Written By Em

Em Morley

Property Industry Responds to Queen’s Speech

Published On: May 19, 2016 at 8:34 am

Tags: Housing and Planning Bill,housing law,property industry,Queen's Speech

Yesterday, the Queen announced the Government’s new laws for the year ahead at the state opening of Parliament. The property industry has responded to the legislation that will affect the housing market.

Property Industry Responds to Queen’s Speech

The Queen’s Speech revealed plans for a Neighbourhood Planning and Infrastructure Bill (England and Wales), which would introduce the following:

Pre-commencement planning conditions to be streamlined to speed up housing developments.
Local communities to have more say over neighbourhood planning.
Changes to make compulsory planning orders “clearer, fairer and faster”.
A new statutory framework for paying compensation, based on market value of land.
National Infrastructure Commission to be put on statutory footing.
Consultation on future of Land Registry with a view to privatisation.

The new proposals follow in the footsteps of the Housing and Planning Bill, which received royal assent just last week.

The Managing Director of estate agent Stirling Ackroyd, Andrew Bridges, comments on the new bill: “Planning has been pushed down the agenda. Millions of people across the country see housing as one of the most difficult day-to-day problems affecting their lives. Acknowledging the role of the planning process in delaying new homes progress is a crucial first step. But planning hasn’t been prioritised, as it should be.

“Planning delays are a real obstacle – approvals for new homes dropped 64% year-on-year in Q1 2016 in London. Ministers need to face up to the fact that this could continue if real change isn’t enacted – and quickly.”

He adds: “Tackling rigid planning practices is no easy task, and this could usher in a new commitment to deal with planning delays. Alone, these plans might not be enough to reverse the fortunes of London’s housing deficit, but some acceptance of the issues is at least a concrete starting point.”

The Head of Residential Development and Investment at Marsh & Parsons estate agent, Charles Holland, also responds: “As homeownership plummets to just 63% of the population from nearly 70% a few years ago, it’s vital that the development community is encouraged to build more property in London. Significantly increasing the supply of new homes will enable house prices to remain steady rather than becoming more out of reach for first time buyers.”

What do you think of the proposals outlined in the Queen’s Speech?

RLA calls for delay in energy efficiency targets

Published On: May 18, 2016 at 11:46 am

Author: Em Morley

Categories: Landlord News

Tags: buy-to-let landlords,energy efficiency,landlords,tenants

The Residential Landlords Association has moved to urge to Government to delay new energy efficiency targets scheduled for 2018.

Calls for the postponement come with a warning that if the changes go ahead as planned, rents will rise substantially.

Delays

In response to the Public Accounts Committee inquiry into the Green Deal and ECO scheme, the RLA believes that the timescale is too soon for many landlords.

The Green Deal, which promoted loans and grants to fund improvements, was abolished last year due to low demand. Now, a new ECO programme, where people on benefits obtain cash for improvements to their property, is being devised, with the intention of starting next year.

New energy efficiency targets require all rental properties to be brought up to a minimum energy performance certificate (EPG) rating of E or above by April 2018.

RLA calls for delay in energy efficiency targets

Warnings

Though landlords are not required to carry out energy efficiency improvements to any expense, the RLA is concerned about the possible impact on tenants.

A statement from the association said, ‘in our response to the Government, we at the RLA have warned costs incurred by landlords in carrying out improvements are likely to be passed to the tenants via rent rises.’[1]

In addition, the firm also points out that 18% of homes were built before the introduction of cavity walls in 1919.

‘Solid wall insulation is also an issue. This is necessary if we are to make older, harder to treat properties energy efficient. However we believe that it is out of reach of the vast majority of landlords financially without some form of public subsidy,’ the statement continues.[1]

‘The Government has already delayed the introduction of the register of exemptions to the legislation. We believe that the implementation of the minimum standards themselves should also be put back,’ it concludes.[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/5/trade-body-wants-lettings-energy-efficiency-deadlines-to-be-delayed

NLA Chief Executive Accuses Chancellor of Insulting Landlords

Published On: May 18, 2016 at 11:39 am

Author: Em Morley

Categories: Landlord News

Tags: chancellor,landlord taxes,mortgage interest tax relief,Stamp Duty

The Chief Executive of the National Landlords Association (NLA), Richard Lambert, has accused Chancellor George Osborne of insulting private landlords.

NLA Chief Executive Accuses Chancellor of Insulting Landlords

Speaking at the Instinctif Partners Great Housing Market Debate, Lambert addressed the Chancellor’s crackdown on the buy-to-let sector.

He claims that Osborne made a mistake by introducing a 3% Stamp Duty surcharge on buy-to-let properties and by reducing the amount of tax relied that landlords can claim on mortgage interest payments.

As of 1^st April, landlords are now charged an extra 3% in Stamp Duty on the purchase of rental properties. This guide will help you understand the tax change: https://www.justlandlords.co.uk/news/landlords-guide-stamp-duty-surcharge/

From April next year, landlords will be hit by the reduction in mortgage interest tax relief. Finance expert Paul Mahoney, of Nova Financial, has explained how this will affect your lettings business: /contrary-to-popular-belief-buy-to-let-is-not-dead-insists-finance-firm/

Lambert said: “[The Government] is now talking of discouraging amateur landlords in favour of institutions, in effect directly insulting my members.”

Lambert warns that many landlords will be unaware of the future changes to mortgage interest tax relief and will be shocked when they start receiving bills from the taxman in the near future.

Nigel Terrington, the Chief Executive of the Paragon Group, insists that the changes do not create a level playing field between landlords and homebuyers – as intended by the Government – as landlords don’t benefit from schemes such as Help to Buy and are charged Capital Gains Tax on accumulated housing wealth, unlike homeowners.

Nick Leeming, the Chairman of estate agent Jackson-Stops & Staff, believes there should be a free market for owners and tenants.

Issues such as the forthcoming EU referendum and changes to the law on gazumping were also discussed at the event.

How much does it cost to sell a property in the UK?

Published On: May 18, 2016 at 10:53 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,estate agents,homeowners,landlords,selling a property

Netanagent.com, an estate agent comparison site, has provided a new online map to give property owners a better picture of the cost of selling of house in Britain.

This new map gives homeowners in the UK quick and easy access in assessing the cost of putting a house on the market.

Costs

According to the report, Hexham, a village in the Tyne Valley, is the cheapest place to market a property in Britain. On the flip side, Kensington in London was found to be the most expensive place to sell.

In addition, the map uncovers the differences in price being paid to move home in Britain. Unsurprisingly, London made up six of the top ten fee hotspots.

The 10 most expensive areas for estate agent fees were found to be:

Kensington-1.63%
Walsall North-1.60%
Cities of London and Westminster-1.58%
Preseli Pembrokeshire-1.56%
Chelsea and Fulham-1.54%
Putney-1.5%
Hammersmith 1.5%
Banff and Buchan, Scotland-1.5%
Holborn and St Pancraas-1.5%
Ynys Mon (Anglesey), Wales-1.5% [1]

On the other hand, the 10 cheapest regions for estate agent fees were found to be:

Hexham-0.72%
Newcastle upon Tyne North-0.80%
Cannock Chase-0.82%
East Renfrewshire-0.84%
East Dumbartonshire-0.86%
Shrewsbury and Atcham-0.86%
Glasgow North-0.87%
Glasgow Central-0.87%
Glasgow South-0.88%
South Derbyshire-0.88% [1]

The average nationwide fee was found to be 1.10%.

How much does it cost to sell a property in the UK?

Selling

Alex Thorpe, netanagent.com managing director, observed: ‘No-one will be surprised to hear that London is the most expensive area to sell, but they may raise an eyebrow at two remote spots in Wales and Scotland hitting the top ten.’[1]

‘The costs are easily explained though and this is something that estate agents often struggle to get across-remote locations can mean a huge geographical area to cover, with increased overheads and a genuine lack of buyers. All of this can equate to a larger workload for an agent, justifying a slightly higher fee. Equally, in London, selling property isn’t just about listing a property on Rightmove and sitting back: we’re talking about vast sums of money, requiring agents to stay closely involved at all points and delivering the sort of high end service you expect to pay for,’ Thorpe continued.[1]

Averages

The online map covers the year between April 2015 and April 2016, drawing an average of property fee quotes from this period. This then gives a typical figure from sales of property of all different values.

In context, a property priced at the current UK average of £307,033 will cost £2,210 to sell in Hexham. However in Kensington, this will cost a fee of £5,004.

‘Whilst even the lowest fee may seem expensive to some homeowners, when selling a property the work that goes on behind the scenes is a lot more extensive than agents often talk about, especially post offer. Agents are the go-between in one of the most stressful processes we go through in life and they often become the main point of contact for a vendor, offering advice, support and hopefully peace of mind right up until completion,’ Mr Thorpe concluded

[1] http://www.propertyreporter.co.uk/property/where-is-the-cheapest-place-to-sell-a-house-in-the-uk.html

Thousands of Amateur Landlords are Putting Tenants’ Lives at Risk

Published On: May 18, 2016 at 9:34 am

Author: Em Morley

Categories: Landlord News

Tags: gas safety,landlord responsibilities,smoke alarms,tenants

Many amateur landlords in the UK are putting their tenants’ lives at risk by avoiding their responsibilities over gas safety, according to a new study.

The survey of 1,000 part-time landlords and 500 tenants of amateur landlords by Atomik Research, on behalf of British Gas, found that 20% of amateur landlords do not conduct

Thousands of Amateur Landlords are Putting Tenants’ Lives at Risk

compulsory annual gas safety checks, while over a third are not even aware that gas safety is a legal requirement.

Landlords that do not adhere to the law on gas safety could face hefty fines if they are caught.

Gas safety checks, which must be carried out by a Gas Safe registered engineer, pick up a range of problems, including faulty boilers, and are vital in helping to prevent gas leaks, explosions and carbon monoxide poisoning.

Landlords must also be aware that they are required by law to fit smoke alarms on each floor of their rental property, and carbon monoxide alarms in rooms with solid fuel burning appliances.

The Chair of the All-Party Parliamentary Carbon Monoxide Group, Barry Sheerman MP, says: “It is shocking that 38% of landlords in the non-traditional rental sector – which includes holiday lets, Airbnb accommodation and lodgers – do not know that they are legally obliged to have a safety check conducted on all gas appliances in their premises.

“I urge all landlords to have their gas appliances serviced by a Gas Safe registered engineer on an annual basis, to ensure that they are in safe and functioning order, and that holidaymakers and others staying in their properties are safe from CO [carbon monoxide] poisoning.”¹

British Gas engineer Sheena Anker insists that it is vital that amateur landlords to ensure their tenants are kept safe and to stick to the law: “Although they may only rent out a room or property for a few weeks each year, it’s crucial for part-time landlords to ensure that their tenants are kept safe, and to stay on the right side of the law.

“I’ve visited properties and seen unsafe appliances which either haven’t been serviced in years or have been installed by illegal gas fitters. Worryingly, tenants are often oblivious to the danger they are in. To stay safe, tenants should ask landlords for a copy of the Gas Safety Certificate, following a check from a Gas Safe registered engineer.”¹

For all of your responsibilities as a landlord, check this comprehensive Gas Safe Register-approved guide: https://www.justlandlords.co.uk/news/landlords-guide-gas-safety/

¹https://www.britishgas.co.uk/media/r/1409/lives_put_at_risk_as_part-time_landlords_overlook

5m tenants have no plan to cover rent if they fall ill

Published On: May 18, 2016 at 9:17 am

Author: Em Morley

Categories: Finance News

Tags: paying rent,rental market,renters falling ill,tenants

A concerning new report has indicated that nearly five million tenants in Britain have no contingency plan to cover their rent if they become too poorly to work for three months or more.

This alarming figure comes despite the fact that 27% of renters in paid employment said they knew someone who was struggling to keep up with payments.

Survival

34% of renters in paid employment admitted to not knowing how long they could continue paying rent for, should they fall ill. 60% said they could only survive on their savings for three months or less.

53% said that they would apply for benefits should they fall ill. 47% said that they would cut their household expenses and 39% said they would utilise their savings.

However, just 7% of tenants currently in paid employment said they had conducted a financial adviser, with most people turning to friends and family for help.

5m tenants have no plan to cover rent if they fall ill

Reality

Head of Protection for Royal London Intermediary, Debbie Kennedy, said, ‘renters who assume that housing benefit will be there when they need it could find the reality is very different. A series of cuts to housing benefit means that more people would not get their rent paid in full if their income fell unexpectedly.’[1]

‘It would be bad enough to be taken ill without the added anxiety of getting behind with the rent and facing possible eviction. Income protection may be more affordable than people realise and can provide a financial safety net and enable people to focus on getting better,’ Kennedy added.[1]

Over the next ten years, economists predict that the UK will experience slower levels of homeownership and increased levels of private renting. It is predicted that in ten years’ time, 59% of 20-39 year olds will privately rent, up from 45% in 2013.

[1] http://www.propertyreporter.co.uk/landlords/5m-renters-at-risk-warns-royal-london.html