David Gilman is partner in charge of Blacks Connect
For those of us who have been working in and around the mortgage and housing markets for some time the renewed positivity we are currently seeing is not something to baulk at.
We have all been through some incredibly lean times in the last half a decade or so and therefore to see the market bounce off the bottom over the past year has, without doubt, been welcome news for all.
However, looking at the market chatter that is currently taking place I can’t help but feel the UK housing market is either feast or famine.
Either we are all on our uppers and the doom and gloom merchants are in the ascendency or we are on the verge of another boom to end all booms. It’s at points like these that we might all wish for some stability and to see a market that can show sustainable and long-term growth.
Whether this is achievable or not in a country which can achieve a housing market frenzy in the time it takes to say ‘Credit Crunch’ is another thing entirely.
What is most interesting for those of us who have been in this market for longer than five minutes is the many and varied ways people are seemingly able to repeat the mistakes of the past despite an infinite number of warnings.
For example, is it possible that we are seeing the return of the much maligned ‘property club’ sector – I’m not sure about you but I seem to be inundated at the moment with email marketing imploring me to invest in ‘heavily discounted’ apartment blocks in city centre locations. Surely nothing can go wrong with these ‘guaranteed high-yield investments’, can it?
Another practice which we might all have thought the Credit Crunch and subsequent housing crash had put paid to is gazumping, however if we are to read the latest surveys and take anecdotal evidence from estate agents it would seem the great gazump is back.
Unsurprisingly it appears to be most prevalent in London and the South East however in other property ‘hotspots’ it also appears to be back on the agenda.
Putting aside the moral arguments against such a practice, if the market is heading ever upwards, then all stakeholders in the property transaction process had perhaps better get used to its return and, crucially, prepare our clients for it.
Certainly in conveyancing terms the client can lose out on a significant amount of money if they are outbid at the eleventh hour and therefore advisers might want to ensure they protect them against such an outcome.
This is just one of the reasons why we offer purchase clients our Buyer Protect policy which will reimburse them for a number of associated costs should their transaction fall through.
Remember that up until the ‘gazumping point’ your clients are likely to have paid out for (amongst other things) searches, surveys, non-refundable fees to the mortgage lender, the list goes on.
This is a significant amount of money that they would, in normal circumstances, never see again without such fall through protection. However, with our policy the client could secure a cash return of up to £1850 covering off arrangement, product and booking fees, or valuation fees, or solicitor’s disbursements.
Who knows what other practices might return to the marketplace in the future but, in an increasingly competitive situation, the least you can provide is peace of mind to your clients should the worst happen and they end up not completing on the property they’d set their hearts on.