Ministers aim to give market shot in arm

Measures designed to prop up the ailing housing market were pushed out by ministers yesterday amid a blizzard of bad news for the sector.

Jim Pickard, Political Correspondent, FT.com - 3 July 08

Caroline Flint, housing minister, confirmed plans to change payments to housebuilders from public sector clients so that they would receive more money upfront.

Other plans, revealed in the Financial Times last week, include a new clearing house to help housing associations find appropriate properties that developers cannot sell privately.

Ms Flint also announced £270m for specific projects from housing associations to deliver 3,800 homes for social rent and 1,500 for shared ownership. The money will come out of an existing three-year affordable housing programme - full article

Landlords and The Party Wall Act

Being a Landlord you rely upon your tenants to do many things; pay the rent and look after your property would be the main two but passing correspondence on to you can be equally important, particularly when protecting your property from structural damage could depend upon you receiving that correspondence.

As prices have risen over the last few years more and more owners have decided to extend their homes as a cheaper alternative to moving. Many of these alterations will put adjoining properties at risk of damage and structural movement which is why they fall within the scope of The Party Wall etc. Act 1996.

Many owners believe that the Act only covers work which involves alterations to a party wall but the scope of the Act is much wider than that. It also covers adjacent excavations (such as those for the foundations of extensions) and under the Act ‘adjacent’ means within three or six metres depending upon the depth of the excavation. This means that as well as loft conversions most domestic single storey extensions, even on semi-detached or detached houses, require notice to be served under the Act.

So how can you ensure that you are given the opportunity to examine the proposals, and if necessary appoint a surveyor, before work commences? The procedures laid down in the Act are actually very helpful to adjoining owners if only owners planning building work followed them.

Continue reading Landlords and The Party Wall Act…

Guarantee for bank savers raised to £50,000

Alistair Darling confirmed yesterday plans to increase the guarantee on depositors’ savings to £50,000 if their bank fails, but said that the bill would be met initially by taxpayers, not by the industry.

The Times - Siobhan Kennedy and Christine Seib - 2 July 2008

The increase from the existing £35,000 is an attempt to give consumers more confidence in the banking system in the event of another Northern Rock-style collapse.

Yet rather than ask the banks to pre-fund the deposit - as in the United States - the Chancellor said that he was not proposing to introduce such a scheme immediately, although he kept the door open for the future.

Instead, if a bank fails, the Government will use taxpayers’ money to pay out the deposits within seven days. Then it will claw back the funds through a sale of the banks’ assets - a process than can take months or years - as well as a levy imposed on other banks - full article

Centre for Cities report highlights NALS Scheme to Regulate Agents

With the prediction of the continuation of high demand for rented homes and as many as 3.6 million tenants by 2021, National Approved Letting Scheme (NALS) has fully welcomed the findings of think-tank, Centre for Cities which recently launched its comprehensive report on “The Future of the Private Rented Sector” which highlighted the NALS accreditation scheme to regulate agents.

2 July 2008

The Lord Richard Best’s chapter entitled: “Time to Regulate”, the Vice-Chairman of The Ombudsman for Estate Agents (OEA) highlighted the work of NALS, the approved and Government recognised accreditation scheme, originally set up by RICS, NAEA and ARLA together with the Empty Homes Agency.

Referring to NALS, Lord Best said “the National Approved Letting Scheme which accredits lettings and management agents and gives reassurance to landlords and tenants that they are in safe hands. Such accreditation provides the basis for a complaints and redress scheme by establishing the criteria against which standards of service can be judges.”

Caroline Pickering, Chair of The National Approved Letting Scheme (NALS) said: “With the number of accredited firms growing and with some 1600 lettings agents in the UK currently signed up voluntarily to the NALS scheme we are delighted to receive this recognition by Lord Best. NALS accreditation is imperative to the many hundreds of firms who use the NALS kite mark to demonstrate to consumers they meet an industry standard for customer service.”

Adding further value and weight to the accreditation, in January this year, consumers using NALS agents benefited from a partnership between the OEA and NALS allowing them easier access to independent redress to settle any disputes and seek early resolution to issues.

About NALS

NALS is backed by the Government and the professional bodies in the lettings sector. NALS offers a reliable benchmark for landlords and tenants to compare the standards of service they receive from residential letting agents. All accredited firms commit to providing clearly defined levels of customer service, have client money protection cover, maintain professional indemnity insurance and operate a customer complaints procedure. For more information visit www.nalscheme.co.uk

Top tax man reveals frustrations with the tax system as main reason he no longer gives tax advice

Mark Lee, a past Chairman of the ICAEW Tax Faculty has revealed that his frustrations with the tax system led him to move away from giving tax advice two years ago, despite having reached the top of his profession.

Wednesday, 02 July 2008

In an extended ‘Comment’ article in the current issue of Taxation magazine, Lee, who is a Fellow of both of the Institute of Chartered Accountants and of the Chartered Institute of Taxation, explains that his frustrations were a direct consequence of three key developments in the tax system, some of which Lee felt were in danger of bringing tax law into disrepute.

“The ever increasing complexity of our tax system has caused inequalities and inconsistencies and this is not helped by the ‘doublespeak’ of politicians and civil servants with regards to our tax system. Combine this with the prospect of increased powers for HMRC without adequate safeguards for taxpayers and things become very worrying indeed” says Lee.

But despite his reservations about giving tax advice directly, Lee still retains a passion for supporting other accountancy professionals and last year, at the age of 50, he founded the UK’s first independent specialist tax advice community - the Tax Advice Network. In just over six months the Tax Advice Network has grown to over 1,000 accountants and other registered users, who regularly use the network to source quality and up to date tax advice from tax specialists across the country.

Taxation magazine editor Mike Truman commended Lee for his contribution by saying “Mark is probably one of the few people who can write about this from the inside, because he is no longer giving advice, yet is still closely involved with the tax scene.”

Continue reading Top tax man reveals frustrations with the tax system as main reason he no longer gives tax advice…

Painful economic correction looms as mortgage lending collapses

The risks of a painful correction in the economy are increasing, judging by economic data showing new mortgage lending has collapsed, consumer confidence near all-time lows, and lower productivity that will put pressure on businesses to cut jobs.

Property Week, 01.07.08

The Bank of England said yesterday that mortgage approvals for house purchase slid from 58,000 in April to 42,000 in May, much lower than analysts had expected and 64% down on a year earlier. First-time buyers have almost completely disappeared and the mortgage market is at a standstill as Britain endures its worst housing slump since the 1970s, official data suggested yesterday.

The figures confirm the speed at which conditions in the housing market have deteriorated. Mortgage approvals are one of the best guides to the likely course of house prices, as they reflect new funding entering the market - full article

UK Commercial & Residential market overview June 2008

Despite some recent stability, a further softening in yields looks likely in the next few months, particularly for secondary stock. However, there does now appear to be some light at the end of the tunnel and whilst it seems clear that there will be more distress in the months ahead, so far at least, the dire predictions of bank foreclosures and widespread forced asset sales have not materialised.

Property Week - 1 July 2007

To some extent, this has actually held the market back from finding its floor as buyers and sellers are not yet in agreement on pricing. A lack of evidence is still masking exactly where the market is standing.

So far, the indications are that occupier markets are holding up well but parts of the market are undoubtedly more challenging and looking forward in to 2009, rental growth looks set to slow as weaker demand and inflationary pressures leave occupiers looking to cut costs.

As a result, the UK property investment market will remain demanding and, inevitably, comparisons with the slump of the early 1990s will continue to be drawn. There are, however, important differences between then and now.

Not least, there is currently a strong weight of money standing by to invest once the market is deemed to have reached its floor, focusing on prime stock.

This, together with a relatively balanced occupational sector, a falling pipeline of future developments, high employment levels and the lingering promise of lower interest rates, are the important elements which were not present during the recession of the early 1990s and which still point to the start of a recovery in the market by the year-end.

Cushman & Wakefield - For the full report click here

Landlords predict growing demand

A leading survey of landlords has shown that over half are confident that demand for rental properties will increase.

Paragon Mortgages’ trends report found that 54 per cent of the 200 questioned believe tenant demand will continue to grow over the next year, as difficulties in securing a mortgage force many people to rent rather than buy.

MoneyExpert.com, 30 June 08

Managing director John Heron said potential buyers are “uneasy about the current market”, adding: “Combined with strong demand from students, immigrants and people that choose to rent as a lifestyle choice, this is putting an increased strain on the private rented sector’s stock.”

Only five per cent of landlords surveyed predicted a decline in demand over the next 12 months.

Bank of England governor Mervyn King this week said that activity in the housing market would slow down, though he could not predict how long it would be before a recovery sets in.

Paragon Mortgages Index - May 2008

First-time buyers trapped by rent rises

First-time buyers trapped by rent rises

The dream of homeownership has slipped farther from the reach of first-time buyers, who have been unable to afford a home because of the credit crunch.

Property Week - 25 June 2008

They are being squeezed again, by surging rents - up by almost a third in some areas - and by yet another increase in borrowing costs.

Monthly bills for a rented home have risen by an average 11.7 per cent across Britain in the past year, according to research from Paragon, a buy-to-let mortgage lender.

Tenants in the South West have been hit hardest, paying almost 30 per cent more in rent than a year ago, with those in East Anglia, the North and Yorkshire reeling from increases of up to 25 per cent.

Banks turned the screws even tighter yesterday when they raised the cost of borrowing, increased rates and demanded bigger deposits. One lender, Woolwich, will require as much as 20 per cent of the value of the property on many of its popular mortgage deals - full article

Rents Steady as Supply & Demand come into Balance

ARLA Members’ Survey Q2 2008

Marginal falls in rental returns for houses and flats are reported in the latest quarterly survey of ARLA’s member letting agents published today, June 9. This, ARLA believes, is due to the number of new developments coming on-stream. The Association also points out that this demolishes the myth that rent levels are soaring.

Demand for rental property still outstrips supply in some areas, with the proportion of letting agents reporting this imbalance at its highest in Greater London and the South East, followed by Prime Central London and the rest of the country. Overall, the proportion of agents reporting more tenants than there are properties available to rent remains at a historically high level of 39%. However, average weighted rents for houses are down by 7% and for flats by 9%.

Commented Ian Potter, Head of Operations for ARLA, “We are seeing corrections in individual locations throughout the country. The main cause of these is the developments of new blocks of two-bedroomed flats coming on-stream. In many places this has had a positive effect as it has allowed the rental market to provide stability in housing at a time of volatility in the sales market. It also demolishes the myth of soaring rent levels. As before in volatile times, the rental market is proving to be the white knight for housing as a whole.”

Average rents for a house range from £3,000 a month in London to £931 a month outside the South East. For flats, the rental difference is £2,000 a month in central London, £854 in the South East and £585 a month elsewhere.

Continue reading Rents Steady as Supply & Demand come into Balance…