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First-time buyer deposits, rural properties, arrears thresholds, repairs to flats, and London’s declining population

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Headline writers seem to have been especially busy these last few days as they respond to stories about the property market. The following property news stories are some that caught our eye.

First-time buyer deposits rise to almost £60k

The lively recovery of the market and rocketing house prices in the last part of 2020 is likely to have hit first-time buyers especially hard.

A story in the Daily Mail on the 25th of January revealed that, as the average price of a home in the UK rose to £267,000 (and above £500,000 in London), the average deposit that had to be found by buyers climbed to a record £57,278.

Average deposits leapt by some 25% in many parts of the country, taking 2019’s average of £46,449 up by more than £10,800 to nearly £60,000. In the capital, the increase was even more severe – an average deposit of £130,357 which is more than £20,000 higher than the average in 2019.

Even with house prices riding such a high, the article noted that first-time buyers still make up roughly half of all mortgage-backed home purchases. At the same time, though, more than 50% of first-time buyers under the age of 30 were able to do so only with thanks to the bank of Mum and Dad.

Demand for rural properties on the rise

Older homeowners have naturally fared amongst the worst of the population under the restrictions of coronavirus lockdowns – loneliness and difficulties in seeing children and grandchildren have hit them hard.

It may be little wonder, therefore, that estate agents have noticed a surge in demand for senior living properties in the countryside from this older demographic, reported Property Wire on the 23rd of January.

A move to a more rural location offers such buyers a chance to enjoy a village lifestyle and the type of community spirit they may have missed during lockdown.  Plus, access to greener open space, and the prospect of moving closer to other family members.

In addition to entirely independent living, the slightly more elderly are also showing their preference for purpose-designed retirement communities. Associated Retirement Community Operators (ARCO), for instance, has said that 55% of its survey respondents reported at least a 30% increase in demand over previous years, while 25% of respondents said they had seen sales increase by 50% or more.

“Substantial arrears” threshold stays at six months

In an article on the 25th of January, Landlord Today reminded its readers of the relevance of rent arrears for landlords wanting to evict tenants or repossess their property. In this context, “substantial arrears” continues to be defined by rent arrears of longer than six months.

On the 13th of January, Financial Reporter had noted that the Financial Conduct Authority (FCA) had extended until the 1st of April the ongoing ban on landlords seeking to evict or asking the courts for repossession orders. One of the few exceptions to the ban was in the case of tenants who had slipped into “substantial arrears” of more than six months.

Six months remains the defining period for substantial rent arrears – and the ability of a landlord to seek eviction or repossession – confirmed the story by Landlord Today.

Flat owners launch £2.2 million claim over the cost of repairs

Since the Grenfell Tower disaster in June 2017, leaseholders of flats in high-rise blocks across the country – but especially those in London – have been locked in disputes with landlords, developers, and contractors about the high costs of fire safety repairs and alterations.

A story in Homes & Property on the 25th of January recounted the action – and frustration – of leaseholders of flats in a block in Hornsey in the North London Borough of Haringey.

The residents of 56 flats in two blocks have now opened legal proceedings in pursuit of a claim of £2.2 million launched against the National House Building Council (NHBC) for fire safety remedial works.

NHBC is believed to have provided the 10-year guarantee against major defects in the newly-built blocks of flats which were completed by developers Bellway Homes in 2011.

The legal action by the Hornsey residents is one of the first to come before the courts since the tragedy occurred.

What London’s falling population means for the housing market

For the first time in three decades, the population of London is in decline, according to a report published by the Financial Times on the 22nd of January.

The capital has suffered a double blow as a result of the coronavirus pandemic and the restrictions which followed. Not only have many London residents looked to move away to less crowded, semi-rural communities where they can work from home, but foreign immigration has also been stemmed by the controls of the pandemic.

The Financial Times estimates that nearly 700,000 foreign immigrants alone have now left the capital.

With such a dip in demand – the population has effectively shrunk by around 8% – rents have fallen (by an average of almost 7%). The FT investigates whether this is likely to be a temporary blip or a longer-term trend.

It draws the conclusion that while falls in rental yields and the price of houses in the short-term is bad news for property owners, it may prove a welcome reset for the market in London homes in the longer-term if more affordable prices attract the return of younger buyers.