What has not been said about this property market? that it is a bubble, that it is unsustainable, that prices in London will always go up. It seems like everybody in London is looking to buy, to sell, preferably both at the same time. I dare not predict the future but as a foreigner that has been living in this city for nearly 10 years I have a few observations to make about the peculiarities of this system.
Climbing the property ladder this idea is completely alien to me, where I come from you buy when you can afford and you buy where you want to live, but here a 23 years old paralegal once told me he intends to buy a flat – with what money???? Clearly I missed the memo and refused to buy a flat just for the sake of climbing the property ladder, three years later that flat increased its value in 30% – ok I get it now. But just think about it: a 23 years old, who has only worked for maybe two years wants to spend hundreds of thousands of pounds that he does not have on buying a flat which he probably does not want just to get on the property ladder – isn’t it why we got into the crisis? But yet it looks like this is the right way of doing things in England, or at least in London, so as they say: when in London do as the Londoners do!!
Good Faith in Negotiations this is the jewel in the crown and the most challenging difference between the UK property market and at least Civil Code legal systems. Under Civil Code you need to conduct negotiations in good faith, you don’t waste people’s time for the sake of it. An offer is binding and an acceptance of the offer is a contract, not in a property contract in the UK: an offer is not binding, I will say it again to make it clear: AN OFFER IS NOT BINDING, you can offer left right and centre, you don’t have to buy any of those properties. There is no certainty in the system, you can invest money in a survey of the property, pay a lawyer to do searches and then the seller found a better buyer that can offer more, and off he goes and you stay with the expenses of your searches and you can’t claim it from the seller because the negotiation is not binding. That leads me to another term:
Gazumping: you found the house of your dreams, you spent money on the survey, you paid the solicitor to do the searches and everything looks good you want the house, now the seller knows you invested time and money in this house, you will not walk away from the deal, so they increase the price- gazump, in a civil code legal system this is called negotiations in bad faith and you could claim damages from the seller, but here in the UK it is legal and you can either tell the seller to f*** off and come to terms with the fact that you just lost a few thousands, or you cave in and you pay extra to this bad faith seller.
Chain/Chain free: say you own a flat but now you want a bigger flat or a house or a house with a garden, in order to afford a bigger house you need to sell your flat and with this money buy a bigger house – so far so good, but in England you don’t want to stay houseless or to leave your house to a rented property until you find a house – so what do you do? You buy and sell at the same time – you are in a “chain”. Now if the house you are buying is owned by people who do the same as you – they also buy a bigger house with the proceeds of the sale of their house and want to do it at the same time – you now have three property transactions that have to happen at the same time: what are the chances of that? Admittedly this is an ideal situation nobody spends money on unnecessary rent or move an extra unnecessary move, but what are the odds that all these chain transactions could happen at the same time?
School catchment area: now that is a real pain, the easiest rule is that if you have kids at school age, you either need at least a £2 million pound home or move out of London. This is quite understandable, this city attracts people from all over the world, it is over populated and there is shortage of houses and schools. No longer are the days you went to the school near you together with all your neighbours – simply because this school will not have enough places. The situation is so ridiculous that the school measures the proximity of your house to the MAIN gate of the school so that if you live adjoining to the backyard of the school and can literally climb your fence and get to school you might still not be admitted to that school because the distance between your door to the school’s main gate is outside the catchment area! Confused? Worried? Well you should be!
Freehold/Leasehold
An interesting English legal concept: you have ownership and not so much ownership.
Freehold: you pay hundreds of thousands of pounds and then you own your property.
Leasehold: you pay hundreds of thousands of pounds and then you own your property, except you can’t put a carpet, you can’t remove a carpet, you can’t do renovations, you can’t do structural works without the consent of the freeholder – who is the ultimate owner. You can buy a top floor flat but the ultimate owner of the roof will be the freeholder and not you. So what is actually the difference between rent and leasehold? You pay a lot more for a leasehold…
Carpets: carpets are so important in the English home that they are actually a part of the Leasehold agreement, reason being that they block the noise so if you are walking with high heels or have a toddler throwing balls the neighbour has a layer to muffle the noise. Surely these leases were drafted in Victorian times were there was no insulation, these days you can simply add insulation and put a wooden floor but you would still be in breach of the Lease because an insulated wooden floor is not a carpet…
Window in the bathroom or lack thereof: clearly the smeliest places in the house are kitchen, bathroom, toilet – one would expect a window for proper ventilation in these rooms, but somehow bathrooms and toilets with windows are few and far between in London. I guess it is due to the fact that most properties in London are Victorian and Edwardian conversions: large houses for families and their servants were converted into flats for modern life living. These toilets and bathrooms were not intended as such and were built quite randomly inside a flat where there was no possibility to have a window. The funniest thing (or the smeliest thing) is that now even new buildings are built without a window in the bathroom (sometimes even two bathrooms without a window) because generations of people are used to having bathrooms without a window so why build one? That is how I chose a flat – if there is a window in the bathroom I take it!
Bidet: for our continental friends, no there is no bidet in the English home – use the bath and get over it!!