Yearly Archives: 2018

The Express has commented on the data released by trade lending body UK Finance which demonstrates that the number of first time buyers in August was the highest monthly level since June 2017.  Whilst this is not a particularly long time, it may demonstrate to the Chancellor that the changes to the taxation of properties owned by investors is working to assist people get on the property ladder.If the Chancellor decides the existing changes have not made enough of a difference he may well consider implementing the rumored proposal to give a capital gains tax exemption to landlords who sell property to tenants who have lived in the property for three years or more.  It has also been suggested that the exemption is split between the landlord and tenant so that the tenant has a contribution towards their mortgage deposit.This would put tenants in a very strong bargaining position if they wanted to buy the properties they have been renting, but the overall effect on the property market is something the chancellor will want to consider carefully.The fact that the phrase ‘housing ladder’ is thrown about so often demonstrates how we in the UK treat our homes – always an investment rather than just a place to live, waiting to move to the next ‘rung’.  The UK economy in turn in intrinsically reliant on the property market ‘working’ and further taxes on landlords could be the straw that breaks the camel’s back.Landlords and tenants alike will be waiting with baited breath for the budget to see if the proposals are to be implemented, however the effect of them will take far longer to be realised.

The BBC has published an article with some shocking statistics on the affordability of renting for young people.The article states that “a salary of £51,200 is needed to “afford” to rent a one-bed London home”. This is an astonishing figure, particularly when you consider that this could provide you with a 10% deposit for a half million pound house (should you be able to save up these monies instead of paying them on an annual rent).The report focuses on those in their 20’s, as recent studies have shown that they are more likely to rent.Collyer Bristow LLP has commissioned its own report looking into ‘generation rent’. A copy is available here.This report found that 100% of 20-24 year olds have aspirations of owning their own home. This seems an insurmountable task when you consider the huge rents they are expected to pay each year.Alex O’Connor, Partner in Commercial Real Estate said: “We all know that there is a housing crisis in the UK and that it is particularly acute in London and the South East. We have seen developers bring forward new tenures, such as dedicated Build-to-Rent schemes, but home ownership remains the ultimate goal.”“It is interesting that all of our panel’s 20-24 year olds say that they will own their own home, only for those hopes to be dashed when the reality of buying a property hits home. That picks up slightly, perhaps as our panel start to marry and think about starting a family.”Whilst measures are being implemented, new types of tenure considered and there are new and creative ways being introduced to improve the market, the housing crisis is not going to disappear and something needs to be done urgently if young people’s dreams of owning their own properties are to be fulfilled.

The Ministry of Housing, Communities and Local Government made a new announcement on 1 October 2018.On the face of it, it is brilliant news. The announcement addresses the need for planning reform to provide the homes the country so desperately needs, measures to improve the safety of high rise buildings following the Grenfell Disaster and a ‘New Homes Ombudsman’.This new ombudsman is said to “champion the rights of homebuyers and help ensure that when they buy a new home they get the quality of build they rightly expect”. The announcement continues that “the New Homes Ombudsman will protect the interests of homebuyers and hold developers to account when things go wrong.”This sounds like great news for homebuyers and could help boost the market if buyer concerns over ‘dodgy developers’ are reduced. However, developers would be right to be slightly more sceptical about the announcement. This is because the government has stated that they intend to introduce legislation requiring developers to belong to a new homes ombudsman – and frustratingly, that is all the information there is at present!This leaves developers and home builders with the potentially onerous obligation of being required, by legislation, to belong to a watchdog but there is a complete lack of detail about that watchdog. There is no information as to how many watchdogs a developer will have to select from when they join, how the watchdogs will be made up or what powers they will have.This seems to be a bit like the recent announcement on ground rents – where a grand statement has been made but those it affects will have to wait some time (and presumably until after Brexit is sorted) until housing is back on the agenda and some clarity is finally given.