Ross Clark

Hot Property

The end is insight for estate agent's bragging

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In these pages recently Elisabeth Anderson wrote about, but declined to give the name of, a website that gives the price of any property sold in England and Wales during the past five years. Actually, it’s called www.nethouseprices.com, and a quick nose around the site reveals that flats up Liz’s way, Marylebone, are selling for anything between £200,000 and £500,000. But the website isn’t good just for being nosy about your friends and colleagues; it gives property buyers the wonderful advantage of being able to catch out estate agents and developers. How often have you heard, or read in the press, an estate agent bragging, ‘We’ve just sold Noggins Hall for well over the £5 million asking price’ or ‘The first phase of Thamesmead Waterside has already sold out’? One thing is for sure: they won’t get away with it for much longer.

As soon as nethouseprices.com was launched I became almost obsessive about checking out sales at some of London’s most prominent developments. It turned out that far from selling at the advertised prices, some apartments have been selling for tens of thousands of pounds less. In one case a £450,000 flat had been sold for just £264,000. Moreover, some flats in units supposedly ‘sold out’ appeared not to have sold at all, long after the date on which the sales ought to have been completed. One imagines that they will be disposed of in due course, not via the developers’ plush sales centre, which has moved on to selling the next phase of the development, but quietly through local estate agents as if they were second-hand.

One ‘property broker’ let on to me how the system works. When launching a development, the developer wants to create a sense of excitement and urgency. Yet few ordinary buyers want to be first to sign on the dotted line for a new apartment. Therefore the developer quietly approaches the broker, who sells a block of apartments to seasoned investors, typically for a 20 per cent discount. The development can then be advertised with the banner line ‘First phase sold out in one weekend’. Unsuspecting ordinary buyers then think they must be on to a bargain — and cough up the full list price without realising that the early buyers paid very much less.