What is a Primary, Secondary or
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Primary, secondary and tertiary markets
Primary, secondary and tertiary properties are property terms used to describe the quality of a property's location and as we all know with property three things are important, location, location and location.
Here are some examples of quality of a location:
1. The primary location would be a shop in a high street or the main part of a shopping centre.
2. A secondary shop would be one within walking distance of the high street.
3. A tertiary area would be one which is on the outskirts of towns.
There are some interesting other markets, such as a local shopping precinct, which could be considered as primary, secondary or tertiary depending on how active the market is and how much money is being spent there.
Interestingly, what are primary, secondary and tertiary areas for shops may not necessarily be for other key market sectors. Let us have a look at offices.
What makes an office primary, secondary or tertiary from a location point of view?
Offices look at more general things, such as is the area a good area for the type of people they need to work within the offices and are the skills available? For example, Central London for offices with regards to banking, or Leeds, Birmingham and for computer skilled people Reading, Swindon or Milton Keynes but there are more location specific things that make an office location primary, i.e. being close to rail links so that your staff can come arrive in the morning on time, the area having a good road system, again so the staff can come in and having basic things such as good data / communication services will make the location into a primary location.
In our experience also the quality of the office; whether it has the latest specifications for offices is also a major factor in it being a primary office location.
Secondary and tertiary office markets tend to be the older style office which a non-corporate company would not use as the office says a lot about them as a company. The secondary market tends to be smaller companies or companies which already have a good head quarters trophy office, and both the primary and secondary market tend to have specific office built buildings, whereas the tertiary market tends to not only be in a less desirable area it could also be converted buildings of one type or another.
It's all about borrowing
It's interesting to see how primary, secondary and tertiary property locations link to the quality of the covenant, which is the quality of the ability of the occupier to pay the rent and bills. You could argue that this in turn relates to how the major banks and building societies and lenders consider companies and their confidence in them, which in turn would be reflected in money they will invest with them or lend them
How the primary, secondary and tertiary markets affect you and me
We also see how the mortgage companies look at you and me as a prospect (that's the prospect of being a future customer). A primary customer would be able to use a primary company such as one that's on the high street in a primary location! For example: Lloyds TSB, Barclays, National Westminster and HSBC, or the ex-building societies / modern banks, such as the Halifax, Bradford & Bingley, and the Nationwide. All of these companies tend to have a strong national presence and they are looking for strong credentials from you to lend to you.
Secondary and tertiary lending
You would be surprised how many people fall into the secondary and tertiary lending criteria. They can be people:
1. That can't prove their income, such as the many self-employed people.
2. Previous difficulties with money, such as a CCJ (Count Court Judgment). These will tend to go to the tertiary lenders, many of which you won't have heard of unless you've actually been in the mortgage market and had to go for this sort of tertiary lending. It normally takes a good mortgage broker to know the market and find the ones that are best for you or for you to spend hours on the Internet.
Tertiary lending could be described as high risk and as such the tertiary companies want higher rewards. Ironically, many times these tertiary companies are subsidiaries of the primary companies such as the ones mentioned and if they don't have a tertiary company they will certainly have a secondary lending company.
The aims of these tertiary and secondary companies are to not tarnish the brand names of the main high street companies.
A secondary client or prospect is likely to be someone who is self-employed with accounts, possibly someone with a damaged credit card record. You can check these by having a look with experian.co.uk, equifax.co.uk or checkmyfile.com. We are sure if there are any others they will be on moneysavingexpert.com
So, as a secondary prospect you would deal with such companies such as IF, or to give them their full name Independent Finance, which interestingly is a subsidiary of the Halifax, which in turn is a subsidiary of HBOS plc, and as you can see there is a lot of brand protection here.
Smaller building societies
Other companies that operate in the secondary and tertiary markets could be identified as small building societies. Some of the building societies that exist at the time of writing this article are:
Bath Investment and Building Society
Beverley Building Society
Bristol & West
Buckinghamshire Building Society
Cambridge Building Society
Century Building Society
Chorley and District Building Society
Coventry Building Society
Darlington Building Society
Ecology Building Society
Harpenden Building Society
Ipswich Building Society
Leeds Building Society
Leek United Building Society
Manchester Building Society
Melton Mowbray Building Society
Monmouthshire Building Society
Newbury Building Society
Norwich & Peterborough Building Society
Nottingham Building Society
Penrith Building Society
Progressive Building Society
Skipton Building Society
Swansea Building Society
Tipton and Coseley Building Society
West Bromwich Building Society
Yorkshire Building Society
These will tend to look at more local markets and until recently we believed that they would also look at you more along the lines of the old Dad's Army Captain Mainwaring type bank manager where they looked at you specifically and weren't simply doing a number crunching and tick boxing exercise. However, we are advised that this isn't necessarily the case.
Other articles that you may be interested in:
Compare our Commercial Surveys
Information on Dilapidations
If you would like to talk to a surveyor about investing in a commercial property, or even the surveys that can be carried out on your home, please do not hesitate to contact us on free phone 0800 298 5424 for a friendly chat.
Please note we are independent surveyors and as such we give an independent view. We are not owned in any way whatsoever by banks, building societies or other mortgage lenders.
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