Category: Chamberlains Blog

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1 in 5 Brits have been involved in a dispute with neighbours

According to a new report from Co-op Insurance, one in five of us have been involved in a neighbour dispute – almost half (46%) of which are still unresolved.

‘A portrait of the modern British community’ provides a striking snapshot into neighbourliness and the changing shape of communities in 2016.

Of those who have experienced nuisance neighbours, excessive noise was by far the biggest single cause of residential issues nationally, with over two fifths of Brits (41%)experiencing noise related issues, including stomping around the house, loud arguments and late night parties. Nearly one in four (22%) have suffered rude or abusive neighbours and a further 21% have had problems with barking dogs or wars over parking (19%).

Regionally, London and Birmingham has by far the highest number of neighbour issues, with a quarter (25%) of those questioned saying they have encountered some form of nuisance neighbour during the past year. The most harmonious place in Britain is Milton Keynes, with only 7% of those asked recording a dispute with their neighbour, compared with the national average of 20% – perhaps a legacy of its new town status.

The research shows Brits’ ideal neighbour would behave respectfully at all times and is the top trait that characterises a good neighbour (77%), followed by being tolerant and understanding of other residents’ needs (75%).

With 99% of the population having neighbours, you’re almost sure to always find someone living next door, however nearly one in twenty (4%) Brits go a month without ever seeing their neighbour, whilst for 12% of Brits they wouldn’t even know who their neighbours were if they bumped into them on their street.

Gone are the days when neighbours would have homely conversations over the garden fence or nip round for a brew and a natter, as only one in five Brits (19%) have been invited round for a cup of tea. Surprisingly it’s men who are most likely to have visited a neighbour’s house, with over two-thirds (68%) admitting to stepping foot inside their neighbours home, in comparison to 65% of females.

A generation gap is also apparent as half of under 35s have never set foot inside a neighbour’s house, in comparison to four out of five (77%) of over 55s who have.

We are of course a nation famed for our politeness but could our ‘British reserve’ actually be putting that polite reputation on the line? It would seem so, as less than 30%, of Brits would go round and introduce themselves to new neighbours, with nearly half (48%) preferring to just bump into them, while one in six (16%) would do nothing and almost one in twenty (3%) would just ignore them completely. Although over 75s are more than twice as likely (48%) to introduce themselves compared to under 35-year-olds (20%).

Top neighbour disputes

1 Excessive noise 41%
2 Rudeness or abuse 22%
3 Barking dogs 21%
4 Parking wars 19%
5 Nosey neighbours 18%
6 Unruly kids 15%
7 = Boundary disputes 12%
7 = Gossipy neighbours 12%
8 Messy gardens which blight the community 11%
9 Roaming pets 7%
10 Not keeping shared facilities maintained 6%
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Buy and house and live longer

New analysis from HomeOwners Alliance looks at the correlation between longevity and homeownership.

Across most of the UK there is a direct correlation between homeownership levels and life expectancy according to an analysis conducted by the HomeOwners Alliance; where homeownership levels are higher, so is life expectancy.

However, homeownership levels have been declining for the past decade (peaking in 2002 at 69.7% down to 63.8% according to latest official figures from the April-June 2016 Labour Force Survey). High demand for homes is pushing house prices to unaffordable levels. Political parties, experts and the government all agree that the underlying cause of the housing crisis is that we have not been building enough new homes for decades.

The decline of homeownership is having and will increasingly have profound, long-lasting and adverse economic and social consequences. For example, it increases poverty among pensioners, increases social problems for children raised in insecure rented accommodation, reduces living standards among lower and middle income earners, pushes up the housing benefit bill and increases inequality. And, as our analysis shows, it also has an impact on life expectancy.

The only exception to the correlation between homeownership and life expectancy is London, where life expectancy and homeownership are not strongly linked.

Paula Higgins, CEO of HomeOwners Alliance believes, “Reversing the decline in homeownership should be one of the government’s highest priorities. We know that homeownership in this country has tangible benefits – including longer and happier lives. But the high costs mean it is out of reach for more and more people – widening the gap between the rich and the poor and fuelling social inequality. The UK urgently needs a functioning and stable housing market as the current housing situation is deeply unfair.”

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Top tips to achieve an autumn transaction

Now that silly season is over and people are settling back in after vacations, if you are contemplating or trying to sell or let a property it’s a good time to take stock of the situation and plan the way forward.

October and November are usually active months for property so it’s a good idea to make the most of them and try to get your property sold or let before Christmas when the market usually stalls.

With the current economic climate, uncertainty over Brexit, levels of Stamp Duty Land Tax and the punitive added taxation for investors and second home buyers, residential property – particularly in London and the South East – is going through a period of readjustment.

It has become apparent over the last few months that even slightly overpriced properties have struggled to achieve sales or rentals. Although there are numerous other forces at work, the internet may also have some part to play. This tool can prove a powerful friend but also a brutal enemy. With the transparency provided by the property portals it is almost impossible to hide the promotional record of a property, thus allowing anyone who is interested to establish the first date of advertising, any price reductions and other information that may give prospective interested parties historic data to use when considering an offer, or during negotiations.

In a rising market these facts may not be so important, but during periods of stagnation or falling price levels, they may be used as a weapon to beat prices down. Consequently during these cycles of hesitation it is essential to make sure that all marketing is strategic, well considered and engineered.

It is certainly not all doom and gloom, as irrespective of the world events and economic ” bulls and bears”, people need to buy, sell, rent or let for various reasons. As a result, there will always be successful deals, although currently perhaps not at the prices or volumes previously enjoyed.

Here are a few suggestions that may help you achieve an autumn transaction:

1. Make sure that you have realistic asking price
2. Keep the property clean and tidy
3. Make repairs to anything that is visibly broken, also touch up scuff marks (but don’t try to hide defects)
4. If you have a garden, keep it well tended
5. On colder days, warm the property through, even for an hour to take away any chill
6. Open windows on brighter, warmer days unless there is extraneous outside noise
7. Ensure that the property smells fresh
8. Remove pets (if possible), such as dogs and cats when conducting viewings
9. Leave the agent to conduct viewings and remove yourself into an alternative room or, go out if you can
10. Make sure that there are keys available for all outside doors and, if providing keys to the agents, that they work
11. If you are away please ask the agent to pick up the post and switch on or off the central heating, so that the property looks and feels lived in and cared for
12. Lastly if you will not be home or the property has been vacated, let the agent know so that he or she can go to the appointment earlier to arrange to switch on lights, open or close curtains etc.

If you do receive an offer get back to your agent as quickly as possible with an answer, even if its negative, so that while buyers or tenants are still interested negotiations may continue:

Employ a good and proactive solicitor
React in a timely fashion to any requests for further information
Have all the required documents such as, insurance papers, guarantees, deeds (if you can), a copy of your lease, service charge payments or invoices, planning permission, etc. available and ready for early access
Make sure that all the curtains and blinds are up, during the day to bring in the light
For evening viewings put lights on in every room and light the front path and rear garden, so that they look attractive and viewers don’t trip over an unseen hurdle.
Remember the old adage “you never get a second chance to make a first impression”.

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35% of homebuyers check with estate agent every day

Research for the Nottingham Building Society has found that over a third of us check in with our estate agent at least once every day when we are trying to secure our dream home.

The study revealed that 35% of homebuyers admit to contacting estate agencies either on the phone or online at least once a day. It also found that the average homebuyer registers with three estate agent offices or online services and an extremely eager 12% have signed up with five or more.

The Nottingham’s research highlights the ongoing British obsession with house prices and home buying – around 72% of homeowners admit to regularly looking at houses for sale and prices in their area even if they are not actively planning to sell or buy.

The Nottingham, which offers building society and estate agency services under one roof, believes the research underlines how important expert support is during the home buying process to enable customers to achieve the best possible service whether they are buying or selling.

Su Snaith, Head of Estate Agency at The Nottingham, said: “Home buying and selling has changed in recent years as more online services have become accessible but as this research shows the one thing that does not change is people’s appetite to keep updated of changes to the market. The number of available properties to buy is at an all-time low and it is understandable that some people that are checking with agents every day. It underlines the importance of a strong relationship with your estate agent and is the best way to stay on top of what is a major purchase.

Customers need to find a service which can help them research the market and work for them. At The Nottingham, and our Harrison Murray Estate Agency (part of The Nottingham), there are dedicated sales negotiators who can help find a dream home and specialist sales progressors who will provide support once a purchase has been agreed.”

The Nottingham’s study shows the most common way to research the market for buyers is going online to find average prices. However some buyers are still happy to go to estate agents offices.

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‘Traditional’ estate agents

Consumer organisation Which? said that in research amongst 2,000 recent home movers 55% found their new home using traditional methods such as looking in an estate agent’s window or local paper or spotting a For Sale board as opposed to 45% who found their home via a “modern” method.  

First time buyers, despite their younger age group, were even more unlikely to find a home on a property “portal”, with 60% using traditional methods rather than portals or apps.  This research confirms the importance of using an estate agent with an office on the high street.  

A “traditional” agent with an office on the high street provides a comprehensive mix of on-line digital and conventional marketing as well as offering the vital direct personal interaction so important in the buying and selling of property.”  All of Chamberlains’ offices are located in strategic “high street” locations in Kingsteignton, Bovey Tracey, Newton Abbot and Teignmouth.

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Setting up a limited company for your buy to let properties. Is it worth it?

If you’re starting to feel the pinch in the buy to let market and have concerns ahead of the proposed changes to lending affordability and the additional tax changes coming into force in 2017, now could be the time to consider limited company buy to lets.

Setting up your buy to let investment in a limited company allows you to benefit from advantageous tax rates that can be lower than high-rate income tax and capital gains tax rates which could apply if property is held in your personal name. Those who hold property in limited companies will also be unaffected by the tax relief changes coming into force in 2017, meaning that buy to let lenders may continue to offer lower rent stress tests and improved lending affordability to such landlords.
Who are buy to let Limited Company investments for?

Whether you’re an established buy to let investor or just starting out and considering investing through a limited company, it’s important that you seek tax, legal and mortgage advice from the outset. This knowledge will help you understand the potential advantages and disadvantages associated with company ownership as well as the additional responsibilities you’ll be taking on.

The decision as to whether a company should be used to hold property will essentially depend on your future intentions. As with any financial decision, suitability is dependent on a number of individual factors, from your goals, financial situation, current rates and the availability of mortgage finance to Limited Companies. There are many things to think about if you’re looking to move from personal name to limited company and many possible advantages and disadvantages that you’ll need to consider.

Possible advantages of using a Limited Company

Higher tax relief – from 2017-2020 the amount of buy to let tax relief individual landlords will be able to claim back, will be progressively cut from a maximum of 45% to 20% for top rate taxpayers. This change does not affect Limited Companies though, so if you are a top rate tax payer, the amount of tax you’ll pay via a Limited Company will be lower than tax on your individual income.
No income tax when reinvesting profits to secure further properties – this means you could grow your BTL portfolio quicker within a Limited Company because you won’t be paying income tax on the retained profit. Although corporation tax is payable on trading profits, this is lower than the higher income tax rate.
Personal funds can be drawn back out of the company – any advances your you makes to your Limited Company, for example the mortgage deposit, can be drawn back out of the company by way of a Directors Loan, which is a tax efficient way of withdrawing the money.

Possible disadvantages of using a Limited Company

No Capital Gains Tax (CGT) allowance when you sell a property – whereas individuals selling a property would have £11,100 CGT allowance (2015/16)
Additional cost of running a Limited Company – such costs include the preparation of accounts, company tax and corporation tax calculations for HMRC, filing at Companies House, legal fees, and annual auditing if applicable. Your accountant may also charge higher fees when preparing the accounts for a Limited Company.
Higher mortgage rates – Most lenders charge higher interest rates and fees for buy to let mortgages via a Limited Company to individual buy to let mortgages. This could change if competition increases in the market.
Reduced choice of lenders and mortgages – Many lenders do not offer mortgages to Limited Companies and often, if they do, their product range is much smaller.

Should you transfer from individual name to Limited Company?

If you don’t yet own any buy to let properties it’s simpler to start the process with a Limited Company than if you’re an investor transferring existing property. However, before deciding to proceed you should seek independent advice from tax, legal and mortgage specialists.

If you are transferring property from your personal name to a Limited Company you are likely to be liable for Capital Gains Tax and Stamp Duty Land Tax (SDLT) on the transfer, so it’s important to understand if the overall benefits outweigh the costs. It is therefore important that you speak with an accountant or tax advisor before undertaking this type of transfer.

What you plan to do with your buy to let investment will impact this decision so it’s important for you to outline what you ambitions are. Do you want to downsize or grown your portfolio? If it’s the latter then doing so via a Limited Company structure, if you’re willing to pay these one off costs, it could possibly be worth it in the long run.

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Significant increase in older people living alone

According to a new report from the International Longevity Centre, despite significant increases in the numbers of older people living alone, half of all older people with care needs haven’t made adaptations to their homes to make it easier to live in.

Whilst specialist retirement housing can offer more adaptations and play a part in supporting downsizing, new analysis from the think tank finds that the retirement housing supply gap is set to worsen.

The State of the Nation’s Housing is published today by the International Longevity Centre – UK (ILC-UK), and supported by FirstPort, the UK’s largest residential property manager. The report paints a picture of increased under-occupancy and declining average household size:

• Since 2005 there has been a significant increase in the number of 45-64 year olds living alone (500,000) as well as the number of 65-74 year olds living alone (300,000).
• The average household size was 2.9 people in 1971. Today there are on average 2.3 people per household.
• Over 16 million people – mainly owner occupied, middle aged and older households – live in under-occupied housing. 6 million live in houses with 2 or more excess bedrooms.
• The 50 to 64 age group has the highest number of people in under-occupied homes (4.5 million), while the 65-79 age group has the highest proportion.
• Nearly 9 in 10 of the 65-79 age group live in under-occupied housing – over 50% live in homes with two or more excess bedrooms.

But millions of over 50s with care needs haven’t adapted their housing

Population ageing is leading to rising care needs, but these needs are not being met. Since 2008-9 the numbers of older people (aged over 65) receiving care has fallen by 30%, while it has fallen by around 26% for those aged 18-64. As a result there are now half a million fewer people receiving care services than there were in 2008-9.

In 2012/13, there were 1.86 million people over the age of 50 in England who had unmet needs – an increase of 120,000 people (or 7%) since 2006/7. This means that around 1 in 10 people aged over 50 in England has an unmet care need. Less than half of those over 50s with a limitation in an Activity of Daily Living (ADL) live in homes with any health-related adaptations.

Specialist retirement housing could be a solution for some, but new analysis by the ILC-UK projects a shortage of 160,000 retirement housing by 2030

• Those in retirement housing are significantly more likely to be living in homes with adaptations than those who do not. Approximately 87% of those in retirement housing have home adaptations, by comparison to around 60% of other housing.

• The rate of construction of new housing for older people has varied over the years. It peaked in 1989 at 30,000 units but has since fallen back dramatically – averaging around 7,000 new units a year over the last decade.

• There are around 515,000 specialist retirement and extra care homes in England. However, this means that there is only enough specialist housing to accommodate 5% of the over-65 population.

• According to our calculations, there could be a retirement housing gap of 160,000 retirement housing by 2030 if current trends continue. By 2050, the gap could grow to 376,000.

• Among those over 50 who reported having problems with their homes, the most common noise (around 25%) and being too cold in the winter (around 20%).

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Making sense of the property market

It has only been a month since the Brexit vote but it actually feels like closer to a year. So much has happened – and in the case of Bank Base Rate cuts, hasn’t happened (yet) – in the last four weeks that you might legitimately feel that the world has been turned upside down, turned back up, and is currently deciding on which axis it should tilt on now.

Just in terms of a political upheaval, you would be hard-pressed to come up with another period in time where so much has changed in so short a time. We all felt the referendum was a seismic moment in UK politics, but I think most deep down felt the ‘status quo’ would triumph in the end. How wrong we were. Since those votes were cast, we’ve seen more comings and goings than a revolving door convention and one gets the sense that there is much more to come, particularly if you’re a member of the Labour Party.

Those of us working within the property market have been trying to make sense of what it means for us, our clients, and our businesses, and the honest truth is that it’s incredibly difficult to say at the moment. We’re in danger of turning the phrase, ‘a period of uncertainty’ into something of a cliché but this is undoubtedly what we’re living through.

The property market is of course reacting and agents will know that better than anyone what that means, whether it’s vendors dropping asking prices, potential purchasers pulling out, or others who pre-referendum were on the verge of making their move now deciding it would be better to take a ‘wait and see’ attitude. One suspects, and I’m hearing this anecdotally, that the purchase market is not reaching dizzy heights at the moment, and with the summer holiday season upon us one must think that this isn’t going to change for a number of months.

 
 

Politically however there may be some positives to hold onto. They come from the first utterances on housing by the new Prime Minister, Theresa May. In her pre-appointment speech in Birmingham she spoke of the need to get more houses built and to get more first-time buyers onto the housing ladder. She said the same in her first speech outside Number 10 – a Government not for the ‘privileged few’ we were told, but for those who wanted to own their own homes. Now, of course, we’ve been here before, for some time now, and the undersupply of new homes in the UK is still huge but will the new PM be able to turn this around and will first-timers benefit the most.

Certainly, the focus on helping first-timers – at the expense of buy-to-let landlords no doubt – which began under David Cameron and George Osborne, does look likely to continue under Theresa May/Philip Hammond. What this actually means in practice however is still vague. Undoubtedly the Help to Buy Scheme – in all its forms – has been viewed as a real success, particularly HTB1 which covers off new builds. That part of the scheme has already been extended until the end of the decade, and it appears likely it will become a permanent part of the housing furniture.

Help to Buy 2 however – the mortgage guarantee element – is due to finish this year, but given everything else on the Government’s plate will it also be extended? I think it might especially as it will need little effort to do so and indeed will at least guaranteed some continued supply of high LTV mortgages, which of course are greatly wanted and needed by first-time buyers.

Other first-time buyer focused policies that might see the light of day include no stamp duty for first-timers at all, Help to Buy housing developments only available to first-time buyers, and more generous support within the Help to Buy ISA. However, the overarching issue – as it has been for so long – is housing supply and until we can have some serious movement here, I suspect we will be playing catch-up for many years to come.

That said, agents should be aware that this could be a much more welcoming marketplace for first-timers and that developers and builders are going to be encouraged to keep building for this demographic. That being the case, it is younger buyers who could be leading the market, and therefore agents might do well to put some serious resources into this sector.

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Rents continue to rise in June

The rental market remains resilient in the face of the various economic and political headwinds the sector has faced recently

The index, the most comprehensive data available on the UK’s private rental market, shows that rents agreed on new tenancies across the UK (excluding London) over the three months to the end of June were up by 3.5%, compared to the same period in 2015. In the capital, meanwhile, rents were 3.9% higher.

By contrast, the UK-wide figure for May was 4.4% (6.2% in London). The more modest rental increases seen in June are a continuation of a trend that has developed throughout the first half of the year, with rents rising across much of the UK each month, but at a slower pace than was the case throughout most of 2015; last June, rents were rising at an annual rate of 7.8% (10.1% in London).

The data suggests the private rental sector has responded to the needs and concerns of landlords and tenants alike during the first half of the year. Landlords were hit by higher stamp duty charges on purchases of new property in April, which led to a rush to complete transactions before then – and a spike in the supply of rental property thereafter.

Meanwhile, tenant demand for property has remained strong, particularly given rising house prices and squeezed mortgage availability, and projected growth in the UK’s population suggests this will continue; official projections suggesting this growth will come from both the British-born population and net migration. Nevertheless, the slowing in the pace of rental increases may reflect landlords’ recognition that an affordability ceiling is approaching.

The outlook for the sector will depend in part on the fall-out from the UK’s decision to leave the European Union in June’s referendum. Some economists expect the referendum result to act as a brake on construction in the housing sector, which could exacerbate the current imbalance between demand and supply in the rental market. It is also possible that demand may increase as would-be house buyers opt to wait and see how house prices are affected over the next 12 months and beyond.

HomeLet’s data also suggests that the average length of a tenancy – as measured by how long tenants had occupied their previous rental property – has begun to come down over the past three months. The figures underline the important role that the private rental sector plays in providing a wide range of housing options to those who have not purchased a property.

The June 2016 HomeLet Rental Index reveals that rents continue to rise in almost every area of the country, with 10 out of the 12 regions surveyed seeing an increase over the three months to the end of May.

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How old will you be before you buy your ‘forever home’?

New research from first direct finds our homes may no longer be our castles, but they must come with a large kitchen, a private garden, and easy access to a supermarket.

So, how old will you be before you buy your forever home? According to new research by first direct, the most commonly stated age is 40.

With the average age of first-time buyers now 30, this means once they’ve put the first step on the housing ladder people are giving themselves just ten years to find their forever home. The implications of this are highlighted by the fact 60% of homeowners expect to own more than one home before buying their forever home, whereas just 19% of tenants agree.

What’s in a (forever) home?

The first direct research pinpoints what our view of the modern forever home looks like and finds the top two features people demand in their dream home are a large kitchen (52%) and a private garden (47%), ahead of an ensuite bathroom (28%), an actual bath (24%) and a conservatory (19%).

A ‘forever’ home doesn’t need to come with all these features though, as 98% of those who are now living in their forever home have spent a further £20,000 on average on perfecting their home.

When it comes to essential amenities practicality is the name of the game, and the top three are: a supermarket (32%), good transport links (27%) and friends and family (26%). While men and women agree on the most important amenities, lower down the list there are some stereotypical differences. Women are nearly twice as likely to consider local schools when selecting their perfect home, and men sneak a good local pub onto their list of priorities.

Tracy Garrad, chief executive of first direct, explains: “The saying used to be life begins at 40, but with more people buying homes later and also working and living longer we need to reset the dial. There’s an obvious impact on mortgages, but also on savings and loans too. The research highlights a need for more innovation in products and services as millennials demand solutions tailored to fit in with lifestyles which are very different to that of their parents.”

Almost a quarter (24%) of homeowners report having to ‘work more’ in order to purchase their first home, with 13% saying they took out a loan. And despite headlines over the ‘boomerang generation’, just 8% said they’d moved back in with their mum and dad in order to buy (this rises to 15% for 25-34 year olds).

Among those currently renting just 6% would move back in with their parents – with 22% preferring to rent a really cheap property, and 38% planning to work more. Among renters, saving for a deposit is the biggest concern for both women (34%) and men (23%), just ahead of getting a mortgage (women 30%, men 21%).

While 71% say they bought with a spouse or partner, men were more likely to have taken out a loan to help them buy their first home (15% vs 12%) with women more likely to have given something up such as hobbies or habits (16% vs 11%).