The New Year continues to bring a spate of news headlines about the property market. The subjects include some old chestnuts that have long been around, while others shine a light on new developments emerging amidst the on again, off again lockdowns and restrictions of the pandemic.
Let’s take a brief look at some of them.
The new laws being introduced to protect leaseholders
Relief might finally be at hand for the thousands of leaseholders plagued by some of the inherent injustices of this particular form of homeownership, according to a story in the Daily Mail last week.
We have often reported on the problems facing many leaseholders – resting with our story on the 28th of August 2020 that offered a glimmer of hope following the publication of an in-depth study and preliminary recommendation by the Law Commission.
Those issues centred around homeowners mired in a scandalous doubling of ground rents in precious few years or extortionate charges simply to extend the lease, resulting in many homes proving practically impossible to sell on.
The housing minister, Robert Jenrick, will introduce new legislation designed to give rights to leaseholders to extend their leases for up to 990 years with zero ground rent to pay.
The proposals represent a truly radical shakeup of existing legislation and promise to save leaseholders many thousands of pounds along with freeing up their property onto the open market. There will no longer be any ground rent to pay on leases extended far into the future (up to 990 years). While there will still be a charge for extending the lease or buying the freehold, the costs will be significantly lower than at present – and householders can access a new online calculator to estimate those costs.
Passing the required legislation will still take a little time – when the parliamentary timetable allows – and this may yet be several months or even into next year. But the government has promised to bring forward the next steps during the current parliamentary session.
Which cities are enjoying a property boom?
Major cities across the UK are experiencing a property boom, reported Property Investor Today this week.
In a dozen of the country’s largest cities, sales activity has increased by as much as 55% in the past 12 months, according to letting agents Apropos.
The biggest surge in activity was seen in Edinburgh, where there are currently 55% more properties advertised for sale than at the same time last year. Activity in London was 40% up, while Brighton, Bristol, and Coventry were following closely behind, with increased activity at 26%, 21% and 20% respectively.
The buoyant activity in these markets may be explained by the release of pent-up demand after emergence from the first national lockdown and the encouragement given by the current Stamp Duty holiday. Developments over the next six months are likely to be determined by levels of employment, company insolvencies, and the general health of the economy.
Bucking the current positive trends there were also cities in which sales activity decreased. In Bradford, for example, there were 23% fewer properties for sale than at the same time last year, while Liverpool, Newcastle, Derby, and Hull, also recorded fewer listings – having dropped by 18%, 17%, 11% and 6% respectively.
Eviction ban in England extended for six weeks
The government has extended the ban on the majority of evictions from rented accommodation until “at least” the 21st of February, reported the Independent newspaper recently.
The move has been seen as a rushed response by the government to mounting difficulties faced by an increased number of tenants to pay their rent. Banning repossession orders against a background of rising rent arrears represents no more than a “sticking plaster” solution, complained the National Residential Landlords’ Association (NRLA), in a press release on the 8th of January.
End of 2020 house prices finish at a record high
To cap what has been one of the most challenging years in recent history, on the 9th of January the Express newspaper carried a story expressing its astonishment at house prices having gained a record high. The average price of a home stood at £253,374 by the end of 2020.
Commenting on the house price index maintained by building society Halifax, the newspaper revealed that values had risen for the sixth month in a row and that the increase in prices for December was 6% higher than the same month last year.
2020 was clearly a year of two halves, commented property market analysts. They reflected on a distinct fall in activity and prices during the first half of the year. This was followed by an upsurge in the second half, thanks to the release of pent-up demand, an eagerness among buyers to consider different places to live, and a temporary reprieve from Stamp Duty – until the end of this March, at least.