Last week I had a sit-down session with Alvin Hall, the television financial expert. I gave him the good news about my individual flats, all rented out, all medium geared, all very happy. Then I gave him the bad news about my overall financial status, which is much, much nastier.
“You are way overleveraged,” said Hall. Meaning that the total equity of what I own, including my home, is not sufficiently clear of what I owe. “When the property boom in Britain stops, the situation is going to be similar to that in the mid-1990s, because so many people are leveraged up. Do you remember what happened in the 1990s?” I nod sagely. But broadly speaking, I tell him, capital values are never going to go back down to, say, price levels of the 1970s.
“I am so glad you said that,” said Hall. “Because that is exactly the reason people will, excuse my language, get screwed. Your comparison is invalid. You don’t compare prices to the 1970s! You compare prices to those when the market last corrected itself. And that little bit of delusion in you could lead to your downfall.”
Chastened, that’s how I felt. So to alleviate my overleveraged position, I am putting one of my flats on the market. At which point my attention has been drawn to a new arrival, Buytolet4sale. com, set up in December expressly for landlords to sell to landlords.
The idea is that you put your property details on the site, and for a fee ranging from £99 to £199, you receive a package ranging from online adverts to actual boards and four months’ worth of marketing on attendant sites, plus a direct line into the potential buying plans of other landlords.
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Jennifer Tweed, who set up the site, is herself a landlady with a £1.6m portfolio consisting of various flats and a medieval listed building.
“We offer targeted marketing, and get fast sales because there is typically no chain when you are dealing with landlords,” Tweed says. “Our selling fees are far lower than an estate agent’s, and because we can sell with a tenant still in situ, there is no loss of rental income.”
Who does the showing of the property to other landlords? “Well, you are selling it privately, so if you are the landlord, then prospective buyers contact you directly and you would have to show the flat yourself. We are just an advertising portal, set up as a trading site between landlords.” Indeed, it’s a concept that rival sites such as Landlord Trader have already got onto.
The figures are attractive: the site cites a property for sale at £200,000 as an example, and suggests that if you go through an estate agency, the £4,000 commission and 2% fee of £700 would bring its sales cost to £4,700, whereas if you go through the Buytolet4sale website, you could only pay £199.
“For £99, you get unlimited listing on the website and five photos,” says Tweed. “For £149, you get the ad and photos and a For Sale board outside the property. Our £199 Gold Package gives all the above, but also four months on a number of other property portals.”
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The site includes various click-through options recommending you to mortgage brokers the Money Centre, where Tweed is a consultant, and sites where you can download tenancy agreements or even credit check your tenants.
Tweed says she has 2,000 subscribers, with access to a mailing list of 200,000 landlords from the Money Centre. As yet, there’s not much in the shop window: when I visited the site there were only 32 properties in the database, several of which were off-plan and so had “artist’s impressions” rather than actual photographs.
Is there a big market for landlord-only sales? Not specifically, says Barry Manners of Chard sales and rental agency in Notting Hill. “You might as well go into the open market.”
Yes, but wouldn’t a landlord rather covet a flat with a tenant in situ? “The snag about that is that irrespective of what contract they have signed, the tenant has the right to peacefully enjoy the property, and most agreements will say that you can only show it for viewings to prospective buyers during the last 30 days of the tenancy,” he says. Which means there is not really much point in having your occupied flat on the net for four months, as you will have to wait until the tenant is nearly out before allowing viewings.
“Also, tenants might mind a change of landlord during their tenancy,” continues Manners. “Tenants want to assess their landlord as well. Imagine if you were renting a flat and the landlord suddenly changed to Nicholas van Hoogstraten. Am I allowed to say that?” Obviously, an estate agent is bound to pooh-pooh a site devoted to private sales, but I somehow don’t think the arrival of Buytolet4sale.com is going to make the experts on the high street start running for the hills.
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“The reason buyers are shy of private sales is that estate agents are covered by some legislation, at least,” says Manners. “And I can’t really see your investment banker, who does a 70-hour week in Canary Wharf, willing to stand outside his flat waiting for somebody who may or may not show up for a viewing of something which they may or may not fully comprehend in the first place.”
Equally, buyers might not be so keen. “They expect a degree of service! I have just invested in a fleet of 50 cars for my team to drive buyers around. And the biggest issue at the moment is whether the air con in each car works.”
Well, the air con in the Millard Volvo works brilliantly. And I even have heated seats. Could I see myself driving enthusiastic, toasty landlords towards my beautiful, highly marketable flat? I’ll get back to you on that.