Thursday, 7 November 2019

Professional advice

Following the death of my mother, administrative matters were straightforward - her will essentially said 'all to husband'. This time the situation is only slightly more complicated - my father's estate is left to my brother and me. The bulk is the house, the three-bedroom detached house in West Ealing into which our family moved nearly half a century ago. The cash in the bank and other assets will probably cover the inheritance tax due. Leaving us with a house.

Sell or rent? Develop or leave as is? If develop - how? Split into two self-contained maisonettes? If so, how? Can the garden be developed? Can the loft be turned into living space? If so, how big?

How much is the house worth? Really difficult, as this may be one of tiny handful of three-bedroom detached houses in Ealing. Almost all detached houses have four or five bedrooms. And almost all three-bedroom houses in Ealing are semi-detached or terraced/end-terrace. There's a big garden - but what about that access?

How much can the whole house be rented for? Families rarely rent. Most want to buy. Expats rent, but the steady flow of EU-nationals moving to London to work in the City or in European HQs is drying up because of Brexit uncertainty. Renting each floor separately brings in much more money than renting the whole house. But the downstairs would need a new bathroom installing, the upstairs a new kitchen, self-contained gas, water and electricity would be needed.

How much would this cost to do? How quickly would that investment pay off?

I live in Warsaw, my brother in Derbyshire. Family members need a London pied a terre for work purposes. Could we keep one part of the house and rent the ground floor (with new bathroom) as a garden flat? Would than pay enough to keep the whole thing together (and pay off any loans for the conversion work)? And the garden - should we divide it and sell it to a developer - or develop it ourselves?

One thing is certain - my brother and I are very attached to the property, to the area, and we don't want to sell. To keep the house, it needs to earn money.

The local authority is very happy to see large properties divided into smaller units, easing the housing shortage. Ealing is a popular place - the parklands, proximity to good schools, excellent public transport, close (but not too close) to Heathrow. So permission to divide and expand outward into the back garden patio and upward into the attic should be easy. But the garden will be harder - especially the issue of access.

This is all mind-boggling stuff. This all needs careful analysis, spreadsheet models which look at building costs and rental income with long-term projections. I intend to retire (or at least slow down) in four years, so having a UK basic state pension, a tiny bit of a Polish state pension, a modest UK private pension plus revenue from rental will all add up to a comfortable if not rich old age in Poland.

The value of the pound expressed in zloty terms will be crucial; hence the UK's future relationship with the EU is of intense interest to me.

All these variables are incredibly complex and yet important to me. It seems bewildering at first.

But help is at hand - Britain has very good professional advisers. One phone call to our solicitors and two visits from estate agents has reassured me immensely. I can see many people with the knowledge and experience to offer first-class advice. Obviously, one has to pay for advice, but before that stage, there's much to be learned including the questions that need answering. I feel in good hands.

A bad decision at this stage is the difference between an old age living from month to month to one in which I feel financially secure.

This time two years ago:
Gliwice's new station

This time four years ago:
Reanimated - my father's car 
[Anyone want to buy it? 63K on the clock, one driver from new...]

This time five years ago:
Defending Poland against hybrid warfare 

This time six years ago:
Another office move

This time eight years ago:
PiS splits again - Solidarna Polska formed 

This time nine years ago:
Tesco vs. Auchan

This time 12 years ago:
My father's house


AndrzejK said...

I am constantly reminded of the difference between UK and Polish estate agents. A UK agent specialises in the locality and can quote you a value then and there. Only question will be whether you want to sell quickly or are willing to wait.

In Poland agents deal with "mydło i powidło" cover typically the whole of say Warsaw and typical first question is "how much do you want". And if you do go down the route of getting a prfessional valuation this will be 40 pages long with a whole load of gobbledygook mathematical formulae and an evaluation of everything apart from the three L's (location, location and location). Bottom line will be reference to recent sales of a chicken coop, derelict house and a bomb site located nowhere near the subject of the valuaion. The valuer will arrive at a weighted average price per square metre completely ignoring the fact that a five bedroom 300 square metre detached house may in fact be worth more than a 600 square metre three bedroom property located next door to a factory.

And then of course the agent might or might not tell you than their fee is 3% from you and a further 3% from the buyer against typical UK agency fee payable only by seller of 1.25%. And never mind that UK agent will take care of transfering electricity, gas and telephpone contracts to new owner and will notify local authority that payer of property tax has changed.

Michael Dembinski said...


Entirely agree. My three years at convinced me that Polish residential estate agents were a absolute shower - from the top players to the babcia w kapciach 'agency' run from a small flat, everyone nicking everyone else's databases, doing 'bait and switch', but above all taking commission from both sides (so that advice they're offering - is it in your best interest or the other party's best interest?). This impression was backed up by my first attempts to buy land via an agent - useless. Best to cut out the agent in Poland if you are buying.