An Investigation into South London Property Market Success Factors

This dissertation, submitted by a student with ID MAS15403343 for the BSc Business Management program, investigates the critical success factors affecting the profitable selling and management of residential property, using the South London house market as a case study. The research delves into the historical context of the housing market, examining the cyclical nature of price fluctuations and the importance of informed decision-making in property transactions. The project explores key areas such as property investment planning, identifying potential, the role of landlords, and various selling and buying methods (estate agents, auctions, private sales). The methodology includes research design, approach, philosophy, data collection, and analysis. The study aims to identify factors influencing profit decisions, predict future house price changes, and evaluate the impact of repairs and renovations on property value. The dissertation also addresses research limitations and offers recommendations, providing a comprehensive analysis of the dynamics of the South London property market and strategies for successful property ventures. The literature review covers various aspects of property investment, from maximizing profit to understanding market value and making properties attractive to potential buyers. The research questions address the critical success factors in selling and renting property, and how these factors affect profit decisions and future price changes, considering demographic, economic, and policy-related influences. The project concludes with a discussion of research limitations and recommendations for future research in this area.

Student ID Number MAS15403343
Programme Title Bsc Business Management
Module Title
Business Management Dissertation 1
Module Code QAB020N503S
Module Convenor Grace Mansah Owusu
Coursework Title
An investigation into critical success factors affecting the profitable
selling and managing of residential property: A case study of the
house market in South London
Word Count
7988
Date Submitted 26/12/18
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Contents
Title of Project Proposal........................................................................................................................3
1. INTRODUCTION.............................................................................................................................3
1.1 Identify a specific researchable topic area:..................................................................................4
1.2 Establish the importance of the problem......................................................................................4
1.3 Aim of the research project..........................................................................................................5
1.4 Background of research...............................................................................................................5
2. RESEARCH OBJECTIVES..............................................................................................................5
2.1 Research Questions......................................................................................................................6
3. LITERATURE REVIEW..................................................................................................................6
1. Planning property investments.......................................................................................................9
2. Identifying property potential......................................................................................................10
3. Landlords Role in property investment........................................................................................11
4. Selling & buying property...........................................................................................................11
5. Investing in buy to let passive income.........................................................................................11
6. Selling& buying through an estate agent.....................................................................................11
7. Selling & buying through Auction...............................................................................................12
8. Selling & buying privately...........................................................................................................12
4. RESEARCH DESIGN AND METHODOLOGY............................................................................12
4.1 RESEARCH TYPE...................................................................................................................13
4.2 RESEARCH DESIGN...............................................................................................................13
4.3 RESEARCH APPROACH........................................................................................................13
4.4 RESEARCH PHILOSOPHY.....................................................................................................14
4.5 DATA COLLECTION METHOD............................................................................................14
4.6 SAMPLING METHOD.............................................................................................................15
4.7 DATA ANALYSIS PLAN........................................................................................................15
4.8 ACCESS TO DATA AND RESEARCH ETHICS....................................................................15
5. DATA ANALYSIS AND INTERPRETATION.............................................................................16
6. RESEARCH LIMITATIONS, RECOMMENDATION AND CONCLUSION..............................24
6.1 RESEARCH LIMITATIONS:...................................................................................................24
6.2 RECOMMENDATION.............................................................................................................24
6.3 CONCLUSION.........................................................................................................................25
6.4 VALIDITY AND RELIABILITY.............................................................................................25
REFERENCES....................................................................................................................................26
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Title of Project Proposal
An investigation into critical success factors affecting the profitable selling and managing of
residential property: A case study of the house market in South London.
1. INTRODUCTION
Historically house prices, renting and letting prices go up or down. From time to time, we can
see the housing market boom or bust. Despite this, the practice of buying, selling and letting
houses remains one of the most important activities undertaken by people in their lifetime.
Different people buy houses for different purposes, some for private use, some for making
money on it (James, 2015).
The UK property market [in October] accounted for 102,530 residential and 11,220 non-
residential transactions. (UK Property Transaction Statistics, 2018) The residential market is
huge, the problem is how to find the right property for a good price for the right individual,
and how to organise the effective management and improvement of that property for further
profitable selling or letting. In order to make a profit from buying, selling and letting houses,
a person must have trading skills and understand the niceties of the product. In the UK exists
about 25 million homes, from those homes 69% are owner occupied. The number of
homeowners over 17 million and numbers are growing year by year. In the first property they
buy less than one in five homeowners live all they live. During them life times over 80% of
homeowners will be selling their houses at least once, and most of them will sell more than
two times. A big lucrative industry has been created for this reason around property
transactions to satisfy demand people to buy and sell they homes. The practice showing that
proses of selling and buying homes may be complicated it can takes a long time, and
mistakes may cause a losing of money and time. If the process of selling or buying houses
taken without experience, knowledge and professionals it can bring stress and delays.
(Yvonne Jackson, 2013)
To train sales personnel [in an estate agency?], companies invest large sums of money. For
most companies a sales person is the most important link between customer and seller. To get
a profitable deal people who buy and sell houses for profit must understand clients’ needs and
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demands, to know how to satisfy them, and add value to the product. In some cases
customers do not recognise their demand, in such cases it is the sales person must identify
this demand. (Jober 2015)
Explore what are the main reasons of losing money in property market and how to make
money on renting houses.
Recent history in the housing market has shown that many people lost their money, especially
those who invested in property between 2001 to 2007. At the beginning of this period, the
house market was booming, and [than fool –OR- many people rushed to buy, some anxious
not to be priced-out, others fooled, in anticipation that the boom would not end]. This was a
time of low bank interest rates and high mortgage availability, which allowed and encouraged
people to buy houses they could not afford using loans they could not manage in future. [This
was cynical and predatory lending.] House prices were growing [in the form of a bubble]
until banks reset loans, after this prices collapsed, [many buyers then faced the prospect of
both negative equity and repossession].
Is it possible to predict this type of house market collapse? The good investor understands
that there is no investment without risk. But what are the factors that can show where the
house prices will go in the future and what precautions can the house buyer use to mitigate
the risk of losing the money. (Green, 2018)
1.1 Identify a specific researchable topic area:
Explore the ways of making profit on selling and letting residential property in
London. Analyse ways of increasing value of the house for profitable sell. Analyse evaluate
and compare effect of repairs and renovation on house price. To give a reason and evidence
why real estate is a good investment.
1.2 Establish the importance of the problem
It has become very popular to invest in property. This demands exploration of the
main reasons for losing money in property market and how to make money on renting
houses. Recent events in the housing market showed that many people lost their money,
especially those who invest in property between 2001 to 2007. At the start of this period,
the house market was booming and then fool. During that time low bank interest rate and
mortgage availability allow people to buy houses they could not afford using loans which
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they could not manage in future. House prices were growing until banks reset loans, after this
prises collapsed. Is it was possible to predict this house market collapse? The good investors
understand the is no investment without risk. But what are the factors that can show where
the house prices will go in the future and what precautions can take house buyer to mitigate
risk of losing their money. (Green, 2018)
1.3 Aim of the research project
Evaluate the ways in which some organisations or individuals do things differently. Identify
critical success factors selling property affect the profit decision. Finally give prediction for
future house price changes.
1.4 Background of research
In this study, the south London property market will be studied. As it is known that
London is a higher attractive place where tourists are present all the time and thus it is
considerable known to people that the house prices there are considerable higher than others
places in UK. There, the house prices are increasing faster than the country as a whole. From
a longer time, it is seen that the housing market of London is seeing ups and downs, with
volatile house prices in London tending to amplify changes in national house prices (Minton,
2017). London has also seen quite a few episodes of real house price deflation since the ONS
data series began in 1969. In this report, it will be seen that there are various kinds of factors
that affect the buying and selling of the residential properties in London or in any other
country/city. In south London, the prices are high already and with more developments there
the prices are soaring high. From the previous reports of GLA housing and Land, it is
revealed that the housing pricing in London is declining on continuous basis and the buyers
interest in buying the houses are increasing gradually. The situation itself is not that good for
people who are planning to sell their houses in London but if someone is planning to
purchase the houses then they can do as at this time, they will get the house comparatively at
a less price. So, the decisions need to be taken by doing proper research (House prices in
South London, 2020).
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2. RESEARCH OBJECTIVES
The main objective for this research is to explore the ways, benefits and process of how to
make a money in house filled market. This will be achieved by giving answer on research
questions.
2.1 Research Questions
Which critical success factors of selling and renting property affects the profit
decisions in house market.
Sub questions:
o Demographic
o Interest rate
o Economy trend
o Government policies
· Investigate how critical success factors selling property affects the prediction for future
house price changes.
Sub questions:
1. BREXIT effect
2. Labour force in UK
3. Wage rate
4. Spring boom
5. The best month to buy and sell
6. Green signal to HS2 and it effects on London or Bham prices
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3. LITERATURE REVIEW
How to maximise profit? Making a profit from the buying, selling or letting process consists
of four main steps: finding and buying property for a good price, preferably below market
value; making the right improvements and changes for adding value and attractiveness for
potential customers or loggers; control finance by taking in account tax payments and other
side costs; find a customer and take highest possible price. (Holmes, 2008)
The obvious reason why people want to be a landlord is financial profit which letting
property can provide. The advantage of renting property is that the return is generally more
stable prices than in market property prices. With regular income from letting property a
landlord also can benefit from the rise in property value. Property is a form of investment
offers the landlord more control over their investment, than people invested in shares, stocks
and bonds, and can further increase income by right house improvement and management.
(Faulkner, 2013)
What are the critical success factors for profitable buying and selling and renting property?
How to distinguish a potentially good offer for buying a house? To understand what price to
pay for initial offer, the house buyer must define how much they are ready to pay for the
property, with regard to its market value and potential. Market value is a price which other
buyers are willing to pay for the same product. For understanding what is a good offer, it is
required to analyse similar sales, property conditions and conditions of the market. (Boss Jr,
2018)
Investigate which houses are most popular in South London area.
How to make house attractive for potential buyers? The main factor which usually attracts
potential buyers is the price. If the price for the property compares well to other similar,
houses, [are lover –OR- within the range or lower], the property will be sold faster. When the
right decision about the price has been made, the next step is to make house more
presentable for potential buyers.
For making property more presentable it is sensible not to spend a big amount of money for
it, because it may not then give the desired return and invested money will be lost.
(Fastmove, 2016) Making small adjustments and improvements which make house more
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welcoming and inviting will give a good impression and can influence on the customer
decision. Little things like broken tile in kitchen or bathroom, scratches and cracks need to be
fixed. The best way to determine what to improve is to look at every room from the buyer’s
point of view, to make a list of what has to be done to make a house more presentable. Many
people have a strong opinion about maintaining clean and tidy house. Clean and tidy houses
are more appealing for the customer. Whereas clutter in a house can make a room appear
small and dirty which makes it unappealing to buyers. Things like painting and lighting must
be taken into attention for improvement in order to add attractiveness to the house. (Gassett,
2016)
The marketing, selling and renovation of property can help to achieve desired profit. Smart
marketing can bring profit from very small additional improvements. On the contrary, poor
marketing can delay sale and bring price of the property down, to reduce the desired profit.
Successful investors and developers put a lot of effort into marketing their property. The key
factors in selling property are: price, timing, promotion, presentation, salesmanship.
Identifying the right price for a renovated property is always difficult. Asking a very high
price may discourage potential buyers; a low price can make buyers think there is something
wrong with the property. The time of the year plays a significant role in selling renovated
houses. The best period for house sales is in Spring and Autumn. Usually the longer the
house stays unsold, suspicions can grow as for the reason, in potential buyers and it becomes
more difficult to sell the house. For this reason it is advisable to remove the property from
sale for a few weeks and then put it back to market.
Promotion provides information about property for as many buyers as possible and can create
maximum interest for selling property. This may include advertising on websites, newspapers
or by putting a sign outside the property. Presentation can make an influence on a buyers
decision, complementary with instinct and common sense. The factors that influence instincts
are very sophisticated. Small details can be significant, like a pleasant smell of nice flowers
or fresh coffee; décor can act positively on a buyer’s decision. The sales ability of a good
estate agent can include a consultation about the sales potential, which improvements will
help to sell the house, also help to value it at the right price, to manage the viewings. It is
important to choose a credible estate agent which specialises on the type of property the
vendor or developer wants to sell. (Holmes, 2008)
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Investigate What are the most effective ways to find customers.
Explore what are the main reasons for house price changes. Factors that influence house
market will help to make prediction for house prices in future. There are nine main factors
influencing on house market:
State of the economy. In a growing economy, peoples incomes may generally be expected to
rise, and demands for housing to increase, resulting in rising prices. Equally, if the economy
declines people lose their jobs, income decreases, and they may not afford to pay mortgages,
resulting in house prices falling.
Employment. When the rate of employment is high, house prices will go up. But if the
employment falls, or even under the threat losing their jobs, people will start to spend less,
the house market will go down.
Interest rates. If the banks increase interest rates monthly payments on mortgages will go up
and make for some people, the option of renting a house will be more attractive than buying.
This factor will affect house prices.
Mortgage availability. If people can obtain a mortgage on less onerous terms, they will have
more potential for buying house this will affect house prices.
Supply. Excessive supply will reduce house prices. (Pettinger, 2017) The shortage of
money can be a reason people lose their houses, when they cannot pay they mortgages. It is a
good practise to keep a six month reserve for every owed property. Most of the people make
mistakes in the house market by following others and by doing what other say instead of
make their own decisions based on financial principles. Generally it was when everyone is
buying it good time to sell and when everyone selling is a good time to find the best deals.
Avery important factor in choosing property is location. Experienced dealers look for and
buy undervalued properties in good areas which can produce a positive cash flow from
renting, to then add value by making repair or changes. If the decision is to withdraw the
house, or defer to wait for better time for sale, they can benefit from positive cash flow and at
the opportune time, they may sell the house with profit. It is good practice which can help
investors to save money is to learn from the other people mistakes. (Greene, 2018)
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1. Planning property investments
It is widely known that London is always covered with a flock of tourists because of
its beauty and attractive destinations and this is one of the reasons that London is considered
the place to invest in property. There are so many workers come from overseas and also the
investors that come to London frequently for taking advantage of the opportunities available
in the city (Badarinza and Ramadorai, 2018). Therefore, London is always on the top priority
of the people for investing their money into properties. But the main thing is that the investor
will have to check their affordability and demand before doing property planning in South
London. To plan the property investment, the person must select the areas after getting its
complete information because if the decision is not taken properly then the investment might
suffer due to low rental yields, dwelling demand, and slow property price growth as well. But
for the people who are making plans for investing in London property are facing issues
related to the continuous high prices of the London properties and also with the decreasing
rental price growth, the rental yields have also disappointed the investors (Wind, B. and et.
al., 2019).
The case is that if an investor is buying the property for giving it on a rental basis further then
the investor will get less return on investment as compared to the returns they would have got
if they had invested into some other place in the UK. The reports also say that people are now
making plans to leave London to take advantage of the housing market, universities and
business opportunities on the Northside of the UK.
2. Identifying property potential
Before investing in the property at any place, the investor must check whether the
property has some potential or not. There are many ways with which the investor can check
the potential of the property (Identifying the potential in properties, 2020). These are as
follows:
1. To check the foundations – It is necessary to check that whether there are any large
cracks in the walls or ceilings, the walls can be painted properly, the floors are
flourished and the bathrooms are ok or not.
2. Check the height - This is also one of the main aspects that people look at while
making a home or an investment. People see that whether the view is coming great or
not. People often don’t know that the houses which are set in low areas can also enjoy
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a great view. so buyers often check the height at which the house is situated to ensure
their pleasant view. If the view is coming great then people buy the product at a
higher price as well but if the view is not that good then selling that house at a higher
rate is generally not possible.
3. Public transportation – It is very necessary to check that what are the convenient
transport facilities available near the location because if there will be no busses or
auto stands near the locality then it will be difficult for the person to adjust in that
locality. As south London is a posh area so the transportation, recreational facilities
will be good there but for buying a property in other areas, public transportation is a
must check (High potential investment properties, 2020).
3. Landlords Role in property investment
A landlord can be defined as an individual or a business or an entity who generally
owns a real estate property. It is up to them that what they do with it i.e. either rent it or lease
it or sell it. The Landlords play a very crucial role while doing property investment because if
there is a landlord it means that the property is being sold again (Watt and Minton, 2016).
The landlords create problems in selling the property to the buyer by taking out various kinds
of issues like the amount is not acceptable etc. So, it is very necessary for the buyer that they
talk to the landlord before thinking of purchasing thr property as later on issues can be
created by them.
4. Selling & buying property
Buying and selling a property in London or any other place is not an easy task. While
buying a house, lots of things needs to be checked like the amenities are good or not, the
location, the recreation facilities, amount etc. The buyers need to check all these things before
making a decision of buying a property. In London, the prices of properties are going down
so people have started thinking that whether they should buy the property or not. In case of
selling also, lots of factors are required to check like the buyer is good or not, the amount
they are paying is ok or not tec. There are much more factors but all these are checked and
then only a house is sold. So, is it London or any other place, buying and selling of a property
require time and patience (Pennell, 2018).
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5. Investing in buy to let passive income
Passive income can be defined as the term which is used for the money which is
earned from the source which does not involve much effort from the person. There are many
times that people invest in the real estate properties just to give it on rentals so that passive
income can get started (Atkinson, 2019). Therefore, people are investing their money in
properties as they think that it will be double benefit i.e. they will have a house and the
passive income will come as well. so, investing in real estate to earn passive income is not a
bad idea as it eventually provides profits to the investors as a whole.
6. Selling& buying through an estate agent
There are many times that the house are bought and sold with the help of a real estate
agent. They are the ones who gives leads to the sellers and the buyers for selling and buying
their home. They take a commission for doing this work which is also called as brokerage.
These agents keep complete information about each and every property and when a buyer
comes to them they help them in selecting the properties as per their budget and interest. For
buying a house in South London, these kinds of agents can be of great help.
7. Selling & buying through Auction
Auction can be defined as an event where the houses are sold to the highest bidder at
a public place. The investor needs to be very clear before buying a house through auction
because here the authorities does not allow the home to get inspected before selling and they
often do not provide complete information about the property as well. it is always suggested
by real estate agents that buying a property through auction is a bigger risk than buying a
property through a usual process (Best and Kleven, 2018).
8. Selling & buying privately
If a seller is selling the house to a buyer in a private deal then here the risk gets
bigger. It is because less people are involved in this process and in case of any issues further
then the seller cannot complaint to anyone. But this is a very way as well because people like
to sell their homes or properties privately as they think that the broker might charge high fees
so to avoid such things, they decide to sell the house in this manner. The same thing happens
with the buyer as well because they also think that the agent charges can be avoided if they
find a house by their own (Right time to buy property in LONDON, 2020).
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