The Glitch In The Matrix
Some time ago we were focusing on an auction deal which came up in Harrow & Wealdstone.
It was a piece of land which had planning for a commercial premises and uppers. The next door building, which was existing, consisted of the same. It was on the market with a naff agent who would not return our calls. Consequently, we managed to contact the owner, and showed up at his door step; he was surprised but hospitable. He was not aware a third party could track him down without having connections in the MI6.
Nonetheless he entertained us. The property was on the market for £650K, they would take an offer of £625K. They weren’t budging. The building seemed solid though derelict.
The neighbouring property was in an auction, with a guide of £200K. The construction cost for a sizable new build was quoted at £350K, therefore, there was some margin there. And, you would have a new build with the energy efficiency which goes with it.
We were prepared to go up to £275K on this property at a push. However, the bidding price went all the way to £331K, which made absolutely no sense to me at all.
The only way I could rationalise this price, was for two reasons. One, perhaps someone had over paid simply to have a project in their locality. Two, perhaps someone wanted to keep their builders busy in between jobs.
However, in showing an investor and an accountant a derelict property recently, we got talking about the state of the property market and how everything seemed to be going for way more than it’s worth, especially when the properties required refurbishment. It was then he mentioned the reason for this is perhaps this is used as a good way to get rid of any cash the purchaser has lying around, as this could be used to pay builders etc. This would serve to get rid of any cash and provide a cheaper pool of builders, especially labourers.
This for me was the missing link. This resonated more as to why many refurbishments or small scale development deals were achieving more than they should have been. It often looked like a glitch in the market, but this piece of information provided the reason why. The noose on this is tightening. Soon cash will be a thing of the past. Something we all used to use. Already, many people pay with their mobile phone alone, no requirement for even a card.
Everything which is online is trackable and traceable. Therefore, there is a move for society world over to be heading into this direction.
This is probably one of the few remaining chinks in the matrix which can be used currently. If this theory is correct, when we are finally in a cashless society these sort of chinks will no longer show up in the market. It will be interesting to see, when the day finally arrives.