Tag Archives: political
More transparency and communication needed in property leasehold sector
Property managers should not be subject to more formal regulations by the government but there needs to be more transparency and communication in the leasehold market, it is claimed. The Competition and Markets Authority (CMA) has, however, made a number of recommendations as a result of its market study into the residential property management services sector in England and Wales. It had consulted extensively with consumer groups, leaseholders, the industry and government during the course of the study and found that overall while the market works well for many leaseholders, some have experienced significant problems in a sector where total annual service charges are estimated at £2.5 to £3.5 billion. The issues identified include leaseholder frustration at a lack of control over the appointment of property managers, high charges for services arranged by property managers or poor standards of service. It also found leaseholders suffered unexpected costs and were being charged for works they consider unnecessary, poor communication and transparency between property managers and leaseholders, and difficulties in getting redress. The CMA has also identified some concerns about prospective purchasers’ understanding of leasehold, and their obligations and service charge liabilities for leasehold flats. In light of its findings and on-going developments in the market, the CMA has made a number of detailed recommendations aimed at improving prospective purchasers’ awareness of leaseholders’ obligations. It also wants to improve disclosure, transparency and communication between property managers and leaseholders and leaseholders’ access to appropriate forms of redress. It says that these recommendations will make leaseholders better informed about the responsibilities and performance of property managers, while greater transparency will increase pressures on property managers and landlords to take account of leaseholder interests. They will also provide improved mechanisms for dispute resolution, should issues arise that require action. The CMA is also recommending changes to legislation affecting rights of consultation relating to major works, as well as supplementing the existing Right to Manage legislation to enable leaseholders, where there is a majority in favour, to require the landlord to re-tender the property management of their block. The CMA is not recommending that property managers should be subject to more formal regulation by government. It says that for many the market works reasonably well, and satisfaction levels are particularly high where leaseholders have exercised their Right to Manage. It adds that existing legislation provides significant protections for many leaseholders, and the sector has engaged constructively with the CMA during the course of its study, recognising that there are improvements to be made and showing a willingness to address the issues that have been identified. ‘Many property managers provide a good service to leaseholders, but protection against the worst failures by property managers is vital because when problems do occur they have a major impact on leaseholders,’ said Rachel Merelie, the senior director at the CMA who led the study. ‘We are pleased that within the sector there is a consensus that change is needed and a genuine willingness to be part of that change. This is evidenced… Continue reading
Prime property sales outside of London benefits from ripple effect
The number of properties in England and Wales which are worth £1 million or more and located outside of London has increased by 38% over the last year, new research shows. Using sales data from the Land Registry and price performance at a local authority level over the year to September 2014, real estate firm Knight Frank has identified the areas where the largest number of property millionaires have been created over the last 12 months. The biggest growth, in terms of households, has been in markets on the outskirts of the capital such as Elmbridge, Guildford and Windsor and Maidenhead. These markets have been the biggest beneficiaries of price growth rippling out from central London, while rising demand for family homes from both Londoners looking to move out of the capital and buyers wishing to trade up in the local area has helped to boost property values. The UK’s economic resurgence over the last year, which has played its part in boosting buyer’s confidence, together with increased activity in the mainstream property market have also been factors, the report suggests.. The data also shows that the number of properties sold for £1 million or more outside of London during the first six months of 2014 was 44% higher than the corresponding period last year. Overall country house prices have risen in value by 5.6% since the market low in 2009 and currently sit 16% below the previous peak. In contrast, in prime central London prices have grown by 74% and are 32% above their previous peak, making the country good value for those wishing to trade up and out. In the Midlands and Wales the number of £1 million plus sales over the year to June 2014 rose by 78% year on year, while in the north, where the housing market recovery since the downturn has been slowest, the number of sales in this sector was 24% higher compared to the previous year. However, in terms of the number of sales, the bulk of prime activity during the first half of 2014 was concentrated on southern England and the Home Counties with the majority located around the transport corridors of the M3, M4 and the M40. These markets benefit from their proximity to London and excellent transport links back to the capital, good schools and local amenities. Agents report that demand has been bolstered by an increase in the number of buyers looking to take advantage of the gap between urban and rural values, particularly those moving from London. Prime prices in the country look good value on a historical basis having experienced several years of static or modest growth since the end of the financial crisis. But while the number of property millionaires in England and Wales may be rising, it is worth noting that the number of homes worth over a million pounds outside of London still only accounts for less than 1% of the total housing stock. ‘These increases confirm the long held belief that property in the… Continue reading
Global economic outlook and general election impacting on UK property markets
A more challenging domestic and global economic outlook and political uncertainty in the lead up to next year’s general election are having an impact on property price growth in the UK. According to the latest analysis report from Knight Frank while the first interest rate rise for years is now expected in the second half of 2015, the UK economy is facing additional challenges from overseas. It points to the continued problems in the Eurozone, the withdrawal of quantitative easing in the United States and the fact that global economic growth has also slowed to a six month low. ‘It is a combination of these factors which prompted the Bank of England to push back its expectations of when the first base rate rise will occur. With a much more benign outlook for inflation, the markets are now pricing in a rise in October 2015, with the expectation that the base rate will still only be at 1% well into 2016,’ said Grainne Gilmore, head of UK residential research at Knight Frank. ‘As a result of the new outlook for interest rates, mortgage rates have receded again, which is good news for home buyers and those re-mortgaging their home. However there are also factors weighing on the mortgage market which are likely to feed through to slower activity, such as the new loan to income criteria from the Bank of England, as well as the new rules for mortgage applications under the Mortgage Market Review started in April this year,’ she pointed out. The analysis report also points out that UK house prices rose by 0.5% in October, with the annual rate of growth slowing to 9%. Prime central London house prices remained static in October, the first month in four years in which no growth was recorded. Annual growth in prime central London prices slowed to 6.5% and rents in the prime Home Counties market fell by 0.8% in the third quarter of the year but the annual rate of growth moved into positive territory at 0.1%. ‘Residential property price growth is slowing across the country, including prime central London where the political uncertainty in the run-up to the election, especially over a potential mansion tax, is tending to weigh on activity,’ added Gilmore. The report records that prime central London prices did not rise in October, but are up 6.5% year on year. But price growth in the prime central London market continues to moderate amid growing political uncertainty in the run-up to next year’s general election. ‘The election is primarily causing unease because of the property tax measures which depend on the outcome. Both Labour and the Liberal Democrats have pledged some sort of tax on higher value properties, whether a ‘mansion tax’ or a re-banding of council tax,’ explained Gilmore. ‘Ed Balls, the shadow chancellor, pledged that those in homes currently valued at £2 million to £3 million a year would not pay more than £250 a month, or £3,000 a year (after tax) as part… Continue reading
