Whilst the recent birth of my second child only a week or so ago has left the Dad within me contemplating nothing but cuddles, gurgles and kisses, the Estate Agent couldn’t be faulted for wondering if my children will ever be able to afford a house at all.

According to recent research those actively motivated, fully employed, first time buyers are having to save for an average of eight years to acquire the basic deposit needed to by their first property. I don’t work for the Department of National Statistics but my children having full time employment could well be triumph enough. Buying their own property could simply be the icing on the cake. 60% of first time buyers receive help from parents and grandparents and if it’s possible to do so then I would certainly like to honour this statistic. I would love to believe I’ll have the ability to pass lump sums to each allowing them to purchase their first home.

Could this be realistic though? It’s cost enough raising children whilst maintaining the ability to pay a mortgage, financing the family car and facing the inevitable breakdowns and household dilapidations that running a family require. My head began to ache (could have been lack of sleep?). Here are a few suggestions Elizabeth Davenport’s financial advisors have recommended to me.

There are many ways that a parent or grandparent can help their children with that DO NOT involve parting with their own assets. Remortgaging your own home, with the right advice, may mean that your own repayments raise but you will have released a sum to enable your children to pay for their own house rather than Mr & Mrs Landlord’s!

Even more generously minded parents or grandparents who seek to downsize themselves will find tax benefits in gifting monies to their offspring rather than allocating it as possible inheritance. This is a particularly tough conversation to instigate with Grandpa as it involves giving money and death but nonetheless it may be one that an astute Grandma could initiate instead!

Thirdly the ability for a working parent to guarantee a mortgage loan can help top up the deposit. Certainly if their own professional history and credit rating is credible this can be a very valuable tool in securing the right property rather than the compromised shed in not as bad a location as the other forty you looked at!

Finally, despite there being a raft of other options available I’ll present the ultimate. If your relationship with Mum and Dad is faultless and you truly remain the apple of your parents eye then a mortgage can be guaranteed via a charge on the parental home. This is a massive trust related gesture which is essentially a declaration that you can trust your children implicitly and they honour you enough to never default. This, of course will be my chosen path because as every new parent is certain, their children will be faultless!

Since the beginning of history a favourite outcry to gain attention has always been “The End Of the World is Nigh!”

Each generation assumes that they are the gifted ones that will have the honour of destroying the earth once and for all. The reason for the final destruction varies and has ranged from an “act of god” to a “cataclismic natural disaster” to more recently “manmade self inflicted global warming”.

Such predictions of impending doom sell newstime and quickly collect public support and outcry. At the same time predictions of impending happiness, success and world order are pushed aside and ignored. Sadly, good news simply doesn’t sell.

By the same token, predictions of a stable housing market where prices are steady and properties sell quickly to happy buyers with good credit ratings are overlooked in favour of stories about housing price bubbles, crashes, repossessions and mortgage scarcity. The “housing shortage crisis” sounds much more exciting than “housing harmony” and “steady sales and rebuilding”.

My prediction for the next 3 years is for steady growth and very gradual increases of prices, probably in line with inflation but no more.

I tried to sell this story to the press but surprisingly they weren’t interested. Now if I’d told them that prices were set to sky-rocket……………………..

Once again the media are talking about house prices rocketing and we’re heading back towards a housing market bubble.

The facts of the matter (taken from the Land Registry Price Index) are that prices in Coventry currently (as of June this year) stand at the same level they were in Jan 2011, the same as they were in Feb 2010, the same as they were in Feb 2009 and most surprising of all, the same as they were in July 2004. Yes, that’s right, house prices in the Coventry area are the same now as they were 9 years ago.

The media seem obsessed with house prices. The national figures churned out on a monthly basis are heavily skewed by what happens in London and aren’t really relevant to areas outside the home counties. What really matters and is relevant is the number of transactions that are going through. The great news is that volumes have indeed increased this year in the local area and there is a healthy amount of activity meaning if you intend to move home, now is a good time. The number of buyers out there in a proceedable position has increased meaning sensible people with sensible expectations are able to sell their properties and move on to pastures new.

Fortunately talk of another bubble at this stage is make-believe.

The property market has fragmented into two clearly defined places.

One is the place where houses go on sale at a sensible, current market value figure. The moment they go on sale the phone begins to ring and viewings are booked in. After approximately 6-10 viewings an offer is received, negotiations follow, a sale price is reached and finally the “Sold” Tab goes up outside the front of the property. Painless.

The other place is on the edge of Sanity where common sense and reasoning have no place. Properties are over-valued as standard by overzealous Estate Agents who have no Unique Selling Points other than their silly high prices. Absurd initial asking prices followed by long periods of no interest and no viewings are followed by systematic price slashing. Weeks, months or even years follow before the property begins to attract a decent level of interest and eventually offers. By the time a sale is agreed, the vendors have lost all motivation but gained plenty of grey hairs. The over-zealous Estate Agent still walks away with their fee, despite the fact that they gave their client very poor, if not downright reckless advice in the first place. The client ultimately could well have lost thousands.

You may think this all sounds rather extreme. But this is truly the current state of the market. In all seriousness I can say that I moved house myself in 2004. We went on sale at a reasonable figure and sold to the first person that viewed. The neighbour by contrast put his house on sale at the same time for too much money. He is still there in the same house 8 years later. I have moved house twice more since then!!!

If you are considering putting your property on the market then give me a call. I will visit you at your home and talk through carefully with you recent SOLD prices in the area and suggest a sensible asking price to get you moved quickly and for the market value figure.

Among us Estate Agents, there’s one topic of conversation that really gets our feathers ruffled and makes our blood boil. No it’s nothing to do with our fees or our For Sale boards or even our poularity ratings (or lack of) in the latest poll of polls.

Money Talks

It’s to do with Valuations and Appraisal of properties in the local area. Over-valuing is the oldest trick in the book and yet time after time unscrupulous agents try it and get away with it much to the expense of their would-be clients. The single biggest mistake a vendor can make when choosing their Estate Agent is to plump for the “Big Gun” who pulls an enormous figure out of their hat during the appraisal. Its not difficult to reel off lots of zeros, in fact it takes no skill at all; the only art involved is making the over-hyped valuation sound convincing.

The saddest part of the story is that vendors who start out with the best of intentions can quickly be duped by large numbers and the promise of a fortune. After all, when you’re talking property prices these are life changing figures for most people. A higher sale price could mean buying a much bigger property, extra cash in the bank or even a whole new lifestyle. But getting caught up in the excitement of a big figure value is the first big no-no when inviting Estate Agents to your property with a view to selling. Don’t be the next victim of your local pie-in-the-sky Estate Agent.

Of course, most vendors are sensible, level headed people and some will see straight through these tactics. But for many people the biggest worry (understandably) is that their home could be sold for less than market value. They worry that the asking price could be too low, not too high.  Experienced property professionals will tell you that this is very unlikely to happen. A modestly priced property in Coventry or any other part of the country will attract lots of interest from educated buyers that are on the hunt for a bargain. Lots of interested buyers means lots of offers, bidding wars and ultimately a higher selling price.  By contrast, an inflated asking price means few or no viewings, no offers and no sale.

In years gone by the one saving grace was that house prices were always rising. Those properties that went on sale at over the odds would sit around for a few months but eventually  the market would catch back up and they would become saleable. Vendors would purposely “wait to get the best price”. But in a falling or stagnant market this is no longer the case. The “best price” now goes to those homes that sell instantly. Those that stay on sale for any period of time simply become stale and unwanted.

Big Shot Estate Agents

But We Can Reduce The Price Later If Need Be?

Any Estate Agent worth their salt will tell you that the greatest interest for properties comes during those first few magic weeks on sale. This is the honeymoon period when buyers clamour to book viewings and make offers. They know that the best bargains and the best properties always sell quickly and they do not want to miss out.  Once this magic period has passed by there is no going back, you cannot recreate that initial surge of interest no matter what. When told that a particular property has had its price reduced, most buyers will respond with “Really, what’s wrong with it then?” They are instantly suspicious. They also smell blood; if the price has come down already how much more might they be able to get it reduced by. In a falling market reducing the price now to what it should have been six months ago is simply closing the stable door after the horse has already bolted. The boat has been missed.

But Surely Estate Agents Don’t Want Overpriced Homes On Their Books

In today’s internet based market it costs very little for an Agent to market a property once the initial costs of take-on are covered. Once they’ve hammered that £10 For Sale board into the front flower bed of your house they will be happy to leave it there indefinately. Why wouldn’t they be, every day dozens of cars and pedestrians will go by and see their “billboard” mounted outside your front door. It’s free advertising and it also gives the impression that they are big players in the local market. Potential vendors often look around to see which agents are marketing similar properties so the more they have on their books, the more valuations they will pick up.

In Conclusion

Before you invite any Estate Agents around to value your home, make sure you have done your own research on prices first. Don’t pay too much attention to asking prices, its SOLD prices that count. There are many websites that offer this information for free www.nethouseprice.com is a good one to try.  If one (or more) of the agents pulls out a huge figure that sounds high, be cautious and ask them to back it up with evidence of RECENT SOLD prices in your local area. Before choosing which agent to use, ask them what their REAL Unique Selling Points are. You may just find that for once they are lost for words.