9 October 2006
Exclusive interview with "property goddess" Sarah Van der Noot
Sarah Van der Noot, London's "property goddess" and founder of London Property Search, has been dealing in the London property market for almost twenty years. Recently describing the current market as an "impossible disadvantage without a buying agent on your side", Sarah has been helping people "find a home and not a house" in London for over 10 years. She was also the BBC's resident "property guru" on the successful reality TV series "Would You Buy a House with a Stranger?" earlier this year and spoke exclusively to Renthusiast this weekend via email about London's red hot property market; her take on the property industry including investment tips and strategies for those wanting to enter the London market and the more experienced investment players:
1 ) Without revealing your trade secrets, how do you source your properties; is it through special relationships with agents, or do you use other methods?
We source our property through a number of means. The most obvious is through estate agent but additionally we are well linked into the property market grapevine and hear of properties through other property professionals, developers, estate agents themselves and lawyers which will never come to the open market for various reasons (well known personalities in the media and business who don’t wish to make their personal affairs public or have joe public snooping round their houses!) or prior to going onto the open market in the hope they can achieve a sale without having to have a lot of viewings.
In the current market best prices are being achieved on the open market because of the competition amongst buyers (too many buyers for too few properties) so other than at the top end £10m plus there are fewer off-market deals to be done for now. Because of the competition amongst buyers in the current market the good relationships with estate agents built up over the past 10 years are essential to ensure that we are the first, or amongst the first, people they call when they take on a new property.
If a client wants to buy a property only on a particular street (couple of streets) we will write individually to the owners of properties on those streets addressing them by name not just as a general mail drop. This has been fruitful in a number of instances.
2) You were working as an estate agent, before launching London Property Search "after several frustrating years" according to your website. What frustrated you most about being an estate agent? And what do you see most wrong with the estate agency business model as it is today?
As much as I am passionate about architecture and interiors I also enjoy the relationship that grows with clients as you help them find their homes – I am a people person and enjoy the process of discovering, with a client, what it is they are really looking for. Many aren’t totally sure themselves and it is satisfying guiding them through the process of decision or surprising them with their “perfect” property having read between the lines what would suit them even if it is very different to what they thought they were after. Hence are tag line of “Finding you a home not a house”. In estate agency it was more a case of getting enough people around a property until you’d sold it and then collecting the fee which just I simply did not find fulfilling enough. Yes it was satisfying to achieve high prices for ones client but I still get that, albeit lowest possible prices, for my clients.
The only issue I have with the business model of estate agency today is that many of them are now offering buying services (ie. acting as buying agents) as well continuing their regular job of selling properties. I see this as a two-fold problem. Firstly there is a direct conflict of interest with acting as a buyer and seller – how can you achieve the best possible price for one of your vendors is you are selling their property to one of your retained buyers for whom you are trying to achieve the lowest possible price? Additionally, acting for retained clients is a full-time job in itself if you are to be on top of if you are doing a good job for your vendors should you really be passing up one of their properties You can’t is the simple answer. Additionally, if your time is spent servicing your retained clients how can you focus on the business of selling your vendor’s properties at the same time? Your vendors are not going to get the same level of service if you are distracted by retained buyers. It just doesn’t work. Let buyers be buyers and sellers be sellers!
3) How do you define your business model?
Service first! Most of our new business comes through the recommendation of previous clients. This wouldn’t happen if they weren’t happy with the service we give them. It is my belief that each client should feel like they are our only or most important client and that our work to find them their new home is as important to us as it is to them. We achieve this by limiting the number of clients we take on at any one time so that we can give each search the maximum amount of time required to do it thoroughly and effectively.
Straight-talking and honesty is also paramount. Assisting someone in the purchase of their home is a personal task and the management of their expectations and advising them on what is realistic and what isn’t is essential and has to be done in a way that doesn’t offend them. If what they are hoping to achieve is impossible within their budget we will tell them this and help them find ways to compromise (most likely in size or location) if they are unable to extend their budget. It is not our job to encourage our clients to spend more than they want to but equally there is no point in kidding them that they can achieve what they are aspiring to if they can’t.
Discretion is also key to the success of my business. We have assisted many well known personalities in the search for a home or investment and they can trust us not to talk to the press or other individuals. The same goes for all our clients. If, which is often the case, we are dealing with various employees of one company (one referral leads to another) it is imperative that each individual client is not discussed with another – their personal details, budgets and plans are personal to them and not for anyone else’s knowledge.
4) What impact do you see the internet having on the industry?
The internet is a great tool for researching the property market and that in itself has had an enormous impact on those wanting to invest in bricks and mortar. It has made it easier to research prices and yields in different locations but in my view it will never replace the property industry professionals.
5) Your focus appears to be on specific areas in London, mainly west-central; is there any specific reason for this?
We cover the most prestigious areas of London, ie. Chelsea, Kensington, Notting Hill, Holland Park, St John’s Wood, Belsize Park, Primrose Hill and Hampstead. To do this job successfully and to attain the best results for a client you have to know your market very well indeed. By focusing on a smaller area you learn very precisely what’s going on in that particular area with regards to price fluctuations, developments, latest trends etc and above all it takes time to build up relationships with agents, developers and other property professionals and if you spread yourself too thin by diversifying into many other areas your knowledge and relationships can never be as thorough.
6) You were the resident expert on the successful BBC reality series "Would You Buy a House with a Stranger?" Did filming the series teach you anything about the reality of first time property buyers in the UK?
The first time buyers’ market is not a market I work in on a professional basis as our budget range for carrying out a search is £700,000 to £10m + (with an average budget of around £2m), however what I learned was that the fundamentals remained the same in terms of monitoring and managing expectations, explaining the professional jargon and hand holding required to steady fears and emotions. This group of buyers deserves as much help as those with bigger budgets but as payment terms in this industry is percentage led unfortunately there are not many search agents who work at the lower level of first time buyers.
7) The program was all about co-buying and HSBC is now marketing a specific co-buying mortgage product. We can only assume other lenders will soon follow suit. In general, would you recommend co-buying as a good strategy to get on the property ladder?
Funnily enough I co-bought when I first got onto the property ladder 16 years ago. This wasn’t so much led by not being able to afford to buy on my own but it did mean that the friend I bought with and I could buy a much larger and nicer property than we would have been able to do on our own.
I do think that if co-buying offers you the only opportunity of getting yourself on the property ladder that it is great idea. However, I would only suggest you do this with a friend or relation (someone you know well and believe you could live with – unless you are buying an investment property) and that you have a very comprehensive contract drawn up to cover all eventualities (one of you wanting to move on or buy the other out etc).
9) What is your forecast for London real estate?
In the long term, investment in London bricks and mortar, I believe, will always be a great investment. The property market is not an exact science and many things can affect capital growth both positively and negatively eg, the UK’s economy, the City economy as an entity of its own, the world economy, interest rates, politics, war, oil prices, the stock market etc. In the short to medium term I envisage continued growth but not probably at the rate we have seen over the past two or three quarters. I could be eating my words if the supply of new properties to the market does not increase and the numbers of buyers remain the same. It is possible however that many vendors are delaying offering their property to the market until bonus time hoping to benefit from a market fuelled by cash rich buyers.
Will there eventually be a crash? Will the bubble burst? Who knows? I think a crash of the type we saw in the early nineties is unlikely, however I would expect a redress in the balance to some extent eventually.
10) What is you forecast for the UK?
Capital growth for areas outside London has been a bit more volatile in it’s ups and downs but again, in the long term good levels of growth should be expected – the population is increasing at a great rate (a huge influx of workers from the EU) and the demand for housing rising with it. If a good building programme is not kept up there will simply not be enough housing which will push prices even further.
visit London Property Search for more details on Sarah and her company