Wednesday, October 12, 2011

Diminishing Asset - Wednesday

‘Got a market appraisal for you.’ Begins trainee F enthusiastically as I walk wearily through the door. I should be energised. The chance to pitch for a new instruction is the lifeblood of any estate agency office. Without stock you founder frighteningly quickly.

‘Where is it? I ask cautiously. It’s not good management to sound churlish when a team member has ferreted a lead out for you, but some homes you don’t want at any price. F has done the right thing, even down to calling the appointment a “market appraisal”, a litigation-limiting ploy brought about by lawyers, owners and lenders wanting to use sky-high figures from inexperienced agents for their own ends. I still feel my appraisals are as good as any surveyors and probably more accurate, I just don’t have the professional indemnity cover. In my head I still call them valuations though – always the rebel, even with less hair.

F reels off the address to groans from the more experienced staff members.
‘What?’ He questions sulkily, demeanour suddenly like a whipped dog. I don’t want to stifle his enthusiasm, but I don’t particularly want to risk parking my car anywhere near this block. And walking along the street in a suit with a briefcase is the equivalent of one of those scowling German types with a machine gun they hoist on pulleys at firing ranges – an easy target.

‘The lease is a bit suspect.’ I tell F soothingly, as assistant manager guffaws in the background.
‘So that’s not good then?’ Quizzes F, brow more creased than his shirt now.
‘Not if you want to find a lender who’ll advance monies on it.’ I reply.
‘Don’t bother,’ Interjects fat finance man M as he sways past. ‘The construction is dodgy and until they extend the lease to at least ninety-nine years you are talking cash buyers only.’ He pauses and bites into something chocolate-coated before adding. ‘And pretty naïve ones at that.’

Sadly M is right, outside of central London - where a different set of rules apply, so perpetuating a two-tiered property market that skews the national figures endlessly – lenders require the lease to have about fifty years still to run once the loan period ends. With a twenty-five year mortgage, that means any lease less than seventy-five years remaining starts to become harder to shift and a diminishing asset. Personally unless you have a share in the freehold, or a 999-year lease with peppercorn ground rent, I’d steer clear.

‘But that’s not fair is it?’ Persist F. If he thinks property is fair he’s still got a lot of learning to do. I explain in small syllable words how you can enfranchise if the block meets the right criteria, and force absentee freeholders to allow you to extend your lease if it hasn’t run too low. But as ever there is a cost and getting consensus in buildings where leaseholders have probably bickered over parking, communal areas and parties, is notoriously difficult.

‘Keep an eye on your car for you?’ Grunts a pre-teen in a hoodie rhetorically, as I park within sight of the grim block in question. It’s a fair bet the architect responsible for this particular concrete and steel carbuncle doesn’t live nearby. Grade Two listed rectory in the countryside, as a rule.

‘It’s fine.’ I snap back curtly.
‘Could get keyed round here.’ Persists the play school mugger, sinisterly.
‘It’s a company car.’ I tell him dismissively. Not sure if that will make a difference to the junior extortionist but apart from the paperwork and the trip to the bodyshop, I don’t really care.

‘Third floor.’ Says the tinny voice as they buzz me in and I inhale the familiar whiff of boiled vegetables and stale urine. I’m just eyeing the battered lift warily and wondering about the stairs when I spot the Out Of Order sign. Decision made.

‘Nobody mentioned the lease when we bought.’ Replies the owner tersely, as I sit, still sweating, heart rate not back to normal. They never do. He and his partner are in denial - and in arrears. They want to sell and split up. I have a feeling their attachment to this damp block will last much longer than their own.

On the up side the car was undamaged.


Mr P said...

I suspect that a lot of places, bought (using mortgages) in desperation/greed/fear of mising the boat in the boom/bubble years, are unsellable in the clear light of day we have now - and for many good reasons.

Russell said...

Give them the number they want to hear and send F on the viewings. Cheap way to make him as pessimistic and untrusting as he'll need to be to survive? Stick the costs on the training budget.

amused said...

Hey Mr Agent it's been a week! Hope that all is well. I am missing my dose of realism and black humour.

secret agent said...

As Mr Schwarzenegger said - I'll be back..