A recent subscriber to the LonRes country offering, ResCountry, we catch up with Grosvenor Billinghurst’s Director, Gareth Davies who works out of the company’s Cobham office.
LONRES: Let’s start with a bit of background on Grosvenor Billinghurst. Tell us about the company.
GD: We opened our business in 2003 and I joined a year later in 2004. Grosvenor Billinghurst is a family-run, boutique business, that prides itself on its independence. We have four offices across Surrey (Claygate, Hinchley Wood, Woking and Cobham) and I head the Cobham office which has a staff of 10 working across sales and lettings. On the sales side, we sell everything from small investment properties, right up to large new build mansions.
LONRES: You recently joined LonRes as a country agency, the link between town and country is obviously a big part of your market. Have you seen an increase in applicants from the capital over the past few years
GD: London buyers continue to play an important part in our market, but despite a small pickup in recent months we’ve seen less of an increase in recent years. Sluggish house price growth combined with a more general struggle to sell homes in the capital have taken their toll on London-based applicant numbers.
LONRES: Looking at your London buyers – who are they and have they changed over the years?
GD: Historically they’ve been families attracted by Surrey’s green open spaces, good choice of schools and amenities.
But we also see couples looking for a change in lifestyle moving into the area. And first-time buyers too, priced out of the capital and in search of more home for their money.
LONRES: And where are they moving from?
GD: Our buyers typically come from South West London, places like Barnes, Putney, Fulham and Chelsea.
LONRES: What’s the motivation behind their move to the country?
GD: As well as lifestyle – outdoor pursuits and rolling countryside on their doorstep – for many buyers it’s the prospect of being able to trade up to a larger home with a bigger garden.
For the same price as the property they’re selling in London, buyers are generally able to purchase a considerably larger, often detached, home here in the Surrey countryside, yet still within a reasonably easy commute of the capital.
The London buyers we see are generally looking to spend between £1-2m. They’re after a detached family home in a nice street with a sense of community, somewhere they can put down roots.
Generally, these are buyers who are planning on staying put for some time, so schools and somewhere that they, and their children, can make friends and feel settled, is important to them.
LONRES: And is there a particular property type that appeals to them?
GD: Yes most definitely, London buyers tend to want more traditional properties with period features, or brand new with all the mod-cons and low maintenance.
LONRES: For many, it’s a big move. Do you get London applicants looking to rent before they buy?
GD: Yes we do – it’s a very popular choice for buyers moving from London. They often take a tenancy for between 6–12 months to get settled into an area. Often, they’ll sell their home in London and then rent in the country. That way they’re in a strong position to buy when the perfect house comes along.
We used to see lots of people hanging on to their London homes and renting them out. But additional stamp duty charges on second homes means that we’ve been seeing less and less of this more recently.
LONRES: When it comes to buying, what’s the spending power of a London purchaser compared to that of a local buyer?
GD: It’s true that buyers moving out of London have some of the bigger budgets, but we mustn’t forget that many local/domestic buyers started off as London buyers too and will trade up again within 3–5 years. Typically, buyers leaving the capital start in the £1m-£1.5m price bracket and move on to a property costing between £2 - £3m.
LONRES: Do local buyers often come up against London buyers? If so, who wins?
GD: Local buyers tend to be more conservative - they have better market knowledge of their own patch and can be picky on price. That said local buyers also know the best road, the best plot on those roads and are quick to recognise an opportunity when they see it. They’re also prepared to pay a premium to secure such properties.
Price benchmarks, on the other hand, tend to be set by new buyers coming in from outside the area and this includes London buyers. And in a competitive bidding situation, London buyers tend to win out.
LONRES: It’s often said that London buyers tend to be more decisive – is this your experience?
GD: Our business is underpinned by local knowledge – I grew up and went to school here. We like to think that by sharing our knowledge we give all our buyers – whether they’re from the area, or completely new to it – the tools to make an informed decision.
That said, people are less decisive at the moment, but for those London buyers deciding to push on and make the move, they’re typically looking at properties for a period of between 3-4 weeks before taking the first steps to buy.
In contrast, local buyers can put off their move more easily – they already live in the area and have less of a sense of urgency.
LONRES: Turning to your sellers – how optimistic are they right now and have you seen a change in the level of new instructions?
GD: Today’s sellers are in a different place to where they were even three years ago. With so much uncertainty and feeling financially secure (interest rates are still historically low) our clients are happy to hold out for the price they want. There’s no real pressure for them to move if they don’t have to.
However, for those are genuinely motivated to sell, we’re seeing a bit more realism on pricing.
It’s true to say that five years ago, we had more stock than we did three years ago and today we have less. But, while we may no longer have the quantity of instructions we’ve seen in the [recent] past, we’ve certainly had some good quality homes come to the market of late.
LONRES: And are offers typically being agreed on asking price and has this changed?
GD: A lot depends on how the property has been priced. We tend to value more realistically to achieve at/or above the asking price. I’d say the majority of properties in the Cobham market are sold within 5% of their asking price and this has been the case of the last two years or so. Some agents are still overvaluing to gain instructions and these will take longer to find their level.
LONRES: You mentioned instructions earlier – what helps you win an instruction?
GD: When we’re selling a person’s home, trust is all-important - people buy trust. While prospective clients think about how much their house is worth or what they’d like to sell it for, at the end of the day it comes down to whether we’re able to deliver on that. Realism, especially in this market, is key. Our aim is to deliver the best possible price for our client in order that they’re able to make the best possible move.
Grosvenor Billinghurst is all about family, duty and care. We want to achieve the best we possibly we can for our clients. And people buy into these values.
Research is also important to us. It demonstrates to would-be buyers, sellers, landlords and tenants that we really understand their markets. It builds credibility and confidence in us as a company and as individuals in our field.
LONRES: Our research shows that the number of properties being withdrawn from the market is rising. Is this something you’re seeing and if so what’s been the main reason behind withdrawals in your area?
GD: In our experience, the main reason sellers take their homes off the market is that they’ve either been given incorrect advice from estate agents or the valuations they’ve received don’t match what they’d hoped for.
In the long-run, it always pays to be realistic in setting prices. Properties that come to the market for too much money are simply at odds with buyer’s expectations and won’t sell. Consequently, vendors become disillusioned and withdraw their property from the market. It’s something we see often here. We’ll always make the difficult decision to question whether it’s worth taking on a property that’s been over-valued.
LONRES: And finally, what are the greatest concerns for buyers at the moment and are you optimistic about your market for the year ahead?
GD: It’s all about uncertainty in Europe and how this might impact the wider economy and jobs. It’s true that interest rates remain low, but buyers don’t want to risk taking on a large mortgage if they’re unsure that rates may rise and/or their job may be at risk. The cost of moving is also prohibitively high for some. Many of our clients used to move once every 4-5 years, but now it’s more like once every 10-15 years. Second homes stamp duty has also dented demand within our market.
But looking ahead, yes - we’re optimistic. It’s been a painful three years for many, but as soon as we have clarity – whatever the outcome of the Brexit negotiations – people will be in a position to know what they’re dealing with, which will help the market immensely.
With thanks to Gareth Davies at Grosvenor Billinghurst. LonRes subscribers can view all properties in Surrey here. Not a subscriber? Gain access with a non-obligatory free trial or find out more about our ResCountry service,connecting agents outside the capital to serious buyers from London.