BUYING
MANAGING PARTNER AT BLACK BRICK, BUYING AGENT
Q. The Budget suggested that it is going to become easier to get planning consent. What will be the impact on house prices?
A. The Budget announced measures to streamline planning applications, including a 12-month guarantee for processing all applications and appeals, a fast track for major infrastructure projects and a consultation on proposals to make it easier to convert commercial premises to residential. This is good news for developers and could mean that we see more commercial property get developed into residential property as a result. With the current downturn, there are many commercial premises that are now vacant, and may never be tenanted again, and with the current housing shortage in UK, the announcement will be welcomed by many. Red tape and lengthy planning applications can and do put off many developers, and we should start to see more new residential properties being developed as a result of the changes. The impact on houses prices is likely to be negligible in the short term, as financing is still an issue for many developers and it’s unlikely the recent changes will suddenly cause a huge surplus of supply into the market. What will be interesting to watch is how the changes will affect the value of commercial property. Residential property has a higher capital value than commercial property, and so we may start to see the value on some commercial property rise as a result.
Q. What are the pitfalls of buying at auction?
A. We do keep our eyes peeled firmly on what properties are being sold in auction, but in truth, we rarely find properties that meet with our clients’ requirements in auction. A lot of our clients want to buy property in prime locations in central London, and very few properties in good central London postcodes end up in auction. It’s more common to find properties in less desirables areas, or properties that need huge amounts of work, which doesn’t appeal to everyone. That’s not to say auctions aren’t worth considering, but buyers need to be aware of how auctions work. It’s important to do your homework before an auction. This should include a site inspection and it’s a good idea to get a surveyor to attend with you, to give the property a once over and check for any major potential structural issues.