Uk
Conveyancers set for a year of change ahead in UK home buying industry
The outlook for conveyancers in the UK is looking like one of change with extra stamp duty and high demand set to make 2016 a buoyant year for the industry, according to the latest sentiment tracker report. Some 27% of conveyancers believe transaction levels will increase by up to 20% this year, according to the report from Searchflow. It also says that with the UK Government encouraging first time buyers to the market and pledging to build new homes there will be change in the industry. The conveyancing industry is very likely to see a rush to complete property purchases prior to April when the extra stamp duty on buy to let and second home purchases becomes active. But according to Maud Rousseau, the firm’s group marketing and communications director this is likely to settle later in the year. ‘If rents remain high and housing stock is still in short supply, buy to let will remain a profitable investment for many. The market will continue to be boosted by new homes,’ she added. She also pointed out that last year saw a record level of new homes being built, up 25% year on year and reaching the highest annual increase in a generation. This trend is set to continue as the Government continues to roll out planning reforms to help increase housing supply. Technology is also set to have an impact. ‘With the advancement of agile technology and big data analytics, search companies are seizing upon the opportunities to drive through major changes. Data and technology providers are working together to create a one stop shop to not only streamline the process but help improve risk management,’ said Rousseau. ‘The trend for transparency within the conveyancing sector will continue to drive the delivery of new product offerings tailored for the homebuyers. These products will enable conveyancers to provide their customers with an improved service, whilst also benefiting from reducing their time required to update clients,’ she explained. The impact of online estate agents is set to be a major topic of debate this year is another issue highlighted in the report and it says that the conveyancing industry needs to be prepared to adapt quickly if online estate agents achieve their ambition of being ‘highly disruptive in the world of estate agency’. This year, there are a number of planned consultations that could have a very significant impact on the conveyancing sector. They included the Government’s consultation on the privatisation of the Land Registry will be closely monitored. And in advance of the review of Legal Services Act which is scheduled to be reviewed during this parliament, the Government has announced its consultation on alternative business models entering into the legal sector. The Government claims that it wants to ensure that innovative businesses are able to enter the market, providing greater choice for consumers. The Solicitors Regulation Authority (SRA)… Continue reading
Surge in demand for buy to let funding via limited companies from UK investors
The decision by the UK government to charge an extra 3% in stamp duty on but to let property buyers from April this year has led to a sharp increase in demand for limited company lending. New research shows that property investors looking for finance using a limited company has increased and at the same time the number of buy to let lenders offering finance to limited companies has also risen. The latest index from Mortgage for Businesses, covering the second half of 2015 shows that new applications for limited company buy to let mortgages had dipped to 15% of all buy to let applications in October but, then, almost immediately started to rise sharply, spurred on by the stamp duty surcharge announcement. By December, new limited company buy to let applications accounted for just over 38% of all buy to let applications. Completions for limited company buy to let mortgages accounted for nearly 22% of all buy to let completions in October, up from nearly 17% the previous month and this increased to 24% in December. ‘The increase in limited company buy to let activity is to be expected since the proposed restrictions to buy to let mortgage interest relief for individuals paying the higher tax rate were announced by the government in the Summer Budget,’ said David Whittaker, managing director at Mortgages for Business. ‘Operating portfolios via corporate structures is expected to be more tax efficient, particularly for higher tax rate-paying individuals, including individuals where the new tax regime will tip them into the higher tax bracket where previously they had remained below it,’ he explained. ‘The stamp duty surcharge has also had a direct impact on activity with investors trying to get purchases completed before 31 March 2016, particularly as the actual rules where the surcharge will apply will not be confirmed until 16 March 2016,’ he added. The index also shows that almost a third of buy to let lenders offered products to limited companies in the second half of the year, up from 23% in the first half of 2015. However, by the end of December this figure had risen to 36%. The number of products for limited company applicants increased by nearly 50% to an average of 147 in the second half of 2015, up from 99 in the first half of the year. ‘It’s good to see that the results continue to disprove the theory that there are insufficient products available to limited companies. It’s also interesting that pricing has come down, if only marginally. I wouldn’t be at all surprised if rates for limited companies reduced further in the coming months but I doubt we’ll see huge falls,’ said Whittaker. In December 2015 products for limited companies were, on average 0.7% points more costly than the market as a whole, a marginal reduction compared to July when it was 0.8%. The average limited company rate in December was 4.4%, down from 5.4% in July. Across… Continue reading
Millions of pounds handed over to councils for new homes in UK
Housing Zones around the UK are now receiving funding that the government says will kick start work to build tens of thousands of new homes. Nearly £6.3 million is being distributed to help revive brownfield sites across the country which comes on top of a £1.2 billion Starter Home Fund designed to prepare brownfield sites for at least 30,000 new homes. The funds will be used to speed up work, enabling homes to be delivered quickly and most of it will go to councils to help with work in 19 out of the 20 flagship Housing Zones, which are described as a new approach to getting new homes built easily and quickly. The 20 Housing Zones, spread across the country, will see councils working in partnership with private developers to deliver the new homes on brownfield land. Housing Minister Brandon Lewis also said that the government is also committing to work with an additional eight short listed potential Zones and together these have the potential to deliver 45,000 new homes. ‘Housing Zones offer enormous potential to use brownfield land for new homes which is why this government is determined to get them built out as soon as possible. This funding will play an important part in getting work underway which will lead to new homes and more security for aspiring home owners,’ he explained. ‘Britain is building again with the number of new homes up 25% in the past year and these zones will play an important part in giving an extra million people the chance to achieve their dream of home ownership,’ he added. The funding includes £600,000 in Guildford, £27,000 in Hertsmere, £700,000 in Thurrock, £150,000 in Gedling, £165,000 in Greater Gainsborough, £240,000 in Stoke city centre, £213,616 in Derby and £220,000 in Gateshead. There is also £365,000 in York, £261,000 in Wakefield, £165,000 in Preston, £700,000 in Weston-Super-Mare, £124,116 in East Hampshire, £300,000 in Gloucester, £313,000 in Bath and North East Somerset, £100,000 in Hinkley, £300,000 in Bristol, £330,000 in Tewkesbury and £30,000 in Poole. The remaining £740,000 from the fund will be used to provide specialist technical support to the Zones. There will be further new developments coming in 2016 as part of the Housing and Planning Bill including a new legal duty on councils to guarantee the delivery of Starter Homes on all reasonably sized new development sites, and to promote the delivery of Starter Homes in their area. Also there will be permission in principle for sites identified in plans and brownfield registers to give certainty around the sites that are suitable for housing, while protecting the green belt and planning reforms to support small builders requiring councils to ensure they have shovel ready plots to match the local demand for custom build. Continue reading
