Episode 58: Navigating the Property Market, Charlie Ellingworth: Property Vision
Episode Transcript
00:01.33
Caroline Garnham
Hello, my name is Caroline Garnham, founder and CEO of Caroline's Club. I set up Caroline's Club because professional advisors need to win good quality work to keep their jobs.
00:13.91
Caroline Garnham
From my experience as a partner at city law firm, Simmons and Simmons, and my background in psychology, I developed a client-centric methodology where networking works for cross-referral, networking, and building trust with clients.
00:29.23
Caroline Garnham
I'm joined today by Charlie Ellingworth, co-founder of Property Vision, the first and leading buying agent for this episode, episode 58. fifty eight Charlie, you left university to take up engineering and become a ship broker.
00:46.89
Caroline Garnham
Describe to me your journey from engineering to property vision and why did you call your business Property Vision? Charlie?
00:54.91
Charlie
Hi, Caroline. Thanks for having me on. ah i wasn't really join I didn't really join an engineering firm. I joined Jardim Matheson, who were a big so conglomerate out in in in in the Far East.
01:07.14
Charlie
And um my first sort of a... ah fresh out of university, I was put in the engineering department, which I was only there for a year. And then i was I went to the shipping department, which actually was a lot more fun and actually fascinating because we we owned about 30 ships and it was it was very interesting.
01:24.77
Charlie
um So I was in Hong Kong doing that for about four years and then was posted back to London to do a year and on secondment to a ship broking operation in the city, which was actually also part of Jardines.
01:37.21
Charlie
um And when I was there, um and at the time, Jardines was going through quite a hard time. And I think I had to make the decision, did I want to go and live in Hong Kong for the rest of my life or did I want to do something else? And I met ah Willie Gething, who has since become a great friend, but at the time we hardly knew each other, but we were both very keen to start our own business.
01:57.87
Charlie
And that was the sort of genesis of ah property vision. um And the great idea we came up with was to help buyers, well, help the the selling of property from a buyer's point of view by using videos, which sounds like the white heat of technology, but actually, as we...
02:13.60
Caroline Garnham
Thank you.
02:18.19
Charlie
did some research on it, we discovered that this really wasn't the right way forward. And there hence, this is the name property vision. That's where it came from. um The problem was a real number of things, really.
02:29.27
Charlie
the The most unexpected one was that ah people didn't want to have videos of their homes, even though they're happy have photographs. There was something about videos which people found too intrusive.
02:42.12
Charlie
The second thing was you know who buys and who who buys who buys and who benefits. So if somebody's paying for the video, then they want to be able to see all all the problems. But if it's an estate agent and doing it, they don't want to show the problems at all.
02:56.38
Charlie
ah And you know so basically, as we were doing researching this, what we really found out was that what buyers wanted and what would help the process was ah advice on their behalf, looking at property from their point of view,
03:10.60
Charlie
finding, weeding out the bad stuff, getting hold of the good stuff early, because it's always difficult, particularly in the country, and then negotiating it for the best price. um This was all ah fine, but and it was there wasn't existing buying business at the time, but it was very much done as a sort of slightly as a thing by the estate agents when they were active, they couldn't get a fee, they would they would simply get a buying fee.
03:36.57
Charlie
And the problem was that they all said you can only charge 1%. Now, ah what we realised very soon was that 1% wasn't really the basis of a business. And so we started, charged more, we we went up to one and a half, then two, then two and a half, then two and three quarters.
03:51.32
Charlie
And what we found along the way was the the irony was that the more we charged, the better clients we got and the more clients we got. And I think this may be something to do with selling any sort of quality brand that, you know, if you if you charge too little, you're not perceived as giving a particularly good good service.
04:10.20
Charlie
And think that was probably the only clever thing we ever really did was to do that. And what we did was we set off my partner, Willie Gething and I, to build a business. We weren't trying to do a lifestyle business because it's it's an easy business, property buying, because there's no barriers to entry. So lots of people can...
04:28.49
Charlie
and set up shop with very little yeah background ah and um call themselves buying agents. But we always said we want to build a business which is scalable and which we can eventually sell.
04:41.62
Caroline Garnham
Thank you, Charlie. Just one thing to pick up on. um what What makes a property bad? What sort of things?
04:49.25
Charlie
Well, I mean, it's I think probably if you score them from 10 downwards, um ah you know, a 10, think, i think I've seen one or two in and the whole time I've been in the business.
05:01.72
Charlie
And that that's something, you know, which is in a lovely location, lovely land all around it, beautiful house. I mean, all the ticks in the right boxes. And then one would be, you know, a falling down ruin on the edge of a motorway but with a railway line on the other side and probably a pig farm on the other side as well.
05:18.88
Charlie
But, you know, good houses, you're probably any good house is probably ah six to seven upwards. And as I say, know, You have to compromise somewhere. There's always compromises, but it's just working out what compromises a client is prepared to do.
05:33.94
Charlie
And that's always difficult. You know, people start off with this idealized thing. They're going to find the perfect you know Georgian rectory in the most lovely situation, but that they don't really exist. So what you've got to get to is the next best thing and decide where on that scale you're you're happy to to settle when price comes into that.
05:50.24
Caroline Garnham
Thank you. Presumably, you didn't abandon the business when you realised that taking videos of people's homes was not such a good idea. um sentiment towards videos now changed?
06:03.94
Caroline Garnham
um And how did you evolve from a misplaced idea to becoming the first buying agents you've already touched on that but maybe you could elaborate understand some people thought becoming a buying agent was not such a good idea although you touched upon the the the increase of the of of of the the the interest the the commission um and and better buyers which is an extraordinary insight uh there are now 200 buying agents in london alone you presumably prove your critics wrong
06:34.18
Charlie
Well, I hope so. um you know, to some extent, we've probably created a price umbrella under which other people have sheltered. um But going back to the ah video business, it's interesting, it still hasn't really taken off. And I think i think fundamentally, the problem is that property generally is static.
06:53.92
Charlie
And video is obviously moving and we're very used now to to having um to seeing film shots in very short clips. And a long panning shot is unbelievably boring.
07:06.69
Charlie
So I think the the bottom line is that I don't think the medium really fits the fits property. So it's never really taken off. um So we were much too early and much, much too wrong.
07:19.57
Charlie
Yeah. yeah
07:21.62
Caroline Garnham
There are now 200 agents. Tell me bit about that. buying agent um tell me a bit about that
07:26.88
Charlie
Well, I think there's there's probably quite a lot more than that around the place. the The categories they fall into are estate agents who have buying departments and night frags and savils have perfectly good buying departments.
07:42.54
Charlie
um ah And then there's some independents, which are yeah companies of more than yeah more than like ah one or two people, um of which we are very but by a long way, I think, the biggest.
07:56.37
Charlie
um And then there are lots of what I call kitchen table operations, you know people who operate from home, charge a fee and and have their bank of clients. And there's nothing wrong with any of all these any of these things.
08:09.07
Charlie
It's just yeah we've chosen to be at the top end of it.
08:13.31
Caroline Garnham
yeah um in Yeah. 2001, you sold Property Vision to HSBC, but then a partnership with which you were associated, but not a partner, repurchased it in 2012.
08:27.19
Caroline Garnham
Tell me a bit about this episode in the journey of Property Vision.
08:31.31
Charlie
Yeah, well, about 2001, we were about 16, 17 years old. And we were, you know, we were top of our game at that particular point. And at that time, ah ah HSBC Private Bank, it it was the private bank that bought us in London, was a very involved in, sounds rather unusual, but their prime thing was lending money to rich people.
08:56.16
Charlie
And that fell very much into the category of of of what we we were doing. And it was you know it was it was it worked very well, i think. you know we we We referred a lot of business to each other. It worked very well. We were separately branded.
09:10.13
Charlie
in a separate building. And, ah you know, I think we were a service which which was very good for their clients. And we were able to help in many ways with with their with their business.
09:20.89
Charlie
I think that, you know, where it started to go wrong was that inevitably, I think, you know, big businesses and HSBC by any standards is a big business. They just can't accommodate really small businesses. They just don't work together. I think there's nothing, they were all very decent people and it was a happy business.
09:39.10
Charlie
ah thing generally but I think after a while they start to to kill the thing they love. um I mean for instance you know IT systems which are set up for a huge bank are not really suitable for a small business like ours and in 2012 there was a sort of rationalisation and didn't fit in and was the the bank had changed much more to an asset gathering business than a lending business And ah so, you know, we we, with very good goodwill, we bought up we bought bought the business back.
10:08.30
Charlie
But what we decided at that point is the business was better set up as a partnership. And Willie Gething and I both decided we didn't want to continue and be partners, ah but still very much, you know,
10:21.21
Charlie
sort of ah very much supporters of the business and still keep it very much in touch and I'm still involved in a rather tangential way but it's it's going going very well and but as a partnership
10:32.50
Caroline Garnham
And are the people, the employees of of Property Vision part of the partners or did you bring other people in?
10:39.40
Charlie
no they're all they're all in the business already. And a lot of, most of those partners I've known for 25 years. I mean, so, you know, they they're their're friends and, you know, we've known known them no we've known them all on our working lives. So it's it's a very it's a very nice, it's and it's still got the ethos that I think, you know, that we set up um both sort of as an internal partnership And as ah as a business and in pursuing pursuing excellence, now I know that sounds rather corny because every business does say that, but I think that's always been right at the core of what we of what we do as a business.
11:14.48
Caroline Garnham
And not being a partner, you still still feel very much involved, even though you may not be involved with all the day-to-day decisions.
11:21.84
Charlie
Absolutely. And, you know, they I hope that every now and again, you know, I'm asked my opinion on something and I can say something sensible and I write stuff for them and, you know, generally keep in touch.
11:33.83
Charlie
And I'm sort of very fond of everybody there. So it's it's it's um it's a nice and's relationship.
11:37.10
Caroline Garnham
It's a win-win. Yeah. Talking about writing articles, I noticed an article written by Max King quoted you as saying that attitudes towards buying homes in the UK has changed.
11:51.83
Caroline Garnham
Indeed, we've seen a massive increase in stamp duty land tax. I think this is an effort by the government in order to reduce the the the value of homes in the UK.
12:02.42
Caroline Garnham
ah You say people are now buying homes to live in and not as an investment and more homes are being bought using a buying agent. They buy less frequently and stay longer. Tell me a little bit about this trend and is it bad for the youth coming into the onto the property ladder?
12:21.03
Charlie
Yeah, I mean, i you know i think I personally think stamp duty is the sort of, you know, if you if you want to if you want to have a tax that's going to stop growth, then stamp duty is one of them because basically it's a tax on mobility.
12:33.50
Charlie
ah
12:33.57
Caroline Garnham
you
12:34.37
Charlie
But what it means is mean you know, after 2014, when george's George Osborne brought in his, but i I think you fairly say punitive, uh, STLT, uh, it effectively puts a kibosh on lot of things to do with property. you know, being a property developer now is extremely difficult. You know, if if you're, if you've got a headwind of 15% before you even start, then that's makes most deals pretty, pretty thin.
13:02.04
Charlie
and it's probably no accident there are 70 70 or so big developments in london now that are in trouble simply because they've because of those thin margins and because price costs have gone up over the last four or five years um and i think that as a consequence i think people are moving less ah Because you if if every time you pass go, it costs you 15% plus, that's that's something that people don't do unless they have to.
13:26.32
Charlie
And a lot of the people, for instance, we used to have a lot of clients who would come in from abroad, they buy a house to live here for four or five years, and then sell it and move on. It's just not worth it. i mean, by the time you've actually, you could rent something for the same price as as as that stamp duty.
13:42.88
Charlie
So it's it just doesn't make much sense. So I think it's what it's done is it's it stopped turnover in the market generally and made it much more difficult for people to move. And as a consequence, property the London property market, for instance, at certainly at the most of the normal end, hasn't gone anywhere in the last 10 years.
14:01.90
Charlie
but That's not what most people think, but it actually hasn't gone anywhere. fact, it's gone down slightly.
14:06.07
Caroline Garnham
It is ironic that the government says that it wants to create more homes and yet makes it incredibly difficult in order to to achieve that. um And I'm sure and lots more people are are renting rather than buying, as as as you said.
14:21.93
Charlie
Well, that's two-stage process there. One is obviously that the because there's let they're also attacking the rental market on the way with lots more onerous things for landlords. So you've got less rental properties, ah much more difficult for for people to get mortgages. You've got to have a deposit for the mortgage and then you've got to pay your stamp duty.
14:39.06
Charlie
So you're you're adding to that that burden of anybody trying to to get going. and you know i I don't hold my breath for any great changes, but it doesn't seem to be working at the moment as far as I'm concerned.
14:51.15
Caroline Garnham
It is extraordinary. I mean, certainly I bought my first home with an idea that it was capital gains tax free and a very good good investment to make. But i don't I don't see the youth of our day having the same the same incentive.
15:03.61
Charlie
no
15:05.48
Caroline Garnham
And the other thing, of course, is is that, um you know, when you move home, you then engage architects, decorators, plumbers, etc. So it's having a knock on effect on our entire economy.
15:20.17
Charlie
Yeah, yeah, I completely agree. and And yet, you know, the council tax thing dribbles on, you know, they with just some ludicrously small council taxes in some areas and huge ones in others.
15:32.10
Charlie
And there's no it seems very unjoined up, put it that way.
15:36.41
Caroline Garnham
Can you see any light at the end of the tunnel? yeah
15:39.99
Charlie
yeah they they just They just, you know, everyone lobbies the Treasury and that sort thing.
15:40.13
Caroline Garnham
Well,
15:45.70
Charlie
But, you know, there's always something better to do. And time duty brings them a lot of money. So I think... Yeah. i think
15:51.68
Caroline Garnham
it's it's very difficult to to avoid. um Having been a tax lawyer, I know it's difficult to avoid because it's it's it's collected on the transaction, um but it is really ah driving
16:00.92
Charlie
yeah
16:03.85
Caroline Garnham
ah i people out of business, as as you quite rightly said, with the development. But let's not get into the sideshow of politics.
16:12.44
Charlie
Thank you.
16:12.63
Caroline Garnham
Let's move on. um In 2009, you became a director and trustee of the Cadogan estate. And when you're not acting responsibly for a large chunk of Chelsea and its other property investments,
16:25.74
Caroline Garnham
You paraglide over mountain ranges, which I think is terribly dangerous, pilot aeroplanes from places such as Norway to the southmost point of Libya, and sail across the Atlantic.
16:38.46
Caroline Garnham
um Tell me about your life and and and these hobbies, which seem very dangerous to me.
16:44.21
Charlie
Well, um do you want to talk about the that or or about the Cadogan estate?
16:48.27
Caroline Garnham
Start talking about the Cadogan State, and then we'll move into your hobbies.
16:51.64
Charlie
Yeah. Cadogan is, as most people know, they they own a big chunk of Chelsea and they it's been It's been a really interesting journey because it started before I got there, from being a residential, long freehold long leasehold, freehold estate, almost entirely residential, to, in the last 30 years, to now a mainly commercial estate, of probably two-thirds commercial, ah with with us owning really most of the shops from Harvey Nichols down to Sloane Square, around Sloane Square, Duke of Yorks, and quite a lot of the King's Road.
17:27.93
Caroline Garnham
Thank you.
17:28.02
Charlie
um And, you know, very much based on placemaking. We've just spent a lot of money redoing the whole of Sloan Street and that sort thing. And really making Chelsea into the place where people want to come and live and work.
17:40.57
Charlie
um And I think the sort of results so speak for themselves. And I'm certainly very proud to be. to be part of it it's it's been you know very dynamic and and driven as an estate and um i think it's um a real example of what urban generation i wouldn't say regeneration because always a nice area chelsea but what you can do with an existing area to make it better and better and better for people to live in so i'm sort of i find that absolutely fascinating and i'm very lucky to have that job it's a really interesting
18:07.83
Caroline Garnham
and and Before you go into your hobbies, can you tell me a little bit about the trends in in the retail sector, because they've been hard hit by all sorts of taxes and competition from online, etc.
18:21.11
Caroline Garnham
um What can you see the trend there?
18:24.09
Charlie
Well, I think that's without doubt. In retail in general, the you know the lot of it's gone online. but I think that's backing up now, I think, a bit. i think there's i think people are realizing the limits of it. ah But you know if you're a major retailer like Next, you have a massive online business as well, and they all work together.
18:41.26
Charlie
As far as we're concerned, yeah we're very much at the luxury end of the market, and particularly at the north end of Sloan Street, where you have all the big international brands, you the the all the the huge ones. so um And those seem to be still very, it's still, we have, not queues, but we have always nearly always two or three people who want each each of each shop as it comes up.
19:05.61
Charlie
And that seems to be relatively unmoved by some of the other trends in in in in the retail business. um But I think that really comes down to is creating that environment where people won't want to come and live and shop so I think you know you see other areas in London where you've got just you know badly coordinated shops where you just you just turn I think Kensington High Street is probably quite a good example where it's not It's not owned by one landlord.
19:30.79
Caroline Garnham
It's
19:32.42
Charlie
There's lots of different landlords down there. And you have a pretty mixed bag of retail. think if you compare that with, say, Maribyrn High Street, and but howard walton or Chelsea, or or yeah some of the stuff on on the Grosvenor Estate or around Mount Street and that sort thing, I think you can see how curating...
19:51.17
Charlie
that's what it is. It's like a big game of Monopoly. You're moving stuff around to get the right combination of things. I think that's that's that's successful, and I think it's really working. And I think when you see some of the big new developments, like ah Argent up at King's Cross or or the Battersea Power Station, you know they're they're they're seeing this thing as the whole, not as a series of individual shots bunched together.
20:12.27
Caroline Garnham
And is luxury a bubble on itself, insulated from all the problems, or curation is the key?
20:19.82
Charlie
Well, I... Luxury is having ah a bit of bad time at the moment, but that's a lot of that's to do with China and a lot to do with Trump's trade wars um and also not helped by the lack of duty free shopping in here.
20:33.30
Charlie
um But it still seems to be, you know, there there are a lot of rich people around still. um I like all these things these things tend to go and so in cycles I think it's in a slightly down cycle at the moment but I'd say it's certainly nothing near a recession it's still pretty pretty pretty robust mean I fly plane
20:51.82
Caroline Garnham
And tell me about your dangerous hobbies, which seem to be, I think your wife must have nerves of steel.
20:59.47
Charlie
and daily so i mean i fly a plane and but i've I've done that for about years and we like doing some trips together we go i say we did we've been from the north north north cape which is the furthest north in norway and we've uh been all way down to the bottom of libya in in in my plane it's a little two-seater um and then i do quite little paragliding which know sounds like um like a lunatic opera occupation but it really isn't and you can do it very quite safely mean it's not obviously it's flying it's risky but um
21:31.44
Charlie
we we only, we only, nobody gets out of here alive. um yeah i'm i'm I'm getting nearer 70 than 60.
21:36.14
Caroline Garnham
But it's a question of when and from what.
21:42.12
Charlie
So I suppose that's, ah that that means, you my three score years and 10, I'm on borrow of borrowed time. um And then sailing, just, you know, we sailed the Atlantic a few years ago and and it's just, you know, fantastic trip. And I think, you know, you just want to live life.
21:57.29
Charlie
I don't want to go to die and and not have done the things I want to do.
22:01.02
Caroline Garnham
So you have a bucket list of things to do still.
22:03.89
Charlie
Yeah, we i just you keep on going. It's good.
22:06.94
Caroline Garnham
Keep on trundling along. Yes, absolutely. um Well, it sounds it sounds very exciting and if not adventurous, ah but from my perspective, rather scary.
22:16.31
Charlie
stupid i
22:19.70
Caroline Garnham
um You read history at Oxford University, a subject you have remained passionate about, and you've written two books, Silent and light and silent Night, about the lives of ordinary people in World War II, which I have read and can highly recommend.
22:36.87
Caroline Garnham
ah The second, Bitter Harvest, is about women's lives during World War One. Tell me a bit about these books and why you wrote them and how you got into to to writing such books, which are very, very compelling.
22:51.02
Charlie
Well, I'd written one novel which didn't get published before. was a comic novel, obviously not funny enough. And um so I was sort of looking around for so for a subject that sort of I found interesting. and And I went to a lecture by Anthony Beaver, who almost like a sort throwaway, he was saying he was saying that he was reading, he was saying that during the end of the war, ah but during the war, the whole of Europe was turned upside down and people's lives ruined.
23:19.90
Charlie
And he said he said, just for an example, and he saw through this one away, he said, I was reading the other day about a German woman after the end of the war who was found on a train going through Paris.
23:30.62
Charlie
And when she was questioned about what she was doing, it turned out that she'd had a ah farm in Germany during the war and had had a French prisoner war belittled on her farm. And they'd had an affair.
23:43.53
Charlie
And she was on her way to find him. And Anthony Beaver said, well, he said, well, what happened when she got there? Did this man have a wife and a family? there's a novel there. And I went, yeah, that that that's a great story. That's a fantastic story.
24:00.56
Charlie
So the novel was based around that story about the ah about the the German woman in Germany ah and her affair with the Frenchman, which was very much sort of a story of but ah a coup de foudre, a very sort of passionate and very highly sexed relationship.
24:16.23
Charlie
And then the french ah Frenchman's wife living in in northern France, whose father is the petunist mayor of the town. And she has an affair with ah with a German pilot who's billeted on her farm, on their in their house.
24:28.70
Charlie
But it's a very different love affair, very sort of long, drawn-out friendship. And um it's really what happens when those two stories come together. So that but that was i was the genesis of that.
24:40.50
Caroline Garnham
Tell us a bit about that that episode, which I found really chilling, about um how the public reacted to affairs between um German officers and and, say, the French.
24:53.25
Caroline Garnham
I remember one part of the book, it says, you know, that she had a hair chopped off.
24:57.45
Charlie
Yeah, well, I mean, that that was it the after liberation.
24:57.61
Caroline Garnham
Yeah.
25:00.95
Charlie
There were a lot of scores settled and a lot of women had had affairs with German soldiers. And then it was called the Éploitation Sauvage. And they these poor women were taken away, their head shaven sort of you know spat on. And it was it was horrible. i really And and lots of lots of scores settled, lots of people killed.
25:19.92
Charlie
I mean, it was ah it's it's a bit of the bit of the war the French, I think, would rather forget. it was it was It was a horrible time.
25:26.52
Caroline Garnham
Well, you wrote it in a very chilling manner because it's it's still stayed etched in my mind. um Tell us a bit about Bitter Harvest, which I've got a copy signed by you on my desk here.
25:37.94
Caroline Garnham
i haven't had a chance to read it yet, but tell tell us a bit about Bitter Harvest.
25:42.15
Charlie
Well, the genesis of that story was that I was brought up in a sort of little village up in Leicestershire. ah Small, was Hamlet really, it's no no pub, no shop. And in that village, and and I can remember as a child, there must have been at least five Miss, Miss, there's Miss Hart, Miss Morris, Miss, all these things.
26:01.59
Charlie
And also and the next door village, we had a sort of, was a cleaner come nanny who we were but very, very fond of indeed. And she lived with her three sisters. And, ah of course, these were the generation of women who, or their their future husbands or their husbands, had all been killed in the First World War.
26:19.02
Charlie
And they had these pals battalions and so went over in something like the Somme. And, you know, whole villages of men folk were were just rubbed out. And see I just remember thinking, you know, of course, as a child, you don't think about it or you didn't realise that. But now, and knowing what it is, I just thought, you know, what what was that like? What was it like?
26:37.74
Charlie
in 1919, suddenly, if you're a woman, you're just suddenly looking at the world and everything's changed. you know All the things that yeah you were judged by, husband your husband, all those things, all gone. And how did you deal with that? And how did you how did you react? And what was it like being a man then? you know Suddenly,
26:54.03
Charlie
in that sort of environment, this sort desperate environment, it must have been very, very tricky. And it was a sort of to the bit of the history that sort of kind of overlooked. And I just thought this was a really interesting subject.
27:05.48
Charlie
So was it's sort of set in Dorset, where i don't ah near where I live now, and in um and in and the Paris Peace Conference. So there's quite a lot of historical figures that come into it, like Lloyd George and Thomas Hardy and things like that.
27:21.58
Caroline Garnham
Well, I'm very much looking forward to reading it and thank you for sending me a copy. um Charlie, thank you very much for joining me on How to Keep Your Money. Buying a house is a stressful time for most people and a buying agent is there to lend a helping hand.
27:39.00
Caroline Garnham
Caroline's Club is for professional advisors who want to network strategically to increase revenue, cut costs and save time. If you would like to do a podcast or find out more about Caroline's Club, contact me or visit our website.
27:53.76
Caroline Garnham
Charlie, thank you again for sharing the value of your expertise and your career journey with us. Thank you.
27:59.82
Charlie
Thank you. It's been fun.
