We were lucky enough to secure the attendance of James Sumner, one of the Partners at Bowen Son & Watson Estate Agents in Wrexham at our May meet up. James provided us with a very informative talk which not only included what he does on a daily basis, but the property market in Wrexham and what it’s currently doing.
Why not check out what James had to say below ! If you’d like any further information or would like to speak to James, then his contact details can be found at the end of this article. Happy reading !
James introduced himself and explained that he is a Chartered Surveyor and works at Bowen Son & Watson Estate Agents in Wrexham.
As most people don’t know the answer, he posed the question ‘What do Chartered Surveyors do ?’ He went on to explain that they do many other things than sell houses, let property and carry out survey work they also do lots of professional work with valuations covering a wide range of subjects including work with commercial property – rent reviews, Landlord and tenant matters and consult in agricultural property as well as matters that have legal implications.
There is a huge raft of legislation that they have to be aware of and comply with on a daily basis, for example when acting as Expert Witness for Court or under the Charities Act or Land Compensation Act; the latter covers valuations where land is compulsorily taken. They also deal with professional matters of valuation for all purposes including taxation etc. and including those for building reinstatement for insurance purposes.
Over the last 12 months there have been three cases locally where landlords have been left considerably out of pocket by being underinsured. A property in Ruabon caught fire when the tenant set fire to it to get back at the landlord, causing approximately £50,000 worth of damage. The loss adjuster advised that the landlord should have been insured for £140,000 but the landlord was only insured for £70,000. As a result only fifty percent of the landlord’s claim was paid. You have to be insured for not only the rebuilding but the possible costs of demolition and the costs of clearing the site together with professional fees. The insurance reinstatement value is not linked to the market value and this is often misunderstood.
In order to place an accurate figure on a building’s reinstatement value you have to figure out how the building comes apart and how much it would cost to put back together taking all site factors into consideration and professional fees. It should not cost much more to insure your property for the correct reinstatement value.
Most lenders will actually provide you with the reinstatement cost in your insurance policy.
James informed everyone that this year’s cost of reinstatement building tables will be higher than last year higher due to rising building costs, partly brought about by the scarcity of trades at the moment.
James stated that in his opinion if someone wants to make some money in property at the moment then they should consider buying land and developing it; they should then sell two and keep two. This can however be difficult to finance. There is however land availability at the moment. Lenders though still have to come around to the opportunities here and start supporting again. Larger projects that have been recently completed locally have tended to have been crowd funded. He stated that he would be very happy to work with collaborative landlords to do such projects.
Insofar as ‘cheap’ houses are concerned at the moment, he stated that in his opinion property is ‘value for money’ at today’s market value. Market value of terraced housing and flats tend to be available around the investment value. If you buy a property today therefore you are still buying at the bottom of the market. There has been virtually no growth in property capital values in and around Wrexham since the recession. Wages have not been rising. Most people on a local level who are employed tend to be in households of moderate earnings and are looking for ‘bread and butter houses’ and so there are less sales occurring at the moment in the higher price brackets. There is also at the moment no real inflation. With static wages and less movement in the upper price brackets therefore there is no catalyst to push property prices upwards. Interestingly there is a slight lack of supply at the moment, which is keeping sales of properties quite brisk – for many reasons there are not as many properties coming onto the market at the moment. He advised that property stocks generally are about 20% lower than this time last year but commented that property sales are more certain at the moment, partly due to the reduced supply. Employment levels are also helping here.
In 2006/2007 buy-to-let lenders were sustaining the market with banks throwing unlimited money at borrowers during that time. 2008/2009 was of course the bite of the recession and not a good time. In 2010 the change in government did alter things. The private sector had already been hit hard by the crash but by 2010 people in the public sector started spending again as they could afford to upgrade. To them the reduced interest rates and the lower property values were attractive. Sales at this time were brisk. This however didn’t last. Job cuts in the public sector and the rising cost of living during 2011/2012 (He commented on the cost of filling up the car with fuel at that time and stated that people were frightened of going to the supermarket !) resulted in another dip and the more static market that we see today.
He concluded by saying that we are now at the point whereby everything seems to be turning to more of an equilibrium. So now is the time to make those decisions and for all sorts of reasons….now is the right time to buy.
Should you wish to contact James, then his details are below:-
Contact James at
Bowen Son and Watson, 1 King Street, Wrexham, LL11 1HF