Time for some home truths. Attempting to sell my flat and helping my mother sell her house has revealed some worrying aspects about the British property market.
Number one: My own sale. It took six weeks for my Home Information Pack (HIP) to be delivered, when it is supposed to take two weeks.
It has been illegal to put a home up for sale without a completed HIP since April, so theoretically my flat could not be marketed during that long wait. As it was, my estate agent was not too fussy and started marketing my flat without a HIP. Needless to say, not a single viewer asked to see a pack during those six weeks.
Such lax attitudes might be enough to worry some people, but there is a bigger issue which ought to concern everyone. HIPs were intended to speed up the sales process, but if it takes six weeks for a pack to be prepared, then the system is failing and actually slowing the process down.
This raises another question: If HIP providers are failing to produce reports on time now, when there are so few sellers in the market, how will they cope when the market gets busy again? Will this added bureaucracy make the housing market even more inert?
Number two: My mother's sale. Two buyers made offers on my mother's home and both asked surveyors to value the house for them. Only 17 days separated publication of these surveyors' reports and yet their valuations differed by 25 per cent. There were no sudden shocks to the market in the days between these valuations and no secrets about the house revealed that might affect its price. So what could explain such wide variation in these valuations?
The lower of the two valuations could be explained by good, old-fashioned backside protecting. Some surveyors have been criticised for giving low valuations in recent months so they can avoid being sued by mortgage lenders if prices fall further.
In both cases, the prospective buyers paid these surveyors in excess of £1000 for these reports. Was that money well spent? Did these highly qualified, independent professionals know their job? Are they really better than anyone else when it comes to property valuation? Bluntly, are they useless?
The wide variation in those valuations reveals an unwelcome home truth. It shows that pricing a property is a guessing game. Yes, investors will use yields as a scientific way to determine a home's value, but for a great many owner-occupiers, emotional factors dominate: “Will that home make me happy” they ask themselves, which is absolutely the right question.
Estate agents valuations which, we all know, vary widely and surveyors valuations which do too, apparently, are merely rough guides, and are useless when it comes to putting a value on individual domestic happiness.
Put another way, the value of a home depends entirely on what it is worth to the person buying it and to the person selling it, it is entirely an individual matter. That is why my mother will pay over the odds, in many peoples' opinion, for her new home, a mansion block flat, because its location, lightness, airiness, spaciousness and working fireplace are worth so much more to her than others it seems.
We won't bother to have a surveyor value it. She doesn't need a mortgage and the money will be better spent on putting right small things and making it look nice. We haven't seen a HIP for it either. Chances are, it's not published yet. In any case, sometimes, intuition can be more useful than thousands of pounds worth of professional advice and a vendor's half-truthful answers on a HIP's Property Information Questionnaire (PIQ), and it's free. It's less of a bureaucratic mouthful too.
(All The World's a Home : Global Property News)
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