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The BIG question: What is my house worth?

What is my house worth?
This is the big question, and as Estate Agents, it is one we naturally get asked most frequently, but it is also quite a difficult question to answer, mainly as there are a number of ways of answering it. Let’s look at them in depth:

1. What the Home Report values it as.
This is generally the accepted de facto answer. We are blessed in this area that we have a number of excellent local surveyor firms who are generally excellent at valuing local properties, and the Chartered Surveyor who will carry out your Home Report will have based his or her valuation on a number of factors, and used their experience to factor in all pertinent attributes relating to the property..
…however, this is just one person’s opinion (albeit a very experienced and learned person’s opinion!) and it is inevitable that their thoughts will be influenced – for better and worse – by recent experience. Surveyors themselves state that their valuation is based on “what a normal person might pay in a normal situation” however we are dealing with real life where there is no such thing as ‘normal’!!
It is also worth stressing that a property’s value will be constantly changing due to market conditions, whereas a Home Report value is merely a snapshot in time.

2. What a similar property elsewhere sold for.
By identifying a house of similar size/design/layout etc. that has sold in recent times can give a good idea of the value of a property. However, the main flaw to this method is summed up by the old estate agency saying of “Location, Location, Location”, and so the location of the property will have such a large bearing on the value, that comparing values of similar properties elsewhere should only be used as a very loose indicator. A location will easily account for 10’s or 100’s of thousands of pounds of value of a property.

3. What the neighbouring property sold for.
This is a reasonable guide to any house price, and by comparing properties within close proximity, it will to some extent remove the element of variation that the location will place on a property’s value. However, it has been known for two identical properties on opposite sides of a certain street to have significantly different valuations. This is the fundamental flaw in the ‘valuations’ you will get from a property portal or a non-local agent. For example, it is often the case that houses on one side of a street will have fine open countryside or even sea views, whereas an identical house on the other side of the street looks onto more houses. Although less relevant here in the Highlands, this stark pricing difference can particularly be seen in areas where the catchment area for a desirable school may be bounded by the centreline of the street, and one house is within the catchment but the other is not!

This method can be supplemented by doing what is known as a ‘cost-walk’, whereby one takes the value of the similar property, adds or subtracts ‘value’ based on features (or lack thereof!), condition, etc etc. To illustrate (using approximate figures for guidance only):

Number 27 in ‘Anytown’ sold for £215,000, so what is number 22 worth?

Value of number 27………………………………………………………………………….£215,000
Number 22 has 3 bedrooms (Number 27 has only 2) ……………………+£15,000
Number 22 doesn’t have a garage (Number 27 does) …………………..-£8,000
Number 22 has had a recently refurbished kitchen + bathroom ……+£13,000
Value of number 22 ………………………………………………………………………….£235,000?

Obviously, different people will place different values on these features – some people need a garage more than a 3rd bedroom for example – and some features will be more or less important depending on the property and its location, and so this method is not an exact science.

Note: One warning about methods (2) & (3) above, where the value of one property is compared against one sold previously, is that the other property could have been bought for significantly more or less than its actual worth based on the buyer’s or seller’s personal situation e.g. seller desperate for a sale and so the house sold for less than its true worth, or buyer fell in love with the property and was willing to pay over the odds to secure the property which brings us nicely onto…

4. What the Estate Agent thinks it could/should sell for.
Like the Surveyor, a local Estate Agent will have an excellent knowledge of the local property market, but a good local agent like Fiuran Property will also have an in-depth knowledge in knowing how other comparable properties have fared in the marketplace, how long they took to sell and the feedback from the market regarding those properties. And whereas the Home Report valuation will look solely at the property and its current position in the market, the Estate Agent will also have a ‘real time’ handle on exactly how the property market is fairing and the feedback on similar properties. The Estate Agent will also take into account the seller’s personal circumstances & wishes with respect to the sale and this will effect the price that the seller wishes to offer the property for.

5. What someone is willing to pay.
This is often given as the right answer, and this goes beyond the basic calculations used to generate the Home Report figure. The great thing about properties is that no two are identical, and certain features may not have a strong monetary value, but a huge emotional draw which the right buyer may put a monetary value on over and above its actual worth.
However, to illustrate a flaw in the ‘what someone is willing to pay’ strategy, I’ll use an example of a 1 bedroom flat coming onto the market, offered at £82k:

Scenario 1: At the time, there is only person (Person A) seeking a 1 bed flat who is ready to buy. This person has a budget of £85k, but offers the asking price of £82k and, in the absence of competition, the seller accepts the offer.
Result:- Property sells for £82k

Scenario 2: At the time, there are numerous buyers in the market seeking a 1 bed flat, and subsequently a closing date is set. Person A offers their full budget of £85k and this offer is accepted.
Result:- Property sells for £85k

Scenario 3: Person A is awaiting his annual bonus from work which will allow him to fund his full budget of £85k, but it won’t come through for another 2 months and so Person A cannot currently pursue the flat. In the absence of any other buyer, the seller decides to drop the price in a bid to attract a buyer. A local developer sees an opportunity and offers £79k, the seller accepts as they have found their ideal next property and are keen to secure their next purchase.
Result:- Property sells for £79k.

You will note that nothing changed with the property itself, nor did what someone (Person A) was willing to pay for it, it just came down to correct buyers being in the market for that particular property at that time. The more unique a property is, the more it will tend to be affected by this, purely as unique properties have a limited market in the first place.

So you can see, the question of “What is my house worth?” is a very difficult one to answer! As ever, if you’re thinking of selling your property and need advice, talk to a local Estate Agent who knows the local area and market. At Fiuran Property we are specialists in residential property sales in Fort William and the surrounding area.
We look forward to hearing from you.

House prices continue to grow in the Highland Region

House prices have continued to grow in the Highland Region for the third consecutive quarter, and has now reached a record high of £188,690.

I’m sure we’re all seeing the headlines such as “New year chill for UK housing market” and “Annual house price growth stagnates” but, as ever, it is important to recognise that not all property markets in the UK are experiencing the same effects, and it is therefore very important not to take UK-wide property market headlines (good or bad!) and assume they are applicable in our wee corner of the globe.

Also, it’s important to actually interpret what is actually being reported; To illustrate, the BBC’s graph in this article shows the line dropping recently which of course doesn’t look promising, but it’s important to distinguish that that is not house prices dropping. It is the growth that is dropping. As long as the graph is above zero, it mean prices are actually still increasing.

This strength in house prices is perhaps surprising against the daily doom and gloom media reports of the Brexit Crisis, but what this demonstrates is that often national UK events seem to have a very limited effect on the Lochaber property market, akin to dropping a stone in a pool of water where the ripples become less pronounced the further out you go, and this perhaps explains why we appear to be somewhat isolated from Brexit turmoil.

Of course, only time will tell if there will be any affect when Brexit happens, but at the time of writing, we still don’t know what the Brexit ‘deal’ will be, much less the resulting effects of this.

Footnote:

Lucky to be living in Lochaber

We have always felt that we are extremely blessed with our seaside location here in Fort William, not just because it’s a beautiful place to live, but also because we believe spending time beside the water is immensely good for our wellbeing, bodies and soul.
For centuries people have harnessed the magical power of the water, even dating back to Roman Times with the eponymous Roman Baths, and then came the 19th century boom years of the Hydropathy movement when Spa towns became very popular in the UK and ‘Taking the waters’ became a fashionable trend, which was then believed to cure a variety of illnesses including rheumatism, alcoholic related diseases and depression.

So it was very interesting to read the recent BBC article suggesting that “there’s growing belief that being near, on, in, or under water has a far more powerful impact on our mental, and physical health than we might realise”.

The great thing about water is that there are so many different ways – for all ages and abilities – to appreciate it in the Lochaber area. Here’s just a few:

Sailing
We are blessed with an excellent sailing club here in Fort William with the Lochaber Yacht Club. It’s also a recognised RYA teaching establishment, so perfect for the next generation to come to appreciate the simple pleasure of sailing.

Sitting beside the water
Enjoying the water needn’t cost anything. Just sitting beside the water watching the boats go by is a fantastic relaxing pastime (as Otis Redding knows very well!). Here’s one of our favourite spots at the canal basin at Corpach.
(Is there a canal with a better backdrop anywhere in the UK?!?)

Action sports
For those seeking more of a thrill in the water we are spoiled for choice here in Lochaber. Of course being in the Outdoor Capital of the UK means there are plenty of action sports involving water on offer – outdoorcapital.co.uk have provided a comprehensive list of exciting water-based activities in the area.

Scuba Diving
The cold, clear waters of Scotland lend themselves to excellent scuba diving conditions, and Lochaber offers plenty of things to see beneath the surface, including some of the scuba diver’s favourites of wrecks and wildlife.

Restaurants
Fine dining is always enhanced via a spectacular setting and Lochaber is blessed with a great many such restaurants, perfectly exemplified by the Crannog Restaurant right in the centre of Fort William.

Sea Kayaking
Kayaking tends to be viewed as an action sport, and that’s certainly the case with river kayaking, however there’s also sea kayaking which can be a very gentile and relaxing way to explore the coast. Companies such as Rockhopper Sea Kayaking offer the full package.

Boat tours
Being on the coast means that there are a multitude of boat trips right on our doorstep, and the feeling that a wonderful island adventure is just moments away, is eminently palpable. There are a number of different boating experiences available, such as Crannog Cruises who offer a wonderful cruise down Loch Linnhe and the chance to experience some of Scotland’s best wildlife including porpoise, common and grey seals and maybe even a golden eagle. Caledonian Discovery offer a cruise along the Great Glen, taking in the spectacular scenery of the Caledonian Canal and the beautiful inland lochs of Loch Ness, Loch Oich and Loch Lochy. Fort William Sea Tours offer a breathtaking rib ride down Loch Linnhe to see the local seal colony and take in the magnificent views on every side, and they pride themselves on getting you close to the local wildlife including seals, dolphins, eagles and seabirds.

Beach walking
The sound of the sea lapping at the shore and getting sand between your toes are simple pleasures, but ones that definitely shouldn’t be overlooked and underappreciated. Being coastal, there is an abundance of coves and small beaches to be explored in Lochaber. One favourite of ours is Bishop’s Bay at Ballachulish, which is only around 15 minutes’ walk from the wonderful property The Heronry, available to buy now:

The Heronry, Ballachulish, PH49 4JX

So, in summary, Fort William and Lochaber is a great place to live, not just on account of all there is on offer, but because its waterside location is good for you too!!!

We’re number one!!

Lies, damned lies, and statistics (and property!)

(or “Statistics, and how much credence to place on them“.)

Many of our blogs have reported statistics concerning the Oban and the wider Argyll & Bute property market, and here I am telling you to be very careful when reading statistics. Allow me to explain…

I first learned about percentages in St John`s Primary School (now a nursery) in Croft Road, Oban, and I remember being taught that if a child got 49 questions right out of 50 they would have a score of 98%, whereas a child that got 2 out 2 they would have scored 100%. It seemed terribly unfair to the young me that the child who got 49 questions correct got a worse ‘score’ than the child who got 2 correct, and this was an early lesson to be careful when reading statistics.

Of course as education continued, through High School with Standard Grade Maths, Higher Maths, CSYS Maths, and then Maths at University, my appreciation and understanding of statistics continued (confession:- I’m a bit of a numbers geek!), and that one of the fundamental underlying principles of statistics is that of sample size.

As a fun aside, and to illustrate the point, the next time a beauty product manufacturer boasts that ‘89% of customers agree that their shampoo/make up/moisturising cream improves things, have a look at the small print stating the sample size. Often it’s less than 100 people that they had try the product. Given the small sample sizes, it would be perfectly possible for the manufacturer to sample, say, 100 people and if only 22% agree it was a good product, then it wouldn’t be a difficult for them to find another 100 people hoping for a different result…and then repeat until the ‘right’ result was obtained.

So what has this got to do with property?

Well the Argyll & Bute property market is comparatively small – only 429 properties were sold in Argyll and Bute in the last quarter, which is a very small proportion of the 26,982 properties sold in Scotland as a whole over the same period, and indeed a very, very small proportion of the 300,000+ properties sold in the UK. As such, small changes to the value or number of properties sold will have a significant effect on the percentages.

As I stated in our recent blog “it is important not to take UK-wide property market headlines (good or bad!) and assume they are applicable in our wee corner of the globe!”. As if to exactly illustrate my point, there was a column in the Property Section of the local paper recently with a headline that read “UK asking prices continue to rise post Brexit”
…the average price in Argyll & Bute actually fell by 4.6%*.

So, in summary, never take statistics on face value and always look at the detail surrounding them – you may be surprised with what you discover!

(* compared with the same period last year; Registers of Scotland Quarterly figures published 25th October 2016, https://www.ros.gov.uk/)

A good time to buy property? Yes, quite possibly

As reported in our last blog, the average house price in Argyll & Bute is lower than it has been in the past, and this is perhaps the strongest evidence to support the notion that there is scope for prices in this area to increase.
Further, some sources have suggested that house prices in Argyll & Bute will increase as much as 95% by 2030, and Professor Paul Cheshire, Emeritus Professor of Economic Geography at LSE, has predicted house prices in Scotland are set to rise 76% over the next 15 years, suggesting this would be a very good time to buy property.

Of course, recent political activity has added another factor that could effect house prices, however the truth of the matter is that no one knows what will happen following the UK’s vote to leave the EU, and most evidence at these early stages suggests there has been little or no effect at all. Indeed, Registers of Scotland have just reported that the volume of residential property sales rose 4.9 per cent in the last quarter (April-June 2016) compared to the same period last year – a total of 25,760 properties changed hands between April and June, the highest volume of sales for these months since 2008-09. The highest percentage rise in the volume of sales in Scotland was here in Argyll and Bute, with an annual increase of 24.5 per cent to 462 residential sales.

This does not come as any real surprise, as the overall housing market is governed by a basic rule of economics – supply and demand – and while there remains a housing shortage in the UK, demand outstrips supply. Secondly, as mentioned in a previous blog, national circumstances seem to have a reduced effect on the Argyll property market, akin to dropping a stone in a pool of water where the ripples become less pronounced the further out you go, and so the shockwaves of significant national events have substantially petered out by the time they reach us.

Generally speaking, property is generally a safe investment which is likely to only appreciate when viewed a long-term investment, and the real losses on property generally only happen when the property is bought and then sold at the wrong time across a short timespan. That said, the property market – like any other market – can be volatile and there are no guarantees to be had, so only you can decide if this is the right time for you to buy. If you are considering buying property in and around Oban, please feel free to browse all of our properties and plots for sale here. As estate agents, we can provide help and guidance on the whole house buying process and so if you need any advice, or if you would like to view any of our properties, we will be delighted to hear from you.

Getting the job done

Have you ever noticed that, in all walks of life, professions, services, industries, there are generally two types of attitude?

There are those with a positive, ‘can-do’ attitude who simply want to get the job done, and then there are those teeth suckers who have a negative frame of mind and who seem to try their hardest to find obstacles as to ‘why not’. They focus on different ends of the task.

The achievers seem to visualise the goal, the ‘end game’ and work back figuring out how they will overcome the obstacles they may encounter, whereas ‘the negatives’ seem to identify the first potential problem, cite that as a reason not to continue and want to give up.

This applies to all walks of life, and when you’re dealing with absolutely anyone it is quite interesting trying to spot which category they fall into – it’s normally fairly easy.

Needless to say, we at Fiuran Property are firmly in the former category. We will do everything we can to help you sell your property and will be relentless in our quest to find a suitable buyer. Of course, some properties are harder to sell than others, however we firmly believe there is a buyer for every property, and there is unquestionably someone out there ready to love your property as much as you do.

There is no such thing as the ‘perfect property’ and the correct approach is to focus on the positives that the property offers and, provided it is priced correctly, it will sell. Equally, there’s no such thing as a bad property, only bad pricing, and it is quite common for a seller to over-value their own property – this is entirely understandable as a home is much more than just a pile of bricks to them (see our ‘House: home or asset?’ blog from October 2013 – http://www.fiuran.co.uk/fortwilliam/house-home-asset/ ), but it is very important to be impartial and realistic when selling a property; Celebrity New York estate agent, Fredrik Eklund, has some sage words on the subject of property pricing:

“Indeed, a good agent must dish out tough love; the most common cause of break-ups [of agent and seller] is when the seller won’t take the agents advice and pressures them to market it [the property] for more than it’s worth. If the agent caves-in in order to keep the client, the seller will soon despise him when he doesn’t get enough traffic.”

Every property has issues, and many of them can be remedied by the seller prior to putting the property onto the market. Leaking roof? Small damp patch? Many such issues can be fairly easily addressed by the seller, and usually at a lower cost than the amount a buyer will knock off the value of the property (as a buyer will inevitably overestimate remedial cost to protect themselves), and so it often makes the most financial sense to have the work undertaken yourself – this will have two benefits: firstly it will make the property more sellable and secondly, is likely to be more financially beneficial for the seller.

So, together and with the right approach & attitude, we can get your property sold!

"Buy cheap buy twice" "You get what you pay for" etc

“Buy cheap, buy twice” “You get what you pay for” etc etc.
We’ve all heard phrases such as these, and in many cases, it’s good advice. Tools are a good example of where this usually holds true, normally because more expensive tools are made with superior materials, with better manufacturing processes and produced to tighter tolerances – all of which combine to bode well for a lasting, quality product.

However, there are many instances in life where these phrases – often trotted out blindly – don’t stand up. For example, there are two German supermarket brands whose operations are defined on their good value and absence of unnecessary costs. By offering quality goods at reasonable prices, they have increased their market share significantly over the last decade, to the point where they are serious competitor in their field and one of them even being crowned the UK’s top supermarket chain in 2014! This is not something that can be achieved with sub-standard goods or services. And this is a very important point. It is prudent in every case to ask the question “where is the extra money going to, and is that going to benefit me, the customer?“ In many cases the extra money isn’t going into product or service itself, instead it goes to cover unnecessary overheads as a result of an non-lean operation.

Going back to the supermarkets example, the majority of the extra costs of the expensive products go into marketing and the brand name; the actual product – which is the bit the customer is interested in – is no better (no matter how much their clever advertising tries to convince the public otherwise!). And often the VFM supermarkets products are actually superior – “like brands, but cheaper” as the advertising campaign goes.

Reason for this blog? Well, if you’re reading this, hopefully you’ll be aware that we at Fiuran Property offer some of the lowest prices for estate agency in Oban & Argyll, and this is achieved by stripping back unnecessary expense which is of no benefit to the customer, whilst still providing everything you expect from a local agent (and more), specifically:

– Excellent local knowledge
– Professional, experienced staff
– Detailed property particulars including high quality photography
– 3d floorplans for every property
– 24 hours a day, 7 days a week availability
– Supervised viewings available
– A choice of fee options
– Personal service tailored to your needs
– Free advice on presenting and marketing a property for sale.
– Expert negotiating on your behalf

Further, our fees are not hidden from sight – a method often used so that the fees can be offered at whatever level the agent thinks the client can afford, or so that the fee can be offered at a level to simply undercut competition on the day.
Nor are our competitive fees just ‘for this month only’, i.e a quick deal to fill the books on an otherwise quiet month; we offer consistent good value – permanently.

All the best bits of a local agent but with the cost savings by being online. The best of both worlds! Give us a try – you won’t be disappointed.

House Price Comment

With the BBC reporting UK House prices are firmly on the rise, and the Express reporting that prices are rising at their fastest rate since 2007, it may be worth a brief pause to think about what this actually means in real terms.

On the face of it, house price increases are generally an indicator of a strong, stable or recovering economy, and that in itself is, of course, something to celebrate. However, whilst house prices have generally increased in the last 20 years, the Independent reports that the gap between house prices and salaries is widening and if house prices are increasing at a higher rate than salaries, property becomes generally less affordable. This is particularly pertinent for first time buyers who, with no previous house equity to help their cause, often really struggle. And with no first time buyers entering the bottom of the property ladder, those further up the ladder won’t be going anywhere fast either!

The other main concern with property prices rising too quickly is that this can cause a property bubble, and even the threat of a ‘boom-and-bust’ scenario is enough to have a cooling effect on the market. In some instances, this can become a self-fulfilling prophecy as those desperate to sell before a suspected crash, will reduce their house price to secure a quick sale, but in doing so, contribute to falling houseprices!

So how does this apply to Oban and Argyll? 

Well, in general, national circumstances seem to have a reduced effect on the Argyll property market, akin to dropping a stone in a pool of water where the ripples become less pronounced the further out you go. We saw this during the recent recession where, whilst the market certainly slowed in Argyll, prices did not appear to drop significantly (and certainly not to the magnitude of the 20%+ drop seen in some other areas of the UK).

Of course, all towns and cities have their own individual factors which will affect house prices regardless of what is happening at a national level, and we’re lucky here in that the many great accolades and attributes that make Oban and Argyll such a great place to live, helps ‘insulate’ us from the worst of the national effects. Titles such as ‘The Gateway to the Isles’ and ‘The Seafood Capital of Scotland’, in addition to Oban’s beautiful seaside location, contribute to a consistent and stable draw to the area which in turn supports a sustained demand for property here.

And so, whilst London is seeing a perhaps unsustainable 18.7% year-on-year increase, the office for national statistics are reporting Scotland’s increases at a more modest (and sustainable!) 4.8% – good news for us!

What does ‘Fiuran’ mean??

A lot of people ask us what ‘Fiuran‘ means, so here goes…

Fiuran is a Scottish Gaelic word that basically means ‘a straight free-growing young tree’ or ‘a blooming or handsome youth’. Although we don’t speak much Gaelic, we still appreciate it as a beautiful language, and this simple word seemed to sum up where we were.

“Out of tiny acorns, mighty oaks grow.”

Modest beginnings, but with the right foundations, ingredients and substance to become something great. All companies – even the biggest you can think of – started somewhere, usually an individual, or a small group, with a great idea and the drive and belief to make it work.

We didn’t set out to be the biggest, only the best. We strive for 100% satisfaction and the feedback we have had suggests that we’re on the right track, with us recently receiving our first bit of repeat business.

However, although we have now perhaps grown past the point of being a ‘small sapling’, the company ethos is still resolutely there, and the satisfaction of our customers is and always will be at the core of what we do.