The Leasehold and Freehold Reform Bill was the final piece of legislation to pass before Parliament closed ahead of the General Election on July 4.
It has been described as a “muted win” as while the law introduces more transparency on charges and a ban on leasehold houses, there wasn’t enough time to include a cap on existing ground rents.
Proposals to include agency regulations as part of the legislation also failed.
Founder of the National Leasehold Campaign Katie Kendrick said it was a “real missed opportunity” that the Government did not manage to introduce a cap on ground rents, something they repeatedly promised but failed to deliver.
Co-founder Cath Williams, added: “There is lots to celebrate in the bill, most notably the removal of marriage value. This will save leaseholders with less than 80 years on their lease thousands of pounds in lease extension fees. We have had lots of comments in our campaign group who are crying with joy. This is truly life-changing for leaseholders with short leases.”
There is a chance that secondary legislation could be introduced to bring in a ground rent cap and improve the law but that will depend on the new Government’s priorities.
"The bill does not contain many of the important provisions that were promised by the Government. The commitment to remove ground rent for existing leaseholders, or even cap it at £250, has not been included.
"Another notable omission from the bill is the prevention of forfeiture, a draconian measure that allows a freeholder to repossess a flat for a debt of just £350.
"Frustratingly, most of the changes which have been included will not come into effect immediately or even within a specified timeline. These included-but-delayed changes include banning leasehold houses, and also abolishing marriage value which could make it cheaper for leaseholders with fewer than 80 years left to extend their leases.”
Timothy Douglas, head of policy and campaigns at Propertymark, added: “The recently passed leasehold legislation is far from perfect, but it is the start of reform to outdated legislation that was not fit for purpose.
“Once implemented the new laws will make it more commonplace to extend a lease and information about leasehold property will be made more transparent, which will make buying, selling and renting leasehold property easier.
“However, the legislation is a missed opportunity to tackle some key issues. Propertymark argued that the legislation needed to go further to incorporate the recommendations for the Regulation of Property Agents. At a time where building safety regulations have increased and become more complex, it is shortsighted that policy makers were unwilling to see the benefit to consumers of qualifying and licensing the competency of those who work in the property sector.
Chain-free homes command asking price premiums of 3.9% over homes on sale with buyer-chains - and in one location at least, the premium is over 7%.
Upfront information provider Home Sale Pack has analysed asking price data for chain-free and non-chain-free homes on the market in 10 major English cities.
The research shows that the average price for a chain-free home on sale currently is £259,791.
This is some £9,739 more expensive than the wider average asking price of £250,053, creating a premium of 3.9%.
This rises as high as 7.2% in Bradford, West Yorkshire, where the average asking price for a chain-free home is £186,472 against the non-chain-free norm of £174,016.
Liverpool’s chain-free asking price of £200,836 is 7% compared to the city’s wider average asking price, and in Manchester the premium hits 6.5%
The smallest premiums were found in Bristol (1%), Sheffield (1.2%), and Birmingham (1.5%).
A spokesperson for Home Sale Pack says: “Property chains are the stuff of buyer and seller nightmares. They take an already complex and stressful sales process and put control of one person’s fate into the hands of another person, or even another ten people.
“So it’s little wonder that homes free of a chain have an increased desirability and can often command a higher asking price. But, for the most part, chains are unavoidable.
“There’s no way of changing the fact that your typical house buyer needs to sell their current home in order to fund the purchase of a new home. So if we can’t get rid of chains, the only option is to improve the homebuying process so that it is faster, more efficient, and more reliable, thus reducing the chances that a sale somewhere in the chain will collapse and have a devastating domino effect for so many others.”
Agents remain typically optimistic about the property market after interest rates were been held at their 16-year high of 5.25% by the Bank of England (BoE) yesterday.
It is the sixth consecutive monetary policy committee (MPC) where rates have remained frozen, but there is some hope of a cut in the coming months after two of the nine policymakers backed a reduction.
Lucian Cook, head of residential research at Savills, said: “The Bank of England’s decision to hold interest rates at 5.25% won’t come as surprise, as inflation remains high and uncertainty in the Middle East continues.
“This is in line with our forecast expectations that we are unlikely to see a further meaningful fall in mortgage rates this year, despite an improved overall outlook, with the potential for short term fluctuations in the cost of debt and house prices.
“However, the highly competitive nature of the mortgage market has meant that mortgage costs have already nudged down this year, and have been much less volatile. Combined with an improved outlook for economic growth, and increased buyer confidence, we can now expect modest house price growth this year.”
He added: “The Bank of England’s hawkish approach may not be headline grabbing, but at least it isn’t a distraction for buyers or sellers who want to press on with their sales and searches. While everyone in need of a mortgage would prefer rates to fall significantly, interest rates of around 5% are not high by historic standards.
“It’s important to keep in mind that, while the past 18 months have been a time of economic headwinds, the exceedingly low rates that became the norm in the 2010s were the exception and not the rule.
“A pivot towards lower rates in June, even if only minor, would help to ease affordability constraints at the lower end of the housing market and help to ensure chains don’t break down once sales have been agreed.
“For now, the ‘hold’ should help to maintain the fragile momentum we've seen building in the housing market recently. Across the Jackson-Stops network in April we have seen a year-on-year uptick in viewings, new instructions and new buyer enquiries, which bodes well for a busier second half of the year.”
Nathan Emerson, chief executive of Propertymark, said: “As interest rates continue to remain the same in order to combat levels of inflation this country has not witnessed for decades, Propertymark is optimistic that buyers will continue to adapt to these new market conditions.
“Our own Housing Insight Report discovered that there has been a 4% increase in the number of potential buyers registered, and an 8% increase in the number of available properties to rent, which shows that there are some reasons to remain optimistic that the housing market is recovering from shock economic factors from the past three years.”
It comes as figures from banking trade body UK Finance showed a 3% rise in mortgage arrears among homeowners between the end of 2023 and the first quarter of this year.
The overall proportion of mortgages in arrears remains low, at 1.11% of homeowner mortgages and 0.69% of buy-to-let mortgages.
t’s taken eight years but one of London’s highest profile estate agencies says the value of its Under Offer pipeline has at last exceeded the figure at the time of the controversial Brexit referendum in June 2016.
After the vote, interest in London property eased back, worsened during the uncertainty over what Brexit meant, and then exacerbated by the ‘race for space’ during the pandemic.
But now a statement referring to its own business during the first quarter of this year, says: “Sales agreed in the quarter were 31% higher by volume compared to Q1 2023. At the end of March 2024, the value of the under-offer pipeline was 34% higher than 2023 and 12% higher than 2022, the highest value since the 2016 Brexit vote.
“This under-offer pipeline is expected to support further revenue growth in Q2, supported by an improving sales market backdrop as mortgage availability and rates have both stabilised, alongside good levels of available stock.”
The Brexit information comes in a report to its shareholders on performance in the first three months of 2024.
It says sales revenue was up 17% to £9.5m (compared to Q1 of 2023 when it was £8.1m) with growth underpinned by a significant increase market share of transactions. Sales shares have grown in four out of the last five quarters, it says.
Lettings revenue was up 5% in the quarter to £24m (Q1 2023: £22.8m) reflecting what Foxtons calls “incremental revenues from the two 2023 portfolio acquisitions and broadly flat revenues on a like-for-like basis. As expected, compared to 2023, the supply and demand dynamic has normalised and rental prices have stabilised accordingly.”
The agency’s Financial Services revenue was up 16% in the quarter to £2.3m (Q1 2023: £2.0m), driven by increased mortgage volumes and levels of cross-selling across.
“This has been a strong start to the year with our revenue growth demonstrating the real momentum we have built across the business. Last year we regained our number one position in London and delivered significant growth in our market share of property instructions across both Lettings and Sales. The business is now focussed on converting these listings to transactions as we deliver results for our clients.
“Sales revenue was up 17%, reflecting improved market conditions continued growth in market share as the operational improvements we made last year took effect. We entered the second quarter with the highest value under-offer Sales pipeline since the 2016 Brexit vote, giving us optimism for the rest of the year.
“We have made great strides in the past two years, with the business’ foundations rebuilt operating Platform significantly strengthened. We are well placed to continue to unlock value within our business, drive growth, and ultimately deliver against our medium-term adjusted operating profit target.”
Register with us and we will keep you up-to-date with the latest properties which match your criteria. It couldn't be any easier!
Below are some of the ways we can make finding a new home stress free.
