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  • Property-a-holics

    A "masterclass" in how to value a property correctly

    A number of friends in Hong Kong received this mass email from one of the UK firms very active in marketing off-plan properties to investors in the Far East (edited slightly for brevity):

    ..it has been announced that from 6th April 2015 all UK non-residents disposing of UK residential property are required to pay Capital Gains Tax based on any profit realised.

    Should you wish to sell your property after this date, you will need to prove to the Inland Revenue the value of the property (the base value) as at April 6th 2015, in order that the profit can be assessed and subsequently taxed at the prevailing rate of 18 to 28% depending on your tax bracket.

    As a result of the new legislation, I am pleased to announce (our) exclusive service of an independent RICS Chartered Surveyors valuation.

    I would highly recommend that you take up this service, which is designed specifically for the purpose of safeguarding our client’s best interests including time, money and a significant future hassle.

    Our rate card according to property value is as follows:

    Up to £500,000 ...................................£750 plus VAT
    £500,000 to £750,000 ...........................£850 plus VAT
    £750,000 to £1 million ........................... £975 plus VAT
    £1 million to £1.5 million.........................£1,050 plus VAT ......


    I'm assuming this is equivalent to a mortgage valuation. In which case, nice work if you can get it !
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    This is different to mortgage valuation work and looks to be viable (mortgage work barely is to be honest as the fee to the surveyor is dictated by the lender (who charge a large margin on top of the actual fee to the customer)).

    For those valuations referred to in the email, you could say that valuing a £500k one off property might take a day in total including the visit, measuring up and research which works out to a professional charge out rate for the surveying business before overheads, salaries etc of circa £100 an hr. Good luck to a surveyor being able to value a £1.5m property for a £1k.
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    Rural Practice Chartered Surveyor. Experienced in estate management, residential investments, planning and development and rights for utility apparatus. All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    Well-justified, Ben, so I might be a bit harsh, then.

    Still, probably in excess of 95% of these target clients will have been off-plan purchasers across maybe a few dozen developments. One two-bed flat in Ritzy Towers will be much the same as the next, therefore (given the same surveying firm is doing all the work) the marginal cost of each additional client survey presumably would be diminishing to some level of base overheads plus time out.

    Apologies, folks, for the thread drift.
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    It looks like a surveying firm may have found a niche where they can make a profit margin - however, the fees do not actually look that high for one off work with individual clients and all the admin that occurs each time, even if the properties are similar. If the owners have the time they will get competitive quotes. More likely they will be wealthy foreign business people/investors who can't be bothered. In addition, they will all be selling at different times in the future!

    Alternatively the surveyor will have to put up with their client's disputing the valuation and all the additional work and effort that entails.

    I'm pleased a professional might be making a profit somewhere. Yes, this is a slight digression ! :-)
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    Rural Practice Chartered Surveyor. Experienced in estate management, residential investments, planning and development and rights for utility apparatus. All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    News from Property Industry Eye:

    Rightmove is to trial a new valuation tool for consumers, with a cautious attitude suggesting that it is aware that it could be stepping into dangerous waters.

    Rightmove claimed, pointedly but without naming names, that it will be offering “a better and more honest solution to the existing automated valuation tools freely available on the internet”.

    It also emphasised that it neither wants to replace nor undermine agents, but hopes its new offering may help agents get new instructions.

    Rightmove says the launch of its new ‘Move or Improve’ app, expected within a fortnight, is in response to home-movers’ curiosity which leads them to increasingly research property values online.

    Rather than generate an exact figure like other tools which Rightmove says “can be misleading”, the new app offers a 15% range estimate of a property’s value – 7.5% up or down from a mid-point.

    The app specifically prompts consumers to contact local agents for a more accurate valuation, should they be thinking of selling.

    However, yesterday afternoon one agent told Eye: “Whilst I agree with it being a good idea to encourage the user to contact a local agent for ‘accurate advice’, I’m not so sure that it’s a good idea to do it through the use of a valuation tool, especially as agents have already shown a disliking to that particular tool.

    “With a 15% price estimate the figure could vary considerably and in some cases by £100,000s."

    Another agent told EYE: “It has to be better than the Zoopla method but it will still be wrong in some cases and we’ll have vendors telling us even more that it’s worth the top price they quote if we think it’s less.

    “It will also make it very easy for inexperienced valuers to just go with the top price that Rightmove quotes to win the business and have something to back them up, even when it’s wrong.”

    Full/source story
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    I use a combination of all - nothing beats viewing something in the flesh - you get to find out how high the ceilings are, how good the communal parts are, any nightmare neighbours, any nearby issues you missed on streetview or googlemaps.

    I use use rightmove, nethouseprices, zoopla, street view and maps. I also call local agents (at the right time as you don't want to bring their attention to a good potential buy). Nethouseprices is great if prices never change, they tell you what condition the property was in and size of the sold comp (but they don't). It's not just about size and condition - layout makes a difference too.

    Prices often rise or fall so fast that rightmove and nethouseprices can't keep up with whats happening so you need to via your instinct and local agents. You also need to know what likely to happen in the next 6mths as this determines if you can make a good profit when you sell or get your deposit back out for next property.

    I've seen many clients buy blind (at auction) and regret it - poor communals and a worse freeholder, japanese knot weed, missed a legal issue by not reading the legal pack correctly, missed a flight path, didn't realize how busy/noisy the main road its on was. subsidence of course.

    I learnt myself the hardway - mansion flat in hammersmith with lovelly views of the......flyover!

    well worth the hour to view even if just from outside as tens of thousands of pounds ride on it. Inside is somewhat less important as its nearlly always a refurb between 5-10k difference

    regards Andrew.
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    regards Andrew Peers - property investor / sourcer - 07912674181

    a.peers@seamlessproperty.co.uk

    Property Redress Scheme Number 011436     NLA member 174404