Mnay years ago, when I was training Estate Agents, it occurred to me that the valuation that is put on a property depends upon how quickly a vendor needs to move.

If they have no urgency and are prepared to wait say for example 12 months, themn the price that the property is advertised at can be somewhat higher because the vendor is looking for that one buyer who “falls in love” with the property and is prepared to pay more than its estimated value (people will pay more for perceived quality in any marketplace).

Conversely, if they need to sell their home quickly, maybe because of divorce, relocation, a death in the family, redundancy etc, then they need to find a considerable number of buyers who would be happy to pay that price. This is a market where property developers and investors inhabit. People who are looking for a bargain.

This is all simple economics. Supply & demand.

So, why then don’t agents seem to discuss this issue and price variation when they are do listing appointments (more commonly known as valuations).

Patently my training has been forgotten, so out of interest I have posted the question on an Agents forum in LinkedIn.

If it interests you, check it out at;

A good article by Jo. It should be copied by Estate Agents & given to all vendors before they put their property on the market.

Have a look at Estate Agents photos and see how many vendors need advice!

Good article.

I don’t understand how people come to the conclusion that Buy-to-let investors prevent first time buyers from purchasing property. Someone on a LinkedIn forum made this statement last week as well, so I had to politely correct them.

Buy to let investors do not look to buy 1 bed flats or small houses. They tend to look for Houses where they can rent to several people, esp Houses of Multiple Occupation (HMO).

In addition, for an investor, as the saying goes “you make your money when you buy”. In other words investors are looking for bargains by buying below the normal market value (“BMV”). If a first time buyer wants to buy a property all they have to do is outbid an investor. This isnt difficult – they just need to offer the normal market value.

As for the comments being made by, mainly socialist, politicians & people / agencies with an agenda about rent controls, this is utter nonsense. They do not understand supply & demand. There is a demand for private rental property, so investors supply it. If you cap their rent then when market forces change ie interest rates go up, then many investors will be LOSING money. What happens then? They sell. Who then provides the accommodation? Not the Government. They are broke.

Unfortunately, it is not understood even by many new landlords how little profit there is in Buy-to-Let property after tax, void periods, repairs & the cost of finding tenants. This is when interest repayments are at their lowest, so what will happen when interest rates rise, as they will do, will result in a MASSIVE sale of rented properties by Landlords who can no longer afford to pay their mortgages.

How does this help the Private Rented Sector? It is electioneering and greed. The (mistaken) politics of envy.

Further evidence, although it’s not needed, of how little politicians understand about supply & demand and how markets work. Their ignorance is depressing.
Why do politicians listen to the idiots at Generation Rent? Landlords will go out of business. Landlords are taking big risks in buying property anyway, and their net profits are frequently NEGATIVE as esp in London they are relying on capital growth. So what will happen to the housing stock when landlords sell? Who will buy it? Who will provide housing for those who cannot afford it? If its not the Private Rented Sector then how do these idiots propose that housing is made available? Do they think that a bankrupt Governmment can magic them? Do they believe that they can steal enough properties?

Alternatively, Landlords put up rent to compensate for the additional tax. Who does that benefit? Not the voters that they are appealing to. When will socialists learn that interfering in markets distorts them, and that businesses need to make a profit to stay in business?

Most landlords only have 1 property. These are not rich people, just ordinary folk. Gordon (“the moron”) Brown destroyed the pensions industry. Nobody trusts banks. Interest rates give no return, and the stock market is very risky. Where do people invest their savings to get a return? They are gambling on property values increasing! Now as a result of this Gvmt incompetence, they are proposing to compound their mistakes by taxing people more.

This will end VERY badly.

This is great news! Not before time. Previously is was a bizarre and unfair tax.

At last the unfair block system has been removed and a system akin to income tax rates has been introduced. This means that the higher rate only applies to the price banding rather than the full value of the property.

Residential properties Purchase price of property Rate of SDLT…more

This will free up the distortions in property prices & enable properties to be sold at market value, not a value distorted by avoidance of a major increase in SDLT costs.
A property being sold at £260,000 will now attract SDLT as follows;
The first £125000 = Nil
£125000-£500000 = £2500
£250000-£260000 = £500.
Total £3000.

Previously this would have been £7800

Well done Chancellor. Can’t remember the last time I complimented a Minister.

This outrageously soft penalty incenses me and I felt that I had to comment upon the thread that had been posted on LinkedIn.
The Landlord should have been put out of business. The tenants could have been killed but they only received £60 compensation!

All landlords need to know about this addition to the Big Brother household of unnecessary, time-consuming, bureaucratic and penal legislation. In this case its to cover up for the total incompetence of the Gvmt in knowing who is/has entered the UK since Labour got in Gvmt over a decade ago.

Unsurprisingly most landlords aren’t aware of it, and many intend to ignore it. Whilst my instinct says exactly that and the Gvmt needs repelling, unfortunately this approach could prove costly. Like ignoring those speed limits that have been reduced to raise revenue rather than increase safety. Eventually you get caught. Ultimately the bureaucrats and central planners win even when they are wrong.

Croydon council proving the extent of their greed. Do they really believe that the tax (its not about licensing, its about raising money) won’t be passed on to tenants. Idiots!

Use existing powers to catch & prosecute “rogue” landlords!

My contempt for the authorities grows daily.

£100k discrepancy between ONS and Land Registry

So, who is right? Who knows?

As the article states, nobody in the media appears to have noticed!

If its a Gvmt statistic, always treat it with scepticism, if not downright cynicism, and question the basis upon which it was based.

I’ve been saying for a few years that I don’t believe that many landlords make a profit on their rental, and are in fact speculating on property price increases.

There is a big difference between gross yield and net yield and I don’t think many understand the ongoing costs before they buy a rental property.

Once interest rate start to rise, these “investors” will start feeling the financial pain. Many will then have to sell, or will be tempted to remortgage and take out more equity if values continue to rise. This is a dangerous game.