clear guide around your home. So, what I’m saying is by all means, advertise the fact that you’ve got one and it’s available, but it needs to be, as quite a few of the good agents are doing, accompanied online by the agent, i.e. the agent has the video tour on their screen sharing with the interested party who’s been pre-qualified and vetted but it’s the agent that retains that file. The agent holds that video and that way the agent can go and chase up potential interest and again get the best out of them. If you have one of these videos or indeed, your property online, who are these people looking at your video? Who are these people looking at right move? Yes, an agent may say we’ve had 200 hits this week but at the end of the day right move doesn’t know that information. You cannot as an agent go and follow them up and that’s why I always say less is more. Put less information online, have potentially interested parties engage with the agent to say you didn’t tell about x can you tell me more about why? They’ve then rung and engage with the agent. The agent gets all their details. Give them the answer and more importantly go and follow them up. So, as I said, virtual viewings certainly have their place. It’s early days but again to have it freely available on all these websites. I’m not sure that’s necessarily the way forward at the moment because you need to tightly control who’s viewing it and go after them as well.

    And look if there’s any other questions, feel free to get hold of me or indeed have a word, the website is alexgoldstein.co.uk and really hope that’s been of use to everyone. No doubt see you soon. Thanks again.

    How To Choose An Estate Agent

    May 2020
  • Full transcript below:

    Alex: Believe it or not UK estate agents are actually the cheapest in the world. America for example is 10% for your agent, Australia it’s 4% and in Ireland it’s 3%. The general average for the UK is between 1% and 2, something like that. Whilst it may feel great to you to squeeze an agent right down on his commission and get a deal, at the end of the day is that agent going to be motivated for you? Is he really going to be pushing to get you that extra £5-10,000 on that accepted offer, probably not. If he’s on a very mediocre fee I can tell you now, he’ll just want it straight off his books, so you instantly damage your sale. My advice to a lot of clients is to strike a sensible chord, have a commission right on the fence, if you feel it worthwhile do an incentivised, a staggered fee, so that you know that your agent is truly motivated in your best interests.

    What Fees Should You Pay An Estate Agent?

    April 2020
  • When you deal with estate agents, how do you stay at the front of their mind so that you are the first person they think of? Join property expert Alex Goldstein in this educational discussion

     

    How to stay front of mind with an estate agent

    Full transcript below:

    Linda: Alex, I’m on the market with an estate agent at the moment and things are ticking along but how can I continue to get the best out of them and ensure that they’re always pushing my property?

    Alex: Linda, great question. One of the best things you can actually do is get the front-of-house team or the office-based staff to view your home. The more staff that have seen it, the more they’re going to remember it and they’re then going to mention it to the buyers out there. The other thing is, I think you need to stay in touch with your agent but do keep it brief each time. Remember agents are salespeople and they’re often short of time, so having a 30-minute telephone call is just going to clog them up and let’s face it, I would much rather they were using that 30 minutes on the phone selling your property. So, really keep it short and sweet with the communication, that’s the key. Again, on that point, remember estate agency is of course, it’s a people business, so therefore be nice as I know you would be, but people always go out of their way to help anyone that’s great to get on with and keep a solid personable rapport with the agent. Really, the ultimate tip and trick here, stay front of mind with your agent, go and buy them some cake and seriously I do mean that, pop by the bakers, get them a selection of cakes in a box and drop by the office and say that you were thinking of them. So, when they’re eating them, and the other office staff are asking where these cakes come from, they’re discussing you and your home, and again in other words you are front of their minds and you’re being a great client and therefore they will continue to go above and beyond for you. I really hope this helps.

    How to Stay Front Of Mind With An Estate Agent

    April 2020
  • Are you fed up with estate agents having had the initial pushy salesmanship and then having to constantly chase them for viewing feedback and to remain proactive? There is another way and this video explains all.

     

    Sell Your Home With A Property Expert Guide

    Hello, I’m Alex Goldstein from Alex Goldstein Property Consultants. Are you fed up with estate agents? Do you initially get the pushy salesman approach, and then it’s left up to you to constantly chase them for viewing feedback? And, it’s over to you to spoon-feed them to remain proactive? Wouldn’t it be great if there were someone like TV’s Phil Spencer who could step in, and stand by your side, and guide you through what is one of life’s most stressful experiences? I’ve been in the property sector now for 15 years working for some of the UK’s most renowned estate agents, so I know what you should and should not do. Wouldn’t it also be great if you didn’t actually have to pay anything for this service, as my fee is taken out of the appointed agent’s commission? I look forward to working with you, and give me a call so we can chat through the options available to you.

    Sell Your Home With A Property Expert Guide

    April 2020
  • What is the mindset of an estate agent? What happens behind the scenes in estate agency? Why are estate agents sometimes pushing hard to get property for sale?

     

    Behind the Scenes of Estate Agency

    Full transcript below:

    So now we’ll slightly flip the coin, this is where I couldn’t find a better picture so apologies to the agents in the room. So, this is where your estate agent is coming from. So, when he comes to see you as the homeowner as you are looking to sell, what is he thinking and what are hid angles. It’s a bit of a sad reflection of the economy and the climate that were in because commercial reality nowadays means that a lot of these estate agent employees effectively are under a lot of pressure. You’ve got key performance indicators, KPI’s, as they are commonly referred to. You’ve got daily targets, and got monthly targets, you’ve got increased competition from other agents, you’ve got increased London costings and weighting if you are part of a national firm. So, this is always sort of playing on their minds. So, their view point tends to be, I really need to get that property on the books, minimises the risk of the estate agent and of course the negotiator can go back to his boss manager at the end of the day saying boss, did a great job, got Tom’s house on the market, pat on the back for me, great tick the box for today’s targets, everyone’s happy. Or are they? Because the associated problem with again, this sort of mindset, again the agents are coming in with a sort of pre-conditioned idea, that they just have to get property on their books. They’ve got to get it no matter what and sometimes that overtakes what’s actually looking in the client’s best interests.

    For example, it sometimes crops up where an estate agent would necessarily say to you, the homeowner, please do go and get planning permission, I’ll see you in six months’ time. That is potentially looking in the clients best interests, but he’s not necessarily going to say that because from his perspective, it’s going to mean a delay in marketing for him, he’s going to allow the competition through the door, you’ve got a six-month window, all his competitors could get through the door and he’ll miss out and at the end of the day as I’ve mentioned he’ll miss his target. You miss your target, boss I’m really sorry I didn’t get that job, Alex, into the office, why didn’t you get that job? Well I advised that should get planning or the guide was out. Well next time Alex you need to do this, you need to give a higher guide, you need to do this.

    Again, a lot of agents now, dare I say if there are any in the room, that is accountancy led and it can distort the way they’re thinking so again it’s just something to be mindful of, they’re not all that way. As I said there is good news of course, estate agents at the end of the day they are salespeople, they are very strong willed and they are rather tenacious at the best of times and the end of the day as I’ve mentioned they would much rather be selling your property, dealing, as they like to call it, dealing on the phone, doing in the calls, then spending 20 minutes on the phone with you. That’s what their job is to do. They are on high commission so again they are incentivised, they want to do the deals, they want to be on the phone, they want to be pushing your property and not necessarily, again this is where it heads into the news, necessarily sorting out sort of client liaison and keeping their clients happy. From their perspective the quicker they can get a property under offer, it all leads o to bigger and better things of curse because they can shout about it from their websites, they can put it out on social media, they can run adverts and there’s a say in the business, boards breed board. So, if you have a for sale board it very often leads to another for sale board, it goes under offer or sold. It again the whole cycle goes around again, that’s what agents want because they just need the churn, they need the turn of properties coming on to their books.

    Behind The Scenes Of Estate Agency

    April 2020
  • How To Search For Property

    April 2020
  • Is Your Estate Agent Team Best in Show?

    April 2020
      Tuning the television into Crufts the other month, I was amazed at the dazzling array of different dog breeds – no less than 222 according to the Kennel Club. They were tested across numerous situations and aptitude tests, displaying…
    Read this article
  • If you’re moving house, then instructing a conveyancing solicitor is a Must-Do! says property expert Alex Goldstein. He is constantly amazed by the amount of times it doesn’t happen and house sales either grind to a near-halt, or fall through altogether. Don’t let this happen to you!

     

    Instructing a conveyancing solicitor

    Full transcript below:

    When it comes to instructing a conveyancing solicitor for your sale or your purchase then key is to do this sooner rather than later and I am constantly amazed how rare it is for an estate agent to flag this up to their clients who are selling or indeed to purchasers. Well I go over here you say well Alex that’s great but what is the actual point of doing that? Now look, if you’re selling for example you’re going to need to provide original or authorised copies of your passport and a recent utility bill. Scan and email is no longer accepted. You’re going to need to sign the solicitor’s paperwork, ask them to open a file, plus instruct them to collate the title information go through it and if there are any issues to iron out you may need to get some indemnity insurance. As the vendor you’re also going to need to dig out all your paperwork and the guarantees and the certificate and before you know it you’ve easily wasted ten days trying to secure all this information. Now if you haven’t done this early on you’re now going to waste valuable time sorting this out very often at the point of going under offer and this is really when you should be focussing and progressing towards exchange. Most importantly if you do forget to do this it sends completely the wrong message to your buyer and dents their confidence because you’re wasting 10 days before the solicitors can even do anything with the whole transaction. So, the key, always instruct a quality solicitor and ensure you do it at the same time as instructing your estate agent, then there’s never going to be any surprises down the line. That’s the Alex Goldstein Property Show and yet again some superb top tips and features. If you need expert information, videos and up-to-the-minute property news then head over to my website alexgoldstein.co.uk alternatively if you require personalised advice or 15 years of experience advice when it comes to buying or selling your property, please get in touch directly.

    Instructing a conveyancing solicitor

    March 2020
  • If you’re thinking of extending or making changes to your property, you might need to look into gaining planning permission. But should you approach the local council first? No, says Alex Goldstein. Watch this short clip to learn Alex Goldstein’s tips on securing planning permission.

     

    Tips on Securing Planning Permission

    Alex: The property hospital is all about me answering your property concerns and demystifying the process. This week, I am taking a question from Adam, who’s got this to say.

    Adam: Alex, I want to put a good size extension on the back of my home, so I thought I’d just ring up the council and debate it with them. Is this the right thing to do?

    Alex: Adam, interesting question here. Now, look, the best advice I can give when it comes to planning permission is never speak with the council until you’ve spoken with a professional. Remember, as soon as you speak or, indeed, email them, everything’s on record. If you inadvertently rub them up the wrong way, you’re going to have a serious struggle on your hands. So, firstly, take your time, speak with a reputable architect, usually they going to be RIBA, or equivalent, qualification.

    The planning laws have changed very quickly in the last few years, therefore, sometimes you can actually extend your property under what’s called permitted development. The architect’s gonna advise you on this, and, look, if it’s a more complicated case, say, for example, you’re a listed building or you’re in a conservation area, then you may need the expertise of a planning consultant. These are people who know the laws around the planning, whereas an architect, effectively, draws you the nice pretty pictures. Speak with the professionals, and if they give you the green light to speak with the council, then go for it, or be under their guidance. If you’re unsure about which architect or planning consultant to use, feel free to drop me a line.

    Tips On Securing Planning Permission

    March 2020
  • Listen to Alex Goldstein’s discussion on Leasehold Property Top Tips with Matthew Jones, a legal expert on leasehold and enfranchisement (the process of buying the freehold of a property). He explains the pros and cons of a leasehold versus freehold and explains the pitfalls and benefits of both.

     

    Leasehold Property Tips

    Alex: Great to be joined in the studio by Matthew Jones from LCF Law in Bradford. Matthew thanks very much for coming in. The department you’re part of is the Lease Extension and Enfranchisement Team. Can you actually just talk everyone through it, because again, these are these boss words that get thrown around fairly readily but no one actually understands it? Talk us through.

    Matthew: Yeah, sure Alex. I work at LCF Law as you say in the Lease Extension and Enfranchisement Department. What that effectively is, lease extensions are when tenants want to extend their lease which they can do under legislation. Enfranchisement is when tenants want to collectively buy the freehold. That’s it in a nutshell. I mean there is more detail to that which I’m sure we’ll come on to.

    Alex: And what again is parts of that? You’ve got the Leasehold Reform Act. What does that encompass and what does that actually mean?

    Matthew: The act basically allows a leaseholder to extend their lease by an additional 90 years providing certain criteria on that. The main one is that they’ve owned the property for two years or more. Now they have to pay a premium for this and what they get is a new lease on the same terms and no ground run. So that’s the lease extension element. Now the enfranchisement side of it, that as I said before, allows a group of tenants in a building to join together and buy the freehold so the actual building in which those flats are located. And the rights are granted under an act.

    Alex: Yeah, and talk to everyone, because we’ve slightly skipped over it but talk everyone through freehold property versus leasehold property and if you’ve got a leasehold property then as you said the cluster is more of a tenant rather than an owner, just talk everyone through the actual basic differences on that because again I think it’s commonly misunderstood.

    Matthew: Yes, it is. It’s something that we get asked quite regularly. We’ll take leaseholder.

    Alex: Yup.

    Matthew: Basically, what that means is that you have your property on a lease for a set term. So for instance in flats that could be 90 years, 150 years, even 999 years. But there’s a set start date and an end date. For a free hold you own that property indefinitely until you part with it either through sale or you lose it by some other means, for instance, the bank claimed it back or something like that.

    Alex: Yeah and you mentioned there a sort of a long lease, 999 years. Some people so say, “Well that’s as good as freehold.” Is that still the case nowadays?

    Matthew: I mean no one’s gonna live that long to see it through to the very end.

    Alex: You never know with modern technology croaking.

    Matthew: It’s always better to have the freehold. It really is because at the end of the day even though you may have a 999-year lease, with a lease comes certain restrictions so you have to comply with certain requirements. So say if you owned a flat, that lease that you have will say that, I don’t know, for instance if you’ve got a balcony, you can’t put washing out on that balcony or you can’t play music after a certain time. Things like that.

    Alex: And I guess this also comes into pets as well?

    Matthew: Yeah, absolutely. Yeah, so if you were a big fan of hoarding iguanas or something like that then there might be a restriction preventing that. Dogs, cats, anything can be put into that lease.

    Alex: Got you, so basically if you own the freehold you’re in charge effectively of your own destiny rather than being a lease holder. So talk us through the structure. If I’m a tenant, I’m a lease holder, I own the apartment under a lease, you’ve then got a freeholder above us. How does that actually work, that actual structure?

    Matthew: So what you will have is you will have the freeholder who owns the building, the large building where all the flats are located. He will then grant individual leases to the tenants. Sometimes you can have a scenario where there’s a management company, so you’ll have a lease from the freeholder to the management company and then the management company will then grant further leases to the individual tenants. So it can get quite complicated.

    Alex: Frankly that does get really complicated quite quickly, doesn’t it? And I mean everyone talks about the number of years left on your lease.

    Matthew: Yes.

    Alex: Why is that important? What number should people look out for and why?

    Matthew: Right, well, anything around 90 years or less, I’d say that you really need to start thinking about extending that lease.

    Alex: Is that extending the lease by the 90 year element?

    Matthew: Yes, absolutely.

    Alex: Can you ever do more than the 90 years?

    Matthew: You can in certain instances. What you can do, under the act, you are allowed an extension for 90 years.

    Alex: As the minimum?

    Matthew: That’s it, that’s what you are allowed under the act that we referred to earlier.

    Matthew: You can, in certain instances if you’ve got a very good relationship with your freeholder, your landlord, you can look to extend it for longer. If for instance as we mentioned earlier with the enfranchisement where collectively the tenants own the freehold, you can look to extend to 999 years because you own it together.

    Alex: And how does it work when people hear that they want to buy the property. They’re a lease holder at the moment, they’re then to gearing up and they actually want to buy out the freeholder. How does that side of things work?

    Matthew: Yes, well, how that works, I mean the first thing and I can’t stress this enough is that they need to instruct a specialist solicitor to do it because it’s a very complicated area of law. It really is. Quite often you see people who’ve instructed the local solicitor, the family solicitor and it goes wrong. The first step obviously once they’ve done that is they need to get evaluation and again there are specialist surveyors and valuers out there who can do that for them.

    Alex: Just specifically because the fact it’s a leasehold property, it’s not a civil building survey necessarily or anything like that.

    Matthew: It’s because of the act and there are special calculations that need to be worked out. I’m not ofay[SP] with those simply because it’s so specialist and as solicitors we can’t advise on those kind of things. It’s something that the surveyor would do. Once that’s done, they obviously need to see who’s interested in collectively buying that freehold. Once they’ve done that, usually you’ll set up a company to acquire that freehold then formal notice is served on the landlord, the freeholder, and provided they accept the right, then effectively it’s a conveyance so a sale or purchase…

    Alex: Transaction.

    Matthew: Yeah, transaction to acquire that freehold.

    Alex: And does the freeholder always have to sell? Are there any circumstances whereby the leaseholders collectively or singularly approached the freeholder and said, “We want to buy this?” And where do the rights lie? Where does the law actually reside or it’s up to negotiations?

    Matthew: That’s why it’s very important as I said to instruct a specialist because there are certain criteria involved. That’s why the investigation stage is so important. So when those tenants come to myself, come to our team, it’s very important for us to do those investigations thoroughly and that’s looking at the act, looking at the requirements, seeing the individual tenants, their leases, things like that and then saying, “Right, yes, we can go ahead and do this. You qualify under the act. We’ll get notice served.”

    Alex: And why is it beneficial. I know when we talked about extending the lease and you said, “Well, look, the critical number Alex, it’s around 80 to 90 years left or remaining on the lease?” Why don’t I just sort of leave it to there, 5 to 10 years on the lease and then I extend it for another 90. Why wouldn’t you play it like that?

    Matthew: Simply because if it gets below the magic year which is effectively 80 years, once it gets below that, then it’s gonna be even more expensive for you to extend that lease.

    Alex: Why?

    Matthew: Something called marriage value. Now it’s very complicated, I’m not gonna bore you with the details because it’ll fry the noodles of the vast majority of people probably who are listening. But once it gets below that magic line then it becomes incredibly expensive to do so. Now why you would want to extend your lease. Clients come to us for a number of reasons, firstly, they’re looking to sell, perhaps they’re flat, mortgage lenders, banks, they will want to see a long term you.

    Alex: Yeah, it’s low risk.

    Matthew: Exactly. Another reason perhaps if people are looking to put their affairs in order, they’re coming up to a time and [inaudible 00:08:45] or older, they want to make sure their beneficiaries have got no worries basically when they look to sell the flat as part of the estate. Another reason it protects the interest that you’ve got and the money that you’ve invested in that flat. You know you want to make sure that you’ve got something that’s gonna just increase in value. You don’t want something that’s gonna depreciate.

    Alex: Yeah, an asset. You want to ensure that your property remains an asset and that’s very important.

    Matthew: Exactly.

    Alex: In terms of costs, to be mindful. Obviously you’ve actually got the, I suppose the pure finances of actually sort of extending the lease or indeed looking to buy the freehold. You’ve obviously got your cost as well. Is there anything else one needs to be mindful of when going down this route at all?

    Matthew: Yes, obviously as you say there are your own solicitor’s costs, there will be your own surveyors’ costs for them carrying out the valuation. You will also have to bear in mind the premium that you’re paying. So you have to factor that into your budgeting. There’s also the landlord’s surveyor’s cost that you have to pay.

    Alex: Really?

    Matthew: Yes and also the landlord’s solicitor’s cost. But they can only claim so much.

    Alex: Oh, okay. I envisaged a lot of zeros all of a sudden there but you put my mind at rest.

    Matthew: Yeah, yeah absolutely. And yeah though there’ll also be other things such as land registry fee and if you’ve got a mortgage, your mortgage lender might have a charge for transferring that across.

    Alex: So it’s actually quite an expensive thing to go through.

    Matthew: It can be but it’s certainly worth it.

    Alex: But of course there’s no stamp duty on that, is there, unless you’re buying the freehold?

    Matthew: No basically the stamp duty, you don’t have to worry about that if you’re extending the lease. So as I said the only things that you have to worry about are those I outlined earlier?

    Alex: And what happens if you’re buying the freehold? Sorry.

    Matthew: If you’re buying the freehold, again, no, you don’t need to worry about the STLT but you do have to worry about those costs and things that I mentioned earlier.

    Alex: Okay, now it’s all in balance. So Matthew we’ve talked through if I’m a tenant and I’ve got the apartment under a lease, what happens if it’s the other way around? How can you guys help and it’s actually on the landlord at the end of the day?

    Matthew: Yeah, and we do have a number of clients who are landlords themselves and what we can do is when tenants come to them with formal notice, exercising their right to either extend their lease or collectively purchase the freehold, we can act for them and see it from the other side and act from the landlord’s perspective. So doing the investigations to see whether those tenants qualify, if they do then we can work with the landlord effectively to make sure that they can get the best premium and things like that. Interestingly we have won a number of awards, acting for landlords and tenants alike.

    Alex: Have you? Okay.

    Matthew: Yeah we’ve actually won The Young Professional Enfranchisement Lawyer of the Year. We were also nominated for the Regional Professional Enfranchisement Lawyer of the Year. Surprisingly you know there are awards for these things.

    Alex: There are must’ve been fun to you, that one.

    Matthew: Not as glamorous perhaps as the Brits or the Oscars but nevertheless, you know…

    Alex: A close second.

    Matthew: Absolutely.

    Alex: Matthew, if anyone wants to sort of touch base with you when it comes to your lease extensions, the enfranchisement or indeed the leasehold reform act, how are people going to best reach you?

    Matthew: Well the best thing is just pick up the phone. Our Bradford office is 01274848800. So you can give them a call and you can also email me at mjones@lcf.co.uk and visit our website and go through that way as well.

    Alex: Matthew thanks so much. Some great tips and advice there.

    Leasehold Property Top Tips

    March 2020
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  • Should you use a packing service when moving house? This is one of the most common questions property consultant Alex Goldstein gets asked. Yes, he says, for several reasons. Find out those reasons here.

     

    Should you use a packing service when moving

    Full transcript below:

    Following on from Chris’s excellent property hospital question, it brought to mind a question I get asked a lot by my clients, which is should you use a packing service when moving or is it better to save your money and pack up your house by yourself? Now I personally always suggest using the packing service for the following reasons, firstly it usually costs a lot less than you think. I know a contact of mine in the removals business explained that they keep the extra cost quite small because they’d much rather you let them do it. Their guys have trained to pack things properly and you’re less likely to get breakages. Second point, any breakages that do occur should be covered by the removal firms insurance. If you packed yourself its fairly unlikely to be the case. Thirdly, the removal guys are going to be a serious amount quicker than you and the stress of just having to face it will be lifted from your shoulders. Moving house is one of the most stressful things you can do, so do yourself a favour and let someone else take this on. And the last point but take note, they will pack absolutely everything, down to the very last holey sock in your drawer so do a thorough declutter before moving day so you don’t waste time and money having to unpack rubbish you would have planned to get rid of anyway.

    Should You Use A Packing Service When Moving

    March 2020
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