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

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.

The Act requires notice to be addressed to the owner at their current address or alternatively to ‘The Owner’ at the adjoining property. If it is addressed to ‘The Owner’ it should be pinned in a prominent position on the adjoining property rather than posted. This is all very well but as it is usually the owner, as opposed to a surveyor, serving the notice they are unlikely to be aware of this caveat and simply drop it in the door of the neighbouring property only for it to sit on a hall table until your next property inspection.

There are two important time periods associated with party wall notices. The first is fourteen days and is the time allowed for an adjoining owner to consent to the proposals and the second is the notice period, which is either one or two months depending upon the type of notice.

The problem is that owners planning work assume that if the notice has not been replied to by either of those dates they are free to start work. Fortunately this is not the case as your tenant will almost certainly not have passed the notice on to you by the first date and possible not even by the second. If you do not reply to the notice you are deemed to have dissented and must appoint a surveyor. The surveyor will then prepare a Party Wall Agreement (known as an ‘Award’)

So what can be done if you only become aware of the work when it is already underway? If you catch it early you can request that work stops until you appoint a surveyor. Owners and builders normally do not react kindly to such a request as it is very disruptive but if they had followed the rules they wouldn’t be in that position.

If they refuse to stop work you can apply for and should obtain an injunction. There are two problems with this; if the notifiable part of the work has already been completed an injunction is no longer an option (the Act does not allow for retrospective awards) and injunctions are expensive. It is better all round if you receive the notice and reply to it before work is due to commence.

So the next time you give your tenant that list of reminders at the start of the tenancy, asking them to keep the heat on low on frosty nights or report and leaks immediately, remember to include a request to pass on all post immediately, even the boring looking brown envelopes from the Local Authority, and to make you aware if scaffolding starts to go up outside the neighbour’s property.

Article by Justin Burns BSc MRICS of Peter Barry Party Wall Surveyors

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

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

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.”

The Tax Advice Network is the UK’s first independent network of tax specialists. For more information visit www.TaxAdviceNetwork.co.uk

Notes:

1 - Taxation magazine, published by LexisNexis, was founded in 1927 and is the leading authority on tax law, practice and administration in the UK. The current issue appears on Thursday 3 July. Full copies of the 2,800 word article are available on request (see below).

2 – Mark Lee has been a tax partner at both BDO Stoy Hayward and at Horwath Clark Whitehill. He remains chairman of the Personal tax and finance committee of the ICAEW and vice chairman of the London Society of Chartered
Accountants tax committee. He is a well regarded speaker and a respected commentator on the tax scene.

3 - The Tax Advice Network is a free to use online search facility that helps you find the specialist tax adviser that you need.

It is the UK’s first independent network of tax advisers and was the brainchild of Mark Lee, a former Chairman of the ICAEW Tax Faculty. He has ambitious plans for the network drawing on his many years of experience in the profession and his involvement in both offline and online membership communities.
i
The Network provides accountants and other regulated advisers with the ability to choose who provides them and their clients with specialist tax support.

Our tax specialist members expect to enhance their businesses through the benefits they gain within the network. These include the additional exposure they get to their target audience and from being part of a supportive community of tax advisers.

Membership of the Network is limited to tax specialists who are able to satisfy our membership criteria and are willing to make a commitment to the Network and the members thereof.

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

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

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

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

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.

The ARLA survey shows that most investment landlords (77%) are marking time and neither selling nor buying.

The average capital asset values of rented houses have fallen by 2.4% in Prime Central London, 1% in the rest of London and the South East and 5.1% in the rest of the UK. For flats, average values rose in the South East by 0.9% while falling 3% in Prime Central London and 8.1% in the rest of the UK.

The average values of rented houses are £800,000 in Prime Central London, £336,900 in the rest of the South East and £223,500 in the rest of the country. Rented flats in Prime Central London have an average price of £486,300, compared to £213,000 in the South East and £149,400 in the rest of the UK.

Void periods have continued to shorten. This quarter they have fallen from 24 to 22 days. Tenants are still staying in properties for longer for an average of 16.3 months against 16.1 months in the previous quarter. They stay the longest in central London at 17.3 months. In the South East they stay for 16.8 months and for 15.4 months in other areas. 17% of all tenants are immigrants

The ARLA Survey of Letting Agents is the largest independent survey of its kind conducted in the Private Rented Sector and is supported by the ARLA Group of Buy to Let Mortgage Lenders: Bank of Ireland, Cheltenham & Gloucester, GMAC Residential Funding, Mortgage Express, NatWest and Paragon Mortgages. The Second Quarter 2008 survey was drawn from 444 responding lettings offices.

Click here to view the full ARLA Members Survey of the Private Rented sector