Saturday, 1 December 2012

The good, the bad and the seriously overpriced.

This so-called diary is like a politician's. In other words, it should not be entirely trusted to tell the truth, the whole truth and nothing but the truth.

This is especially so since I am still writing retrospectively, trying to remember actual properties, actual events and conversations.

Soon, we'll be up to date and entries will, hopefully, contain rather less hyperbole, more specifics.

We're in September by this stage; the buying season is back in full swing and we are back from holiday relaxed, tanned, settled in the new house and keen to get our cash working for us.

It seems to me that 'making cash work harder' is a fundamental driver behind the strength of Prime London property.

For the rich, with large cash balances, you see, there's a limited range of options.

Interest rates mean that keeping money in a bank is pointless. Dodgy economic forecasts make stock markets less reliable than a casino. And who'd invest in a new business with Europe collapsing, the US split irreversibly in two and even Asia's charge slowing.

There's only really art and property left for the rich. And if you buy art, you need walls to put it on, bigger walls, more walls.

Walls that will also be worth 12% more by the end of 2012, apparently.

Of course, we're not competing for properties with the bonused-up Goldman partner, the cashed-in tech guru or the frightened-out Oligarch.

We're well down the food chain, but not so far down we're unaffected. The trickle down effect in Prime London is profound.

A Donne deal?

It means that even the meanest little flat in a semi-good location is (or was in September) a hot property, able to whip up a frenzy of interest and command an unrealistic price.

If it's anything better, like a potentially cute unmodernised little terraced house round the corner from Brompton Cross, then the market goes insane.

We saw just such a house come on the market in September and 24 hours after it was first listed went to take a look.

Donne Place is a little, tucked away Chelsea street containing tiny cottages rather than classic stucco townhouses. It's a bit shabby to be honest. And the houses are seriously Lilliputian.

This might put some people off Donne Place.

The one that comes to market is 1000 square feet and seemingly hasn't been touched in 60 years. It doesn't have a garden, but I guess an optimist would say it has a 'patio'. The windows look like those of a post war local authority house and to call it '4 bedrooms' may be technically correct, but is in no way a truthful description. You might be able to add 100 square feet. Might.

It's listed at £1.65m. That looks a bit toppy, as Tracy would say, but if they'd take £1.55m there would be some, limited potential for a small developer.

Not a chance. The agent explains that interest is such that 'sealed bids' are required by 10 am the following day, and the house is expected to go for 'above asking'. In addition, the agent insists that any offer is submitted by our solicitor with full disclosure of our 'financial means'.

We reckoned, on the back of a Starbucks napkin, that it would cost £300k + to renovate, making a total cost of over £2m when you factor in tax and fees.

You might get that back for a finished 'product'. But with the new 7% stamp duty on £2m+ properties it would be a hard sell just to break even.

I have no idea what price they finally achieved. We had already walked away. Fast.

Full on Fulham.

Having just moved out of Fulham, I wasn't that keen to go back as a developer.

But the trickle down effect I mention above means that this borough has now become the place for young professionals as they start breeding. (The destination of choice used to be Wandsworth's Nappy Valley, but it really isn't close enough to the action for today's young.)

There have always been hot spots in Fulham such the Peterborough estate, parts of Hurlingham and bits of Moore Park, but now even Sands End and the streets around Munster Road are filling up with 4x4s, black labs, double buggies and Hunter welly wearers.

It's not so long ago that you'd want an armed guard to venture far into Sand's End, but today it's a plantation shutter makers dream. All fake Farrow & Ball finishes and, increasingly, French accents.

(Just off the wrong end of Wandsworth Bridge Road, there's now even an Ecole des Petites.)

Basically Fulham is the closest to Chelsea these folks can 'afford' if they want room to have even a modest family.

Doesn't look much, but this is the
highly valued Peterborough Estate

Perfect, then, you would think, for the greedy attentions of a little developer like us.


I'm sure there are opportunities, and we did take a look at several. But the streets in these newly up and come areas really aren't very inspiring. There's a uniformity, a boxiness, a production line repetitiveness to the place that I simply don't like.

In a more 'hard-nosed' vein, I also think the market's overheated. With the City cutting jobs and professional firms tightening their belts, even Fulham prices are beginning to look beyond the ordinary mortal.

And where there are 'bargains' to be developed, there's also a young couple prepared to outbid our profitability cut off point.

Vauxhall. Like the car, you wouldn't be seen dead in it.

My very first company car was a Vauxhall. Although it was completely free in those days, I was still embarrassed to drive it even at the tender age of 21.

More recently a friend has been involved in the planned relocation of the US embassy to Vauxhall, an event which has been heralded by agents as creating a potentially massive boom in local and neighbouring Battersea property prices.

I'm sure they're right. It's logical. It makes complete sense. But then so does driving a reliable, cheap to buy and run car from the General Motors offshoot.

I just can't do it.

It might be a great home for dogs,
humans I'm not so sure about.

Even Battersea, which as many of you will know is not the name of a car, doesn't work for me. I got as far as the front door of a couple of properties and had to turn back. It just wasn't for me.

Within empty beer can throwing distance of the properties we looked at there really is a housing estate where a bodyguard is advisable.

Taxi drivers won't venture into it, even the police only enter mob handed.

So I won't be venturing anywhere near it either.

Lots Road. Or the Golden Triangle, to you.

This area ought to be the Holy Grail for people like me. Certainly the agents keep saying so.

It's an almost triangular area of Chelsea bounded by the luxurious and ever expanding Chelsea Harbour complex at one corner, the King's Road and Ashburnham Road which leads down to the Embankment. It feels cut off from 'mainland' Chelsea and in terms of property prices it is. Or was.

Once again, the inexorable march of plantation shutters can be seen gradually colonising even this once down at heel area.

A trendy photographer's agent I know has moved into Burnaby Street, Upcerne is almost entirely gentrified, there's a grand new art school and a rather mysterious new secondary school housed in lavish new quarters.

We went to see a strange property that had become stuck on the market, and was now open to 'offers'.

There are bargains in Lots Road.
The house wasn't one of them.

The owner, a structural engineer by trade I think, had started a full refurbishment of the house while still living in it. He didn't like the ground floor much, so stripped this back to floorboards and unplastered walls and then left it. Retreating to the upstairs, he built what he needed above this main ground floor. And then appears to have run out of either money or interest.

It was a great 'developer' opportunity. The numbers stacked up. The area is up and coming. Houses around it had been seriously tarted up. There was just a couple of problems.

It was noisy. And the ground floor was very dark (no wonder he retreated upstairs). If it had been 50 yards to the west it would have been a great project.

Once again, we had to walk away.

By now - mid September - the bank's meagre interest rate was beginning to look a better option than property for our cash.

Depressed we retreated back to Walton Street to welcome my stepson from Hong Kong with dinner at The Enterprise. At least his arrival would take our mind off property, or so we thought...

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