The latest UK property news is inevitably overshadowed – and then some – by the tumultuous political changes, twists, and turns at the very top of the pyramid.
Certain issues continue to circulate, such as energy-saving measures and discussions about rent and evictions in the private rented sector. But the main headlines are reserved for the weighty policy decisions that aired – however briefly – in the ill-fated mini-Budget of the 23rd of September and its influence on mortgage interest rates.
Energy Saving - landlords urged to do more
Against the background of swingeing energy bills this winter, a story in Landlord Today on the 19th of October shone the light on a new campaign called the Energy Guide.
The campaign is encouraging private sector landlords to do more to make energy-saving efficiencies in their let properties.
The need for action on the part of private landlords is highlighted by the Energy Guide which claims that 6.3% of homes in this sector are rated F or G – despite legislation that currently requires any let property to be rated at least E or above. In the social housing sector, by comparison, only 0.7% of homes continue to have ratings of F or G.
Legal opinion to be sought on Scotland's rent freeze and eviction ban
Landlords and their agents are looking to overturn decisions by the Scottish government that brought into effect emergency provisions to freeze rents and ban the eviction of tenants until at least the 31st of March 2023.
Groups representing the landlords and their agents have sought clarification of the legal validity of the emergency measures, according to a press release by the National Residential Landlords Association (NRLA) on the 12th of October.
The Tenants Protection Bill was introduced in Scotland in response to the worsening cost of living crisis and imposed a freeze on any further rent increases with effect from the 6th of September until at least the end of next March – though two further extensions of six months each are also envisaged, if necessary, in the legislation.
At the same time, a six-month stay has been imposed on all evictions – which will be allowed only under certain prescribed circumstances – to give tenants longer to consider their options in finding elsewhere to live.
What the mini-Budget reversal means for the housing market
When the then Chancellor of the Exchequer, Kwasi Kwarteng, set out his mini-Budget on the 23rd of September, the financial markets reacted immediately and vigorously – reflected in the plummeting value of the pound and intervention by the Bank of England to increase the minimum lending rate (and, therefore, the interest rates on mortgages).
Almost all of those decisions were reversed by the current Chancellor Jeremy Hunt and the effects of those U-turns are analysed by the online listings website Zoopla on the 18th of October.
The main takeaway is that the housing market is likely to stabilise once again after the reversals made by Chancellor Hunt but that mortgage interest rates are likely to continue to rise – and this, in turn, can be expected to slow down further growth in house prices.
The principal tax change to remain is the raising of the threshold for Stamp Duty. This kicks in only on house purchases of more than £250,000. On a value between £250,000 and £925,000 there is 5% to pay; from £925,000 to £1.5 million, 10%; and on the value above £1.5 million, 12%.
Two-year mortgage rates hit fresh 14-year high
Echoing the point about increasing mortgage interest rates, the BBC on the 18th of October reported that these are now higher than at any time since 2008.
Although the main impact of increases in the Bank of England lending rate has yet to feed through to the whole of the mortgage market, the BBC revealed that the average rate of interest for a two-year fixed-rate mortgage has risen to 6.53% and that for a five-year fixed rate mortgage now stands at 6.36%.
Right to Rent changes explained at webinar
In a news release on the 18th of October, Property Wire revealed details of a webinar organised by Propertymark and a speaker from the Home Office on recent changes to the Right to Rent legislation and guidelines for landlords and lettings agents.
The operation of Right to Rent checks has changed and the new guidelines reflect:
- the system’s emergence from the restrictions of the pandemic;
- the completion of Britain’s exit from the EU; and
- the steady progress of digitisation of procedures at the Home Office
At the webinar, the Home Office spokesman outlined how these changes have ushered in new roles for identity service providers (IDSPs) and the digital systems developed for EU citizens and overseas nationals.