I am surrounded by prophets of doom. The world is going to hell on a handcart. Nobody is interested in investing in property anymore. They haven’t made a sale since Christmas 1943 and they are going to lose their Ferrari.
This is just not our experience. Of course, there are less buyers than there were a few months ago but we believe that many serious investors are still in the market place – buying bargains whilst they still can. They are looking for the best property in the best locations. This does not mean the most expensive property. They are looking for property that is well built and offers true value. If you are selling that property you will do well. If you are selling over priced rubbish you will not sell to investors – and you will probably not sell it to anybody else.
The people about to retire are still there. They are still going to retire this year, next year or the year after. It will take a lot more than a minor economic reversal to put them off their lifetime dream of retiring to Spain. They already own their property in the UK. OK, it may lose a bit of value but then the house they are going to buy in Spain will also be a lot cheaper than it would have been a year or two ago. The Euro may be a bit more expensive but, with some clever financial packaging, we can minimise the impact of this. If you are selling the right property these people will still be there as your clients.
The people rich enough to be able to afford a holiday home are also still there – though not in the numbers found a few years ago. If you have the right property, at the right price, you will sell to them.
There are also lots of other opportunities. Few people are comfortable with the idea of investing in the stock market (bingo for the upper classes) and yet they understand all too clearly that if they don’t provide for their own future nobody else is going to do so. They need to provide for their retirement. They need somewhere to invest and property still stacks up very well. But to sell it as an investment today requires some careful planning and some clever and safe legal structures that will appeal to the investor in this time of greater uncertainty and less willingness to expose themselves to lots of debt. Property investment funds, property partnerships, property clubs, fractional ownership schemes and the like offer lots of opportunities for the right property in the right place.
Notice that I keep on talking about the right property in the right place. I should also add ‘at the right price’. The sad truth is that many estate agents and developers have not been selling the right property in the right place at the right price. They have been selling property in a way that was driven by commission and cost of construction, not by the underlying desires of the potential buyers. They might have wanted small houses built on their own plots. They were offered two bedroom apartments and told to like them.
Adjusting to these new circumstances will be very painful and for developers with a large amount of unsuitable property to sell it could prove fatal unless they can find new and innovative ways of cutting their losses and turning un-sellable stock into cash but the change in direction will have to be made. Those ways exist but adopting them may need specialist skills and some courage.
We at The International Law Partnership believe that this market offers us more opportunities than threats. We are seeing more, rather than less, enquiries from investor clients and more enquiries from developers and agents who realise that they need to buy in additional skills and new ideas.
As a result we are significantly increasing our staff numbers and the range of services that we offer. Expect to see some announcements over the next few weeks.
You, as agents and developers, can also change your business model and thrive. Not all of you will and, of those that don’t, many will not survive. But if you are determined to prosper then I believe that the key to that success will be your decision to provide the best products targeted precisely at known markets and wrapped in the best legal and financial structures.
I have no doubt at all that there will be a thriving international property industry in five, ten, twenty or fifty years’ time. It is worth remembering this during those moments when everybody about you is talking doom, gloom and imminent disaster.
The International Law Partnership LLP
Solicitors & International Lawyers
Holborn Hall
193-197 High Holborn
London
WC1V 7BD
Tel: 020 7420 0400
Fax: 020 7836 3626
Email: info@LawOverseas.comInternet: www.LawOverseas.com© The International Law Partnership
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