Market Reflections 1: House sale reasons and lettings cowboys

There are interesting figures behind what gets in our window...

A couple of interesting newspaper reports this week, both in the London Evening Standard of 27 February.

The longer report described research by Castle Trust which stated that one in four properties to have changed hands in London since 2007 has been sold at a loss. Journalist Anthony Hilton came up with three lessons: 

"Lesson one is that even in a bouyant market it is possible to lose money." 

"Lesson two, however, is that you have a better chance of doing well here than elsewhere - in the same period in England and Wales as a whole, two out of five houses were sold at a loss."

"Lesson three is that, although in the long term house prices tend to rise in parallel with wage growth, it is clear that there are blips and individual house prices can be really volatile. Home owenership is a lot riskier than most people appreciate."

Anthony also brought up some interesting statistics:

• Of the 12,500 loss making properties sold since 2007, the average shortfall was a little under £50,000. Whereas the 34,000 making a profit made an average profit of a bit over £92,000;
• The highest reason (18%) for selling poorly was to buy another home at a good price; 
• The second highest was, more sadly, divorce or separation;
• Another 18% was made up of a combination of illness, moving into care or death;
• 13% sold owing to a need for a larger house;
• 12% moved due to relocation for work;
• 11% moved owing to not being able to afford their mortgage;
• 9% moved to raise money;
• 8% was due to job loss or redundancy;
• Having to clear other debts accounted for another 5%.

You can read the full article - and Anthony's views on a couple of offers which Castle Trust have for home owners that he describes as "interesting and innovative" here. 

In another article in the same issue of the Evening Standard, a headline appears "Act now to curb cowboy lettings agents". The article says that the independent adjudicator on rental property disputes (the Property Ombudsman, of which we are a member) is demanding the government curbs cowboy agents. The Ombudsman, Philip Hamer, says up to 40% of lettings offices are not regulated in any way, a business worth £40 billion a year. Whether or not the government acts, the Ombudsman refers to there being 15,782 complaint enquiries in 2012, a 12% rise. The biggest award was £13,335 to a buy-to-let London landlord whose agent put an illegal tenant in her property and refused to take action for months when no rent was paid. If the landlord had not been a member of the Ombudsman scheme, no claim could have been made.

On 20th March there is a debate on The Future of London's Property Market in Westminster. Tickets are no longer available, but it should be interesting.