Hello and welcome to Property Questions Time. I'm
Stephen Galpin and this is the show where you can
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have your property related questions answered by
a team of property experts. And joining me today
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is Lucy Waters, Managing Director
of Aria Finance. Welcome.
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And Glenn Jacobs, Director of Next Home London
Estate Agents. Welcome to you, Thank you.
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OK, let's get straight on with the
questioning. And Glenn, you're going first.
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What are the most common reasons
for a home sale falling through?
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Wow. I think right now I'm having a real problem
with AI generated discounts requested upon
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exchange, if I'm honest with you. Four last week
I've had what people are doing is getting reported
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to, getting searches, getting the mortgage off
of the survey, the level two slash level threes,
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drone footage, roof inspections, damp
inspections on PDF documents, putting it into AI.
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And generating discount
requests on the basis of that.
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And unfortunately AI tells you what you
want to hear. So it's all bias, isn't it?
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It's all fully biased. There's no caveats to it.
There's no well if you've got a standard Victorian
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house, standard Victorian house has nooks and
crannies all over the place. Basements always got
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condensation and damp in the basements. Always.
But you're buying someone on the premise of you
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know what you're buying. You're not buying a brand
new build. You're buying a Victorian house that
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sometimes has signs of movement. That doesn't mean
it's falling down. That means there's signs of
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movement. It's lived for a war. It's that sort of
thing that you try and explain to someone and then
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they realise and come back to you, well, you're
acting for the vendor. I'm paid by the vendor,
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I'm instructed by the vendor, but I do have
a duty of care to advise you correctly. But
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the problem is you've gone to the point of
exchange before presenting this information to me.
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Do you think the proposal to
effectively bring back the
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home buyers information
perhaps is going to help that?
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I think it could potentially help or maybe hinder
because you might end up with some sort of redress
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claims 'cause if certain things aren't documented
in that, depends how far you want to go with them.
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If you have a is it going to include a level
two slash level three server of on a property?
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Who knows?
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Precisely. And that's kind of the issue that
you've got. If there's any information omitted,
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it looks like you've been sneaky, I suppose,
at that stage. yeah, it's a real problem and
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it's taking a lot of my time. And it's what I'm
here to do. But if you've got not only that,
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I mean AI is also elongating scenarios at the
moment. It's a problem right at this moment, AI.
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But I don't suppose AI can really judge or put
into context the information that it's giving
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you. I mean, you might be buying that property at
a super low price that takes into account all the
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potential defects, complications or whatever
else and AI won't context that, will it?
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Also, you probably had the majority of that
information before making the offer. You know you
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mentioned some surveys and things that come back
afterwards. But actually where that conversation
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should happen is when striking the price because
ultimately that's where you need to start pulling
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all the market information and you've been to see
it. You should have done enough diligence to be
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able to offer the right money unless something
really horrible comes out that would work.
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My job is to overcome objections, long and short
of it. That's what I'm there to do. Objections in
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regards to price and objections in regards to why
they're not purchasing the property. But if you're
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purchasing a dilapidated property at a certain
level, if you're expecting a vendor slash landlord
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to then decrease by a further £40, £50,000,
£60,000, and then the property's going to be worth
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peak market level, why is the vendor gonna pay
that in effect for you to benefit. Why don't they
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do that and then benefit from the market level?
Yes, there's scenarios where vendors can't put the
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money in their out of their own pocket, but that's
the counter-argument to that is well, you're
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asking that amount of money, why don't the vendor
just put that into that property and then get that
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actual level? They they're giving it to you for
this amount for the convenience of not having
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to do it. That's basically what they're doing. But
if you want to, if you want to reduce any further,
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in answer to the question, another avenue that's
causing sales to fall for a lot at the moment is
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time. Conveyancing's taking so much longer. I
think it's an average of five, six months at
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the moment. What I'm finding, and one solicitor
that I'm dealing with, had a big conference with
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a few solicitors at the moment, because there's
solicitors that are generating a hundred plus
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inquiries at the point of receiving the contract
pack. All that's done is by putting the IR
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With the risk of upsetting Lucy, that the
lenders issue that they're asking solicitors
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so many questions these days? Because
that's what the solicitors are saying.
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I mean, if yet they're not templated to
that particular property, they're generic.
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And I'm sure a lender doesn't care about generic
inquiries, it's specific to that property. So
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what they're finding, up to a hundred inquiries,
I've heard, just after receiving the LPE one, the
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fiction and fitness protocol forms and
the contract. Up to a hundred inquiries.
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It's ridiculous, but that's all generated again
by AI. And I think at the moment we're at a
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stage where it's not really benefiting the
transaction times or sales, it's actually
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finding its way of being
a hindrance at the moment.
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Anything to say to that Lucy?
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I think on the solicitor's side, what I
would say is my experience of the process is
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the buyer should instruct their solicitor that
should make inquiries on their behalf initially.
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So if those inquiries are coming out pretty much
day one, that won't be lender driven. The lender
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will then come in and potentially add another
hundred inquiries after that. But usually how it
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works is your solicitor is there to protect you,
raise the inquiries that they think necessary.
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Those inquiries get answered. And then when
the mortgage offer comes out and the lenders'
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lawyers are instructed, they then raise the
title inquiries that they think are relevant,
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which in effect should marry to a certain degree
with what the other solicitors raise, because
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to protect the lender is to protect the buyer,
they're very unified in terms of the queries. So
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we get problems with solicitors as well. And not
all solicitors are created equal. And I think
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it's really important when people are choosing
solicitors to make sure they choose one
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who is sensible and experienced. And
yes, you can look at a quote and say,
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this is a really low cost solicitor's fee,
but it's probably a conveyancer who doesn't
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necessarily have the same miles on the clock that
an experienced property conveyancer would have.
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And therefore, you're going to get more
of that, think. But customers often think,
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well, why would I pay that when I can pay that?
And it's just trying to educate people as to.
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And again, in London in particular,
you can always see the red flags when
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somebody out of London wants to appoint their
local family solicitor to perhaps down the south
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of England or in the north of England. Not
used to leasehold properties, for instance.
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No.
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Trying to come to terms with
the leasehold sort of ethos and
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just causes a mess, doesn't it? Yeah. Adds weeks,
if not months to the Absolutely. Absolutely. Okay.
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All right. Good one. Okay.
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Lucy, is there a particular financial
reform that would have a positive
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impact on the UK residential
property market at the moment?
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Financial reform. I think that, I think if we were
to look specifically at development finance and
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say, it's not necessarily a financial reform,
but a planning reform to enable developers to
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build more houses, I think that would have a huge
impact because at the moment we are constrained by
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supply. And when it comes to even rent, and you'll
obviously be seeing this in what you do, but rent,
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where they've tried to actually make renting
more affordable, it's gone completely the other
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way because there's such a lack of supply and
landlords exiting the market and things like that.
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We actually just have to build more homes. And I
think one of the first places that that is getting
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stuck is on the planning side of things. A
lot of developers feel really disheartened
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by the planning process, which is just getting
harder and harder all the time. So I think, OK,
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it's not financial reform, but a planning reform
would be a good step in the right direction. And
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dare I say, I think a change to stamp duty would
be a really big thing now. I don't know what that
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looks like and I'm not even gonna try and guess
at what that looks like. Obviously, it's a topical
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point of conversation at the moment because of
Andy Burnham's views on scrapping stamp duty.
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I think the challenge with how that might
end up channelling through is that the
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higher value end of the market pays for the
lower end of the market which is another....
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What about simply just switching stamp duty as
a liability to the seller rather than the buyer?
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I don't dislike that. I think that
would be a good way because then
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you don't have to come up with it as a
physical layout on purchase, which is
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a massive challenge. The annual property
taxes, I really dislike that because I think
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it forces people out of homes. And even
though it might not affect the masses,
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it will... the impact that it will have on a lot
of homeowners is massive. And buy to let, if they
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do it on buy to let, what's left in the margins
in buy to let? There's nothing, is there? I mean,
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buy to let landlords have, despite the press
that they get, have suffered some huge financial
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penalties over the years. And if they had to
pay an annual tax, I just don't think that...
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The margins are They're not there.
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I just feel the idea of switching it to the
vendor rather than the buyer would work well.
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And also, you've got to balance that against
don't forget if you if you sell your own home
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and it is your own home, whatever profit you
make, and there've been some huge profits on
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that the people have made and enjoyed is tax
free. So I don't think the imposition of the
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stamp duty liability change would
be that great or that unreasonable.
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I agree.
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And there's always the bit, there's always the,
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as you go through the transformation where
you have to work out whether it's just tough
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luck if you paid it on the way in and you're
paying it on the way out or whether they...
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Lucy, it would be very easy because when you pay
it, if you're one of the people that paid it under
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the old regime of going in, then you deduct that
from the payment you're going to make going out.
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Yeah, there's a way to balance the
books for sure. I think that the
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theory of it would work well. I mean, there's
also an argument, what about if you just scrap
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stamp duty altogether? I know that's a big
statement, but the market would move, wouldn't it?
0:11:41.960,0:11:47.120
It sure would. Okay, well, on that note, we'll
go to the break. So thank you both very much.
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Join me after the break when we'll be asking
Lucy and Glenn more of your questions.
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Hello and welcome back to part two of Property
Question Time with Lucy Waters and Glenn Jacobs.
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I've had my house on the market now for
some time with little interest being shown.
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My agent is suggesting that we have an
open house event to stimulate interest.
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What does the panel think of this idea? Well
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perhaps first of all you could explain to
us the principle of an open house showing.
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One of my favourite things in estate agency,
I must admit, when you when you have a good
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open house, there's not a lot better.
It has to be on a Saturday in my eyes,
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because most people are out viewing on a Saturday.
Has to be for a good 45 minutes to an hour.
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You have the house to yourself, so the awkwardness
of having the vendor ideally not being there,
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bogging at everybody walking around their
house, and maybe pointing out things that
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purchasers don't really care about, if I'm
honest with you. But the idea is to get
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a lot of purchases or potential purchasers
to come and view at the same time. I do it
0:12:51.960,0:12:55.120
tactfully. I've been moaned at before
because it feels like you're at cattle,
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a cattle show and all that sort of stuff. But
the idea is to have a purchaser-C competition
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and create that competition and create a buzz
about the property. And then when people come
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away from that after they've viewed the property,
they know they can't take the mick with offers.
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And waste people's time with offers. They
know that there's other interested parties,
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even if the other parties aren't interested.
They know that those other people, because
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you would upsell the interest, if I'm honest.
You would say you would you'd sort of project
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that there's so much interest in the property.
You see the amount of people that see it. Yeah
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you're gonna have to come in with a solid offer.
You need a confident estate agent to conduct that
0:13:34.000,0:13:38.640
as well. There's no point having a quiet estate
agent standing in the corner letting all these
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people it has to be someone that's there that's
going to engage with, exactly engage with it.
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The problem with the listener and viewer with the
question is there's no you can't just launch one.
0:13:52.080,0:13:54.920
It's not you're not gonna have a stagnant
property there and then go, all right, we'll
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have an open house on a Saturday. You're gonna
have to have a pricing strategy and a marketing
0:13:59.240,0:14:05.560
strategy that leads to that. So if you're gonna
adjust your price to a carrot dangling level,
0:14:05.560,0:14:10.800
that's what's gonna make an impact in the
market. You're gonna have to adjust your price to
0:14:10.800,0:14:13.440
something that's gonna entice people
to come and view the property because
0:14:13.440,0:14:15.960
nobody's gonna purchase it unless
they come and view the property.
0:14:15.960,0:14:22.800
I just wonder in some ways whether part of good
practice, shall we say, for estate agents would
0:14:22.800,0:14:28.800
be to have an obligatory sort of program.
You know, I'm taking this property on,
0:14:29.560,0:14:33.920
I'll take it first of all for three weeks, at
the end of three weeks, if we've not achieved any
0:14:33.920,0:14:41.360
interest, this is going to be my suggestion. We're
going to reduce the price by 5%, 6%, whatever,
0:14:42.400,0:14:48.040
and make that an obligatory part of the
of the agency contract. I think that would
0:14:48.040,0:14:52.000
be really helpful. People then wouldn't
feel as though they're being cheated
0:14:52.000,0:14:55.600
or they're being conned or they're
being pushed down a particular path.
0:14:55.600,0:14:59.880
I'do a two-week period personally. Yeah. I
will always go, look, someone if someone's
0:14:59.880,0:15:04.600
sort of disagreeing with the pricing, I'll go,
look, I'm here to be instructed by you. However,
0:15:04.600,0:15:07.680
this is my evidence, this is what I think,
and this is why I think we're going to get
0:15:07.680,0:15:11.920
the best price by doing it this way.
If you want me to try your pricing,
0:15:11.920,0:15:15.600
we'll have a two week period because the
first two weeks are super important to me.
0:15:16.320,0:15:19.960
You're going to get the property launched. The
first Saturday is going to be that open house.
0:15:20.480,0:15:24.480
So let's launch it full of photos, full of
videography, and have a full week. Let's not
0:15:24.480,0:15:27.600
have stragglers in the middle of the week at
seven o'clock at night thinking they can make
0:15:27.600,0:15:32.080
silly offers. Let's have everybody into your
property. If you're keen to sell the property,
0:15:32.080,0:15:36.240
everybody into the property at one o'clock on
Saturday for argument's sake. Then after that
0:15:36.240,0:15:40.000
first week, that's the second week where you're
gonna have your second viewings. People might
0:15:40.000,0:15:43.400
take a little bit more time in the property,
see something that they haven't noticed,
0:15:43.400,0:15:49.160
and then have a have a like a best and final
offer scenario at that stage. But those two weeks
0:15:49.160,0:15:54.040
are key. And if you've overpriced it and not
getting the attention after those two weeks,
0:15:54.040,0:15:57.440
that's on your idea in terms of
pricing. I've been honest with
0:15:57.440,0:16:02.880
you from day one and let's try and go down
your route, but that's how I represent it.
0:16:02.880,0:16:06.240
If a property hasn't sold or created any interest,
0:16:06.240,0:16:10.320
just by having an open house isn't necessarily
going to stimulate anything, is it?
0:16:10.320,0:16:13.400
Two reasons why property doesn't sell
generally it's the price or the condition.
0:16:13.400,0:16:18.040
Depending on condition, there's always a price
for it. So it's generally down to the pricing.
0:16:18.040,0:16:22.120
In that word condition, would you put
presentation into that? Absolutely.
0:16:22.120,0:16:27.440
Absolutely, yeah. Yeah. There's a lot more
staged photos now than I've ever seen before.
0:16:27.440,0:16:32.200
There's a lot more staging that goes into
photography. I know I have a couple of firms
0:16:32.200,0:16:36.040
that do AI and whatnot, which is illegal
under Property Miss Descriptions Act, but
0:16:37.360,0:16:43.200
there's companies that come in there and stage the
property for the photos. So yeah, presentation,
0:16:43.200,0:16:48.560
it's just like a recruitment job board as well.
I mean, if the job doesn't sound good, you're not
0:16:48.560,0:16:52.040
gonna click it exactly the same as a property.
If it doesn't look good and catch your eye.
0:16:52.040,0:16:56.000
So are you suggesting there's AI programs
that make your photos look a lot better?
0:16:57.720,0:17:00.760
Yeah. Unfortunately, but yes.
0:17:00.760,0:17:02.080
There we go. Anything to add to that?
0:17:03.600,0:17:08.960
Probably the only angle that I've got is what we
see. We do quite a lot of bridging finance in the
0:17:08.960,0:17:18.120
market and often the exit for bridging finance is
sale of property and we often have scenarios where
0:17:18.880,0:17:25.960
the valuation comes back lower than the intended
marketing price or the actual marketing price. Now
0:17:25.960,0:17:32.120
that can be viewed that the marketing price
has inflated or on the other side of the coin,
0:17:32.120,0:17:38.360
the value is being conservative because ultimately
the PI is on the line for mortgage valuation.
0:17:38.360,0:17:43.760
So perhaps there's somewhere in the middle
where that meets and is the right number. But we
0:17:43.760,0:17:50.440
actually do see it where people have stipulations
or put on them in their bridging loan conditions
0:17:50.440,0:17:58.120
that they have to reduce the price after a certain
period of time to get the interest going in line
0:17:58.120,0:18:03.200
with the valuation. So it's quite interesting
just seeing it from a different angle of where
0:18:03.200,0:18:08.960
people are trying to generate that interest.
Obviously that stagnation point is big because
0:18:08.960,0:18:15.040
if it does stagnate, then sometimes we just see
these properties sitting on the market forever.
0:18:15.040,0:18:17.920
And it does nobody any favours.
It don't it doesn't do the seller
0:18:17.920,0:18:21.160
any favours in regards to you've got
your property sitting there and it's
0:18:21.160,0:18:25.840
actually devaluing but by if it's been
on for a year, yeah. It's devaluing.
0:18:25.840,0:18:31.400
There's a level of your security going down, it?
Yeah. Week by week, mean. Lucy, your question.
0:18:31.960,0:18:37.520
In the past, property inflation has helped
create financial security for many homeowners.
0:18:38.200,0:18:43.440
Do the panel think that those days are now over
and that we should really look at homeownership
0:18:43.440,0:18:50.680
as being just that rather than a profitable
investment too? In other words, conflating those
0:18:52.200,0:18:54.720
two factors in terms of the value.
0:18:54.720,0:18:59.920
There was a period of time where everybody
thought about what their property would be
0:18:59.920,0:19:05.920
worth after X number of years of ownership, or
if they did set an alteration to the property,
0:19:05.920,0:19:10.360
know, can they add an extension? Can they
do a loft conversion and things like that?
0:19:10.360,0:19:15.480
And I think it's one thing where there's a
value add opportunity and someone's looking
0:19:15.480,0:19:21.240
to enhance the value through works
versus people buying to ride the wave
0:19:21.240,0:19:26.240
of property increases and make money and
like you say, create financial security.
0:19:26.240,0:19:32.120
I think when you're buying a home, you should
be buying a home and that should be the main
0:19:32.120,0:19:40.240
factor. But there is a small subset of people who
take advantage of the tax benefits of not having
0:19:40.240,0:19:46.160
to pay capital gains on their primary residence.
And they will live in a house for a couple of
0:19:46.160,0:19:52.520
years or whatever the statutory limitation is that
you don't have to pay capital gains and just roll
0:19:52.520,0:19:57.520
on and on and on and on and they move and they're
not wedded to any property and they have limited
0:19:57.520,0:20:02.160
resource so they want to own their own home
but they also want to do property development.
0:20:02.160,0:20:07.000
So there is a community of people that do that and
I think there's nothing wrong with that at all.
0:20:07.520,0:20:11.360
If we're talking about the masses, people
that have day jobs, they're not in property
0:20:11.360,0:20:19.080
development, they are buying somewhere to
live, then nobody wants to buy badly. You know,
0:20:20.240,0:20:26.280
when you're talking to people, it's really
important that they can see that they're not
0:20:26.280,0:20:31.440
on the wrong side of the purchase because then
ultimately when they go to sell it, it's going
0:20:31.440,0:20:37.480
to be the reverse. But I think as long as you're
buying at the right level, it should just be
0:20:38.000,0:20:42.600
a case of you're buying it as a home and
you're not looking at what the equity value is.
0:20:42.600,0:20:47.800
I suppose the question is, well, fact, mainly
people in my generation who were always taught
0:20:47.800,0:20:51.480
that if you buy property, you're going to make
money because it's just automatically going to go
0:20:51.480,0:20:58.600
up. those days in these difficult times are over.
You can't guarantee that the value is going to
0:20:58.600,0:21:04.840
go up just because you bought it. And then on top
of that, you've got this, as you mentioned, Lucy,
0:21:05.640,0:21:10.480
that's free from any kind of capital gains tax
or any tax if you make a profit on your home.
0:21:10.480,0:21:14.480
And a lot of people have relied on
that for funding their credit cards,
0:21:14.480,0:21:21.840
for funding their lifestyle.
And sometimes that perception of
0:21:21.840,0:21:28.240
theoretical profit that you've got tax free
has caused people to get into debt problems.
0:21:28.240,0:21:34.720
And that's certainly if people then look
to mortgage to pay off what, you know,
0:21:34.720,0:21:39.480
they're basically borrowing against the equity
that they've created. That can definitely be a
0:21:39.480,0:21:44.520
challenge. And we see that in there's a subset of
the market where people take a second mortgage,
0:21:44.520,0:21:49.840
which is a perfectly legitimate product. And it's
a great product for people that are looking to
0:21:49.840,0:21:56.000
consolidate debts or do home improvements, things
like that. But it has to be used responsibly.
0:21:56.000,0:22:02.200
We do come across customers who are in a debt
cycle and they borrow more money and then they
0:22:02.200,0:22:07.720
come back and all of a sudden they've got that
secured loan sitting behind their first mortgage.
0:22:07.720,0:22:12.160
And then they've suddenly got another
£30,000 worth of unsecured debt and
0:22:12.160,0:22:17.800
they want to consolidate it again. And I think
that's dangerous and that's where people get
0:22:17.800,0:22:24.040
themselves into trouble because the music
will stop eventually. But when it comes to
0:22:24.040,0:22:31.080
creating equity in your home and seeing that,
okay, I bought it for 400 now it's worth 500.
0:22:31.080,0:22:37.000
If you're then looking to buy your
next property and you're going up,
0:22:37.000,0:22:43.080
you're going to have the same percentage increase
if the market's gone up anyway. it's actually,
0:22:44.600,0:22:48.520
in that case, it's not really doing you
anything. Yes, it's gone up, but so has the rest
0:22:48.520,0:22:52.640
of the market. Whereas if you add value, that's
different because you're outperforming the market.
0:22:52.640,0:22:56.880
So with this government desperately trying
to demonstrate that they're going to
0:22:57.480,0:23:01.640
have full funding for all
their ideas and projects,
0:23:01.640,0:23:07.360
do you think the idea of this capital gains
tax free home selling is going to last?
0:23:07.880,0:23:13.600
Really hard to second guess, but
it would be an area that they could
0:23:13.600,0:23:19.520
immediately have tax upside. Like an easy
target for me. I don't know what you think.
0:23:19.520,0:23:20.600
Absolutely. Absolutely.
0:23:21.760,0:23:26.040
OK, well, on that pessimistic note, we're
going to end the show. So a big thank you
0:23:26.040,0:23:29.800
to Lucy Waters, Managing Director
of Aria Finance. Thank you, Lucy.
0:23:30.400,0:23:33.880
And to you too, Glenn. Glenn
Jacobs, Director of Next Home.
0:23:33.880,0:23:36.880
Thank you for coming in. Pleasure. It's
been really good to have you both in.
0:23:37.720,0:23:38.800
That's all we've got time for.
0:23:38.800,0:23:43.200
So I'm Stephen Galpin. Join me next
time on Property Question Time.
0:00:02.320,0:00:06.000
Hello and welcome to Property Question Time.
I'm Stephen Galpin, and this is the show
0:00:06.000,0:00:10.560
where you can have your property related
questions answered by our team of experts.
0:00:10.560,0:00:16.480
And joining me today is Lucy Waters, Managing
Director of Aria Finance. Welcome, Lucy. Good
0:00:16.480,0:00:22.080
to see you. And Glenn Jacobs, Director of Next
Home London Estate Agents. Welcome to you, Glenn.
0:00:22.080,0:00:23.200
Thanks for having me, Stephen.
0:00:23.200,0:00:27.280
Right, Lucy, you're going first,
and your question is this:
0:00:27.280,0:00:31.760
Are the banks part of the housing crisis
that we're experiencing at the moment or
0:00:31.760,0:00:38.320
part of the solution? I.e., are
lenders becoming too risk-averse?
0:00:39.120,0:00:45.760
I think we went through a huge transformation
in the market post global financial crisis.
0:00:45.760,0:00:51.360
So that was, I would say, the biggest
adjustment that the mortgage market saw.
0:00:52.320,0:00:58.800
Arguably, and it's always popular for people
to dislike banks and to suggest that banks are
0:00:58.800,0:01:06.000
over cautious and they should lend more.
But I actually am of the belief that the
0:01:06.000,0:01:11.840
change in regulation around affordability
that we saw post-financial crisis was a
0:01:11.840,0:01:16.400
really positive one because we were in a low
interest rate environment for a long, long time.
0:01:16.400,0:01:20.960
And then we've had the recent shock. I
say recent, it's not that recent anymore,
0:01:20.960,0:01:28.640
is it? It still feels recent. And that increase
in interest rates, if everybody was tested on
0:01:28.640,0:01:33.520
affordability on low interest rates, nobody
would have been able to withstand that. We've
0:01:33.520,0:01:38.240
obviously had inflation run away as well.
So people's cost of living has increased,
0:01:38.240,0:01:45.760
albeit there's been some wage growth as well to
try and keep up with that. I think that the banks
0:01:45.760,0:01:52.400
have a genuine desire to lend. Don't think it's
their business to lend. If they don't lend money,
0:01:52.400,0:02:00.320
they don't earn money. There is a
big, I suppose, restriction in a way,
0:02:00.320,0:02:06.080
which comes from the regulator in how they
do it and to what customers they can lend to.
0:02:06.080,0:02:12.160
So whilst it may appear that
the banks are being difficult,
0:02:12.160,0:02:18.480
they have to adhere to the regulatory
landscape to ensure that the loans are
0:02:18.480,0:02:22.640
affordable to people and that they're
assessing them properly. However,
0:02:22.640,0:02:27.680
there's always an element of the market where
it goes too far the other way. And I think
0:02:27.680,0:02:37.520
that's where less of a pragmatic approach is
taken and banks try to cater for the majority
0:02:37.520,0:02:43.520
and therefore anything around the edges, it's
easier for them to not try and push the envelope
0:02:43.520,0:02:48.560
too because the risk isn't worth the reward
for the number of customers that it catches.
0:02:48.560,0:02:54.160
Lucy, Glenn and I were talking off-camera
about something that happened. 2008,
0:02:54.160,0:03:01.120
we had the crash. Yep. And apart from the
property industry, one of the industries
0:03:01.120,0:03:07.920
that suffered greatly under that crash was
the car industry, the motor industry. However,
0:03:07.920,0:03:13.920
2013 to 2016 they experienced the best
boom they've ever had. And why was that?
0:03:13.920,0:03:22.320
Because the financial restrictions came off, HP
agreements, no deposits became prevalent, zero
0:03:22.320,0:03:29.520
percent finance became quite regular and generally
the whole financial field of lending relaxed their
0:03:29.520,0:03:37.120
views and the industry boomed. Don't
we need that in the property market?
0:03:37.120,0:03:44.960
So on the flip side of that, banks have
suffered serious fines and losses and...
0:03:44.960,0:03:48.400
Only because they were paying out big
commissions to people who shouldn't.
0:03:48.400,0:03:52.560
Yeah, but it was it's an example of where
the market gets carried away. So there's
0:03:52.560,0:03:59.200
probably a middle ground, Stephen. I think, you
know, we had the extreme post financial crisis,
0:03:59.200,0:04:03.360
as I mentioned, and then perhaps we went
to the other extreme. There has been
0:04:03.360,0:04:08.160
talk of lifting some of the restrictions.
And I think that that's something that is
0:04:08.160,0:04:18.960
on the FCA agenda. The reality is. Low deposit,
mortgage lending is always going to be seen as
0:04:18.960,0:04:27.600
higher risk. So there are less banks and lenders
in that space than your 25 % deposit lender.
0:04:27.600,0:04:33.600
When we had those low deposits and
low interest rates, the fallout rate,
0:04:33.600,0:04:39.200
the arrears rate didn't go particularly
high when the crash came, was it? It was
0:04:39.200,0:04:44.800
the American markets bundling up these
portfolios of poor property lending.
0:04:44.800,0:04:52.080
I think the reason why we didn't crash is
because we were in an artificial capital
0:04:52.080,0:05:01.520
growth environment because of the availability
of debt. People were able to live beyond their
0:05:01.520,0:05:07.600
means and property prices went up and that
paid for it. So people could refinance,
0:05:07.600,0:05:10.560
they had perceived equity in their homes.
0:05:10.560,0:05:15.680
But it was growing at a rate which was
unsustainable and that creates a bubble.
0:05:15.680,0:05:22.960
So again, I come back to it's not one or
the other. I think house price growth is a
0:05:22.960,0:05:29.120
fundamental part of the UK property market.
But what we've seen over the years is sort
0:05:29.120,0:05:36.960
of spikes over a period of time and then it
might plateau and even go back the other way.
0:05:36.960,0:05:42.320
And that's usually driven by either big events
or mini events. And it feels like recently we've
0:05:42.320,0:05:47.840
hit a number of mini events, which has taken,
mean, you'll probably know more on the house
0:05:47.840,0:05:56.640
price growth situation than me, but I feel that
in a market where house prices are potentially
0:05:56.640,0:06:04.080
retracting rather than growing, for people
to leverage high and be stretched on their
0:06:04.080,0:06:09.440
affordability is a really risky place for them
to be because if something happens there's not
0:06:09.440,0:06:15.520
really many ways out and I think that that is
what the market is trying to protect. Albeit do
0:06:15.520,0:06:22.400
I think we can do more? Always. I'm just not
sure that it's an entirely bank led problem.
0:06:22.400,0:06:26.880
The difference between them and now though is
everything else is so much more expensive. I
0:06:26.880,0:06:31.280
think you've got solicitors now. Solicitors'
invoices are skyrocketed. You've got stamp
0:06:31.280,0:06:35.120
duty now that's more than ever. Rents
are so much more money now. So you've
0:06:35.120,0:06:39.440
got first time buyers that are paying two
and a half grand on rent that are now being
0:06:39.440,0:06:42.960
knocked back for two and a half grand
on a mortgage. It's kind of it's a real
0:06:42.960,0:06:50.160
tough situation to see which way to pivot to.
Yeah, thankfully I'm not trying to work it out.
0:06:50.160,0:06:56.640
So, just to try and answer that viewers question.
Are the banks the solution or the cause?
0:06:58.640,0:07:01.200
I don't think they're either actually. No,
0:07:01.200,0:07:07.920
I don't think they're either. think that
they can contribute to the solution. Yeah,
0:07:07.920,0:07:12.240
I think they can contribute to the solution.
I don't think that they can do it entirely on
0:07:12.240,0:07:17.403
their own. I think there's a lot of other factors
at play for them to be able to make a big impact.
0:07:17.403,0:07:19.680
Become the government then, shall we?
Okay, jolly good. Thank you for that, Lucy.
0:07:19.680,0:07:26.240
Glenn. Well, I hope you can answer this
one. Where do the experts think the market
0:07:26.240,0:07:33.360
is heading over the next twelve months?
And is now a buyer's or a seller's market?
0:07:33.360,0:07:35.840
Depends on the property. I think it depends on the
0:07:35.840,0:07:43.600
property. I think if you if...I've got
open houses. I have people, five, six,
0:07:43.600,0:07:47.040
seven people attending open houses
if you market the property correctly.
0:07:47.040,0:07:52.560
That individual property would be a seller's
property. That's not a buyer's market,
0:07:52.560,0:07:55.120
is it? If there's five, six, seven
people there bidding against each
0:07:55.120,0:08:02.000
other. It's the sort of stock that
would have stagnated. That's the
0:08:02.000,0:08:05.840
different sort of scenario. You've got
a stagnant property on the market. Well,
0:08:05.840,0:08:11.920
why can't you make an offer on it? So it does
vary on the property that's marketed. In terms
0:08:11.920,0:08:18.800
of forecasting where we're going to be, I'd like
to keep a steady sort of scenario with pricing.
0:08:18.800,0:08:23.200
I'd like to see it sort of stagnate, if I'm
honest. Not going down, not going up. You've got,
0:08:23.200,0:08:30.640
we spoke off air in regards to central London
prices potentially dropping by £250,000. It's
0:08:30.640,0:08:35.600
something that's going to ricochet out or has
already ricocheted out. What I've seen and
0:08:35.600,0:08:41.440
what I felt, if COVID was inflated artificially. I
felt like cheap money inflated the prices and made
0:08:41.440,0:08:46.160
them spiral. Everyone was bidding against each
other, and I felt that was kind of the bubble.
0:08:46.160,0:08:50.480
And I feel like now we're kind of they were saying
ten, fifteen percent increase over that period. I
0:08:50.480,0:08:55.920
think we've kind of crept back down to where we
were pre COVID. And I'm happy with that. Because
0:08:55.920,0:08:59.760
I felt like that was the artificial scenario.
Everybody had money because nobody was spending
0:08:59.760,0:09:07.520
anything. Yeah. I would like to see sort of
a consistent pricing element moving forward.
0:09:07.520,0:09:12.080
As Lucy alluded to earlier, I it's
very difficult to judge, isn't it?
0:09:12.080,0:09:18.480
I mean, as people we all kind of Want to bring
it on as far as inflation is concerned because
0:09:18.480,0:09:24.800
it gives us a feeling of security and equity
in our home and always a something that we
0:09:24.800,0:09:32.960
can cash out and take a profit on it in a
tax-free manner as well. But inflation in
0:09:32.960,0:09:40.880
housing is quite damaging to the economy when
it suddenly stops and people go into reverse.
0:09:40.880,0:09:44.960
Especially as you mentioned at times when
things are so expensive. Things around us
0:09:44.960,0:09:49.520
are so expensive. And it's easy to forget when
it's all right when is the government say,
0:09:49.520,0:09:53.760
well, inflation is down to two, three,
four percent, what whatever it is. That
0:09:53.760,0:09:56.240
doesn't mean prices are coming
down. It just means they're not
0:09:56.240,0:10:00.960
going up quite so quickly. So it's quite
a difficult balance to achieve, isn't it?
0:10:00.960,0:10:02.400
Yeah, it already is.
0:10:02.400,0:10:06.240
I get some buyers coming to me when
they're bidding and offering and whatnot,
0:10:06.240,0:10:09.840
because the news and the publication state that.
0:10:09.840,0:10:14.800
Yes, it might be a buyer's market out there. They
are coming to me and saying, Well, why can't they
0:10:14.800,0:10:19.280
accept it? It's a buyer's market at the moment
and using that as kind of leverage. But it's not
0:10:19.280,0:10:23.200
uniform. It doesn't work on every individual
property. Sometimes you dangle the carrot of
0:10:23.200,0:10:27.440
a price to get the interest in it. But it's all
about what you're going to buy next, isn't it?
0:10:27.440,0:10:30.160
Absolutely. Also depends on
the seller circumstances,
0:10:30.160,0:10:34.640
right? If you've got somebody in a distressed
situation that really needs to move. But how
0:10:34.640,0:10:38.640
many offers do you need to make? And you have
to be fairly unemotional in terms of what
0:10:38.640,0:10:43.920
you're offering on. Whereas if you've just found
a property that you really love and you want it,
0:10:43.920,0:10:47.200
maybe there's a few other people that feel
the same way about it. Whereas if you're,
0:10:47.200,0:10:53.040
it just needs to be a three bedroom house in this
area that I draw a circle around. And then you can
0:10:53.040,0:10:57.760
bid on as many as you want until you find that
seller that was really motivated because they've
0:10:57.760,0:11:01.760
got to go, they've got a deadline, they're
moving out the country, their kids moving to
0:11:01.760,0:11:07.040
a new school or something like that. It's quite
different to just offering on someone's house
0:11:07.040,0:11:13.200
and expecting them to effectively give away the
equity that they think they have in their home.
0:11:13.200,0:11:16.800
Yeah, ex precisely. Yeah, but
even sort of further on that,
0:11:18.000,0:11:22.240
that's a buyer's market. That's not a
seller's market at this moment. I do
0:11:22.240,0:11:25.440
always feel whenever I've sold anything
and an agent's come to me and say, Well,
0:11:25.440,0:11:30.560
why don't you reduce the price or whatever? The
quickest test is to say to the agent, Well, okay,
0:11:30.560,0:11:36.640
just show me what else I can buy for the price
you're suggesting I sell. Yeah. And that'll give
0:11:36.640,0:11:39.840
you a good balance of your garden path or agents
do, whether they're right or wrong or leading you
0:11:46.800,0:11:49.120
Anyway, that's all we've got time
for in this half of the show.
0:11:49.120,0:12:00.160
So join me again after the break when I will be
asking Lucy and Glenn, more of your questions.
0:12:00.160,0:12:04.640
Hello and welcome back to part two
of Property Question Time. Lucy,
0:12:04.640,0:12:09.200
how do the panel think that AI will change
property finance over the next decade?
0:12:09.200,0:12:16.320
Do you know, I think you're in one camp or the
other on that and there is no doubt going to
0:12:16.320,0:12:27.280
be lots of change around processing how mortgage
lenders take your application from start to finish
0:12:27.280,0:12:32.160
and the speed at which they can transact that
using AI and obviously then the number of people
0:12:32.160,0:12:39.760
that they need in that chain to do the work. So I
think that's an absolute given and I expect that
0:12:39.760,0:12:45.680
the mainstream end of the market will see the
biggest change because if it's straightforward
0:12:45.680,0:12:51.840
and it doesn't touch the sides, you know, the AIs
bots can do what they need to do. And you don't
0:12:51.840,0:12:56.240
necessarily need as many people sitting there
checking documents and things. That's a thing
0:12:56.240,0:13:04.960
of the past. And these systems check documents
better than humans. So it's undoubtable that that
0:13:04.960,0:13:13.120
will see a big shift. I think the question comes
in a bit more around advice and how AI will shape
0:13:13.120,0:13:21.280
advice, especially when it's something that's more
unique or specialist because there are scenarios
0:13:21.280,0:13:30.880
which certainly to my mind and I'm not somebody
who is completely embroiled in the world of AI,
0:13:30.880,0:13:38.240
so it could be partly my own bias, but I don't
feel that AI can replace the human when it comes
0:13:38.240,0:13:45.760
to the level of understanding of what someone's
trying to achieve and the creative solutions
0:13:45.760,0:13:52.560
that might need to be applied to that. So when it
comes to advice, I'm just not sure that the robot
0:13:52.560,0:13:57.920
can replace the human, albeit there are plenty
of people out there that say absolutely it can
0:13:57.920,0:14:05.440
and it will. So it could be my ignorance
around AI that sort of limits that view.
0:14:05.440,0:14:10.240
I suppose AI could be quite capable
of producing some quite interesting
0:14:10.240,0:14:15.920
sort of stress tests limits and
suggestions, couldn't it? You know,
0:14:15.920,0:14:20.320
it could create various scenarios
for the underwriter to look at.
0:14:20.320,0:14:24.480
Of course, it could check bank statements,
can put it into affordability models, it can
0:14:24.480,0:14:29.920
check pay slips, it can make sure everything
aligns. So from an affordability perspective,
0:14:29.920,0:14:36.240
what might take a human a couple of hours to
read across all the bank statement transactions
0:14:36.240,0:14:41.360
and then plug it into an affordability calculator,
check it against pay slips and then against their
0:14:41.360,0:14:49.680
affordability model. That can be done like that
using AI and lenders are already investing in
0:14:49.680,0:14:57.920
that and brokerages too to an extent, albeit
mortgage brokers are probably behind lenders
0:14:57.920,0:15:03.600
in terms of how they are bringing it into their
businesses, but it's certainly coming. We see it.
0:15:03.600,0:15:08.640
There's certain things that we're doing to help
speed up the process to improve the customer
0:15:08.640,0:15:16.560
journey, but not anything near how we give advice
and how we make recommendations to customers. It's
0:15:16.560,0:15:22.560
very much at the moment around processing, but I
think it's going to change most industries really.
0:15:22.560,0:15:28.800
I suppose one of the questions here is you have at
the moment you have somebody who wants to take a
0:15:28.800,0:15:35.280
mortgage. The general advice to a broker, because
a broker will present it in a better way to the
0:15:36.080,0:15:42.480
ultimate lender than you could yourself. Do
you think that AI will take out that middle
0:15:42.480,0:15:50.560
part of the broker and make the lender again
more directly involved with the borrower?
0:15:50.560,0:15:58.080
Potentially on an aggregator type system. So
I think the reason why people go to brokers is
0:15:58.080,0:16:04.400
not just to put the information together, but
it's also if you go to bank A and you present
0:16:04.400,0:16:08.320
all the information, they might say, absolutely,
Steven, you can have a mortgage and this is the
0:16:08.320,0:16:12.880
price that you'll pay for it. But you didn't
know that bank B actually had a better product
0:16:12.880,0:16:17.600
for your circumstances and bank A isn't going
to tell you that you should check with bank B.
0:16:17.600,0:16:22.000
So what the mortgage broker does is they
look at the whole market and they tell you
0:16:22.000,0:16:26.000
what the most appropriate solution
is for your needs and circumstances
0:16:26.000,0:16:30.880
and they make recommendation. Now if
you're putting it through a system
0:16:30.880,0:16:37.360
that has all of the banks plugged
into it, maybe that is a world...
0:16:37.360,0:16:39.920
Who develops that at that point
though, isn't it? That's the...
0:16:39.920,0:16:47.600
Yeah, that's it. Who has access to it? And what
the commercial bias is and whether the regulator
0:16:47.600,0:16:55.840
would be happy that that individual is putting
all of their information in and getting advice
0:16:55.840,0:17:02.640
or sort of quasi advice from a machine and
not a person. I'm not sure. I'm not sure if
0:17:02.640,0:17:07.520
it goes that far or not. I think there'll be
versions of but like I say, I think the world
0:17:07.520,0:17:14.080
of AI is much bigger than those who are not
completely educated on AI really understands.
0:17:14.080,0:17:17.440
Anything to say that plan? Absolutely. Yeah,
I think it's already sort of transferred on
0:17:17.440,0:17:22.080
a on a micro level the onboarding
of tenants. So same sort of thing,
0:17:22.080,0:17:28.080
referencing, it's almost as strict as almost as
strict as mortgage applications, if I'm honest.
0:17:28.080,0:17:32.400
You've got to get bank statements, pay slips,
previous landlord references, credit checks, all
0:17:32.400,0:17:39.040
of the all of the above on that front. What it's
done for us and me is on a fraud prevention basis.
0:17:39.040,0:17:42.960
So within a click of a button, you're able
to check, okay, well, this person's put this
0:17:42.960,0:17:47.440
landlord as their previous landlord. Straight
away push the button, you can check on land
0:17:47.440,0:17:51.360
registry that if that's the landlord of that
property, because years gone by, I used to
0:17:51.360,0:17:55.120
be able to put a telephone number for any whoever
Harry. Yeah, he was brilliant paying his mortgage
0:17:55.120,0:18:02.480
or paying his rent. That's now has gone by the
wayside. Documents, pay slips and bank statements.
0:18:02.480,0:18:04.800
Used to get all the time. You used
to get fraudulent documents all the
0:18:04.800,0:18:07.600
time passed through. Now within a press
of a button you can check, All right,
0:18:07.600,0:18:11.440
there's a snag there that means so that's not
correct. it can be very hard for the human eye to
0:18:11.440,0:18:19.600
spot that. And in my years doing this, I've come
across it from time to time. And when you see it,
0:18:19.600,0:18:25.520
you can see how many people would not spot the
inconsistency. Sometimes it's that the math is
0:18:25.520,0:18:33.360
wrong to a penny or something. AI will spot
that in more scenarios than a human being.
0:18:33.360,0:18:38.720
Absolutely. Or if they've paid the tax the correct
amount of tax for their tax code on their pay
0:18:38.720,0:18:45.600
slips. That sort of situation that a human eye
go, Okay, whereas AI is picking those things up
0:18:45.600,0:18:51.440
and able within ten seconds of surfing the whole
internet for it. Okay, good. Well let's move on.
0:18:51.440,0:18:57.440
Glenn. Can the panel explain why some
agents consistently overvalue properties,
0:18:57.440,0:19:01.520
only to suggest a price reduction
shortly after being instructed.
0:19:04.720,0:19:05.600
He enjoyed it.
0:19:05.600,0:19:10.160
Have you heard about No, I'm joking. No,
absolutely isn't. Come on, let's do this
0:19:10.160,0:19:14.240
one. I've got to be honest. So, can you
repeat the question one more time for me?
0:19:14.240,0:19:20.960
No. On the basis of why agents do
it, there can be situations where
0:19:20.960,0:19:26.000
you have to portray that you're able
to deal with someone's biggest asset.
0:19:26.000,0:19:29.920
So if you're a cold star and you've got no
properties and I'm coming to your house.
0:19:29.920,0:19:33.200
And I come around and I say, I'm going
to sell your property for the maximum
0:19:33.200,0:19:37.760
amount of money in the minimum amount
of time, expose it to the whole market,
0:19:37.760,0:19:43.440
but I've got no portfolio behind me showing you
what I've done previously or what I've currently
0:19:43.440,0:19:49.280
got on the market or what I've sold, you're not
going to get the instruction if I'm honest. So
0:19:49.280,0:19:54.080
what people tend to do is if they're an upstart,
it does continue on, but if you're an upstart,
0:19:54.080,0:19:57.440
you'll try and take on a lot of properties
and it doesn't matter what price you've got.
0:19:57.440,0:20:01.360
Got them on for because you've got a portfolio
behind you if you check on the on the internet
0:20:01.360,0:20:06.880
and whatnot. Where you have a business plan
though that overprices to get you signed up
0:20:06.880,0:20:12.480
for 12-week contracts with certain corporate
companies that I've been told not to mention.
0:20:16.400,0:20:20.080
Not even corporate companies, but some
corporate companies in particular,
0:20:20.080,0:20:23.760
the problem comes where it's a business
plan to take the property on to beat the
0:20:23.760,0:20:28.080
other agents and then work the price
down over weeks and weeks and weeks.
0:20:28.080,0:20:34.480
You're not servicing, you're not marketing, you're
almost conning someone into a contract with you
0:20:34.480,0:20:39.200
and hoping that you can negotiate with them to
get the price down. That's what the problem is.
0:20:39.200,0:20:44.880
I think as well that it's very easy to win people
over when you tell them what they want to hear,
0:20:44.880,0:20:49.840
right? And everyone thinks their property
is the best property in the roads and it's
0:20:49.840,0:20:54.400
worth more because of X, Y and Z. They
pull up that something sold six years ago
0:20:54.400,0:20:59.760
for that and you're like, well, that became
irrelevant about five and a half years ago.
0:21:01.840,0:21:09.680
it's not an easy one, is it? Because you are
battling integrity versus trying to drive the
0:21:09.680,0:21:15.040
business forward and those integrity
wins overall ultimately, doesn't it?
0:21:15.040,0:21:19.520
There's two other sort of scenarios that work
around that though, in terms of it's so nice
0:21:19.520,0:21:23.760
when you get that phone call back in six weeks
or twelve weeks' time when that agent hasn't
0:21:23.760,0:21:28.240
sold it. It's so annoying at the time that you've
lost out on pricing. And you question yourself,
0:21:28.240,0:21:33.120
you're like, Well, have I actually priced this
incorrectly? But in six to twelve weeks' time,
0:21:33.120,0:21:36.480
that landlord or vendor is on the back
foot because they're coming to you going,
0:21:36.480,0:21:44.080
You was right, like I take your word on board. The
other situation that happens with these agents is
0:21:44.080,0:21:50.080
if you have a full stock list on the market of all
these properties that are stagnant on the market,
0:21:50.080,0:21:54.480
you've paid three, five, sometimes a
thousand pounds for the marketing, photos,
0:21:54.480,0:21:59.440
videography to get that property on the market.
So you'll have, I know of a firm who you know
0:21:59.440,0:22:05.280
of as well, but no name's mentioned, their whole
portfolio has to take 1,500 pound up front yeah,
0:22:05.280,0:22:10.480
1,500 pound up front just for marketing
off a landlord or a vendor. Because if
0:22:10.480,0:22:14.880
you've got 190 properties on the market
and you've done 1500 pounds in marketing.
0:22:14.880,0:22:17.760
You've got that sitting there and
you're not able to sell any of it. Yeah.
0:22:17.760,0:22:23.120
I mean I do know quite a big firm that tells
its young negotiators that if you haven't got
0:22:23.120,0:22:28.000
it on the books, you can't sell it. Get
it on the books at any price. Yep. At any
0:22:28.000,0:22:34.400
price. And we'll deal with the legitimacy
of that price later on. Yeah. You know,
0:22:34.400,0:22:40.546
and to a point, you can see the logic there. If
you haven't got it to sell, you can't sell it.
0:22:40.546,0:22:40.560
So legitimate.
0:22:40.560,0:22:44.640
And by the way, it's exactly the same in the world
of finance. We come up against that all the time
0:22:44.640,0:22:49.920
where somebody has they put a set of terms and
they say, well, another broker's quote to me,
0:22:49.920,0:22:54.560
listen, you're looking at going, just can't
get that. That doesn't work. And then you get
0:22:54.560,0:23:00.960
a call back in three months to say, we got led
down the garden path. And the only thing is,
0:23:00.960,0:23:05.280
and you'll probably have the same,
sometimes they still win the mandate
0:23:05.280,0:23:09.440
because even though they don't achieve what
they told them they were going to do in the
0:23:09.440,0:23:12.800
first place. They've got them on. They're
so far for you, they're so far into it,
0:23:12.800,0:23:16.320
especially if they paid that money upfront. So
they'll stick with them. They'll sell it with
0:23:16.320,0:23:21.520
that agent anyway. And you lost it just by doing
the right thing, which is a challenge, isn't it?
0:23:21.520,0:23:26.640
Precisely, exactly that. Yeah, it's I don't think
it's ever going to end if I'm honest with you. I
0:23:26.640,0:23:30.240
think that you've got a mixture as well. You've
got a lot of vendors that still believe that their
0:23:30.240,0:23:35.600
price, their property is worth what it was before
the interest rate started going up and whatnot.
0:23:35.600,0:23:38.960
Yeah. Okay, well there we are. Thank you
both very much indeed. That's the end of
0:23:38.960,0:23:43.680
the show. So thank you to Lucy Waters,
director of managing director of Aria
0:23:43.680,0:23:47.520
Finance and Gwen Jacobs, director of Next
Home. Thank you both very much for coming
0:23:47.520,0:23:52.160
in. I'm Stephen Galpin. Join me again
next time on Property question talent.
Hello, welcome to Industry Insights, part of our Property Matters show. Thanks to Lucy Waters this morning, who's the MD of Area Finance, for coming along and giving her
view of the property finance market.
Morning, welcome to you. Lucy, let's start off. We've got some volatility going on at the moment, haven't we, with interest rates, borrowing rates, all sorts of things. Where are we?
Yeah, so we've obviously, We've been through a period of instability caused by the geopolitical landscape, and now we've got domestic issues which we're contending with. So it's been a bit of a double whammy, unfortunately, in that we were already dealing with fairly persistent higher interest rates caused by the swap rate market and what's going on in the Middle East. But now we're in a situation where the market has become spooked by what's happening with Keir Starmer and the potential of new leadership, etc. and the outlook for the UK economy, which has led to rising gilt prices and a knock-on impact to swap rates. So we haven't seen a huge rush of rate rises in the market just yet, but we all know that if things don't settle fairly quickly, that that is what we would expect to see next.
And what's this going to do to the market? I mean, is it making life difficult for developers to develop? In other words, housing stock being limited? It really is. I think that problem has been very much there for the last 12 months plus. think we've got land values are still not coming off in the way that they need to enable developers to make the numbers stack. You've got the Gateway 2 issue, which we've talked about before, which is causing big issues predominantly in and around London and building flats and towers, exactly. Then on top of that, there's been some research that's come out this week about off plan sales. So, where the market slowed down generally and units aren't selling as well, what we're seeing is off plan sales, which developers really rely on in order to reduce their holding costs and to offload their stock a bit quicker.
The status something like in 2016, 50 % of sales would be off plan for these bigger units and bigger blocks of units in and around London, et cetera. And now it's at
something like 30%. So that really does have quite big implications for developers. So you've got higher interest rates, land values aren't where they need to be. You've got
the gateway issues and then the fact that the resales aren't there. All the pinch points are making it really challenging for developers in certain areas for certain types of asset classes. I think it's making it difficult for everybody. mean, you're talking to somebody here who made my living from doing off-plan sales for many years, and it was very successful.
There's a very simple rule. As a developer, you'd say to your bank, well, can we have some money upfront? And they say, well, to get your funding, you go and sell 20%, 30 % off-plan and we'll look at funding your development. But of course these days for a young person in particular to buy off plan and make a prediction of what he's going to be able to afford two, three, four years later on when the developments complete, very difficult, very dangerous. And affordability is really tight as it is. So one of the big challenges as well in the market is that first time buyers, the number of products available has gone backwards, especially with a lower deposit products. So that obviously you can see how the circle completes.
You've got the developers that's building the stock, but they're relying on the end user having the affordability and the deposits and the mortgage availability to enable them to buy the units. And unfortunately, the market has slowed down on all accounts. If we get over this geopolitical issue and the conflicts die down, shall we put it that way?
Do you think that we'll get back on a downward path for interest rates? I think the market is broadly positive about that being the longer term trajectory. I think what feels really uncertain at the moment is the shorter medium term because you've got these two things which are fairly acute in the market causing the knock on effect to now, but it can change.
It can change so quickly and so dramatically in the same way that we saw the interest rates spike so quickly from where they were at the beginning of the year. There is still some hope and optimism that that might happen. Albeit, I think the predictions are stretching out for how long it might take for that to start to happen. Do you know, think overall, Lucy, it's such a shame because with, shall we say, rather depressed prices at the moment in the property market. It's probably an ideal time for young first timers to be buying. But if the cheaper finance and lower deposits isn't there for them, it's futile, isn't it? Absolutely. Such a shame because I think this is an opportunity that could benefit the young people of the UK. But there we are, that's life. Lucy, thank you very much for coming in today and sharing your knowledge with us.
Thank you for watching. I'm Stephen Galpin. You've been watching Industry Insights.f our Property Matters series. Look forward to seeing you again
next ti
Hello, welcome to Industry Insights, part of our Property Matters show. Thanks to Lucy Waters this morning, who's the MD of Area Finance, for coming along and giving her view of the property finance market. Morning, welcome to you. Lucy, let's start off. We've got some volatility going on now, haven't we, with interest rates, borrowing rates, all sorts of things. Where are we? Yeah, so we've obviously, we've been through a period of instability caused by the geopolitical landscape, and now we've got domestic issues which we're contending with. So, it's been a bit of a double whammy, unfortunately, in that we were already dealing with persistent higher interest rates caused by the swap rate market and what's going on in the Middle East. But now we're in a situation where the market has become spooked by what's happening with Keir Starmer and the potential of new leadership, etc. and the outlook for the UK economy, which has led to rising gilt prices and a knock-on impact to swap rates. So, we haven't seen a huge rush of rate rises in the market just yet, but we all know that if things don't settle quickly, that that is what we would expect to see next.
And what's this going to do to the market? I mean, is it making life difficult for developers to develop? In other words, housing stock being limited? It really is. I think that problem has been very much there for the last 12 months plus. think we've got land values are still not coming off in the way that they need to enable developers to make the numbers stack. You've got the Gateway 2 issue, which we've talked about before, which is causing big issues predominantly in and around London and building
Flats and towers, exactly. then on top of that, there's been some research that's come out this week about off plan sales. So, where the market slowed down generally and units aren't selling as well, what we're seeing is off plan sales, which developers really rely on in order to reduce their holding costs and to offload their stock a bit quicker. The status something like in 2016, 50 % of sales would be off plan for these bigger units and bigger blocks of units in and around London, et cetera. And now it's at something like 30%. So that really does have quite big implications for developers. So, you've got higher interest rates, land values aren't where they need to be. You've got the gateway issues and then the fact that the resales aren't there.
All the pinch points are making it really challenging for developers in certain areas for certain types of asset classes. I think it's making it difficult for everybody. mean, you're talking to somebody here who made my living from doing off-plan sales for many years, and it was very successful. There's a very simple rule. As a developer, you'd say to your bank, well, can we have some money upfront? And they say, well, to get your funding, you go and sell 20%, 30 % off-plan and we'll look at funding your development. But of course, these days for a young person to buy off plan and make a prediction of what he's going to be able to afford two, three, four years later when the developments complete, very difficult, very dangerous. And affordability is tight as it is. So, one of the big challenges as well in the market is that first time buyers, the number of products available has gone backwards, especially with a lower deposit product. So that obviously you can see how the circle completes. You've got the developers that's building the stock, but they're relying on the end user having the affordability and the deposits and the mortgage availability to enable them to buy the units. And unfortunately, the market has slowed down on all accounts. If we get over this geopolitical issue and the conflicts die down, shall we put it that way?
Do you think that we'll get back on a downward path for interest rates? I think the market is broadly positive about that being the longer-term trajectory. I think what feels uncertain now is the shorter medium term because you've got these two things which are acute in the market causing the knock-on effect to now, but it can change.
it can change so quickly and so dramatically in the same way that we saw the interest rates spike so quickly from where they were at the beginning of the year. There are still some hope and optimism that that might happen. Albeit I think the predictions are stretching out for how long it might take for that to start to happen. Do you know, think overall, Lucy, it's such a shame because with, shall we say, rather depressed prices now in the property market. It's probably an ideal time for young first timers to be buying. But if the cheaper finance and lower deposits isn't there for them, it's futile, isn't it? Absolutely. Such a shame because I think this is an opportunity that could benefit the young people of the UK. But there we are, that's life. Lucy, thank you very much for coming in today and sharing your knowledge with us.
Thank you for watching. I'm Stephen Galpin. You've been watching Industry Insights; part of our Property Matters series. Look forward to seeing you again next time.
Hello and welcome to our property matters feature industry insights. On today's program we're going to focus on the world of finance and my guest today is Lucy Waters MD of Area Finance.
Lucy, welcome.
Hi Steven.
Um Lucy, I guess we better start with the current USA Middle East conflict and what's the effect on the financial markets at the moment?
Yeah, really sad times and and obviously um you know it's a another big market event which we could have really done without and the knock-on effect is uncertainty. So all of the goodwill that we've built up at the start of this year which has obviously fed into interest rates, swap rates and therefore what customers are
borrowing at has been undone really in the space of a couple of days. Um we saw swap rates bounce immediately after the event by about 25 basis points over a couple of days settled slightly. Um but in response to that we saw some of the big banks um announce that they're going to price upwards across residential and buy to let rates when we were sort of expecting it to go the other way. But that uncertainty in the market, rising oil and gas prices, it just creates a another layer of volatility which we thought we'd put behind us for the time being.
Um, you you mentioned oil and gas rates.
Um, I was listening to some commentators yesterday saying that the uh almost 100% increase in gas prices at the moment will take until July to really feed through to anything that matters to us as, you know, private individuals, shall we say? Um, but I think in the financial market, it's going to be a little bit more instant, isn't it?
Yeah. The the the financial market predicts what will happen. So the interest rates that consumers are paying are a forecast of where they think interest rates will go within a period of time. So you look at SWAT rates on a 1, two, three, four, five year basis. The ones that most banks are concerned with a two and five year because most borrowing is linked to two and five year. Um and that's really what drives the interest rates that people see. So whilst we're actually only back to sort
of pre Christmas levels, so that they've not, you know, they've not shot up past where they were at the back end of last year, but it's just like I say, we've undone some of that good work that we've seen early this year, which has fed into confidence and what have you. But hopefully it's a blip, Stephen.
Hopefully.
So what would you say to those people that have been sitting on their hands waiting for interest rates to fall?
Yeah, I say this all the time. I'm a bit of a broken record that you can only predict so far as to what's going to happen and and the market has been fairly clear that it believed there would be a few interest rate reductions this year. Um every year we've come into over the last few people have always said at the start of the year we're going to see four five interest ratecuts. We've been slower than what people have predicted. So therefore, anybody that's held off has probably not seen
the benefit when they finally come to do it and perhaps has lost opportunity in in that waiting phase. So it just shows you really that even when the direction of travel is considered to be fairly certain that it only takes an event and whilst it's unusual times, we've seen quite a few of these events happen of late. So perhaps less usual, unusual than normal. And I think no matter how much we try and stay out of it, it's going to affect us one way or another, isn't it? You know.
Okay. Um Lucy, the final thing that I just want to talk to you about, um with your knowledge of the development market, um the London development market is experiencing serious challenges. Do you want to just run through one or two of those because it's it's holding us up with new homes, isn't it?
It is. Yeah. So the ongoing gateway to issue, whilst anecdotally I think it's getting better, a lot of developers have shied away from constructing towers, high-rise blocks of flats and and actually even if you take Gateway 2 to one side, the resale of those homes because of the pressure on affordability from interest rates and the number of buyers in the market for those homes has drastically reduced. and therefore lots of developers have been sitting on unsold stock u which has obviously had a knock-on effect to valuations which impacts refinance if developers decide to hold on to stock and rent it out. So there actually is not much of an injection of large schemes of flats coming into London versus what there has been in previous years because developers have got too much red tape and uncertainty about resales and a buying resistance due in part to high service charges and high ground rents.
So yeah, there we are.
Okay, Lucy. Um, thank you very much. That's all we've got time for today. I'm Steven Golpin and thanks to our guest Lucy Waters, MD of Area Finance. Thank you for watching our Property Matters feature, Industry Insights, and I look forward to seeing you again next time.
Hello and welcome to Property Matters.
I'm Steven Galpin and today we're going to be looking at the state of the property finance market and to help us with this is Lucy Waters, MD of Area Finance. Welcome Lucy.
Hi Steven. Good to have you back in the new year. Yeah, thanks for having me.
Good. Well, I only got good news for us and not bad news. That's all I'm talking about today. Now, um UK house prices soften towards the end of 2025 um with a quoted 6% fall in uh 0.6% fall in in in in December. Um on calculations it looks like that the uh UK average property price is around 290,000.
Do do you go with that?
Yeah, I think the last Halifax data came out 297 there or thereabouts for December. Um, so actually the the sort of overall picture isn't too gloomy in terms of house prices, but there's obviously some regional differences there with London and the Southeast suffering somewhat. Yes. Where obviously I'm I'm very nervous about taking a cross-country view on on these things. I remember um sort sort of back in CO there was a a a sort of um rush to buy properties in the country with more garden space because people restricted to home and all the rest of it. And we got all sorts of stats coming out sort of saying oh well country homes they they they've had a 400% increase in sales numbers this month. and you'd think that's good. But actually what it meant is they sold four properties instead of one, you know, so it wasn't that meaningful. And I'm a although I get criticized sometimes for being a bit London centric, I do believe that London sets the pace and it ripples out countrywide. Now I don't know whether that applies to the finance market, does it?
I think yeah, look, London is it's always going to be a hub and I think in terms of people making money in property, investing in property, London has always been a really safe place or perceived to be a really safe place to park money. Um, obviously with average property prices being considerably higher, yields have always struggled a little bit more in any case because your yields are lower and and therefore when it comes to investment that drives lower debt and and that couldn't be truer at the moment with obviously interest rates having risen significantly over the last few years and affordability pressures on those mortgages actually borrowing and and investing especially in Buy to let assets in London is a lot harder than it used to be. And then obviously from a home homeowner perspective, you have the affordability pressures for people to be able to come up with the deposit and afford the monthly repayments and and pass the lenders affordability test. So I think London has whilst you see obviously higher wages and perhaps better affordability than you might see in regional areas, it's it's definitely struggled the most. And I think it's pulled down property prices because you see much better results coming out of some of the northern regions.
And why why is that? Is it because commuting costs are so big now or?
Um I think that the whole way that people live and work has changed a little bit for one. So you get a lot more working from home, although that tide's definitely turned a bit and we've seen more of a move back to offices. I think there are still a lot of businesses that offer a degree of flexibility. So people who work in London don't necessarily have to live in London. Um, and I think that has had a contribution and we've talked about it actually on here before with the help to buy leaving the market that had a huge impact especially on your kind of two-bedroom flats in and around London. Um, that definitely caused a slowdown.
But this work from home business, I mean because it's perfectly obvious, but a lot of the big firms now, say here in Canary Wall, for instance, are saying,
"Hold on a minute. We're we're paying five or 10 million quid a year rent for this huge huge office block full of every facility that you can manage, and you want to sit at home and work at home. No thank you. You're going to come back to the office." Yeah. The tide's turned.
It has, isn't it? Yeah. And I I don't think that's a bad thing. I think it takes a really disciplined person to be able to get the best out of themselves working at home and I agree with that. I think productivity goes down.
You've only got to have something good on the telly and you you're gone, aren't you?
Yeah. I've always believed and and us as a business, we've always been off office office based entirely and we noticed that a lot of the banks and the lenders that we work with that moved to homework, we really noticed that service suffered as a result of that and I think that's true of all sectors. You've got no interaction with your work colleagues. So if you have ideas or you have problems, you've got nobody to discuss them with other than on a phone call, which is never the same. Yeah. You don't learn in the same way.
I mean, if you, you know, if you talk to young people, they'll only they'll only ever text. And if you say, "Well, why don't you talk to me?" They say, "Well, I did. I text you." You know, but it's not the same. You know, you can't see the tears. You can't see the smiles. You can't see the thought, can you? It's it's a difficult subject.
Okay. Just coming back to London and this sort of softening of prices. I mean I accept that in some regions of London um prices have dropped quite significantly and 25 to 30% in some cases prime post codes before.
Yeah. Um what what's causing that that softening of pricing?
I think it's I think there's a number of factors. So interest rates is an obvious one. Um, I think there's also tax regimes and the perception of the UK as somewhere to invest and and how we attract foreign investment and foreign buyers. I think that was a large part of the prime market. Um, the budget obviously last year was it was a real hindrance from the summer onwards at the very least because it was one of the most speculated budgets that I remember ever seeing. And I think that that with the speculation specifically around the higher value properties that put a lot of people off transacting in that market in the runup to the budget even though it was obviously nowhere near as bad as we anticipated.
Do do you think the government understood that that would be the reaction? It's a really good question, Stephen.
And it's hard to see how they wouldn't have understood that because speculation is never any good for a market, especially when it's negative speculation. So, it's hard to believe that they didn't see it, but perhaps they just needed more time to get their ducks in a row. I think the question I I I would like to ask of number 10 is that with that budget taking into account also the U-turns that have gone on since and and the some of the catastrophic choices that were made. Was it a budget
that was created by number 10 and our chancellor? So number 10 and number 11 working together or individually what whichever way they do it or or was it a budget that was inflicted on them by civil service advice?
Yeah, it's I mean it's an interesting thought, isn't it? Where did it come from?
Yeah, I think there was a lot of ideology in there and there was a lot of um it it was a very political and a very politically debated budget, wasn't it? there was this um sense of you we heard it a lot a lot in the news in the run up the border shoulders and and I think that that really spooked specifically the London and the prime markets um where you would expect the border shoulders to lie. I mean I I I I was listening to the news today and for instance the government are apparently considering um stopping or or restricting the London Freedom Pass.
Right.
Right. Now what does that give you? It gives you after the age of 66 free travel on the tubes, trains and and buses in and around London.
Okay. And apparently wi within hours of announcing this thought process, they had a petition with 3 million signatures on it. Wow.
And saying, "Look, you haven't thought this through because you get up to the age of 66." 60 to 66, you get a free Oyster card which isn't chargeable.
Then the freedom pass takes over as you head towards your 70s. And so what are you going to do? give it to people free for 60 to 66 and then cut them off and create poverty amongst pensioners or or or what and communication. The government always go on and say, you know, talk to your neighbour, travel, go and see your friends, go and do this.
And that seems just the kind of thing that again they're they're sort of ignoring and it just smacks to me as somebody in the Treasury saying, "Oh, listen, we could save three billion a year doing this and let's do it."
Yeah. I I I think the the thought process to you if certainly from the property side and from the earning side to try and tax our way out of it rather than to invest in growth is a continued frustration. And we certainly see that in the property market with a lot of our developer clients who feel frustrated at all of the red tape and the inability to be able to cut through that. And you know, every time that something positive is announced in order to try and achieve housing targets and what they may or may not do, something else comes in that creates another burden and it's the the whole lack of ability to be able to grow and and you know improve the economy rather than just pay tax.
I think my comment when they announced the 1.5 million homes by the end of this parliament was I think I said good luck.
Yeah. I mean, we're we're we're abysmal at hitting housing targets in any case, but I think that was but there's there's a fundamental flaw there anyway because even if you build this 1.5 million, whether it's to a housing association, whether it's to an individual client, whether it's to an investor, somebody's got to buy all these homes. Yeah.
And somebody like you has got to provide the finance for them to do that. And I'm not sure you can. Well, look, there's there's actually a real availability of mortgage products out there. And that's the funny thing. Mortgage lenders are there. They want to lend, but has to stack up. The affordability has to stack up. And at the moment where there's such a disconnect between house prices and affordability and deposit size and then your other costs such as stamp duty, it's really hard to make it work for people. And therefore the private rented sector is such a important part of our of our economy that actually on the other side we should be supporting that more and looking for ways to help to grow that side of the market if we can't encourage more home ownership.
But hold on it's a little bit like the electric car syndrome, isn't it? They want to encourage electric cars and what do they do? They cut the benefits. Yeah.
I I it's just barmy to me. And I mean as far as as far as housing is concerned um if you're a young person trying to get on the ladder um as I've said to you previously um here in Canary Wolf you know you've got one of the developments here starting one-bedroom flats at 880,000. Well I don't know how young person's ever going to afford that even if they're a couple.
No it's a lot of money is I mean with a combined income they're going they're going to need 150,000 quid aren't they? Yeah, I mean general rule of thumb and obviously this is this is not binary because there's a more complex affordability calculation that lenders apply by looking at people's committed outgoings and their sort of discretional expenditure. But as a general rule of thumb, you might say broadly four times an income would be required um for mortgage affordability.
Some lenders still have that in play and some of them work more on an affordability only. If you say four times income on average, you know, some would do slightly more and some would do slightly less. That just shows you really what you'd need to be earning in order to But you know, let's just wind the clock back a little bit. I mean, I think at the height of it all before we had the financial crash of 2008, 9 or 10, whichever whichever bit you think was the catalyst. Um, we looking sometimes six times earning, weren't we? And I have seen exceptional cases where it was eight times. Yeah, I was I was going to say I think six actually was probably at the lower end in many cases and and self certification too.
Yeah. And look, that didn't work either.
So I think that we needed to see a more prudent affordability regime come in and I think that's probably served us well because we often hear the term stress test and we've heard that a lot over the last number of years and and I think a lot of people that are borrowing see it as a hurdle to overcome but actually the stress came didn't it? We saw the stress in 2022 and 2023 when interest rates went through the roof and actually then people coming off of low fixed rates and their borrowing costs rising exponentially actually the stress test that lenders put in place to make sure that they could afford that rise stopped us from then falling off of a cliff when it came to affordability at the end. So there's a balance for sure, Stephen. And I'm not sure that we've quite got the balance right at the moment. And I think the interest rate, the new interest rate environment will probably prompt a little bit of a reset on that. And and that's happening. You know, there's regulatory review on affordability and lenders are looking at whether there should be certain stress tests and and how they how they look at things moving forward in a more normal or, you know, more usual interest rate environment. Well, let me just comment, you know, 100 years ago when I bought my first home, um I think I paid about n 9 and a half% and I was always taught at that time that if your if your borrowing was at a rate of under 10%, you were doing okay. You were lucky. Yeah.
Yeah. You know, and then of course it went up to 15% at one time, didn't it?
Um but just coming on to the subject of um mortgages for um and I don't mean this in a disrespectful way but for ordinary people and I say that people with normal jobs normal salary expectations no super growth in their career path just just as normal. M um do you think it's time that we looked at the way we provide house finance rather than this just either building society or bank provision? I mean I'm thinking in terms of mortgages that perhaps stay with the house rather than the person. Um longer period of payback maybe 50 years and that could be passed down through generations. I I just wonder whether it's time to have a rethink.
Yeah. Well, there are economies which have longer term fixed rates, which which is an interesting one because I think if somebody was going to buy somewhere and it felt like it was their forever home and they fixed their mortgage for 20 years or 25 years and they knew they knew that that was going to be the cost of their mortgage and that they had done their numbers on that appropriately and the bank had checked the affordability appropriately. Obviously things can change in the future but that is I suppose one way of looking atit whereas ours is a little bit more we fix for two years we fix for 5 years some people might take a variable rate we move a lot so our market doesn't really operate like that um a wholesale shakeup of mortgage finance I mean it's an interesting question but it's I suppose you become quite embedded don't you in in the way things work. And we always hear this word innovation and everyone's always talking about innovation, but it feels like innovation in the mortgage world for us has been really just tinkering around the edges as opposed to wholesale change.
Yes. You see, I I'm I'm thinking um I read some of um your notes on the subject and you are witnessing a return to a higher loan to value in terms of mortgages. you know, we're looking at 90 or 95% mortgages again now, which I suppose is a step towards the 100%, isn't it? I'm not sure what my view of 100% mortgage is. I don't think anybody takes a mortgage out with the idea of defaulting on it. So, I don't think it's quite as bad as some people would make out, but I do I do agree that it it could cause young people stress if there is a sudden change in the market, whether it be interest rates, house prices, negative equity, or any any of the taboo subjects that we get with property.
So, I don't know, but I do you think it's a good thing? Look, I think it serves a purpose and I think that there are still some soft costs and you have your stamp duty, your legal cost, valuation fees, moving costs, and you know, if it's a first-time buyer, they have to set the house up with furniture and, you know, there's there's costs
associated with it that would not seem insignificant to that individual when buying their first home.
um the problem that you have with it is some of the stress situations that you just listed. You then can end up in a situation where you create mortgage prisoners. So I think we would have to have the banks and building societies and non-bank lenders support to the market that they would continue to allow that loan to to run and if it reached expiry of say its initial fixed period, if it was a two-year or 5year fixed period that they would allow that to run without a reunderwite, which a lot of products transfers do allow for in the market because that you know they want the client retention anyway. So if somebody's
paying their mortgage they you know a customer that's already with them is valuable versus going out and having to acquire a new customer. So I think if
they can transition people on and you don't create a scenario where you have a mortgage prisoner that can't do anything. But if somebody then looks to
sell and their property value has fallen, that's when you can cause the problem because then it's a case of actually having to stump up the money.
But I think if I remember rightly, I've got a feeling it was the '9s where banks and building societies were ordered to be more more helpful to um shall we say delinquent borrowers, right?
And um I I thought that was always a very good idea rather than just leap for repossession. M we saw it in co as well,
didn't we?
Yeah. I mean, you know, people forget a bank don't want to repossess your property. The last thing they want is to have your property on their board.
It's also not very easy for a bank to repossess property. It takes time and you know it's it's it's not easy on anybody involved.
Okay, let's just um move on uh for the final minutes of our our show to buy to let.
Now the government has been quite difficult with what they call accidental landlords and I think what they mean is really the land the private landlord with one two three four properties now they've had a a bit of a holiday in terms of lending criteria have been specialist firms for buy to let who've been quite relaxed about the conditions they base the lending on rental income rather than the person's finances and I think that's a great thing specialist lending uh because you do get professionals looking at what you're asking for and I I I think that's absolutely great. But again, the government seemed to have jumped in and and put a stop on all of that by encouraging the you know institutions to take over by and I'm not sure the institutions are going to be very much better at it than anybody else. Why?
because I think the private landlord is very conscious of his asset, tries very hard to get a good tenant, and tries very hard to look after them. I'm not sure that some of these big corporates will, and in fact, I think they'll be quite um don't know what the word is, but um quite brutal when it comes to affordability and and and what they're going to get in terms of yield. How are you finding the financing for these sort of projects? Are are the big institutions taking up the finance and
and individuals being left behind or we're seeing a we're seeing a mix actually now I think when when it comes to the smaller landlords the sort of sub3 properties perhaps if you were to use that as a cut off um that market is really tough so unless somebody has ambitions to scale I think it's very difficult for people to transact in that market and make it work. So we've seen definitely a movement more towards higher yield assets which is probably part of the London sort of regional divide and people are much keener to seek better yields either by moving further a field or you know in areas that present stronger yields or by changing the asset class slightly to HMO co-living student accommodation and alternative types of assets and co-l living is something that we've actually seen quite a rise in in recent times. So you see that that that calling of the small private landlord is being converted into perhaps a restructuring of that kind of business I suppose then yeah to to some extent and I mean we still we still deal with a lot of landlords that have say three four properties upwards to you know many landlords that have 50 60 100 properties and and actually I think the difference there is it becomes a bit more systemized. They It tends to be somebody's full-time occupation as as opposed to something that they're doing alongside their main occupation. And that I think that makes a bit of a difference. And I think people I don't think that's a bad thing.
I don't think that's a bad thing either because people can give it more time and attention. Um and in terms of mortgage availability, there is a lot out there.
you know, there's there's debt is not difficult to come by, provided the numbers work and and I think that's the key really. It's about finding
appropriate yields to support the debt in today's interest rate environment.
Okay, Lucy, I'm going to say thank you very much for coming in today. It's been great to have you in the studio. So, that's Lucy Waters, MD of Area Finance.
Really big thank you and thank you for thank you for the information that you've provided. We're now going to go over to Will Stevenson, co-founder of
Fiber Pay for this month's industry insights on foreign [music] exchange.
Will, welcome to our industry insights property program and our monthly look at the world of currency exchange. What have you got to tell us this month?
Beginning on the uh property market, I think 2026 we've already seen a fantastic start to the year. um thatncertainty that we had from the bud the late budget last year now we know that the expectations of it causing a lot of havoc for this year we know now it seems business as usual um so that's of course fantastic terms of the currency exchange markets I think one big factor to look out for this year is interest rates um of course we've had an interest rate cut towards the end of last year um and it seems that the Bank of England is talking about further cuts throughout the year. Now, that technically should uh devalue a currency. Um however, actually the complete opposite. Ever since CO um we've seen a complete flip in trends in the markets and actually we could see uh the currency go the other way. I believe that it's still going to attract overseas buyers. Um the pound is probably a little bit undervalued at the moment. um and looking at other jurisdictions and their interest rates, Europe currently being lower, I think it's still really appealing for um Europeans uh to to of course transfer funds and purchase in in the UK.
The standard comparison is obviously with the dollar. Yes.
I mean, how's that going? I I some reports you read that Trump is absolutely decimating the American market, so therefore the dollar should be cheap, but it's not.
It's not. The dollar is the the world's safe haven currency. So whenever we see huge yeah geopolitical problems like as we're seeing um there the dollar tends to gain strength again another trend that seems to be uh yeah more common since co days so actually US market uh is m is still huge I think it will be this year it's also incredible value if you look at since the referendum to buy to purchase pounds and sell dollars so yeah those people that have been looking for a few years might be thinking, "Oh, I'm getting 30% off." Um, and I think that it's going to hold this strength.
Trump did want a weaker dollar, but uh with um yeah, all the all the things that he's up to, uh we're we're absolutely not seeing that at the moment, but uh yeah, I think continuing going forward, dollar strength and pound undervalued.
What's the comparison of particularly in the property market of of money coming in to money going out? There's still a I think if you particularly if you focus on London, there's still such a demand for uh internationals having that that London property. Um I guess it's a bit of a a flagship piece that you you have to have if you're a particular high net worth. Um but yes, there are a lot of uh UK people moving abroad. The easy one is still Middle East Dubai. um we see a lot of of fund flow of funds going over there probably because it's it's particularly easy to obtain residency and it's so tax efficient. Now again a trend since since co we see working conditions so different people don't need to go to their offices every day you can work particularly better weather um and better tax situation. Is Dubai still the hot favourite to get for people to go to or where where else is looking good?
Interestingly, the start of this year um Saudi Arabia have of course opened up their property market to the world. So whether that I I think it'll be a bit of a slow start for them just because of the infrastructure Dubai is already so welcoming in terms of the uh yeah being so easy to move into. probably Saudi might look a little bit more frightening, let's say, for people that don't know um the jurisdiction. Uh other than that, Europe's still popular. Portugal, Spain, we see a lot of a lot of people that are retired, expats moving to um why would you not with the you having 300 days of sun on your back?
Well, will thank you very much for coming in and doing your five minute appraisal of the currency exchange market. Very pleased to have you in the studio. Look
forward to having you again next month with your latest comments. I'm Steven Galpin. Thank you for watching. See you again next time.
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Hello and welcome to Property Insights.
Uh I'm Steven Galpin and today we're going to be talking about the world of property finance and nobody better to help me with that is Lucy Waters of Area Finance. Welcome to you Lucy.
Hi.
Well, tell us all about it. What's been going on this month? So, we had the Bank of England meeting earlier on in the month, which to some was quite disappointing. I think a lot were expecting a rate cut on the cards. Um, we were sort of in the balance as to whether that was going to happen and I think the vote being at 5 to four really demonstrates that they were very Yeah, they were very divided. Um, obviously there's the the wider economic outlook, but within that we've still got sticky inflation or stickier than they would like. So, I think until that gets under control, I think we'll continue to see that division um when the committee meets. But it's a bit of a problem really, isn't it, for the Bank of England because you've got you've got people saying, well, you know, inflation's going up, so don't don't cut the rate. But then the next minute they're saying there's no growth and people can't afford the the cost of living.
Absolutely.
Um and I guess I suppose we're as guilty as any because we tend to look at it from the property point of view. Yeah.
But it is a much wider spectrum of that that has to be taken into account.
Well, that's right. I think you know selfishly we look at it from our own lens. But we need the property market to move. We need liquidity in the property market. It's such a vital part of the wider macro and I think despite that the more positive picture is that interest rates or the average interest rates the average 2year and 5year fixed rates were below 5% um at the start of November which is the first time they've been there for some time right so actually what that shows us is that despite the bank of England's decision to hold interest rates we are seeing some lender competition and also a reduction in swap rates which means that lenders are able to pass on a lower cost of borrowing to those looking to buy and re mortgage. Lucy, I'm going to take you up there.
You better explain to our viewers what swap rates are.
Yes. So, a swap rate is effectively the rate at which your fixed rates are based on. So um a lot there's a misconception in the market that the Bank of England base rate is the thing that drives your mortgage rate and to an extent it is but the swap rates are looking at the picture of where interest rates are likely to go over a horizon of the 2-year the 5year um and it's the rate at which lenders are lending to each other and borrowing costs are based on and therefore it drives the interest rate that's actually put out to the customer.
Okay I think I've got it in short.
Thank you. Um, Lucy, I was looking at your notes uh pre filming of this program and um you you're talking about London prices taking a drop and you you you're suggesting somewhere around about 4% for the for the year. Um we do talk to a lot of agents in here and currently on a lot of the quite expensive properties we're seeing anything up to a 30% drop.
What's that doing for lender confidence?
Yeah, I I think that 4% to me sounded a little bit more positive than the real feel of what we're seeing as well. So, I'm probably talking more about Prime London here than anything else.
And I think Prime London has really suffered. And actually there's just not much liquidity in that market at all. Which means that where properties have transacted given the scale of those transactions it can have quite a big you know it skews the market because effectively if someone has to transact and it's a large value transaction. Yeah.
Um whereas actually what we're seeing is a lot of it just isn't trading and I think that end of the market with tax changes proposed tax changes you know it's been suffering for some time anyway. higher interest rates and proposed tax changes has been a real blow, but rental prices actually are growing in that sector. So, I think the yields have gone up, but capital values have come down. I think I'm old enough to realize now, Lucy, that it'll all come back anyway at some point in time. It's a cycle.
It's it's very circular, isn't it really? Um just very quickly um we do see now that with government legislation there's going to be an encouragement to go from lease hold to common hold. Again is that going to cause any security problems in in the property industry?
Are the lenders going to like common hold? I suppose the devil's in the detail with these things, but anything where there's uncertainty and where there could potentially be an impact to security, value or salability, that's what generally spooks lenders. So it will, I suppose, depend how it's managed and how they see that through. But generally lenders like things to be certain and they like to understand what can have an impact on the value of the asset. So I think it will depend how valuers perceive it. No panics yet then.
No panics yet.
Great stuff. Lucy Waters of Area Finance, thank you very much for coming in. Thank you for giving us your five minute roundup of the month's financial information.
Very kind of you. Thank you, Stephen.
Pleasure. Thank you for watching. That was Property Insights.
Hello and welcome to Property Question Time. I'm Steven Galpin and the show today is about answering your questions related to property. We're coming to you today from our studios in Canary Wharf, London. And helping me answer your questions is Sara Newsen of Realm 47 Property Investment Experts.
Welcome to you Sara.
Hello, Steven. Thank you.
And Lucy Waters of Area Finance. Welcome to you Lucy. Thanks, Stephen.
Okay, Lucy, you're going first and your first question is this. Buy to let finance for the last few years has been fairly easy to access with profitability in that sector taking a dive mainly through new taxation and increasing legislation. Will lenders be willing to readily fund diversification into other areas of property investment perhaps even commercial property?
Yeah, we've seen that already actually Stephen and I think um there's been a real shift from the mainstream blet to what we know as the specialist Buy to let market. So the mainstream buy to let focuses more on individual ownership buy to let properties usually where people have one or two and they've done it either you know through some additional funds they've got retirement funds things like that and that tends to be for your more mainstream lenders and we've seen a real growth in the specialist end of the market where lenders are attracting HMO properties SPV lending which has obviously become really popular since the tax ongoing tax changes. Um, so there are definitely more products already available in that side of the market and we've seen a lot of growth where some lenders might have lent on a HMO that was perhaps a small HMO then they start to go to the seven bed HMO and 10 unit multi-unit freehold blocks and things like that. When it comes to commercial lending that is a completely different ballgame. So that is a different type of funding. It's a different type of lender. But you do see more and more lenders stepping inside those product categories. Albeit it tends to be funded differently. It tends to be a completely different operation within their business. But lenders are looking to where there's opportunity and growth, especially with rental growth, which is what landlords need.
Are are you finding a sort of um relaxation of rigidity if you like because I mean the reason I say that just going on from this question you've got buy to let specialist lenders who have been stuck in that that tube okay have in the past have been a little bit reticent to look at anything else I'm also thinking of bridges perhaps in particular who yes we'll do the bridging but don't come to us at the end to do the extended lending because we don't want to know. But all of a sudden they are now there's a little bit of fluidity there, isn't there? Yeah. I think that's a good thing, isn't it? Yeah. Look, for for everybody involved, for a lender trying to capture a client and the entire value chain of somebody that's buying a property kind of pre being mortgageable, then being able to take it to the long-term hold if that's somebody's strategy, that makes a lot of sense for them rather than having it go over to a competitor who might offer one of the other products that they offer. and then they could actually lose the life cycle of that client on the next transaction because often these people are repeat borrowers as opposed to one-off transactions. So there is definitely an awakening in the lending market to diversification across these products.
I are are we moving back to um shall we say loyalty on both parts?
Do you know there is always a pocket of loyalty in the market and we deal with some customers who I know will only deal with us as a broker and they like to deal with specific lenders who they've had good relationships with and who have looked after them and there is also especially at the moment given interest rates are higher and everybody's trying to chase better returns there is a lot of shopping around. There's a lot of people that are kind of looking to find the absolute best margin out there and that strategy can be flawed because there is a risk that somebody goes down the wrong avenue chasing a headline rate and ends up with something that's not deliverable. So there's a balance to be had and and not everybody is as loyal as others and obviously loyalty will can only take you so far. You have to be within the ballpark of pricing to retain someone's loyalty.
Yeah. Okay. So you have a lot of buy to let um customers that you advise and look after. Are we fit are we seeing a real exodus from that particular market at the at the smaller end?
To a degree we're not seeing it too much. Um but if you go on to the social media channels you are seeing those people who manage their own properties exiting it is quite common place for them to be saying that's it I'm done. We are seeing a lot of professional landlords in the marketplace anyway. So you know the for every property we're selling, we've got another investor buying. That's what we do. So um for us, most of those investors are who are selling are moving into a different strategy or they are consolidating um not necessarily leaving the market altogether.
No, I suppose it's the same old thing though, isn't it? If there are a lot of people coming out of a market, what a time to buy. Yes. Yeah. Absolutely. Yeah. Out of disaster comes opportunity.
It really, really is. Right now is a great time to be looking to buy because there's a lot of people who are fearful and they're sitting on the fence and they're waiting and that's when you get your great opportunities come along. But I have to say in this current market when we've seen it before where landlords have got have said, "Yeah, okay, I want out. I will accept quite a substantial discount on my property." I am not seeing it so much right now. people would rather sit and hold their property and get a fair value for it.
Okay, good. Okay. Um, thank you for that, Sarah. Um, sorry, your question is this. Do the panel think that for the smaller landlord, it's perhaps time to come out of buy to let. The government seems very keen to discourage the smaller landlord and encourage the institutions to provide rental stock. If this is the case, what sort of diversification would the experts suggest to replace the BLT investments?
So that is I think an ideal that the government are looking at which is uh passing the private rental sector across into institutional ownership. Um which for me is a bit of a dream. I don't think it's realistic when you deep dive into how that's going to work and whether it will work. What we're seeing now is institutional investors and large large corporations going for build to rent. They're going for economies of scale. They want properties that are central where they're going to get growth. So, city centres, you know, the likes of Manchester, we know there's good growth happening there. They're looking at it from that business perspective, from the corporate perspective. Economies of scale, they want multiple apartments in one block. So also with with uh refurbishments, you know, they've got properties right now that are beautifully done, finished, brand new, high rents. In 20 years time, they'll be able to refurbish them all at the same time or rotate them. Economies of scale, that's what they're looking at. That's what they're getting into some of this bigger student stuff. When you look at all of the properties, the single dwellings that are out in villages out in smaller towns and scattered around the country, that is not something that appeals to them. People with gardens, you know, people who want gardens, that's not something that is currently appealing to the institutional lender or the corporate corporate ownership. So for me, there is always going to be a place for the private rented sector. we will always be needed for that that um space. Uh those people who are renting as well, think about what the institutional uh operator is offering. They're offering something that is newly refurbished in beautiful condition and it's high rents. Not everybody can afford high rents. Not everybody can afford or wants to live as I say in the city centers. So, you know, we have to look at this as a bigger micro a macro perspective. there is going to be a problem there and there's going to be a void and ultimately what's going to happen to those people. Is it going to be a privilege to rent?
Yeah. Well, I think you're right to identify that. I mean to me it seems that where you have these institutional landlords with, you know, very big multiple blocks. Um that's fine, but it's it's a sector of the market. It's not the market, is it? That that's the difference. And that's what that's what we mustn't forget really. Exactly. 100% agree. I mean, otherwise we're we're going to have these people running a cartel, aren't we? Yes. Monopoly once again. Yeah. That's what's going to happen.
Yeah. Caution.
What about the funding for this sort of uh thing, Lucy? Is money readily available for these big blocks that the institutions want to build?
Yes. Um, is the appetite there?
Yeah. It's actually a large part of what we do. I think one of the big challenges that we've seen over the last couple of years is that people who have either built them and retained them within their portfolio because it wasn't the right time to sell or because that was entirely their strategy in the first place. The challenge that you have is the change in yields has meant that some of them have actually become nearly impossible to mortgage purely due to the leverage.
Um because people have taken higher leverage say three, four years ago and now they're coming up to the end of their fixed rates and the yields have moved so much because it has to to support the changing the cost of borrowing that actually the values of these blocks have really taken a tumble. And whilst there is mortgage availability readily there for them, it really is a value thing and and lenders are assessing the value and the loan to value and they're also looking at the block value as opposed to the aggregate value of the individual units in most cases. So where you have more than say 10, that's nearly always the default position that a lender will take. quite interesting there because if you've got a sort of should we say an institutional block um if you want to move it, get rid of it, pass it on, whatever the expression is, you've got to find another institution that will conform with your figures and it's and it's usually on a yield assumption.
Yeah. However, on the smaller landlord situation, um somebody might be buying for any kind of reason. It might be a pension supplement. it might be a safe place to put a few quid that they've saved up. So, the constraints on selling are not quite so strong, are they? Yeah, there's more buyers in the market, isn't there? Quite interesting.
Okay. Well, on that note, um we're going to go to our break. So, join me again after the break when I'll be asking Lucy and Sara more of your questions.
Hello and welcome back to part two of property question time. I'm Steven Galpin and I'm joined by Lucy Waters and Sara News. Welcome back. Do the experts think that a return to 100% residential mortgages would kickstart the market and aid the younger generation in getting access to the path to home ownership?
In isolation, I'm going to say no. I think it is a helpful tool and I don't doubt that it will be useful for some and I think when used in the right way, sold in the right way and appropriately governed um the the product has its place for sure and raising a deposit is clearly part of the barrier to entry for some first time buyers, but you have on top of that stamp duty and legal costs and valuation costs. You know, there's there's many costs in the home buying process. Take the deposit out of it.
Yes, to an extent it helps, but actually affordability still in my opinion remains the number one blocker because actually the mortgage still has to be affordable. Um, generally with higher loan to value products as well, the interest rates are higher and therefore that impacts affordability. Let let me just put you to test on this one, right? Let's let's take down here. A studio apartment will cost you probably 4 to £500,000. So with a 25% deposit, with the extra costs, one thing another as a young person, you're going to have to find probably £120,000 to enter the market with one room and a bathroom. Yeah, it's a lot. Okay.
How are we going to get around that? Because you know it's just not acceptable is it? We we need people to get on the housing matter. We need it for the economy for them to be buying white goods, refurbing places, spending money and the other point that you mentioned which was the the the cost, the legal costs, the evaluation costs, that sort of thing, the stamp duty. They're not fundable are they? They're not fundable. So what's your solution to this as a as a hardened lender? I think the proposal sort of in the in the bundle of proposals that that the government have been making pre-budget.
I think one of the only ones that I actually quite like is to flip the stamp duty on to the seller because that is another blocker. You know, that's a cost that people have in order to buy a home. But actually, all of those costs are one thing. back to the affordability point. If somebody's raising say a three or400,000 mortgage, they need to be earning the best part of £100,000. And that obviously depends on what their expenditure looks like, their outgoings and things like that.
So, affordability is as much of a blocker as the deposit is. And you know, I don't know what you think, but I don't see that changing because house prices, in my opinion, will continue to grow because we have a supply issue. We won't meet the housing demands. We won't meet the house building demands because we never have done and we appear to be miles away from hitting those targets. So, actually there's a real supply issue and then on top of that, an affordability issue. We had the help to buy schemes that tried to address that which in some ways it did. It got many many people on the ladder and it was a really favoured scheme developers.
Yeah, it helped developers but it also then creates sort of a future affordability and also a resale issue because a lot of those properties don't have the value that people paid for them because it was inflated due to the availability of the help to buy scheme. So therefore those values have come back and then people become mortgage prisoners unable to yes do much with that property. But you see again the the government and many other people in the industry love these um 50/50 ownership renting you know part ownership shared ownership.
Um you see I don't I don't like that at all because you're you're paying a mortgage you're paying a rent. The two put together are probably more than the single mortgage would be anyway. And on top of which, although yes, all right, in theory, your your place is inflating and thank heaven you're on in or on the market, but you've got to find somebody who wants to buy half a home, haven't you?
Yeah. Yeah. And and that's not all that, you know, talk about a trap. I it's really it's a really tough one to try and solve because on one hand you've got the government that's really anti- landlord that's trying to push landlords out of the market but then you've got people who have the aspirations of home ownership and I think that that's embedded into our culture and I I doubt it's going anywhere from a perception you know people want to own their own homes. However, if we don't have affordable rental property and availability of rental stock, the people whose affordability is not there to buy homes, what do they do? That was my question to you. But do they do it's it's a real challenge. I think the 100% mortgage it it helps, but it doesn't solve the problem in its entirety. And I suppose you're right. It could cause problems in the future, couldn't it? That that's the difficulty.
Sara, how do the experts see the renters' rights legislation affecting the market? And if in a negative way or even perhaps creating a further stock shortage, will it result in higher rents?
Yeah, absolutely. The Renters Rights Act, which came in recently, uh not fully implemented yet, I will add. So, we're still waiting for dates for the different um parts. Well, can I can I just stop you there? I see the government announced that they they'd found various flaws in the writing of the legislation, drafting drafting of it and I think it's being put back again, isn't it? Well, it's actually passed, so it is law, but the dates of implementation are still to be decided. I think the they were suggesting 6 months until the date that the ass were changed. So, we had the new tenencies that were implemented.
Um, in the meantime, I think, you know, ultimately everybody's preparing for it and there's a lot of landlords who are exiting and that will increase the rents. So, shortage of rental properties will increase rents. However, as I said earlier, potentially those rental properties will just be sold to more professional landlords who will take over. Um, so yes, I do think it will impact the rents. Um, everything that they're looking at doing right now is going to impact the rents. So, I do think we're going to see increases. Uh, but as I say, nothing's in yet. Uh, the main one was removal of section 21. Yes. So, no fault evictions. And a lot of people have said that they're leaving because of that. Now, for me, I don't see it being an issue.
The whole renters' rights act to me, I don't see as a huge issue. Um, if you want your property back, if you want to move into it, if you need to refurbish it, if you want to sell it, you can still ask the tenant to leave. You need to give them a longer period of notice, 4 months, but you can still move that property on if it no longer fits your portfolio. You can sell it to the open market. So, for me, I don't see an issue. What we're going to see is less people who aren't professional landlords going in and and renting a property out short term thinking, "Oh, we'll do this for a while and then we'll step away from it." They won't have that option.
Okay. So, let's just go back to the section 21 or the negation of it. Um, you want your house back or your flat back. Where does the argument take place? If if there is an argument about your reasoning for wanting it back, the argument literally because it's section 8 notices now. So, you have to adhere to one of those notices and that would be if you're selling the property, you are allowed to serve notice and take your property back. You do have to legitimately try to sell your property. There's no getting around that. Um, and if the property is obviously in in desperate need of full refurbishment or redevelopment, then the tenant can't stay in there. But, but but where does the argument take place?
So, I'm a tenant. you're you're you're saying you want it back because you want to sell it or you need to sell it and I say I don't think so. I think you're you're fibbing really. I think you're just trying to get me out. So where does the argument take place? Is it the county court? Is it a tribunal or Yes, it would. It I mean if they if they contested it, but I don't think tenants would contest it. They're humans at the end of the day. And I don't think, you know, yes, you're going to get one or two problematic tenants. Um but overall the the majority of tenants are are fantastic.
Um Touchwood I've had very few issues in my 20 odd years of doing rentals uh managing other people's Come down to London. Oh gosh. Okay. I won't wait then. Tick that one off. Cross it off. It's a it's a difficult one because I can just see the courts getting awfully clogged up on this. And I can also see that if there is um if there is a problem over this, if it becomes problematic to get the decisions made, then Lucy's lenders are going to start fidgeting about about funding properties. This is the difficulty. The concern over the courts is because now tenants have the right to contest any increase in rent and say that they don't believe it's in line with market rent. They've always been able to do that, but previously the judge jury could turn around and say, "No, actually, we think that your landlord's being fair and we think it should be another £100 on top of that." So, it could have gone either way. That's no longer the case. They're no longer going to lose out and all they're going to do is while they wait for the hearing is they're going to postpone paying that increase. This is where the big fear comes from from landlords. But as I said earlier, I don't think the majority of human beings would turn around and do that. I think it's only going to be certain tenants that play the game and look to look to contest it each time the rents increased. Yes.
So overall, are you happy with the legislation? I wouldn't say I'm happy, but I will I will accept it and we can work around it. Yeah. Okay. Do you agree with all that, Lucy? Yeah. I think look, raising standards is always a positive. Um Unfortunately, landlords have had a really tough time. So, the fear of people being able to abuse the system and find these loopholes is clearly a concern to people and then that has a knock- on effect to lenders. But I think if we can raise the standards and compete with the professional landlord concept of, you know, trying to squeeze all the smaller landlords out. If we can say, well, look, we're all adhering to the same standards and everybody's, you know, playing by the rules, then actually the long-term benefits hopefully will have an overall positive impact on the market.
Okay. Well, on that very optimistic note, we're going to end the show. So, I'm going to say a big thank you to Lucy Waters. Thank you for coming in, Lucy.
Thank you, Stephen. And big thank you to Sar News.
Thank you for coming in and traveling all the way down to London to see us. I'm Steven Galpin. Join me again next time on Property Question Time.
That's London TV, channel 117 on Sky, 7:00 on Wednesdays. See you next time.