New private rental electrical safety standards: What you need to know

New regulations on electrical safety standards for private rented accommodation have come into effect. Here is what landlords need to know.

The ‘Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020’ is part of the Ministry of Housing, Communities and Local Government’s (MHCLG) drive to ensure all housing in the private rented sector is safe for tenure.

Landlords must ensure the electrical installations within their properties are safe and inspected by a qualified person at least every five years, and must ensure an Electrical Safety Condition Report (EICR) is produced following the inspection and provided within the designated timeframes.

These new regulations came into effect on 1st June 2020, and apply to new tenancies from 1st July this year and existing tenancies from 1st April 2021.

Who can carry out the inspection?

The regulations require the inspection to be completed by a ‘qualified and competent person’ at least every five years. It is the responsibility of the landlord to ensure the electrician selected is qualified, and that they are qualified to current Wiring Regulations – BS 7671.

A reliable way to ensure this is to choose someone who is a member of a competent person scheme, such as the National Association of Professional Inspectors and Testers (NAPIT) or National Inspection Council for Electrical Installation Contracting (NICEIC).

What will be inspected?

All ‘fixed’ electrical parts of the property must be inspected and tested, such as the wiring, the socket-outlets, light fittings, and any permanently connected electrical equipment such as showers and extractor fans. It does not cover other electrical appliances supplied as part of the tenancy (cookers, fridges and televisions) or any items owned by the tenant.

However, the government recommends that landlords undertake PAT tests on these to ensure safety.

Reporting

An Electrical Installation Condition Report (EICR) should be provided, detailing the findings of the inspection and the next due date for inspection.

For any areas of the installation that do not meet the standards set out in the current Wiring Regulations, the person inspecting the property will classify it with the following codes:

Code 1 (C1): Danger present. Risk of injury.

Code 2 (C2): Potentially dangerous.

Further Investigation (FI): Further investigation required without delay.

Code 3 (C3): Improvement recommended. Further remedial work is not required for the report to be deemed satisfactory.

What action must be taken?

If any part of the installation is classified as C1 or C2, remedial work must be carried out to remove the danger and risk of injury, and must be followed up in writing before the report is issued. Other remedial work and further investigation must be completed within 28 days, or sooner if indicated in the report. Once the work has been completed, landlords must supply the tenant and local authority with written confirmation from the electrician. This process must be repeated until the electrical installation is found to be compliant.

Once the installation is declared safe for continued use, landlords must supply a copy of this report to the tenant within 28 days of the inspection and to a new tenant before they move in.

With the new electrical safety standards in place, landlords are now entirely responsible for the safety of installations within the property. It is important that landlords spend time to understand the new regulations, as they contain obligations they will need to meet moving forward.

Dominick Sandford, is the head and director of merchandising and marketing at ElectricalDirect.

Reference: Dominic Sandford, 'New private rental electrical safety standards: What you need to know', https://www.landlordtoday.co.uk/breaking-news/2020/9/new-private-rental-electrical-safety-standards-what-you-need-to-know 

Mortgages still in lockdown despite stamp-duty holiday

Low-deposit home loans are coming back… but choices are limited and lenders are applying new terms and conditions.

These are difficult times for anyone who wants to buy a home. Despite the government’s attempt to reinvigorate the market with a temporary stamp-duty holiday on properties costing up to £500,000 in England and Northern Ireland, unless you have a large deposit you could face a struggle.

During the crisis lenders have pulled mortgages, with those for borrowers with small deposits disappearing fastest. Some of the big banks and building societies have started to return to the market – last week saw 90% deals launched by Coventry building society and Metro Bank, and, from Monday, Nationwide building society will also be offering them.

But the choice is still limited, and lenders are asking a lot more questions than they were before lockdown.

What’s on offer

Since lockdown, the number of mortgages on the market has plummeted by almost half. Most deals that have gone are those where buyers need a deposit of 5% or 10%. According to financial data firm Moneyfacts, in March there were 779 products for borrowers with a 10% deposit, while the figure is now closer to 70.

For those with 5% deposits, the options are even narrower – in March there were 391, now just 14, and many of those are specialist products, says Eleanor Williams from Moneyfacts.

“This includes guarantor and family-assist mortgages, such as Barclays’ Springboard mortgage, and those open only to applications from selected professions, or from those in specific lending areas, such as those offered by Furness Building Society that reflect its principles as a mutual to continue to support those in their local area,” she says.

Matters are made worse by low interest rates, she says, which mean anyone saving is not seeing their money grow.

The stamp-duty holiday will give extra cash to movers and to first-time buyers spending more than £300,000. But for many, it won’t make up for the loss of 95% mortgages, says Simon Gammon, managing partner of mortgage broker Knight Frank Finance. “The stamp duty cut is not going to make that up, so, if anything, it is more frustrating for first-time buyers,” he says.

Blink and you miss it

With little choice at 90%, borrowers have needed to be on the ball to get their hands on the few mortgages that are available.

Coventry building society came back into the 90% mortgage market early last week, but not for long – it took applications for the deals between 8am on Tuesday and 8pm on Wednesday, saying the flash sale was to ensure good customer service.

Other lenders are taking a different approach to rationing mortgages. HSBC has been offering 90% home loans throughout the crisis but, since April, has limited the number of applications it accepts each day. “A small number of lenders cannot take all the business at higher loan-to-values and hence this action has been necessary,” says the bank. “We will, of course, continue to review the situation regularly and hope it isn’t too long before the market returns closer to normal.”

Nationwide building society will return to the high loan-to-value mortgage market from 20 July, with a 90% mortgage for first-time buyers. It’s re-entry is expected to be a game-changer. It has promised not to limit the number of mortgages available each day, and, as the country’s largest building society, should have more capacity to cope than smaller lenders. Metro Bank, too, has put its 90% home loans on more general release, and is not restricting them to new borrowers.

More questions

Anyone who wants a mortgage at a high loan-to-value should expect a lot of questions. Most lenders have added new terms and conditions to their deals, increasing the number of hurdles would-be borrowers need to get over.

“You are going to have to be a good-quality borrower to access a 90% mortgage,” says David Hollingworth of mortgage brokers London & Country. So anyone looking to remortgage or move may be asked if they have taken a payment holiday. “If you say ‘yes’, you can expect a more forensic examination of why,” says Gammon. “The same would apply if you have been furloughed.” He says he has not seen lenders say upfront that they will not take on borrowers who have taken a payment break, but, after scrutiny, some have been unable to borrow as much as they hoped.

Coventry building society is clear about furloughing: it is only willing to offer loans of up to 65% of a property’s value to anyone currently paid through the scheme. Metro Bank has also ruled out furloughed applicants for these deals – and when you return from furlough you must have evidence of three months’ full pay to apply.

Borrowers may also face more questions about how they raised the money for their deposit. Although help from other people is still allowed, at Nationwide, buyers will only be able to take out a 90% mortgage if they have contributed to the down payment themselves.

Lenders are also asking for more from self-employed borrowers. “Back in February lenders would ask for three years’ business bank statements and base the lending on that,” says Gammon. “Now they want statements for the last three months to see how your business has been trading.” Hollingworth says lenders are keen to see “what income can be evidenced”. For the self-employed or anyone furloughed and on a reduced income this could mean being offered a mortgage based on this sum, rather than what you would expect to earn normally.

A frustrating future

It will be some time before mortgages which require only small deposits will return, said Gammon.

“I don’t envisage lenders rushing back to the 95% mortgage market – they will want to see what happens as the furlough scheme unwinds, and also what happens to prices,” he says.

“I don’t think 95% mortgages are going to be back before the end of the year.”

Case study: ‘Every little bit counts’

Niamh Spence is looking for a house near Manchester. The 29-year-old PR manager is selling a property she bought with an ex-partner and hoping to move into a place of her own.

“I’m looking at around the £130,000 to £140,000 mark so I will benefit from the stamp duty cut. Every little bit counts, so I’m pleased about that. If you think before lockdown there were 95% mortgages, I’ve had to find extra for the deposit to meet the new requirements of lenders only supplying 85%. The problem is, there are barely no mortgages for 10% deposits and it’s so competitive – my broker says that if you don’t get in first thing in the morning you can’t get one from banks such as HSBC.”

Spence is currently furloughed, which hasn’t helped. “My mortgage in principle is based on me being on a furlough wage. Until I get back to work I can’t borrow any more, so I’m looking for something based on what I can do currently.

“I know plenty of people who are in the same position and I’m lucky to be returning to work as I know there are many who are facing redundancy. I’m selling to a first-time buyer and I’m not in a chain, but it is hard. I wish the government had encouraged lenders to come back to offer mortgages to those with 5% as asking for 10% or 15% can mean the difference of £5,000 or £10,000.”

Reference: Hilary Osborne and Shane Hickey, 'Mortgages still in lockdown despite stamp-duty holiday' - https://www.theguardian.com/money/2020/jul/19/mortgages-still-in-lockdown-despite-stamp-duty-holiday

Chancellor makes big changes to Stamp Duty: see how it affects you

Rishi Sunak has announced a stamp duty holiday in his summer statement. How will this affect you?

The chancellor, Rishi Sunak, has announced there will be no stamp duty to pay on property purchases up to £500,000.

What is stamp duty?

Stamp duty land tax, its proper name, is a tax paid by someone who purchases a property or piece of land in England or Northern Ireland – Scotland and Wales have their own systems. The tax is paid when the sale is completed and is based on the sum paid.

Prior to the financial statement, there were two different points at which stamp duty was payable, depending on whether you were a first-time buyer or a mover. For movers, stamp duty had to be paid on any property costing more than £125,000.

For first-time buyers there was no stamp duty to pay unless a property cost more than £300,000. If your first home cost more than £500,000 you paid the same as a mover but if it cost less than that, you only paid tax on the part of the price that fell between £300,000 and £500,000.

What will change?

The starting threshold will be increased to £500,000 on all sales taking place before 31 March 2021. The starting rate above £500,000 will be 5% and will apply to the part of the sale up to £925,000.

The change will apply to second homes and additional properties. They attract a 3% surcharge, and this will still be in place but buying property will now be cheaper for landlords.

Who will this help?

The cut will make a difference for anyone buying a property over the old thresholds. For first-time buyers, it will generally be those in the south-east and London who stand to benefit, as elsewhere they would typically not be spending more than £300,000.

The saving could allow people to move more quickly than planned - instead of needing the money for tax they can now channel it towards their deposit.

About half a million households will not pay the tax, according to analysis by the property firm Hamptons. It says 12% of sales are above £500,000 and these will also involve a saving but the biggest reductions in percentage terms will be at the lower end. A buyer moving to an £800,000 home will see their bill cut in half, while someone paying £5m will get a reduction of less than 3%.

The tax is paid after a sale is completed, so anyone who is part-way through buying a property will benefit.

How much will I save?

At £250,000, a first-time buyer was already off the hook for stamp duty but a mover would pay £2,500. They will now pay nothing.

If you are a first-time buyer spending £495,000 on a home, you will not pay any tax now and stand to save £9,750; a mover spending the same sum would save £14,750. At £600,000, you will pay 5% on the portion above £500,000. Your bill will be £5,000 - £15,000 less than under the old rules.

An investor spending £250,000 on a property will save £2,500, while one spending £495,000 will save £14,750.

Why do this?

The housing market was frozen during lockdown, with buyers and sellers told to stall purchases. Since estate agents reopened there are signs that people are looking again - property websites and mortgage lenders have all reported jumps in interest from prospective buyers but the Treasury is obviously worried that the rebound will be fleeting.

The housing market has a knock-on effect on other parts of the economy - as well as everyone employed in the sector, people moving house also support DIY shops and furniture shops. Estimates suggest moving house drives spending equal to about 5% of the property's value.

Will it work?

While some people are not moving because of immediate financial problems that will be solved by the cut, there will be many others who are staying put because they have lost their jobs, or are concerned about the outlook for the industry they work in. The cut may bring forward purchases but it may not stimulate many extra ones.

Previous holidays have focused on first-time buyers and do not seem to have led to a surge in sales.

What will happen to house prices?

The chancellor mentioned that prices had fallen since the crisis and talked about taking away uncertainty for people, so the move seems designed to support values. Some of the money saved by buyers could go towards their offer for a property and lead to increases in parts of the country where the market is busy. The fact that landlords and investors will also get a tax cut will make this more likely than if it had only applied to homebuyers.

Typically, the largest increases come in the run-up to a stamp duty holiday ending, when people are keen to take advantage of the tax break while it lasts, so we could see a bubble next spring.

How much would I normally pay?

Under the old rules a mover would pay 0% on the first £125,000, 2% on the next £125,000, 5% on the next £675,000, 10% on the next £575,000 and 12% on anything above £1.5m.

On all purchases there is a surcharge if it is a second home.

Reference: Hilary Osbourne, 'Stamp duty: what is it and what has the chancellor changed?', https://www.theguardian.com/money/2020/jul/08/stamp-duty-chancellor-rishi-sunak-summer-statement

What are the Conservatives' plans for stamp duty?

With a brand-new majority government, the Conservative Party now has the mandate to carry out some sweeping reforms and this could well include an overhaul of stamp duty.

Last summer, Boris Johnson repeatedly spoke about the possibility of reducing the Stamp Duty tax. However, these plans were not a part of the Tory manifesto this autumn, but fiscal experts believe the long-awaited reforms are more likely under this government than at any time. Investors are keen primarily because lowering the costs of transactions will trigger the property market in a highly positive way – something the Tories will be in favour of doing, especially to alleviate the effects of Brexit uncertainty.

The impact of any stamp duty reform would be mainly felt in expensive locations such as London, areas where more property owners were impacted by the amendments introduced nearly six years ago when the tax was last changed.

Who will be affected by the proposed changes to stamp duty?

The most likely change to stamp duty is likely to apply to overseas buyers who will pay a stamp duty surcharge of 3 percent. This is believed to apply to companies and individuals buying properties in England alike. Boris Johnson is reportedly interested in refuting claims that he is the leader of the party of the wealthy and to keep new voters on-side. The money raised from the changes – estimated to be circa £120m will be used to combat the capital’s homelessness crisis.

The Conservative Party claims that the measure – predicted to affect 70,000 transactions annually in England alone – would deter foreign investors buying properties and leaving them empty or as rental properties commanding over inflated prices. Recent research revealed that 13 per cent of new-build London properties were purchased by non-UK residents from 2014 to 2016.

The Treasury chief secretary, Rishi Sunak, said he would like Britain to remain open to people arriving to live, work, and settle down “in this great country”. However, the minister added a note of caution, saying that evidence strongly shows that enabling increased demand to housing already in limited supply will inevitably inflate house prices. Introducing a higher rate of stamp duty for foreign buyers will, therefore, help to resolve this issue and could hopefully raise much-needed funds for rough sleepers.

This policy was initially announced by Theresa May in 2018, but following a consultation, is now on the road to being formally adopted.

The surcharge would be imposed in addition to an existing higher rate of stamp duty on buy-to-let and second-home. This was brought in gradations in April 2016: 3 percent for homes worth less than £125,000, 5 percent for homes valued between £125,001 and £250,000, 8 percent for properties deemed to be worth between £250,001 and £925,000, 13 percent for homes up to £1.5 million – and 15 per cent for the tiny percent of properties worth more than that.

These changes mean an international non-UK resident purchasing a property valued more than £1.5m will need to pay a new stamp-duty rate of 18 per cent.


Reference: 'What are the Conservative's plans for stamp duty?', http://www.hip-consultant.co.uk/blog/what-are-the-conservatives-plans-for-stamp-duty-123/#more-5802 

UK home loans fall 90% since start of Covid-19 crisis

Figures drop to lowest rate since at least the early 1990s, says the Bank of England.

The number of new home loans approved in Britain has fallen by 90% since the start of the Covid-19 pandemic to the lowest since at least the early 1990s, the Bank of England has said.

Threadneedle Street's monthly update on the state of the property market found that despite the reopening of estate agents from the middle of May, the number of mortgage approvals fell to 9,300 from 15,900 in April. 

The number of new home loans granted in May was well below the 25,000 anticipated by the financial markets. It was the weakest since the Bank of England series began in 1993. At the start of the year, more than 70,000 new loans were being approved each month.

Analysts said the depressed state of the mortgage market was not wholly expected, given the restrictions on viewing homes until May and delays in home loan approvals.

"The latest fall isn't a sign that the market is struggling to recover," said Hansen Lu, a property analyst at Capital Economics. "Rather, it probably reflects the gap in the sales pipeline, from when the market was closed between March and May.

"With households confined to their homes, there would have been far fewer sales than usual moving to the mortgage approval stage in May. Also, many buyers with half-completed sales have been renegotiating on price, which also points to a delay in the sales pipeline."

Lu said lending was likely to pick up in June after reports of a surge in demand for property and agreed sales.

Mark Harris, the chief executive of the mortgage broker SPF Private Clients, said: "Covid-19 has had a devastating impact on the mortgage and property markets, so it is no surprise that lending was weak in May, with approvals for house purchase falling.

"With lockdown meaning that lenders were unable to send valuers out to physically view properties, the number of mortgages approved fell considerably."

The Bank of England data also showed consumers continued to pay off their debts in May, in a fresh sign the pandemic has made households more cautious.

People repaid £4.6bn of consumer credit in May following repayments of £7.4bn in April and £3.8bn in March, the Bank said. There were repayments on credit card lending (£1.8bn) and other forms of consumer credit such as overdrafts (£2.8bn). The three successive hefty net repayments of consumer credit compared with additional borrowing of about £1bn per month in the 18 months to February 2020.

The Bank said the "extremely weak" net flows of consumer credit meant the annual growth rate stood at -3.0%, the weakest since the series began in 1994. A breakdown of the overall figure showed the annual growth rate of credit card lending was negative for the third month running, falling to -10.7%, compared with 3.5% in February.

The reluctance of consumers to borrow money since the UK went into lockdown has come despite a cut in borrowing costs. According to the Bank, effective rates on new personal loans to individuals fell 34 basis points to 5.10% in May. This was the lowest since the series began in 2016 and compares with a rate of about 7% at the start of 2020.

Reference: Larry Elliot, 'UK home loans fall 90% since start of Covid-19 crisis' - https://www.theguardian.com/money/2020/jun/29/uk-home-loans-fall-90-since-start-of-covid-19-crisis 

Rent increases hit lowest ever levels – ARLA

The number of agents reporting rent increases dropped to 14 percent in May, the lowest level recorded by the ARLA Propertymark Private Rented Sector (PRS) report.

ARLA said this was because many landlords had chosen not to increase rent due to financial difficulties faced by tenants during the coronavirus pandemic. 

This is down from the 41 per cent of agents who said they were noticing rent increases in February, the last time ARLA conducted its PRS report and before the lockdown began. 

The year-on-year difference is also stark, as in May 2019 45 per cent of agents reported rises in rent. 

Furthermore, tenants have been more successful in asking for rental reductions with the number of tenants negotiating reductions increasing to 2.5 per cent in May – the highest since March 2019 when the success rate was 2.9 per cent. 

 https://unsplash.com/photos/rgJ1J8SDEAY

Tenant demand 

As landlords were unable to conduct viewings during the lockdown, the average time properties were empty between tenancies increased to five weeks in May.  

This is the longest time properties have remained void between tenancies since records began.  

The number of new prospective tenants fell to 70 per branch in May, compared to 82 in February.

However, the level of pent-up demand during lockdown meant that despite the fall, this is still the highest level on record for the month of May since records began, compared with 60 new tenants registered in May 2018, and 69 in May 2019. 

Rental stock supply

 

Following the reopening of the housing market, the number of properties managed per branch rose to 208 in May. This is an increase from pre-lockdown when the average number of properties managed per member branch stood at 201. This figure is the same year-on-year.  

David Cox, ARLA Propertymark chief executive, said: “Our latest figures show that landlords and agents have been taking the brunt of the pandemic. They are aware of the financial difficulties facing tenants and have shown empathy, with many landlords not increasing rents where they otherwise might have needed to.  

“As we continue to move forward, it’s important that everyone aims to keep the rent flowing in order to sustain the market and help boost the economy following several months of uncertainty.”  

Reference: 'Rent increases hit lowest ever levels', Shekina Tuahene, https://www.mortgagesolutions.co.uk/news/2020/06/29/rent-increases-hit-all-time-low-arla/

Nationwide triples minimum deposit for UK first-time buyers

Mortgage lender sets 15% level to help protect customers from negative equity

Source: https://i.guim.co.uk/img/media/16b2a7addd19922c30621bdf4
418f9fc454eab46/39_435_4550_2730/master/4550.jpg?width=620&quality
=85&auto=format&fit=max&s=da52552ec3e9ef352bac8783ec7d4107

One of Britain’s biggest mortgage lenders, Nationwide, is to triple the minimum deposit that first-time buyers must put down as it braces itself for falling house prices and the possible return of negative equity.

Nationwide said from Thursday it will withdraw all its new loan deals where the first-time buyer only puts up a 5% deposit and set a new minimum deposit of 15%.

The rise represents a dramatic increase in the amount that buyers will have to save to buy the average home. According to Nationwide’s house price index, the average UK house price is £218,902 – which means a buyer will have to stump up a minimum deposit of at least £32,835 compared with £10,945 before.

Nationwide said it was making the move to protect new customers from being trapped in negative equity. That happens when a borrower takes out a mortgage with a small deposit, only to find that as house prices fall, the mortgage becomes more than the value of the property.

Henry Jordan, the director of mortgages at Nationwide, said: “As a responsible lender, Nationwide needs to ensure borrowers can afford mortgage payments and are, as much as possible, protected against the potential for negative equity, should house prices decrease … Our priority at this time must be to help members keep their homes.”

Nationwide’s decision to cap its maximum loan-to-value (LTV) at 85% comes only weeks after its data revealed a plunge in house prices across the UK in the wake of the coronavirus pandemic.

It said that in the month to May house prices fell by 1.7%, the biggest monthly fall since February 2009, when Britain was in the grip of the financial crisis.

First-time buyers hoping that other lenders will give them a low-deposit mortgage are likely to be disappointed. Nationwide’s move follows a string of market withdrawals by smaller lenders last week.

The tiny Saffron building society remains one of the few lenders that will still offer a 95% LTV – but the broker Chris Sykes of Private Finance said: “In honesty, I wouldn’t be surprised if these are gone by the end of the week as they will be absolutely inundated with applications.”

The Nationwide announcement will be a major blow to England’s property market just as it has begun to pull out of the Covid-19 lockdown.

A month ago the housing market in England was given the green light to reopen after seven weeks of lockdown. However, property professionals warn that if first-time buyers cannot get mortgages big enough to buy homes, then the property market will stall and prices will fall.

Economists are sharply divided about how far house prices will be affected by the coronavirus. The Centre for Economics and Business Research predicted in May that 2020 prices would be down by 13% “as a lack of transactions, high uncertainty, and falling incomes take their toll”. However, the estate agent Savills said the hit to the market could be more like 7.5% and a third of valuation surveyors are predicting that price falls could be limited to 4% or less.

Nationwide said the 15% minimum deposit would apply to all new house purchase, remortgage and first-time buyer applicants.

Buyers who can put up a 40% deposit will benefit from a small drop in its fixed rates, which will fall by 0.1% to 1.09% on a two-year deal or 1.4% on a five-year fix.

https://www.theguardian.com/business/2020/jun/17/nationwide-triples-minimum-deposit-for-uk-first-time-buyers CMP=share_btn_fb&fbclid=IwAR1Gh85VmF4LKYL4DeeVLiA3OPGH4NY3RNZWXaMhlgAREhV_w3BqmCBdls8

House prices:lockdown leads to sharpest monthly fall in value since financial crisis

BY JONATHAN PRYNN

House prices fell at their fastest rate last month since the depths of the financial crisis more than a decade ago, a survey reveals today.

Source: https://lifestylefrisco.com/wp-content/uploads/2017/
08/house-value-calculator-800x534-1-770x534.jpg

The average cost of a home in the UK dipped by 1.7 per cent in May, knocking just over £4,000 from its value, according to lender Nationwide.

It was the biggest monthly fall since February 2009 when the market was reeling from the collapse of Wall Street bank Lehman Brothers.

The annual rate of increase has dropped from 3.7 per cent to 1.8 per cent, bringing the revival in the property market since the election in December to a juddering a halt.

The dip covered a month that started in full lockdown, with only a tiny handful of sales being carried out. However agents have reported a surge in activity since the Government allowed the property market to reopen on May 13.

David Westgate, chief executive at agency Andrews Property Group, said: “May was the ultimate month of two halves. No activity at all in the first half and a frantic hive of activity in the second as transactions resumed.

“It will be 2021 before the property market finally gets into its stride again but for now the level of transactions post-lockdown has been staggering.”

Tomer Aboody, director of property lender MT Finance, said: “Banks are eager to lend, with liquidity extremely high. Interest rates are at an all-time low and agents are reporting a positive uptick in applicants registering.”

Guy Gittins, managing director of agency Chestertons, said: “A 1.7 per cent drop in prices in a month is dramatic but not as steep as many had expected and prices still remain nearly two per cent higher than this time last year.”

https://www.homesandproperty.co.uk/property-news/house-prices-fall-monthly-lockdown-a138606.html

Government urged to extend Stamp Duty relief to last-time buyers

Source: https://media.istockphoto.com/photos/businessman-and-wooden-blocks-with-the-word-stamp-duty-and-house-picture-id1160385576?k=6&m=1160385576&s=612x612&w=0&h=LCvNH-UcqDcV9cxuUkQuTdtFjsg3R1Nnm-otkoaaAsw=

BY MARC SHOFFMAN

A new report suggests the Stamp Duty exemption should be extended to last-time buyers.

Research by the Cass Business School and the Centre for the Study of Financial Innovation, said elderly people should be encouraged to downsize, but warned the lack of age-friendly housing in the UK limits the options for millions who are open to moving but decide to stay.

The report, titled Too Little, Too Late? Housing for an ageing population, found that under-occupation is concentrated among the elderly population – those aged over 65 – where people tend to live in couples or alone.

It claims there are more than 15m surplus bedrooms in the UK, which could rise to 20m by 2040 if no action is taken.

The report recommends a Stamp Duty exemption for ‘last-time’ buyers – similar to the relief offered to first-tine buyers – worth up to £300,000 to encourage older home owners to downsize and free up housing stock.

The Government should promote the benefits of downsizing and incentivise people to do so before social care is needed, according to the report.

It also calls for local authorities and developers to plan for retirement housing.

Professor Les Mayhew, author of the report, said: “If more family homes were freed up by downsizing, the benefits would cascade down the housing ladder because it would enable families to ‘upsize’, allowing more first-time buyers on to the bottom rung.

“More efficient use of the existing stock would reduce pressure to ‘just build more’ as a solution to the UK’s housing shortage.

“The demand is out there as baby boomers seek to redeploy housing equity into smaller, more convenient homes with independent living and easy access to services. This would also reduce pressure on local authority spending through transfer to care homes and allow more efficient delivery of social care to individuals.”

Commenting on the report, Nigel Wilson, chief executive of Legal & General, which is helping fund more retirement housing, said: “Our housing stock needs to work for everybody.

“People of all ages need more supply of housing and better choices.

“We know there is strong demand for the right sort of housing for later life living, with great design, supportive communities and good access to friends, family and facilities.

“Housing policy now needs to catch up with the demands and opportunities of our ageing demographic: getting this right has benefits for everyone.”

Amy Wray, owner and managing director of Yorkshire-based agent Applegate Properties, said: “Whilst many last-time buyers may not actually require a reduction in Stamp Duty to make their move possible – as many have equity in their property – the passing of this exemption alone would raise huge awareness in the UK surrounding the amount of current empty bedrooms. Additionally, it would encourage many home owners to re-think their position once their families have flown the nest.

“Creating an awareness around ‘downsizing to support growing families’, would greatly motivate thousands of potential sellers to make the move sooner, rather than feeling an emotional responsibility to ‘cope’ with their now oversized family home.

“So many home owners have never even considered that they are contributing to the shocking statistic of there being 15m empty bedrooms.

“Therefore, such awareness could make for a huge shift in the mindset of all purchasers, making downsizing earlier the ‘new normal.’

“Good quality, over-55s retirement housing – with 24-hour wardens, maintained gardens, lifts and optional social areas – are hugely popular, so much so that we have a waiting list if any of these homes become available.”

https://propertyindustryeye.com/government-urged-to-extend-stamp-duty-relief-to-last-time-buyers/

Corona Fallout: Renters admit they’re less likely to own a home now

By Graham Norwood

Source: https://brookebot.com/carolinaup
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Research by insurance firm Aviva suggests private tenants are now more pessimistic about being able to buy their own home.

In December, six months ago, the firm found that 68 per cent of non homeowners hoped to buy a property in future: now that figures is just 52 per cent. 

In line with this, the number of under-25s hoping to get on the property ladder in the next five years has decreased from 35 per cent in December to 27 per cent today. 

The number of households - renting and owning - looking to trade up to a bigger property has also fallen from 10 to eight per cent, suggesting the current housing market is causing people to put plans on hold.

The Aviva study also reveals that lockdown has accelerated the way people use online services and video technology. 

Prior to the Covid-19 outbreak, 30 per cent of UK residents aged 55+ used video calls. This has now risen to 38 per cent of this age group.

The number of internet-enabled devices per UK household has increased from 10.3 in December to 11.6 now.

An Aviva spokesman says: “As the lockdown begins to ease, its legacy is likely to continue as new behaviours become the norm. 

If people make significant changes at home - whether this means buying new technology, making substantial property improvements, or even changing one’s living arrangements – it’s important that people keep their home insurer informed so they have the appropriate cover in place.”

https://www.lettingagenttoday.co.uk/breaking-news/2020/5/corona-fallout-renters-admit-theyre-less-likely-to-own-a-home-now

Property market is bouncing back

BY 
RYAN BEMBRIDGE

Source: https://www.widgetfinancial.com/images/headers/
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The Property website www.localsurveyorsdirect.co.uk has seen a sharp increase in activity in the UK housing market in the past fortnight following the slump due to the lockdown.

Since lockdown restrictions were implemented in the UK in March 2020, more than 450,000 people were unable to progress their plans to move house.

JJ Heath-Caldwell, managing director of the business, said: “After a very buoyant start to the year, in mid-March to mid-April the number of enquiries quickly dropped by 80% with the lowest activity recorded on the 14 April.

“Since then, the activity has been steadily rising and is now around 57% down (instead of 80% down). This is still low but we are seeing steady progress in response to some of the government’s initiatives to get the property market moving again.

“Across our sites, we have seen a strong increase in activity, which is promising after everything was closed during the lockdown period.

“My expectation is that the number of enquiries will continue to rise as we go through this year. We won’t see the levels that we saw back in January and February, but things are definitely looking up.”

https://www.propertywire.com/news/property-market-is-bouncing-back/

UK mortgage payment holiday extended by three months

Treasury also extends ban on home repossessions to 31 October amid Covid-19 crisis

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The government has extended its mortgage payment holiday scheme by three months.

More than 1.8 million homeowners have taken a three-month mortgage holiday since the scheme was announced in March to help borrowers in financial difficulty because of the coronavirus crisis, according to Treasury figures. It was due to expire at the end of June but has now been extended by a further three months, while the deadline for applying for an extension has been shifted to 31 October.

“We’re doing everything we can to help people with their finances at this difficult time and that includes making sure people get the support they need with their mortgages,” said John Glen, the economic secretary to the Treasury. “That’s why we’re working with the banks and lenders to extend payment holidays if people need them.”

The government said that while homeowners who had taken a mortgage holiday should restart marking payments if they could, it was extending the scheme to help those still struggling with the impact of the coronavirus.

“Everyone’s circumstances will be different, so when homeowners can pay some or all of their mortgage, they should work with their lender on a plan,” Glen said. “But if they are still struggling, I want them to know that help is there.”

https://www.theguardian.com/money/2020/may/22/uk-mortgage-payment-holiday-extended-by-three-months-covid-19

Government urged to ‘help people meet their rent payments’

By: Marc Da Silva

The government last week announced that homeowners struggling to pay their mortgage due to coronavirus will be able to extend their mortgage payment holiday for a further three months, or reduce payments, but more needs to be done to help people living in private rented accomodation. 

Source: https://thumbor.forbes.com/thumbor/960x0/https%3A%2F%2Fspecials-images.forbesimg.com%2Fdam%2Fimageserve%2F1173883979%2F960x0.jpg%3Ffit%3Dscale

While the mortgage payment holiday extension has been welcomed by many experts, the industry is still waiting to hear if any fresh proposals will be put forward to help private renters facing financial difficulty due to the coronavirus pandemic. 

Joanna Elson, chief executive of the Money Advice Trust,  a charity which runs the National Debtline advice service, said: “People in private rented accommodation are among the most exposed to financial difficulty in the wake of the outbreak, and the government should listen to calls to help people meet their rent payments by increasing the Local Housing Allowance rate to cover 50% of average market rents.” 

Many landlords have been flexible with their tenants, discussing managing rental payments, and helping them find sources of financial support and advice. 

According to a survey of more than 4,500 private landlords by the National Residential Landlords Association (NRLA), 90% of landlords who had received a request for support from a tenant had responded positively. 

This has included offering tenants a rent reduction or deferral, a rent free period, early release from a tenancy or a refund on service charges included in rents for homes of multiple occupation.

Ben Beadle, chief executive of the NRLA, commented: “The vast majority of landlords are doing everything possible to support tenants through difficult times.” 

https://www.landlordtoday.co.uk/breaking-news/2020/5/government-urged-to-help-people-meet-their-rent-payments

Why Bedford is one to watch in 2020:busy market town has Victorian family houses, fast London commutes and good schools

https://www.rightmove.co.uk/property-for-sale/property-68660649.html

Bedford town centre is on the up, with the council planning a high street revamp.

If you are looking for a busy market town with fantastic schools and masses to do, then this ancient spot on the River Great Ouse could be an ideal choice.

Bedford town centre is full of shops, pubs, and restaurants, and there is a good supply of Victorian houses around it.

Trains to St Pancras International take from 41 minutes. An annual season ticket costs from £5,656.

You'll struggle to find a school in town without at least a "good" Ofsted report. And Priory Primary School, Renhold VC Primary School, Castle Newnham primary and St Thomas More Catholic Secondary School all get top marks from the schools' watchdog.

Why Bedford is tipped as one to watch in 2020

Bedford town centre is on the up. The council is about to embark on a project to upgrade slightly tatty but historic shops on the high street, while an upgrade of the dated Harpur Centre, the town's main mall, has just completed.

Work has already started on a new train link between Oxford and Cambridge, which will give Bedford new direct links to both cities over the next few years.

The pros: Bedford is a hotspot for quality Italian bars and restaurants thanks to the strong Italian population who came to the town in the Fifties.

Bedford Park is lovely, and every other year the Bedford River Festival attracts around a quarter of a million people to the town. There is an annual regatta, too. 

The cons: although Bedford is very pretty around the river — an area known as Castle Quarter — the rest of the town centre is too modern to have a lot of character.

Average house prices in Bedford ​— and what there is to buy

Property prices have been rising strongly in the MK40 postcode. An average home now costs £357,000 according to Rightmove, up from £250,000 five years ago.

On the river, you could pay well over £1 million for a waterfront home, but you could pick up a roomy family Victorian semi-close to the station for around half that.

Three-bedroom semis and terrace houses come in at around £220,000 to £300,000. You could buy a two-bedroom period conversion or purpose-built flat for less than £200,000.

https://www.homesandproperty.co.uk/property-news/buying/bedford-2020-london-commuter-town-houses-a136811.html