TESCO PROPERTY SITE – ‘LIVE’

With no announcement and little fanfare, the Tesco Property Website has gone ‘live’.

As expected, it has a nationwide database of about 400,000 properties for sale (supplied by Fish4 and Smart New Homes)which supports a “FSBO” or For Sale By Owner offering at £199. Tesco will provide a For Sale board, automated valuation software to help calculate an asking price and an online brochure.

Mark Davis, of www.Tescopropertymarket.com, is reported as saying: “This is going to revolutionise the property market. If people still want to use estate agents then they can, but we are going to give them all the tools to do it themselves.”
He said sellers will need only internet access, a tape measure and a digital camera.
“For sale” boards for outside the home will be provided and the property will stay on the site until it is sold — or taken off by the seller. The site offers details about local schools and amenities — and gives pin-sharp aerial views of locations.”

Support from Fish4Homes has surprised some in the industry as none of the big property portals had decided to support a private sellers website and only yesterday, a spokesman for Fish4Homes had said “At the time of print it is understood that fish4homes are not intending to support the portal”

Ed Williams, group managing director of Rightmove, said: “We’re not playing ball. This is a Trojan horse and we have declined to participate. Our commitment not to take private advertisers is long-standing and on the record. If Tesco scrape our listings without our permission, we will take the appropriate legal action.”

TESCO ‘FOR SALE’ BOARDS?

Hard on the heels of news that Tesco, the UK’s largest retailer, is plotting to take on high street solicitors by launching a property conveyancing service comes intense speculation that they are also about to launch a service for house sellers.

Using the newly acquired technology company Hikso, which they bought in December last year, Tesco plans to provide a stripped down estate agency service to private sellers and are thought to be close to launch.  Hikso’s MD Mark Davis remains tight lipped about what Tescos plans for his company are but if true, a service for private sellers would in effect turn Tesco into a significant player and arguably and estate agent in all but name.

Whether this would be only be an on-line offering is also of importance as commercial surveyors have confirmed that it is possible that the supermarket would require a ‘change of use’ for any stores that were deemed to be involved in ‘selling houses’. The DTi has only recently been looking at so called “FSBO” sites to see if they fall under the Estate Agents Act.

News that Tesco might even be close to launching a product has caused some panic amongst the big Property Portals. Early media reports had suggested that some might be considering supplying their listings to Tesco in much the same way that some power The Telegraph website or Channel 4. An amusing exchange of emails then followed as each tried to distance itself from the rest by suggesting that they were not going to to dilute the value of their offering to their estate agent clients by helping Tesco and indeed it would now seem that none of the big five will be doing so. Whether they can effectively shut out a Private sellers site the size of Tesco as they have done to other smaller players would seem to raise some competition issues too.

Never the less, the implications for some of these businesses could be significant if a brand as big as Tesco decided to take on the establishment. They are not a company to trifle with and whatever they do will surely have huge backing. Will many clients of the newly acquired Countrywide like the idea of seeing their houses being sold along with their weekly grocery shop and how long before individual agents decide to list direct on Tesco online rather than or as well as with a traditional Portal? 

The public would get more choice but fees in the UK are amongst the lowest in the world. However, it remains to be seen what impact this could have on the value of Rightmove or DMGT shares as well as the quoted agents should individual agents or the public decide that frankly “every little helps”!

MADNESS IN CAMBRIDGE?

Earlier this summer Savills launched The Grove onto the market in Cambridge. A good 6 bed 2 bath house with about an acre of garden including planning consent for a new five bed house. Not a typical Cambridge property but in the right part of town and available in two lots or as a whole. What do you think they were asking? The guide price in fact was quoted as £1.35m.

To cut a long story short(er) there was lots of interest. The old ‘Best & Final Offers’ routine was employed and 29+ bids were received. I bid over £2.1m for a client but it went for …..over £2.8m.

Ok, this could sound like sour grapes but it’s not that I didn’t get it. It was that it went for SO much more than the guide price. How could the agent get it so wrong or was this clever marketing?

Now the central Cambridge market is like London and looks like a poorly poured pint there is so much froth on it. We are used to hearing these kind of stories but my question is this. Was the property marketed deliberately too low – to generate interest and competition as some of the unsuccessful bidders have suggested or is this the final fizz of a market before it pops? Savills are not known as ‘under valuers’ and my instinct is that the lucky buyers of this property will find that a few years into their ownership, that they will need to live there for a generation to get back the amount they have overpaid. But then of course, they may be taking that kind of long term view but it’s scary if they are and clearly makes valuing a popular property impossible.

SUPER RICH FUEL HOUSE PRICES

An international elite is pricing British citizens out of the housing market with the help of government tax breaks for foreigners living in the country, figures reveal.

More than half of London’s multimillion-pound houses are now bought by “nondoms” (nondomiciles) who, unlike most British citizens, are able to use offshore trusts to pay far less stamp duty.

Economists say that the new boom in house prices in the capital fuelled by foreign money is rippling down the market, making it harder for first-time buyers to get on the property ladder.

Gordon Brown will come under pressure today to justify the rules, which critics claim create a double standard. The Government exempts nondoms from tax on their international earnings, even though in most cases their home countries do not tax them either.

While it tends to be wealthy foreign citizens who take advantage of the rules, many British-born people can also declare themselves nondom, on the ground that their family origins and “cultural ties” lie overseas.

A study published by the International Monetary Fund in April ranked Britain alongside Switzerland, Bermuda and the Cayman Islands as an “offshore financial centre”, provoking accusations that the City of London has effectively become a major tax haven.

Liam Bailey, head of residential research at Knight Frank, the estate agent, said that 50 to 60 per cent of properties that sold for £3 million or more now went to foreign residents. He said: “The more expensive you go, the bigger the share of foreign buyers.”

Figures from Savills, the estate agent which specialises in properties at the top end of the market, show that some 68 per cent of properties selling for more than £5 million last year went to foreign buyers.

The Liberal Democrats have described the situation as grossly unfair, saying that the Chancellor has avoided the issue out of fear that tackling it would spark an exodus of wealthy foreigners from the City, undermining the booming financial services sector.

Vince Cable, the Liberal Democrat Treasury spokesman, promised to close the loophole that exempted nondomiciles from tax on their British homes. Under his proposals, which will be expanded upon in a report by the Lib Dem tax commission today, nondoms would also lose their status if they stayed in Britain for more than 17 years.

Government figures show that there were 112,000 nondoms in 2005, an increase of 74 per cent from three years before, and accountants believe that the figures are continuing to rise rapidly. The Treasury says that it does not know how much tax they are able to save on their overseas earnings each year.

Fionnuala Earley, chief economist at Nationwide, said: “Neighbouring regions’ property prices have been picking up alongside London, which suggests that the ripple effect is alive and well.”

As a case study, The Times examined the Land Registry records for properties on the west side of Cadogan Square. Flats on this street regularly sell for more than £1 million.

Of the 13 properties looked at, five were held by offshore companies, ranging from firms based in the British Virgin Islands to Jersey, suggesting that their owners could be taking advantage of the tax breaks for nondomiciles. A further three were registered to companies not listed at Companies House.

Supporters of the rules say that they have encouraged talented people to move to London. Patrick Stevens, tax partner at Ernst & Young, the accountants, said: “If you are trying to boost the City then changing the nondom rules would be insane.”

The Treasury said that the policy towards nondomiciles had been under review since 2002, but senior accountants believe that the issue has been kicked into the long grass. One said: “A minister told me that the review was likely to continue for several years yet. He smiled broadly as he said it.”

Nondom rules

— In most countries, citizens living abroad are not taxed; noncitizens are taxed on their worldwide earnings for as long as they are resident

— In Britain, noncitizens who claim nondomiciliary status are taxed only on the money they earn or bring into the UK. Property taxes can often then be avoided using offshore trusts

— The main exception is the United States, which continues to tax its citizens when they live abroad on their worldwide earnings. US citizens claiming nondom status in London do not enjoy an equivalent tax break to those from other countries

— British citizens living abroad generally pay tax on their worldwide earnings to the country in which they are resident

From The Times Online

STRUTTS & LANE FOX IN MERGER TALKS

Talks are described as at an ‘advanced stage’ between two of the best names in the agency world. Lane Fox, a relative newcomer, is in merger talks with Strutt & Parker who were founded over 120 years ago to create a  50 office rival to the biggest national firms. The new company, if the deal is completed would be the 12th largest agency in the country.

“It’s early days but we are working hard to get a deal” said Henry Holland-Hibbet, director of Lane Fox.  “Strutts strong residential business is obviously something that we think would fit extremely well with the Lane Fox residential business but their commercial and agricultural businesses would give a combined business huge influence”.

This is a move that will clearly close the gap on both Savills and Knight Frank who have dominated the top of the residential market for years. Lane Fox offices in London and Strutt & Parkers country network would create a new and significant player in the market.

And the new name…..?

7-1 Strutt Fox
10-1 LFSP
20-1 Something totally new.