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Landlords in UK should plan ahead for new energy regulations
New Government plans in the UK will require buy to let landlords to spend up to £5,000 to make their rental properties more energy efficient. The new legislation, which kicks in 2018 will require landlords to raise the energy efficiency of their homes to at least Band E for new tenancies by carrying out improvements such as insulation, cavity wall filling and new boilers. It has been suggested by the Residential Landlord’s Association that a total of 330,000 buy to let homes, typically Victorian and Edwardian properties, will be affected and the RLA has warned the new so called ‘green tax’ could push rents even higher. The Government has proposed a £5,000 cap, claiming that most landlords will pay no more than £1,800 but according to Peter Armistead of Armistead Property, the Government should be providing alternative support, now the Green Deal has ended, to help fund energy efficiency improvements. ‘Landlords have been bombarded with new tax measures over the last 12 months and this is yet another cost that some landlords will have to face. Landlords can’t be expected to absorb all these new taxation measures and just stand back and watch their profits being eroded. Unfortunately, it will be tenants that will have to bear the brunt of these costs through higher rents,’ he said. ‘While it is a good move to improve the quality of rented accommodation, there should be another scheme to help landlords make the improvements. The Green Deal gave loans to improve energy efficiency and these loans were then repaid by tenants, who as a result of the works were paying lower bills,’ he explained. To help spread the improvement costs, landlords should start upgrading their properties, before it becomes mandatory in 2018 for new tenants. Buy to let mortgage providers will require borrowers to comply with the regulations and valuers are likely to amend their criteria in the run up to 2018, making buy to let mortgage applications more difficult. ‘Most insurance policies require landlords to comply with all relevant statutory requirements. This may mean that it could be more difficult to get insurance unless landlords comply with the forthcoming regulations. Landlords with F and G rated properties need to manage the upgrading and improving their properties to avoid potential prosecution and fines,’ added Armistead. Continue reading
Millions of UK home owners fail to get a survey on their property
Over seven million UK home owners have taken a serious financial risk by choosing not to have a survey completed on their current property, new research has found. Some 13 million home owners have needed unexpected building work completed on their property since moving in and 56% of those who had major building work said knowing this in advance would have influenced their decision to buy the property. Surveyors say the top three problems with properties which can be detected by a building survey are damp, roof issues and subsidence, according to the research rom Churchill Home Insurance. But millions choose not to do so and this includes 3.5 million who did not have any type of independent checks completed and 3.6 million who assumed a mortgage valuation was sufficient. With the price of property stretching many home owners’ budgets, it appears people are scaling back on the level of surveys completed on their property pre-purchase and choosing to go down the cheapest route. The number of people having at least a base level survey has increased over time, from 63% 20 years ago to 91% in the last 12 months. The number of home owners, however, having the comprehensive building survey has reduced significantly from 28% 20 years ago to just 6% in the last 12 months. The research also found that 36% of UK surveyors have seen a change in the trend for people requesting surveys in recent years, the main one being an increase in the number of surveys requested compared to previous years. Some surveyors said buyers look for the cheapest survey as they want to save money throughout the property purchase. ‘It’s encouraging to see the number of people having a survey has increased over time. Only by having a qualified surveyor assess a property are prospective buyers fully informed of the true state of that property, so it is an essential part of the buying process,’ said Martin Scott, head of Churchill home insurance. ‘Those relying on a mortgage valuation alone should be wary as this is just a cursory look at a property from a mortgage lender to assess how much it is worth, not a survey looking at the state of the property,’ he added. The research also reveals that 23% of surveyors have had clients who needed expensive building works doing to their property soon after moving in, which would have come up in a more comprehensive survey. Indeed, one home owner had a Home Buyers report that missed the full extent of subsidence affecting the property while others needed roof repairs, had problems with dry rot, damp or heating issues, all of which would have come up in a full building survey. Overall 42% of UK home owners have needed unexpected works doing to their property within 12 months of moving in, some 9% needed major works completed, while 15% needed moderate remedial work. Demonstrating that scrimping on a thorough survey can be a… Continue reading
Stamp duty change and Brexit result in falling prices in prime central London
Prime central London property prices fell again in the first quarter of 2016 but transaction levels increased marginally, according to the latest index to be published. Overall the market was notably quieter during due to a combination of the uncertainty surrounding the European Union referendum and a slowdown following a boost in the first quarter ahead of stamp duty changes in April. The market has also been influenced by higher stamp duty for high value properties, according to the report from real estate firm JLL which adds that potential buyers adopted a wait and see attitude ahead of the referendum vote. Since the vote to leave the EU, and the subsequent weakening of sterling, several international buyers have been more active although a good deal of uncertainty remains, especially in terms of the medium term outlook, the report says. However, the fact that the vote is now in the past also seems to have encouraged a few more domestic buyers back into the market. The number of properties on the market has increased again during the second quarter as vendors fail to sell or elect not to sell at prices unacceptable to them. This additional choice and bargaining power for purchasers is contributing to both the scale of price falls and the slowdown in transactions. ‘Given recent uncertainty it is unsurprising that prices have weakened again. On average prices have fallen by 3.3% in the year to quarter two, but they have also declined in every quarter since the first quarter of 2015 as a variety of influences have impacted on confidence and switched the balance of power in favour of buyers,’ said Neil Chegwidden, residential research director at JLL. The data also shows that prices slipped by 0.9% in the second quarter of 2016 having fallen by 1.1% in the first quarter and price falls over the past year have been greater for higher value properties although large lateral flats continue to hold their value better than other large apartments or houses. On average prices have declined by 6% over the 18 months to the second quarter of 2016 with higher value property prices down by an average 10% and prices have fallen across all price ranges during quarter two and over the last year. The sub £2 million market continues to be the most resilient. However, prices have fallen in each quarter since the first quarter of 2015. On average prices in the sub £2 million bracket have fallen by 2.6% over the 12 months. Meanwhile, prices in the £2 million to £5 million market have been declining for 18 months now, with prices down 2.9% during the year to the second quarter. Prices in the £5 million to £10 million price bracket and the £10 million plus market have been impacted most notably by the stamp duty changes. Prices have dropped by 4.4% in the year to quarter two in the £5 million to… Continue reading
