Tuesday, 27 November 2012

Let the X-Factor auditions begin..

The problem with being a Do-Er Upper in Central London is that everyone is now a Do-Er Upper.

You only have to walk the smarter streets of SW London to see just how all consuming the passion for doing up property has become.

Every few yards another basement is being dug out, another gang of loud mouthed scaffolders is busy encasing yet another total refurb, another group of Polish builders stands morosely waiting for instructions, skips take up half the parking bays and white vans occupy the rest.

You can pick up brand new kitchens
in a London skip!

We've become a nation (or world) of renovators, improvers, Sarah Beenys and Grand Designers.

And this is a problem for those of us in search of an 'honest' profit.

The margin is an endangered species for smaller developers because there is now very little difference between the 'newly renovated' price of a property and the 'would benefit from some updating' price. Sometimes, no difference at all.

This is fine if you are an 'end user'. Prepared to buy your house, do it up, live in it for five years and wait for the market to overtake your investment. But if, like us, you want to be in and out within six months or a year, it's a problem.

As I ventured into this opaque world, more and more people crawled out of newly laid wood floors to tell me that there was no money in it any longer, the good days of massive profits were over, our project was doomed and I'd be better off buying a few cheap buy-to-let fleapits in Streatham.

The bland leading the bland.

So, full of all this optimism and encouragement, we set out on our search.

My secret weapon in all this is of course Ms Kellett, the buying agent, who took us out on a couple of 'tours' back in early summer so we could see the problems.

These fast sorties round six or seven properties in a day helped refine our brief for when we started searching in earnest after a few weeks idling in the sun, sea and silly prices of St Tropez.

So, with many apologies to Mr Cowell, this is what we've been looking for:

X-tra space

With prime London property fetching anything from £1500-£4000 per square foot, any extra space you can create via extensions, basements, mezzanines or mansard developments is like finding a goldmine. And the way some people excavate, you'd think they were literally digging a mine.

Along Walton Street from where we live someone is planning to go down 50ft, create three new subterranean floors and 1000s of square feet. It will add millions to the value of the house, and ruin the lives of local residents for up to four years! 

In our more modest way,  we're just looking for places where we might steal a hundred or so extra square feet.

X-traordinarily complicated

You can't normally create extra space in a flat, and our budget doesn't extend to most houses in central London.

What you do find in flats however is legal complexity. Short leases that need extending are guaranteed to put off most overseas buyers, who quite rightly see it as a legal and financial hell hole.

Still, it's one way to acquire something with the potential for profit. But you have to be very, very careful. Otherwise you could be stuck with the flat, unable to extend its lease until you've owned it for several years and at the mercy of a complex and unpredictable valuation system.

It's a bit like spotting a gold bar in the middle of a minefield. Terrifying but oh so tempting.

X-citing possibilities

I get alerts each morning from Primelocation and Rightmove listing the latest properties, within certain categories, to find their way onto the market.

Sadly, it's usually an extremely depressing daily ritual looking at these new 'opportunities'. Not because the prices are too high and not because there aren't often some great properties in brilliant locations.

No, the problem is more an aesthetic one. They all look the bloody same. Especially the 'recently completely refurbished'.

A £3m flat in Cadogan Square looks just like a £1m flat in Shepherd's Bush - empty, soulless, characterless, cold....and very, very boring.

I appreciate the reasons for this. People don't usually want to acquire an eccentric, quirky, messy personal statement by someone else.

They want - as people constantly tell me - a blank canvas. Well, I only believe this up to a point.

The houses I want to live in (and buy if I had the money) are full of interest, look like real people occupy it and feel like a home.

My sister-in-law once bought a house from a developer, and it somehow never lost that bland, cost driven soulless feeling.

So anything we buy has to have the potential to make it feel like a special home, and provoke an emotional not just a rational reaction.

Ultimately, we want properties with personality.

Next time, we start making offers and getting depressed.

Wednesday, 14 November 2012

Special Agent Kellett

Like most men, I'm somewhat averse to asking for help.

I'd rather get lost than ask for directions. I'd rather wrestle with my own worries than share them with anyone else. And I usually prefer my own opinion to those of any genuine experts.

Foolish. And dangerous too. Especially where health or money's concerned.

So for this do-er upper project I am at least pretending to ask for some help. First up, and possibly the most important member of the team, is our buying agent.

Buying Agent???

What the hell's that, most of our friends have guffawed?

Well, think of estate agents as The Seller's Agent...and you've pretty much got the idea.

They work for us, the buyers. Refining our brief. Sifting, short-listing and pre-viewing potential properties. Keeping an ear out for stuff coming on the market. Checking out the trade websites (Lonres). Looking at local comparables in terms of achieved prices. Persuading agents we are serious, cash buyers. And, finally, hopefully, negotiating hard to make sure we get a good deal.

This last part isn't quite such a likely role in a market where the asking price can be just the starting point. But if you're going into a sealed bid (and more about those later) you need nerves of steel and some good advice.

Up to 70% (apparently) of Prime Central purchases are now done with the help of a buying agent, and indeed most people who came to view our last London home came with their own buying agent.

The role is a relatively modern invention. But a good one I think.

Such a good one, in fact, that for a couple of years I and a young Aussie called Murray, who lives in St Tropez, set up as buying agents ourselves. We weren't, it has to be said, always hugely successful.

There were one or two decent sales and a few troublesome rentals, but more often than not the extremely rich proved impossible to satisfy. And all to often the houses for sale in St Tropez were so drop-dead horrible I wasn't surprised.

When we found ourselves having spent nearly two years trying to acquire, unsuccessfully, the same €25m house for a Goldman's boss, I'd pretty much had enough. We're still keeping an eye out on behalf of a couple of clients. But the market down there has been hit hard by Hollande's new tax regime.

Acting as buying agent, we found this very rare old St Tropez
bastide for a UK buyer.
Once owned by Ms Bardot, no less.

An early ad for our buying agency in the FT.
Like most of my ads, nice but largely ineffectual.

For our Do-er Upper project however, we needed a buying agent who knew London property better than us. Someone who would help us be ruled by our head rather than the heart.

Fortunately, I'd been following one on Twitter (@buyingagent) for over a year. I liked her tweets, her blog, her sense of humour and her no nonsense approach to the business. When we finally met Tracy Kellett of BDI Homefinders, I also came to like her.

Many in the property industry will already know Ms Kellett; her blog is both award winning and extremely funny.

She's a canny and relentless operator in a hugely frustrating and often thankless job.

Already Tracy's knocked our brief into better shape, told us in no uncertain terms to forget anywhere but Prime Central, and made it very clear that what we're looking for is practically impossible to find.

Strangely, this honesty has made me much more optimistic.

For all of the above, however,  I still wouldn't ask Tracy for directions. It seems her Range Rover is fitted with a special taxi driver's sat nav that will take you the longest way round to any destination.

Apart from that, you can't go wrong. I don't think!

Tuesday, 13 November 2012

Prime Central Lunacy

Prime Central London, as the agents call it, is arguably the world's most dynamic and valuable property market.

OK, so Monaco may be more expensive but it's small and even those who live there don't really want to live there. They merely save tax there. In reality, it's claustrophobic and full of people you'd rather not know.

Hong Kong is a challenger when it comes to price growth, but it's hot, humid, chaotic and ideal for the young out to make it.

Singapore could be a contender, but it's a sort of Asian Zurich. Ordered, obsessively managed,very controlled and not a lot of fun.

Manhattan is up there, of course. But somehow, the 'new world' has become the old world. It's a bit of a theme park nowadays. Noisy, aggressive, dirty, arrogant and insular - but in a pre-packaged, cynical  sort of Disneyesque way.

Paris or Rome represent no challenge to London at all. Unless you want to live in the past. Yes, they're beautiful, life is wonderful. But they are ultimately little more than social and cultural museums.

It's not surprising then that every billionaire this side of Texas wants/needs a big bit of Prime multi-national London.

And if the billionaires are here, so are those who feed off them. The bankers, the lawyers, the accountants, the advisers, the luxury brands, the interior designers - you name it.

One Hyde Park. At £6000 per square foot
the most expensive Candy you can  buy. 
On top of that you've got Parisians running away from a virulent strain of anti-capitalism called Hollande, Arabs escaping the heat and rigid rules of their home countries, Chinese stashing cash away from communist eyes, Indians wanting to show their one-time colonial masters that they're rich now, Russians worrying they might one day fall out with Putin and Italians/Greeks/Spanish running away from a tax man called Austerity.

London's may these days be the ultimate melting pot but it's also one gigantic cash box.

These people don't necessarily all want to live here. Some just want a stake in a stable country, a world capital with a relatively welcoming tax regime and a reliable legal system.

By way of example, the house I rent in Chelsea is owned by an Italian salami maker!! As far as I know he's never even been here and the investment is managed by his adviser in (where else) Monaco.

It's a mad, mad world.

And it's in this Prime Central world that my Buying Agent has recommended we ply our trade as would-be posh 'do-er uppers'.

Can we cut the moutarde?

The world borough of Kensington & Chelsea

Saturday, 10 November 2012

The future's bright. The future's white walls.

We've sold the house in Fulham, and the one in St Tropez.

We've taken a cute little rented house in a classic Chelsea back street.

The mortgage has gone. The bills are paid. Even the daughter's outrageous Francis Holland school fees have come to an end.

Perhaps more presciently, any remaining career in advertising seems to have fizzled out too.

So now what?

I know, lets do up some properties and make loads of money!

It's easy, right.  London's awash, after all, with dim and desperate foreigners ready to sealed bid their way to a £2500 per square foot blandly modernised mean little flat.

Jolly good. Bring it on, then.

Before you die laughing at the sheer madness of this idea, I should add that we may be foolish but we're not quite certifiably insane.

We do have a bit of form in the property world.

In the last 12 years we've done up two wonderful London homes and four gorgeous French bolt-holes. And done pretty well out of it, to be honest. But, they've been our homes. An investment in our lifestyle, rather than hard-nosed business propositions.

First up was a tiny 17th century garret in Paris's Latin Quarter. The memory of it still has me damp eyed with romantic nostalgia. There was hardly room to swing a chat, and it was 84 steps up a winding, worn and wonky wooden staircase. But the views across the roofs to the Pantheon were wonderful, the precarious little balcony over Rue St Jaques tres charmante and the flea market furnishings so, well, chic.

Indeed, we did such a good job that when we came to sell, the buyer wanted everything down to the last bit of cutlery.

Back in SW15 we bought a lovely home in a shocking location (right on the South Circular). The buses and lorries pounding past at all hours shook the house to its foundations. But it was big enough for the five of us to get along relatively smoothly, and as the agents say 'had potential'.

In came the preposterously expensive (but beautifully made and installed) Bulthaup kitchen, limestone floors, walk through showers, steam room and sandblasted glass doors. Out went most of the downstairs walls...and therefore any chance to get away from eachother.

In France we moved south, completely gutting and modernising an apartment overlooking a St Tropez beach with the aid (apparently) of a trendy Portobello based architect.

After endless fractious rows with our downstairs neighbours, we swapped this for a detached house just along the road that belonged to a well known rock star. He'd clearly bought it in his poorer days as it was not nearly grand enough for him any longer (so he'd installed his parents). Still, it had a good view of the moon (if not its dark side) and steps from its garden led directly onto the beach.

Perfection. Well, yes, in many ways it was. For a year we even lived the dream, with a speed boat moored in the bay. (Its demise in a storm is another story.)

We bought the house for a snip, and sold 3 years later for a far, far less modest sum. And all we'd actually done was throw out lots of heavy old furniture, paint everything white and lay grass in the garden!

Now that's what I call pied de la eau
In London, we shortened our postcode to SW6, and moved to a house virtually on the King's Road near that charming football stadium Stamford Bridge. (Gosh, I do so miss the smell of urine after a match.)

Surrounded by not just footie fans, but several nightclubs, this wasn't a house for those seeking the quiet life. But once again we set to improving it. And over 5 years we saw its value more than double.

So SW6. Colour too!

During this period, there was also another house in France: a massive renovation of a country property. But I'm now almost as bored as you must be. So that's enough of that.

Our aim now is to use this 'experience' to become semi-professional do-er uppers of tired or expandable central London properties and make enough to pay our rent, cover our not entirely inexpensive lifestyle and leave a bit over for when we can't face another day with builders or estate agents.

I thought it might be amusing to track our progress (or lack of) via an occasional blog. The Do-er Upper Diary. Please read on.
Before emptying our bank account...

...and after.