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Energy efficiency savings questioned, house prices, Covid’s effect on the property market, new property tax, and RICS standards

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Want to know what’s hot in UK property news? Then just read on.

Headlines have been made by recent findings about the financial cost of some energy efficiency measures, the inexorable rise in average house prices – and the effects of the pandemic on them – the prospect of a new property tax, and the introduction of new standards of conduct by the Royal Institute of Chartered Surveyors (RICS).

Let’s take a closer look.

Not all energy efficiency measures save money even after five years

Energy efficiency could be costing landlords more than originally envisaged.

According to a report in Landlord Today this week, research has shown that most energy efficiency measures introduced in private rented property have failed to recover their capital cost even after five years – let alone having achieved savings.

Some of the costliest improvements – which fail to show any economic gain after five years – include upgrading the central heating boiler, fitting double-glazing, and the installation of solar panels. They involve spending around £2,500 to save just £850, £4,250 to save £850, and £4,800 to save £1,650, respectively.

Draught-proofing, roof insulation, and wall insulation, on the other hand, soon pay for themselves – well within five years – an outlay of £3 to save £215, £285 to save £500, and £400 to save £500, respectively.

Average house price rises sharply

The House Price Index maintained by the Halifax building society and published on the 7th of October shows a further steep rise in average house prices to reach a record high of £267,587.

This is the result of a 1.7% increase in average prices in the past month alone, an increase of 1.5% over the quarter, and 7.4%over the past 12 months.

Average house prices continue to rise faster in both Wales and Scotland than they are in England.

How Covid has affected the UK property market

One of the unexpected side-effects of lockdowns during Covid has been a steep rise in the number of “flipped” properties, revealed iNews on the 9th of October, explaining that this is the process whereby someone buys a dilapidated property in need of renovation, does it up, and immediately sells it on – hopefully – at a profit.

Citing research by estate agents Hamptons, the news story referred to an estimated 19,000 properties that were flipped in this way. An average profit of £48,190 was made by the 75% of buyers who made more on the eventual sale of the property than they did on its purchase.

Government releases draft legislation for new property tax

The government is planning to raise more funding for remedial works on high-rise buildings with dangerously flammable cladding by introducing a new property tax called the Residential Property Developer Tax, according to Estate Agent Today on the 11th of October.

At this relatively early stage, all that is known about the proposal is:

  • its purpose in raising funding for remediation cladding works on dangerous buildings;
  • the tax will be levied on developments that are mainly residential in nature – whether or not any of the developer’s properties use cladding in any way;
  • the tax will be applied with effect from April 2022;
  • the government aims to raise a total of £2 billion through this measure by 2030; but
  • there is yet no indication of the rate of tax that will be applied – although this is expected to be announced in the Chancellor’s forthcoming budget on the 27th of October.

The press release adds that it expects the new tax to be applied to developments that include the conversion of commercial property to residential, and that gardens and grounds will also be included in any assessment of value for tax purposes.

New standards of conduct set by RICS

The Royal Institute of Chartered Surveyors (RICS) has published a new code of ethical standards that will set the tone for the professional body’s conduct globally.

In a posting on the 11th of October, the website Specification Online revealed that at the heart of the new standards of conduct are two principal strands:

  • all firms having any kind of contact with RICS will be encouraged to implement practices that ensure diversity and inclusivity among the employment of surveyors anywhere in the world – regardless of individuals’ backgrounds or differences; and
  • all members of RICS will be expected to respect and promote advice and guidance on sustainability issues, so that clients will be helped in meeting whatever targets are set by governments around the world.

The new standards of conduct will come into effect on the 2nd of February 2022.