The Croupier's Cut

In the Guardian on 3^rd September 2003, there was a story saying that Asteroid 2004 QQ47 was predicted to potentially smash into the earth on 21^st March 2014, causing the kind of destruction expected in a thermonuclear war. So the current housing market price-growth in London and the South East may not be as sustainable as some people think.

Anyway…

As I’ve said before, our housing policy is made by people who own lots of properties. David Cameron, I will always remember, once forgot in an interview with the Independent how many homes he owned. Currently, and I write this ahead of the budget tomorrow, that policy is to pump as much taxpayer's money as possible into an endless pit of mortgage credit: and apparently these pumps are about to be jammed open (can you jam a pump open?).

I won’t rant any further on this here, and about how the eventual crash will make this Friday’s asteroid impact look tame, but I would however like to offer an indication of how much money is sloshing around at the moment.

I’m always struck by how many estate agents there are on any given high street: now, I’m not having a go; in fact, I think that estate agents are in the last truly competitive industry, as no one agent has more than a single digit % of the market as a whole. I am firmly of the "if you think bankers are paid an unfair amount and want to be as well, then become a banker" school of thought. Systemic sustainability is a separate issue to 'fairness'.

However, as to why so many can survive, I offer as a first example the flats the survey reports for which I am typing up at the moment (which is why I’m writing a blog, as I will find any excuse not to type up a survey report): they form part of a Fulham house that was pretty large (very large actually) that ten years ago was bought for £380,000. It has now been turned into seven flats (pretty tiny) and each one is on the market for just under £700,000 (I'm not saying this is a bubble. Nope. Not me). The agent’s fees are about £10,000 for each, to take some photos and put them up on their website - so not too bad.

As an aside, by the way, each one has already sold (as far as I can make out they came on the market about three weeks ago).  The flat, the specific survey report of which I stopped writing just before starting this blog, has – according to the agent – 42 people interested in it.

Example number two: take the house I’m off to a survey in a minute: this is a four bedroom semi-detached house in London, fairly good area, but not ‘super prime’. This is being bought by a Greek Cypriot family, although I am dealing with their Russian lawyer (paid via an account in the Cayman Islands). The house was found for them by an “executive search agent” who finds properties for rich people living abroad.

The estate agent’s fee in this case is roughly £19,000 - £20,000, going by the published fee scales on their website. Not bad again, for putting some photos up on a website. I’m guessing the lawyer’s fee is probably about the same, but I’ve no idea.

The search agent’s fee is…£36,000.

Not bad for having a quick scan on Rightmove, eh?