One lump or two? – HAWKEYE
Can you imagine going into the pub and asking for 3 spoons of beer?
Or visiting the builders merchant and asking for 5 piles of bricks.
People would think you were one sandwich short of a picnic! However, in the UK nobody bats an eyelid when you ask for a 2 bed apartment.
Why is this odd?
Well a 2 bed apartment could be anything from a 550 sq ft city bolt hole to a 1500 sq ft penthouse suite. The fact that they have 2 bedrooms doesn’t hide the fact that they are poles apart. One you couldn’t swing a cat in, the other you could probably fit in a small cricket pitch.
It’s a bit like saying a Peugeot 106 and a Bentley convertible have 4 wheels. They do – but it’s not terribly helpful in telling you about their relative merits. This is where I get out the Property Hawk soapbox!
The Europeans are a funny lot – the French eat frogs legs, the Spanish think its great fun to let a load of rampaging bulls in Pamplona charge down the high street every year maiming and killing the locals. The Belgium’s eat mayonnaise with their chips!
However, despite these oddities, when it comes to one thing they seem to have the right idea. The Europeans like most countries across the globe sell their property by area. This to me seems a pretty sensible and fundamental way of evaluating what you are getting for your investment money.
In the UK we sell all other types of property in this way – offices, retail, industrial so why not residential. I am sure some ‘traditionalists’ argue that price ultimately reflects size. True to a degree, but not always the case; as some investors have found to their cost when purchasing over valued apartments, largely on the basis of their fit out. Surely in these days of increasing consumer rights with the emphasis on consumer information, then this issue is one the government could turn its’ hand to. After all they found time and spent millions of pounds promoting the ludicrous and failed concept of HIPs (Home Information Packs), which was going to costs consumers hundreds if not thousands of pounds and give them nothing.
Instead they could have concentrated their efforts on a few ‘well chosen’ words to encourage the property sales industry to incorporate this figure into their details. After all they seem very adept at forcing producers in the food industry to show how many ‘micro –mini- milligrams’ of salt there is in a pie, or how much CO2 is produced by your fridge. Meanwhile the poor property buyer is pretty much kept in the dark.
Why has this been allowed to continue? I smell inertia – things don’t change unless governments perceive that people want them to. The builders are quite happy with the situation. Since the demise of the Parker Morris standards in the early 1980’s, which insured that rooms were built to a minimum size, builders have tried harder to squeeze more rooms into less space. The result shrinking room sizes. In addition with the increasing sophistication of the consumer and investor, builders have been clever at ‘specing up’ new homes with up market additions such as wet rooms, fancy kitchens and en-suites. All good reasons why you, the purchaser should pay even more money for your property. The truth is that all these premium additions come at relatively little cost to the builder; but what they don’t give you is more space. For all the under floor heating, impressive lighting and fancy bathrooms you will often find that you are paying a much higher price per sq foot than you would for a more basic unit or a larger older unit without these extras. This has meant fat profits for developers over the last 15 years and therefore they are quite happy with this ‘status quo’. The Government are happy with things because the electorate appears not to be bothered and therefore there are no votes in it. Maybe we should be!
I’m not one for getting rid of the pound or signing up to the European Super State, but on property sales I do think the ‘continentals’ have it right.
HAWKEYE – a unique perspective on property investing