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August 07, 2015

The Property Expert: Phil Spencer in Conversation

The Property Expert: Phil Spencer in Conversation

Phil Spencer. Image: Fiona Murray

Channel 4’s Phil Spencer has appeared on our television screens for the last 15 years, providing expert advice on all things property. Rebecca Foster visited Phil at his home to hear about his latest projects, his tips for first time buyers and hears his views on the highs and lows of the British property market.

The last time we met, the UK property market was slowing down after a busy spring/ summer. How is it looking now?
If we look back at what happened through 2014 there was plenty of good news. Prices, according to Nationwide, rose by 7.2 percent. Transactions were up by 16 percent to 1.2 million. That’s fantastic because it’s the highest it’s been for some time. Levels of first time buyers rose 21 percent and building activity so the amount of new builds rose to 140,000, which is the highest it’s been since 2008. Where are we now is healthy and the fundamentals are okay.

What factors would you say are affecting the market at the moment?
One of the greatest challenges that we face is the lack of supply of new property. Last year, we built 140,000. That’s the highest number since 2008, but it’s nowhere near the government target, and every year that goes past that we don’t hit the government target the problem gets worse and worse and worse and harder and harder to pull out of.

What other factors are affecting the UK housing market?
Right now I think there’s an awful lot of hesitation as a result of the general election earlier this year. People don’t like making an important emotional, financial decision when they perceive there could be some change on the horizon. However, at the end of the day, we all need to live somewhere, and people still die, get married, have babies, get divorced and change job, so there is a certain amount of activity that happens anyway.

What do you make of the government changes to stamp duty?
It was a bit of a shock! That first 24 hours I was thinking, ‘Oh my God, what’s about to happen?’ But once I sat down and actually looked at the figures and how it’s going to affect different areas of the market, it makes sense. It’s helped more people move at the bottom of the market, which is beneficial to everybody. However, it’s a bitter pill to swallow for someone at the top of the market.

Let’s talk about location. Research from Savills suggests that the greatest price growth is expected in the east of the country and the south-east.
Yes, Savills have reported that properties in the east of the country will rise in price by 25.2 percent, and prices in the south-east by 26.4 percent over the next five years—those were the kind of leaders and I picked them out because of their high numbers over the next five years. I don’t want to be too London-centric, but the fact of the matter is, the London market does affect other markets because there’s so much money made, not just in employment but also in equity in London and it does filter out.

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Do you think people are more willing to commute so that they can live outside London, and have perhaps a larger home?
They are probably willing to commute to own a home to start with, so, that’s one thing: ‘I want to buy a property—where can I do it? If I have to spend 45 minutes on a train, that’s what I need to do.’

I know our readers are keen to hear about the latest projects you have been working on. Why do you think it is that property shows remain so popular?
We’ve all got to live somewhere, so, property as a topic is something that everybody who has a roof over their head at night has some understanding of. It’s not like gardening shows, that if you’re not a keen gardener you’re not going to watch. Most people, if not everyone, have some level of interest in housing.

When you’re sitting with the TV producers discussing the potential of new projects, how do you go about keeping things fresh for viewers?
Over the years I’ve made a number of shows and each has its own feel and tone. Before we go out and film a new series we have a bit of a review of how we make it, how we film it, which bits are good, which bits are less good, which bits are vital and which bits aren’t. My greatest worry is if the audience anticipate what’s about to happen, they’ll turn off and find something else to watch. I also like to imagine that viewers appreciate that it doesn’t always go brilliantly—that’s house hunting. It’s tough to do deals—it is real TV. It’s not scripted and it’s not rehearsed. What happens happens, and it’s fun!

When you’re brainstorming ideas for the show, do you and Kirstie usually team up with the same idea or do you ever have completely ideas about where the show should go?
No, we don’t have different ideas. Kirstie is pathological about it being genuine and real and I am 100 percent with that, but I am also conscious that it has to be filmed and it has to be edited. Every time you see the camera angle change, it means there’s been an edit point. It’s all those little shots that enable our conversation to be edited down to something that would work on prime time TV.

Your first series of Love It or List It recently finished on Channel 4. Our readers would love to hear more about it.
It’s been fantastic fun. The reason we made it is because there’s an awful lot of people in the country in the situation where they are thinking … shall I move, or shall I stay? We’ve helped couples where one of them has grown out of the house, got fed up with the house and wants to go. One of them is attached the house and wants to renovate it and stay. There’s a lot of people in this situation having these debates. Again, it’s real life situations, and real positions—man and wife have really come to loggerheads.

That’s really unlike anything I’ve ever seen before!
Yes, there’s nothing else like it. It blends an awful lot of what Kirstie and I have done together and separately, bringing our skill sets neatly together.

Have you enjoyed the fresh challenge?
Yes. As much as I love making LLL, we made a lot last year and so it was really great to be working on something new.

I bet things got quite tense at times whilst you were filming.
Yes, and I thought British people probably wouldn’t lay it on the line on television… but they have. There’s been… ‘You’re talking rubbish—I’m not moving’ to ‘No you’re not hearing me, this and this isn’t working—we’ve got to move!’  When TV isn’t scripted and rehearsed and it’s staged, people are trying to make life changing decisions and if you believe something, the cameraman is standing over there recording… it’s great!

Let’s get back to property. With summer in the air, lots of us are thinking about holidays! Would you recommend buying a second property to rent out as a holiday home in the UK?
You just need to be clear on the maths. Is it an investment or is it a holiday home? If it’s an investment, it doesn’t matter where it is or what it is, it’s all about the maths. If it’s a holiday home then it needs to be somewhere that you’re going to want to go on holiday for a long period of time, every time you go on holiday and really get the most out of it.

What about buying a home abroad?
My wife and I have talked about buying a holiday house in Ibiza, where we often go in the summer. But actually, is it worth it for a two week holiday per year? The concept of worrying about the maintenance is off putting, and there are lots of options to rent. With renting, if you decide to get out because the family situation changes or you don’t use it anymore, then you can move on.

Let’s talk about people aiming to buy their first home. Is it important for first time buyers to be watching the market the whole time they are saving their deposit so they can pounce at the opportune time?
If you haven’t saved up the deposit, you can’t buy it. It’s probably worthwhile being aware of the level of deposit that you need in order to get into the market on your first foothold.
I think the trouble is whether you’re going to buy in London or out of London. You’re looking at whole different sizes of deposits, so it’s hard to know what figure you’re working towards.
I always encourage people just to get on the ladder. If the market is on your radar, I would encourage people to go and have a chat with their bank or an independent financial advisor and come up with some kind of plan just to get your head around what kind of money would you need in order to get your first property.

What’s your opinion of shared ownership?
There are lots of shared ownership options. Some of them are government run and some are controlled by housing associations and councils. I think it’s worthwhile exploring what might suit you if you are planning on buying a property at some point, as there are some good options out there.

In your experience, what’s the most difficult thing in the process for FTBs?
I think it’s when to take the jump—knowing when you’ve seen enough and knowing when to say, ‘That’s the one I want, I am going to put an offer in.’ The decision is never easy. It’s not even easy if you’ve done it four or five times, so the first time you have done it is particularly scary, at whatever price. Talk to as many people as you can, listen, take advice.

If you’re already a home owner, extensions can add a lot of value. Which extensions are likely to add the most value?
Extensions that increase the square footage of your property will always win. It’s my favourite quote of all, that it’s cheaper to build space than it is to buy it on the open market. That is absolutely true and I don’t think it will ever change.

What are your thoughts on underground extensions?
They are expensive so it’s only worth it in areas where the price per square foot of property is worth more than the costs of digging it per square foot. Here in central London, that works. Most other major cities, like Paris, New York and all over the Far East build high with city centre sky scrapers, so it’s not surprising that in this country we are looking for opportunities to go up or to go down.

Read more of Phil's advice about underground extensions.

Is a complete renovation likely to add a substantial amount of value to a property or merely make it a more pleasant place to live?
A complete renovation will certainly make it a more pleasant place to live and really should cover the cost of doing it. I would say it’s not about how much you’ve got to spend, it’s what you do with it that counts. It’s by making it bigger or by improving your property by extending it that you can potentially put it into a different price bracket.

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Are ‘green’ features likely to boost the value of your property? Are they something potential buyers look at on viewings?
Green features may not be the first priority, but they are definitely in the list of pros. We do have a planet to look after! And as the years go by and the generations go by, I think people coming out from school are far more aware of environmental issues than ever before. I would definitely consider getting my own solar panels. Energy is an expanding market.

At home the kitchen is the hub of the home. Do you spend much time cooking for your family?
My wife is listening, so I better be careful how I put this! The kitchen is the hub of the home and we, as a family, spend far more time in here than anywhere else. I always do a weekend breakfast, and I do cook a Sunday lunch! I often talk about kitchens with people when I am looking round houses. I wouldn’t dream of having someone round to watch TV, so I think if you’ve got friends and family round you’re going to be in the kitchen, having a drink or a meal or having a chat.

And, finally, Phil, would you say that gardens are a valuable asset to a property?
I think a garden is as valuable as a room and therefore should be thought of in the same terms. Just as you would decorate a room, furnish it and make it look nice, you should do the same to your garden. It is absolutely an asset and it can put people off just as quickly as it can attract people.