House buyers insist on ‘No vote’ clause for Scottish purchases

House buyers are making offers on properties in Scotland conditional on independence being rejected in this month’s referendum, it has been disclosed.

With opinion polls showing the No side’s lead has closed to six points, solicitors reported that potential purchasers are insisting on clauses that allow them to walk away if there is a Yes vote on September 18.

Murray Beith Murray, an Edinburgh law firm, said properties in the city’s New Town worth between £1 million and £2 million were most affected as they were often bought by wealthy people moving up from London.

The Telegraph also understands that buyers in Fort William and Oban have also insisted on similar clauses. Properties in the area are popular purchases as holiday homes with well-heeled buyers from south of the Border.

Sandy Burnett, a partner specialising in residential property sales and purchases at Murray Beith Murray, said cases were becoming more common as the vote approaches.

“There are often conditions put on offers, but the new one is where it says ‘in the event of a yes vote on 18 September the purchasers can resile from the bargain’, meaning ‘walk away from the contract’,” he told the Edinburgh Evening News.

“I received one offer for a flat conditional on a no vote last week. I have spoken to other agents and it is increasing as we are getting nearer to the referendum. At the moment there is a general air of uncertainty, and no market likes uncertainty.

“In Edinburgh, the top end has been most affected – the £1 million to £2 million New Town properties which are often fuelled by London buyers or Scots coming back from London. They’ve been sitting on their hands for the last few months.”

Investors have been attracted to the property market in recent years as low interest rates have meant savings in bank accounts have produced low returns but Mr Burnett said this had slowed down as people “wait and see”.

He said the market has increasingly slowed down as the referendum date drew closer and the housing market will remain in the “doldrums” until a decision is made.

Potential buyers are also unsure what would happen to mortgages after a series of expert reports warned a separate Scotland would pay higher interest rates.

David Cameron has warned the increase would be “crippling” if Alex Salmond presses ahead with his threat not to accept a share of the UK’s national debt.

http://www.telegraph.co.uk/news/uknews/scottish-independence/11076072/House-buyers-insist-on-No-vote-clause-for-Scottish-purchases.html

Absolute Property Sales – sell your property for just 0.5% + VAT if you instruct us before 30th July 2014!

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Licensing Private Rented Housing to tackle ASB – Proposed Licenses for Enfield Borough Landlords

The London Borough of Enfield, like other London authorities, has seen a considerable rise in the number of houses rented out by private landlords as part of the private rented sector in the last decade.

In Enfield the private rented sector now has approximately 27,500 properties rented as private sector homes, which is approximately 20% of all the homes in the borough. This represents more than double the size of this sector when compared with 10 years ago.

There are concerns regarding a pattern of anti-social behaviour, which is linked to the private rented sector. Enfield Council is extremely concerned about this association, as there seems to be no indication that the current arrangements with landlords and tenants to improve the standards of property and tenancy management are adequately addressing the reduction of levels of unacceptable behaviour.

If the Council does not take decisive action, the indications are that the situation will continue to get worse with parts of the borough deteriorating in a negative spiral of poorer conditions – both for private tenants and their neighbours.

As a result of these concerns, the Council commissioned specialist data analysts NKM, to analyse the levels and location of anti-social behaviour, and any correlation with the presence of private rented sector tenancies. This research has provided evidence that there is a link between the two.

Having undertaken more work to better understand these early findings, involving additional analysis of Council data and having sought the views of key stakeholders in an engagement exercise, the Council has considered the options available to it. The Council has decided to consult more widely with tenants, landlords, support agencies and resident groups and other concerned parties on the introduction of Additional and Selective Licensing schemes.

The Council views that the introduction of this regulation of the private rented sector will support good landlords, and where necessary enforce against negligent or bad landlord practice. The Council considers the introduction of these policies as a last resort due to current arrangements proving to be ineffective.

The main improvement that the Council is seeking is a reduction in anti-social behaviour and an improvement in neighbourhoods, by significantly improving the management of the private rented sector. This would be achieved through Licensing, by clarifying both tenant and landlord responsibilities and the minimum standard of property management and maintenance. This will lead to better property conditions, improved tenancy management, and improved neighbourhoods.

Enfield Council has a clear ambition that its growing private rented sector should not be associated with anti-social behaviour, but be a positive force in the borough – providing homes and contributing to cohesive neighbourhoods and sense of place.

What’s happening now?

There is already action, on a limited scale, involving both private rented sector landlords and houses in multiple occupation (HMOs) on specific issues. HMOs are typically properties where three or more unrelated tenants share kitchen or bathroom facilities, including some houses that have been split into flats or bedsits. The Council has been running a voluntary accredited landlords scheme covering the whole borough for many years, with the Council facilitating regular meetings with landlords and agents. There are currently around 70 landlords participating.

Using the current law, the Council also regulates HMOs on a borough wide basis under a Mandatory Licensing scheme. But because most of the properties used as HMOs, in the borough, have only two floors, only approximately 40 properties are licensed.

There is also a range of private sector enforcement work and action to combat ASB already in hand. This includes
•Investigation, notice service and prosecution for noise nuisance
•Bi-monthly proactive patrols, investigation, notice service and prosecution for dumped rubbish, untidy gardens, pest infestations, graffiti and prolonged display of estate agent boards
•Communications with landlords and letting agents regarding disposal of rubbish at the end of tenancies and prolonged display of estate agent boards
•Support for victims of ASB and enforcement action against offenders using measures such as injunctions, Dispersal Orders, Antisocial Behaviour Orders (ASBOs) and Acceptable Behaviour Contracts (ABCs)
•Management of complex cases through Multi Agency Panel (MAP) meetings and ASBAG (Anti-Social Behaviour Action Group) both include work with tenants and landlords in the private sector.

From 23rd October this year, the Planning Department has introduced an Article 4 Direction on Houses in Multiple Occupation. This means that residential houses now require planning permission if they are used as HMOs. This regulatory action by the Council ties in with concerns over anti-social behaviour and the private rented sector.

The Council views that these actions are delivering a reduction in ASB, but that levels are not coming down as fast as we would like and remaining stubbornly high in some areas. Problems with the private rented sector are growing faster than the sector itself.

Additional and Selective Licensing

The Housing Act 2004 provides Councils with the powers to introduce licensing of privately rented housing properties in areas. This is with the aim of improving conditions for local occupiers and the surrounding community.

The Act also enables the Council to tackle many of the issues experienced within the PRS, through the licensing of all private landlords in a designated area, in order to ensure that a minimum standard of management is met. The Act introduced Mandatory licensing of all HMOs but this was, as referenced previously, limited in scope. The change only affected HMOs in buildings which have three or more storeys and are occupied by five or more persons, forming two or more households. The Act also enables the Council to implement an Additional Licensing scheme for HMOs not covered by the above Mandatory scheme and a Selective Licensing scheme of all other properties within the private rented sector within designated areas.

The Council is proposing the designation of Additional and Selective Licensing schemes across the Borough as a whole, as the Council believes that this will have the level of impact required to deal with the anti-social behaviour problems that exist in the Borough, and will prevent problem tenants and landlords from merely moving to another area within the Borough.

The Council believes both license types are necessary due to the different sizes and characteristics of housing across the borough, and solely focusing on one power or one area would be insufficient.

What’s your view?

The Council is interested in hearing the views and experiences of concerned parties and the wider public, particularly with regard to the levels and types of anti-social behaviour, what might improve the situation and what the community wish to see being done.

All feedback will enhance the Council’s understanding of the problem and the community views on the introduction of Additional and Selective Licensing. Following the close of the consultation period, a decision will be made by the Council on whether to proceed with the designation. The consultation is an important part of the process and its results will contribute to whether the scheme goes ahead and, if it does, its makeup.

How is Consultation being undertaken?

We aim to be inclusive and provide different ways in which you can let us have your views.
Consultation on this issue is being undertaken through a range of methods including an On-line questionnaire, paper copy questionnaire and through discussion groups with tenants and residents, and landlord events on 11th and 12th February – if you are interested in attending please contact us using the details below
You can request other help with this consultation by using the contact details below.

http://www.enfield.gov.uk/info/867/current_consultations/2718/licensing_private_rented_housing_to_tackle_asb

Cleaning remains the No 1 cause for deposit disputes

CLEANING REMAINS THE NO 1 CAUSE FOR DEPOSIT DISPUTES
Wednesday 11th December 2013

The most common cause of a deposit disputes is cleaning, increasing from 46% in 2010 to 56% in 2013, according to new data from the Tenant Deposit Scheme (TDS). Cleaning has consistently been the most common dispute in cases brought to the TDS and is now at the highest level since the start of the scheme.

Damage to property makes up the second most cause of disputes (43%), followed by redecoration (30%), rent arrears (17%) and gardening (13%). The new research also shows that 55% of disputes came from tenants, with 21% receiving 100% of the amount in dispute. Forty five per cent of disputes came from landlords and agents, yet only 19% received 100% of the amount in dispute.

Pat Barber, Chair of the Association of Independent Inventory Clerks (AIIC), believes that cleaning is such a big problem because of the general lack of respect for property by tenants; the rise in pets kept in rental property; and a change in tenant’s hygiene standards. “Time and time again, landlords and agents are increasingly faced with dirty properties at the check-out stage. Many tenants fail to leave their property in the same condition when they leave a property and we have seen many properties left in a filthy state.

“The main problems are dirty ovens and fridges; stains and marks on carpeting and flooring; bathrooms which have not been cleaned for months; and pet hair and excrement on floors, furniture and soft furnishings.

“At a recent check out, the property was left in a very poor condition. No cleaning had taken place during the tenancy. The oven was full of grease with food still present. All carpets were heavily stained and the tenants had kept a dog without the landlord’s permission. Door frames were badly chewed and there was a strong smell of dog urine everywhere. Even after cleaning the smell remained and it was discovered that the urine had soaked through the carpets and seeped into the floor boards, a very difficult problem to solve without huge expense.

“We often find that tenants are often shocked to realise that professional cleaning can cost anything from £10 – £20 per hour depending on the area and type of work required. Some tenants claim that cleaning issues are just normal wear & tear. The simple answer is that if an area or item was clean at check in it should be left clean at check out. It something can be cleaned then it should be. If any dust or crumbs are present then this is clearly not clean.

“It’s vital that landlords and agents do a thorough check-in and check-out, so they have the right proof of condition at the start and end of a new tenancy agreement. At the check-out stage, the tenant should be made aware of the areas requiring cleaning and the potential cost involved.”

AIIC has put together the most common cleaning problems at check-out:

• Ovens – cause the most problems. If it was listed as completely clean at check in, it must be left in the same condition. Burn marks to any part of the appliance means it is not clean. Tenants are amazed that professional oven cleaning costs between £50 – £80.

• Stained and marked carpets – this is a very common problem with some tenants trying to hide stains with rugs and furniture. Tenants are also known to cut out the stain and fill the hole with carpet they have cut from a hidden part of the property eg under the bed.

• Heavy lime scale to kitchen and bathroom fittings – the response of tenants is often ‘it’s not my fault, this is a hard water area’

• Grease deposits throughout the kitchen, surfaces and cupboards may look clean but will feel sticky to touch.

• Thick dust & cobwebs, particularly around furniture and on the ceilings

The AIIC is a not for profit membership organisation and is committed to excellence and professionalism in the property inventory process. The AIIC works hard to ensure that all landlords, tenants and letting agents understand the importance and benefits of professionally completed property inventories.

www.theaiic.co.uk
– See more at: http://www.lettingagenttoday.co.uk/news_features/CLEANING-REMAINS-THE-NO-1-CAUSE-FOR-DEPOSIT-DISPUTES#sthash.52tZCXjK.dpuf

What does the Autumn Statement mean for the property market?

Chancellor George Osborne’s Autumn Statement today to MPs included a number of plans for the property market.

He announced that around £1bn in loans will be made available to help housing developments in various sites around the country including Manchester and Leeds. Councils will also sell off the most expensive social housing in a bid to house more families, as well as regenerate rundown estates.

Most property commentators focused on the Capital Gains Tax move which will be imposed on any gains made by non-residents who sell their residential property in the UK.

Liam Bailey, Head of Knight Frank Global Research, said:”Tax is not the primary driver for the majority of international buyers of residential property in London. We anticipate that the removal of the CGT exemption for non-resident purchasers will have only a marginal impact on demand and pricing. It is important to note that the change to CGT rules brings the UK in line with other key investor markets, such as New York and Paris.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, added: “We await more clarity as to whether this will affect non-residents who have owned property in the UK for many years. The introduction of such a tax will affect people’s decisions on whether they sell or not, and may persuade homeowners to hold onto their properties for longer, applying the brakes to the upper end of the property market.”

Fionnuala Earley, Research Director at Hamptons International, said: “The Chancellor is keen to be seen to be doing something to cool rapid house price growth in London and increasing tax on foreign buyers looks like a vote winner but in reality the proportion of foreign buyers is a lot smaller than one might think. Our data shows that 70 per cent of buyers in London are British nationals with the majority of the remainder being resident in the UK. Over the course of this year, the proportion of sales to foreign buyers has been decreasing, as the mainstream market recovers.

“Inevitably any announcement on property tax will cause some ripples in the market for residential investment, but in reality it’s unlikely to have much effect on the wider market. We already expect the prime London market, which is characterised most by foreign wealth, to cool.”

Commenting on the impact on mortgages of the announcement on the raising of the retirement age for those aged 49 or younger,, Adrian Anderson, director of mortgage broker Anderson Harris, said: “While the pension age has been steadily rising for a while, lenders are well behind the curve. Most will simply not lend past retirement age, which they take to be 65, yet the reality is that most of us will be working for far longer than that. Lenders need to address their policies now, as most of them are already outdated, and ensure lending to a maximum age of 70 as an absolute minimum.”

Simon Rubinsohn, RICS Chief Economist said: “As we’ve been saying for a long time, the lack of housing supply is crippling the property market. If Help to Buy is to remain, Right to Buy extended, and expensive social housing sold off then the Government’s commitment to building houses simply must be extended.

“The £1bn of loans to unblock housing development across the country will contribute towards housing need and will drive construction jobs. However, we still believe housing is not at the centre of a coordinated property-led growth that supports a balanced regional recovery where all can access the market. The increase in the local authority borrowing cap will only make a very minor dent in the housing deficit.

“It was also disappointing to see long overdue changes to stamp duty have been ignored, particularly as the amount of revenue generated from this is rising sharply. The government plans to collect more than £60bn over the next five years in stamp duty receipts from British householders. Moving away from stamp duty brackets to a marginal system would be a boost to those struggling with the cost of living and help boost the number of property transactions. This will remove the so-called ‘dead zone’ created by the previous structure which saw a dearth of properties on the market between £250,000 and £270,000.”

David Newnes, director of LSL Property Services, owners of the largest lettings agency in the UK, said: “The pledge of £1bn of loans to unlock large housing developments is certainly a welcome move and plans to increase local authorities’ housing revenue account borrowing limits are encouraging measures, both will play a part in boosting house supply, whilst at the same time preventing house prices from rising out of reach of buyers.

“Equal focus on expanding the ‘right to buy’ offer and the Government’s investment into affordable housing shows efforts are being made. The government must continue to lend a helping hand to aspiring buyers, so that they can achieve their dream of home ownership, while emphasising the need for more homes to support a healthy rate of recovery for the market as we move into 2014.”

By Alex Johnson
http://www.independent.co.uk/property/what-does-the-autumn-statement-mean-for-the-property-market-8985941.html

Housing developments: building a new village life

Being among the first to move into a housing development has many advantages, according to pioneering families

There is an Adam and Eve element to being first to move into a new development.

Developers may talk interminably of cost and profit, but in reality they are creating a new world where babies will be born, knees bloodied, cakes burnt and friendships forged. All over the country as the market thaws, mothballed sites are being unwrapped, new villages are springing out of the ground and the first residents are moving in.

Buying new is often the best option. It means you are guaranteed a completely clean start for your new life, with insulation values no old house can hope to compete with, and you avoid an onward chain. As the major political parties vie to promote new house-building, there will be more of them. The latest figures from the National House Building Council show the number of new homes rose 25 per cent in the first six months of this year over the same period last year.

There are hidden benefits to being first through the door.

Christie and Tolga Huseyin had always wanted to move to Sevenoaks because they liked the café culture, shops and good schools, and thought it would be a lovely place for their children, Myla, three, and Luca, 19 months, to grow up. They viewed older houses but nothing was quite right, so they went to look at Ryewood, where smart modern homes were being built by Berkeley right on the edge of a wildlife reserve. They loved the idea of being modern, and commuting was made easy by nearby Dunton Green railway station which could whisk them into London in 30 minutes.

“Our house was nothing more than a plot of bare land when we first saw it in June last year,” says Christie. Being involved at such an early stage meant she was able to choose all the colour schemes, the kitchen units, floors and tiles. They bought off-plan so also had the pick of the plots.

“This allowed us to buy at 2012 prices and have the potential for a capital increase in the value before we even moved in,” she says. “In a rising market, we would definitely recommend buyers to look at developments before they are completed.”

They arrived in January this year and have started to make new friends, bumping into people at the children’s play area and in the residents’ gym. Once the first 50 houses have been occupied there is to be a meet-the-neighbours party. “I think that when everyone is new, people tend to make more of an effort,” says Christie. “The great thing about Ryewood is that there is a real mix of people living here, lots of young couples as well as families, which means there are other children for ours to play with. And some new babies have been born in the last few months.”

A welcome barbecue, often with a marquee in case of rain, is now de rigueur on most new developments. At Woodberry Park in north London, part of the Woodberry Down Regeneration Project where 4,600 homes will be built in 64 acres, buyers at New River Gardens gathered this summer. Crucially it has a primary school and a dry cleaner. Yolande Barnes, director of residential research at Savills, has long argued that a true community needs dry cleaners, cobblers and corner shops to be really workable and make people feel at home.

In the highly competitive housing market of Cambridge, buyers have a difficult time finding affordable family-sized town houses, so planners have opted for new villages just outside, with park-and-ride on tap into the railway station and the city centre. Trumpington Meadows, three miles south, is still half-built and raw in the landscape, but it will eventually contain 1,200 homes in 360 acres running down to the River Cam.

Four developers are busy creating a sense of place. Skansa says the design of the houses plays an important part in bringing people together. Benches are carefully positioned outside front doors, under covered porches to encourage people to sit, chat to passers-by and watch the world go by. And what community can survive without a primary school and a Waitrose? Both are already open.

“We are working carefully with the Cambridge Wildlife Trust on the new country park, and there will be a community orchard and allotments,” says Jason Colmer, sales and marketing director at Barratts. “Residents will be able to use facilities in the primary school out of school hours as well, to hold parties or salsa evenings.”

There are plans for a secondary school a Trumpington Meadows football team. It is easier, certainly, to remember village life as it was than to create the sepia tint for tomorrow. But they are trying.

Paul and Nicola Smith have lived in Soham, near Cambridge, for years and felt defeated by the sheer paucity of choice in the city. Now they and their children, Megan, nine, and Harry, four, have happily swapped their five-bedroom detached house in Soham for a three-bedroom house built by Barratts at Trumpington Meadows. “It is rare that decent older city houses come up and there is nearly always a bunfight for them,” says Paul.

Paul and Nicola Smith are settling into Trumpington Meadows

For them it offered an easy path. The promise of part-exchange eliminated all their fears about being able to make their sale and purchase dovetail. “It saved us the hassle of putting our old home on the market and finding a buyer,” says Paul. “And it was fast. We signed on March 2 and moved into our new home 26 days later.” They feel the prospects are good.

“Although we have technically downsized we think that putting our money into Cambridge property is a good investment.”

Estate agent David Bentley of Bidwells says prices have already risen five per cent since the development started.

“There were so few of us living there at the beginning,” says Paul, “that we all got to know each other really well, and are really committed to making a new community.”

Benefits of buying new

You don’t have to inherit anyone else’s carpets.

You can choose paint colours and building finishes.

You may see your house value rise as building progresses.

There may be part-exchange deals.

You feel more involved and keen to make friends.

By Caroline McGhie http://www.telegraph.co.uk/property/

Increase in international tenants seeking homes in London, research shows

International activity in London’s rental market, particularly in the more sought after and expensive locations, is on the increase according to new research from Hamptons International.

More than half of tenants, some 56%, in London over the last 12 months were from abroad and the proportion of international renters increased significantly to 78% in the prime central London market in the last year.

So far this year, there has been a 10% increase in the number of properties let in the London property market, with the number of international tenants increasing by 30% between 2012 and 2013. During the same period, the number of UK tenants remained unchanged across London.

Demand has been driven by Western Europeans making up 24% of tenants, North Americans at 8%, Asians at 7% and Eastern Europeans at 6%, the research from the firm shows.

In the most expensive markets across prime central London, where typical rents for three bedroom properties start from £1,000 per week, the proportion of international tenants increased further to 78% with specific areas appealing to different nationalities for various reasons including history and schooling.

The French alone make up 16% of prime central London tenants and Americans 13%. Chelsea, Kensington and Knightsbridge have the higher proportions of Western Europeans than any other London area, driven primarily by the French and Italians. The Lycée Francais Charles de Gaulle in Kensington is particularly attractive for French families moving to London.

St John’s Wood, on the outskirts of prime central London is notable for its large number of American tenants, who make up 30% of international tenants in the area. This part of London has a thriving American community which is centered around the American School and the American Ambassador’s residence, Winfield House, is also close by.

‘International tenants have been central to lettings market growth across London and are particularly prevalent in central London. Those worried about the performance of the top segment of the rental market as sales pick up should take note; the community of international skilled migrants looking for premium, short to medium term rental property in the Capital is only set to grow as the economy improves,’ said Johnny Morris, head of research at Hamptons International.

‘Demand from this group will likely make up for any established UK renters taking advantage of increased mortgage availability to move across from renting to home ownership,’ he added.

Story via Property Wire
http://www.propertywire.com

Landlords get a boost with change of legislation!

A new piece of legislation is set to make a huge difference to landlords, who have previously had difficulties evicting tenants on the grounds of anti-social behaviour. The year ending December 2012 saw over 2.3 million incidents of anti-social behaviour recorded by police in England and Wales; which is equivalent to around 6,300 incidents each day! However, many incidents were not reported at all, or were reported to other agencies such as local councils or social landlords.

The Anti-social Behaviour Crime and Policing Bill 2013-14 is nearing its final reading, whereby landlords will be able to evict a tenant on grounds of anti-social behaviour – even if the offence has not been committed near the property, and the courts will have to grant possession.

Clause 89 of the Anti-social Behaviour Crime and Policing Bill 2013-14 will introduce a new mandatory ground for possession by private landlords, where a court will have to grant an order for conviction if 1 of the following 5 conditions are met:

-The tenant, a member of the tenant’s household or a person visiting the property has been convicted of a serious offence.

-The tenant, a member of the tenant’s household or a person visiting the property has been found by a court to have breached an injunction to prevent nuisance and annoyance obtained under Clause 1 of the Bill.

-The tenant, a member of the tenant’s household or a person visiting the property has been convicted for breach of a criminal behaviour order.

-The tenant’s property has been closed under a closure order obtained under Clause 73 of the Bill and the total period of closure was more than 48 hours.

-The tenant, a member of the tenant’s household or a person visiting the property has been convicted of a breach of a notice or order to abate noise in relation to the tenants’ property under the Environmental Protection Act 1990.

On top of these, Clause 90 will insert new provisions into the 1988 Housing Act to enable a landlord to seek possession where a tenant (or a person living in or visiting the tenant’s home) is guilty of conduct likely to cause nuisance or annoyance to the landlord, or someone employed in connection with the landlord’s housing management functions, where the conduct relates to or affects those housing management functions. ; In other words, even if an offence (e.g. prostitution or drug dealing) has been committed away from the rental property, there would be absolute grounds for eviction.

-Clause 91 will also enable a landlord to evict a tenant who has been convicted at the scene of a riot anywhere in the UK.

-Landlords who sell on a property knowing that there is an anti-social tenant in situ will also have a legal duty to disclose the situation to the new owner.

The only other realistic option currently available is to serve a Section 21 notice and simply wait.

There are other grounds that landlords can use to seek eviction; Ground 12 (where a tenant is in breach of an agreement specifying no anti-social behaviour) or Ground 14 (where a tenant annoys neighbours) – although both of these grounds would require someone (e.g. a neighbour) to appear in court to provide necessary evidence.

Private landlords are also encouraged to control the behaviour of their tenants through their tenancy agreement; e.g. covering pets such as the keeping of dangerous dogs, bad language and violence – however, the terms must not be unfair in terms of consumer regulation. As the law stands landlords can also serve injunctions on anti-social tenants, although there is very little evidence of private landlords actually utilising this power.

The Bill will also amend the law on dangerous dogs; introduce new firearms offences; criminalises forced marriage; gives powers to the new College of Policing; implement some of the Winsor report’s recommendations on police remuneration; provide new powers for the Independent Police Complaints Commission; and make changes to compensation for miscarriage of justice.

The Bill had it’s second reading in June and is now being picked over, with its remaining stages to be announced.

Source: LANDLORDREFERENCING.CO.UK

Money Help to Buy scheme Lenders brace for stampede as over 600,000 homes eligible for Help to Buy

More than 600,000 homes on the market are eligible for inclusion in the £12bn second phase of the Help to Buy scheme, according to the latest in a series of surveys leading to predictions that lenders will be flooded by pent-up demand for the government-backed mortgages.

Details of the 95% mortgages, which are available to existing homeowners as well as first-time buyers, are to be unveiled by the chancellor , with some banks expected to invite loan applications within hours of the Tuesday announcement. The second phase of the flagship scheme to give more first-time buyers and others wider access to the housing market was brought forward by three months, with a report from high street bank Santander claiming that up to 1.7 million people are planning to use the scheme.

“It is going to accelerate more people going into the market, so the number of mortgage applications will increase and that will put more pressure on lenders and their [loan] processing,” said David Hollingsworth of broker London & Country Mortgages. “But in terms of gross [mortgage] lending we are about less than half where we were in 2007.”

Another mortgage broker predicted a surge in demand, stoked by media coverage of the scheme, that could be blunted by stringent eligibility checks from lenders. “A lot of people want to get on the property ladder and the lenders who come out with these products will be inundated with inquiries,” said Andrew Montlake of Coreco. “But lenders are not going to suddenly forget about being prudent, so people are going to have to qualify for the loans.”

Under this part of the Help to Buy scheme, buyers will need a minimum deposit of 5%, equivalent to about £10,000 for eligible homes in most regions of England and Wales. The government guarantees the next 15% of the property’s value. The scheme is designed to encourage banks and building societies to offer more, and cheaper, mortgages, to people who can only manage relatively small deposits to secure a property.
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Unlike some previous government home-buying initiatives, this one covers existing homes as well as new-build properties. Ministers have claimed it could assist more than 500,000 buyers over three years.

The level of interest rates that will be offered has yet to emerge, but banks have indicated that would-be buyers should not expect cheaper mortgages.

The Treasury is also likely to charge more to effectively insure loans to borrowers with the smallest deposits. Assuming the banks pass on the charges it means first-time buyers are still likely to face higher mortgage fees and interest rates than those borrowing to move house. Lenders are expected to charge rates of around 5% for the Help to Buy mortgages. Despite those reservations, mortgage commentators have expressed fears of a stampede for new applications. Research published on Friday found that two-thirds of adults under the age of 30 planned to buy their first home or move house during the three-year lifetime of Help to Buy.

The data, from the broker called the Mortgage Advice Bureau, also found that 20% of young adults said they were more likely to buy due to the scheme.

The property website Zoopla.co.uk has estimated that there are about 665,000 properties now on sale that are eligible for the second phase of Help to Buy. The scheme applies to any home up to a value of £600,000. Zoopla said that the average minimum deposit required to buy an eligible property was less than £10,000 in six of 10 regions in England and Wales: north-west and north-east England, the east and west Midlands, Yorkshire and the Humber, and Wales. With the average asking price standing at £222,168, the required 5% deposit would be £11,108. But in London, where prices have been rising the fastest in the country in recent months, the figure would be £16,100.

Under the second part of Help to Buy, the government is making available £12bn of guarantees to lenders, though just three banking brands have indicated they will be offering the new deals from the outset: these are Royal Bank of Scotland, its NatWest arm, and Halifax.

RBS and NatWest said that from the launch date of the scheme customers would be able to visit any of their 2,000 branches or phone for advice. They added that opening hours would be extended at more than 740 branches across England, Scotland and Wales “to help with customer demand”.

Estate agents and mortgage brokers have reported an increase in inquiries from buyers. Peter Rollings, chief executive of the London-based estate agent Marsh & Parsons, said the new phase of Help to Buy would be “like a shot of adrenalin”. He said of the London market: “The capital needs this stimulus to free up mid-ladder buyers who want to become first-time sellers. This will create a much healthier balance between supply and demand.”

Many experts have argued that the government should ditch the second phase of Help to Buy, because they fear it will artificially inflate house prices too much by ramping up demand at a faster rate than the supply of homes coming on the UK market. Mortgage availability has become more widespread following the launch of the government’s funding for lending scheme in August last year, giving lenders access to cheap finance in order to help borrowers. The first phase of Help to Buy provides equity loans but only applies to purchasers of new-build properties. The government has brought forward the second phase of Help to Buy despite opposition from within the coalition, including from backbench Conservatives.