Sometimes the Best Advice I Give Clients Is: Don’t Sell.
For more than twenty years I’ve advised estates, family holdings and portfolio clients across London, on assets from £5 million upwards. The most valuable thing I’ve learned is simple: the right advice and the advice clients want to hear are rarely the same.
Right now, many of our clients are under pressure from regulation, tax uncertainty and rising costs to “rationalise” their holdings. Some should. Many shouldn’t. Knowing the difference is where a good adviser earns their fee.
The overvaluation trap
If I tell a client a building or portfolio is worth £5 million and three other agents have told them £6 million, I won’t argue. I’ll tell them I don’t think that’s going to happen. The old trick is well known. Quote the client the number they want to hear, secure the instruction on a long agreement, then reduce the price week after week until it sells, usually for less than an honest price would have achieved at the start. At this level, that isn’t a small mistake. A misjudged guide price can cost a client hundreds of thousands of pounds, months of time, and leave an asset looking stale in a market where reputation matters.
A price either reflects the market or it doesn’t. In today’s Central London market a pound is worth a pound. List it at £1.05 and nobody buys it. List it at a pound and a penny and nobody buys it. It’s a pound.
Vacant stock is expensive stock
When property sits empty waiting for a buyer, the costs don’t stop. There’s finance, double council tax on every empty unit, and service charges, which in London are currently serious money.
If a building is truly worth £5 million but it costs £250,000 to hold while it finds a buyer, the client hasn’t achieved £5 million. They’ve achieved £4.75 million. Across a wider portfolio, the “higher” valuation quickly becomes the most expensive decision on the balance sheet.
These are long-term assets, not transactions
Many of the estates and portfolios we look after have been built over decades. For some clients they’re a family legacy passing between generations. For others they’re the foundation of long-term wealth. Either way, a disposal decision shapes the next twenty years, not the next twelve months.
That’s why I won’t tell a client they’ll achieve a figure the market isn’t going to give. That conversation is hard to have today. It’s far harder six months later, after the stock has been sitting and the price has been chipped away.
Advice has to go beyond bricks and mortar
Before most people are at their desks, I’ve read the market updates and the political news. To advise clients properly I need to understand what’s likely in a Budget, what changes to capital gains tax might mean for pricing, and what each of the main parties intends for landlords and investors.
When holders with significant capital gains exposure rush to sell ahead of tax changes, they push prices down for everyone else. If a client doesn’t need to sell into that, they should know about it before they instruct anyone.
Sometimes the best advice is: don’t sell
For many portfolio clients, holding is the stronger strategy. Rental demand in London remains strong and rents continue to rise. The regulation that worries so many investors is our day job: we manage compliance, legislation and the detail so our clients don’t have to. It carries an administrative cost, but the income tends to more than justify it.
The caveat is that holding is a five-year view, not a twelve-month one. I’d rather tell a client that honestly than take an instruction that doesn’t serve them.
We’d rather shake hands and walk away
We’re selective about what we take on. We only market property with a real chance of selling. If expectations and reality are too far apart, we’ll politely wish the client the best of luck and let someone else try. Our time matters, and so does theirs.
What this means for clients
Don’t appoint the agent with the highest number. Appoint the one who can explain how they reached it, who understands the wider economic and political picture, and who will tell you when selling isn’t the right answer at all.
A good adviser should leave you better informed, whether or not you instruct them.
If you’re reviewing an estate or portfolio and weighing up whether to sell, hold or restructure, I’m always happy to have a confidential, honest conversation. No pressure, just the facts.
Rob Hill, Founder
Greater London Properties
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