Tag Archives: legal
UK asking prices down 1.1% in December, lowest seasonal dip since 2006
The UK residential property market has experienced its lowest property price dip for the end of the year since 2006, according to the latest index figures. Traditionally prices fall off in the run up to the festive season but the data from Rightmove shows that asking prices fell 1.1% in December and it is forecasting price growth of 6% for 2016. It says that increasingly stretched affordability and extra stamp duty on the buy to let sector will be outweighed by stark imbalance between supply and demand. Indeed, buyer enquiries to agents since the beginning of October this year are up 37% but the number of properties coming to market was down 5% compared to the same period in 2014. Looking ahead demand is expected to increase further in more affordable cities such as Leeds, Edinburgh, Cardiff and Manchester as highly skilled workers may choose to leave London for buoyant city regions. The lower than expected fall in prices mean that the annual increase is almost £20,000 or 7.4%, taking the average asking price to £289,452. ‘Whilst a fall is the norm at this time of year, this is December’s best post financial crash performance, signalling another round of price rises in 2016. Despite the shortage of suitable stock in many parts of the market, demand for housing is on the up,’ said Miles Shipside, Rightmove director and housing market analyst. ‘Although the average price of property coming to market is already up by a hefty 7.4% compared to a year ago, Rightmove forecasts that prices will reach and breach new records next year,’ he added. He explained that whilst initiatives are in place to encourage developers to build more new homes to supplement the supply of existing ones coming to market, the lead times are long and developers face capacity constraints. ‘In the meantime strong demand is being further fuelled by the additional momentum and aspiration for home-ownership that schemes such as Help to Buy create. We therefore predict that the average asking price will be another £17,000 higher by the end of 2016,’ said shipside. An analysis of Rightmove data by Dr Alasdair Rae, of the University of Sheffield, suggests that there could be an exodus of highly skilled workers leaving London for more affordable yet vibrant cities such as Leeds, Edinburgh, Cardiff and Manchester. But this ripple effect won't reach all towns and cities and continued stagnation or price falls are likely in less sought after areas in the north and west of the country, especially if buy to let investor activity tails off. Rae suggests that as choosier buyers demand easier access to amenities to satisfy convenience and lifestyle demands, expect to see increased price divergence between the more buoyant large urban markets and smaller urban areas that can’t offer the same range of facilities. ‘2016 may be the year when many young urban professionals finally give up on the London market and consider long term career moves… Continue reading
Survey reveals shocking lack of knowledge over residential property leases
Property owners in the UK who are leaseholders do not know enough about how the system works and much of this is down to poor advice from conveyancing solicitors, it is claimed. They have a ‘shocking’ lack of understanding on how leases work, how they can be extended and the consequences of failing to extend a short lease, says research from law firm Bolt Burdon Kemp. The survey found that over half of leaseholders are unaware of the crucial 80 year rule that once the time left on a lease falls below 80 years, the extension will immediately cost thousands, sometimes hundreds of thousands of pounds more. Almost all flats and apartments in England and Wales are leasehold property yet a fifth of leaseholders are aware that they have leases with less than 80 years left to run and therefore face hefty bills to extend but 36% do not know the length of their lease at all. The majority of leaseholders are unaware they can extend their lease after two years of ownership and overall the situation is a time bomb, according to the firm. The firm points out that a lease with less than 80 years left steadily becomes less valuable, leaving the property owner with a diminishing asset that they may be unable to sell or mortgage. The survey also reveals that many respondents were not given basic information about the importance of lease length and renewing the lease at a time when the number of leasehold owners has increased. Indeed, it points out that buying a leasehold can be fraught with issues and the lack of knowledge can create an avoidable and very expensive problem for home owners further down the line. ‘It is clear from these results that leaseholders are simply not being given enough information by their professional advisors before buying flats and apartments. This is creating a ticking time bomb for many leaseholders,’ said Stephen Hill, partner at Bolt Burdon Kemp. ‘Not knowing the length of your lease or the impact if it falls below 80 years is very serious, it could mean you struggle to sell the property or renew your mortgage. Solicitors and conveyancers advising leaseholders must do more to ensure property owners are fully aware of what they are getting themselves into when they buy a lease,’ he added. The current law states that after an unexpired term of a lease drops below 80 years, the way that the cost of a lease extension is calculated changes. When a lease is extended, the freehold becomes less valuable. It is only if the lease has less than 80 years to run when you extend it that the law requires you to pay the owner of the freehold compensation for the lost value. If there are more than 80 years left to run on the lease, no compensation is payable and the cost will usually be minimal. With each year that passes below 80 years, the lease becomes increasingly… Continue reading
Concerns voiced about new simplified tenancies bill in Scotland
Simplified residential tenancies are now being introduced in Scotland but experts warn that more needs to be done to maintain supply in the private rented sector and attract more investment. Scottish Housing Minister Margaret Burgess said the changes outlined in the Private Tenancy Bill will give tenants greater security and stability in their home and community. ‘It will also give landlords reassurance that their tenants will treat their property as a long term home, rather than somewhere temporary,’ she pointed out. ‘The private rented sector is changing. It is now home to a growing number of people in Scotland, and we recognise there are some areas where rents are increasing significantly. It is right and responsible to give local authorities the ability to introduce rent controls in order to ease areas under pressure,’ she added. The Scottish Association of Landlords said there while there is a broad agreement that the rental regime in the private rented sector needed to be modernised as part of a drive to increase standards and protect tenants, there are concerns that it could harm investment in a sector which is said to have a key role to play in solving Scotland's long term housing crisis. ‘We have particular concerns about measures such as rent controls, as well as removing the right of a landlord to end a lease naturally, subject to a reasonable notice period,’ said SAL chief executive John Blackwood. ‘While we understand the political pressure to tackle rent rises in hotspots such as Aberdeen and Edinburgh, we are concerned these measures could harm investor confidence and drive landlords out of the market, leaving a vacuum that could be filled with less than scrupulous individuals,’ he explained. ‘The way to reduce rent levels in a sustainable manner is to increase housing supply, not punishing landlords that are investing tens of thousands of pounds in their properties,’ he added. According to Scottish Land & Estates the sector also needs to attract new investment, especially in rural areas. Its members are at the forefront of supplying rural housing across the country, many at affordable rents, and the organisation said there were many positive elements to the Bill but that certain elements could impact on rural housing supply. ‘We welcome the degree of clarity that the introduction of the Bill has provided and we can see that there are many positive elements to the government’s proposals. The simplification of the tenancy regime is something that we have long argued for and it is pleasing that the Scottish Government has made a concerted effort to address the need for reform,’ said Katy Dickson, policy officer for business and property at Scottish Land & Estates. She explained that the introduction of a single notice to leave system, with robust and reasonable grounds on which to end a tenancy is to be welcomed, and increased notice periods will hopefully address many of the concerns regarding security and certainty raised during the… Continue reading
