The government has recently announced that it plans to give leaseholders the right to extend their lease to 990 years. Currently houses occupied under a lease can only extend their lease once for 50 years, whilst flat leases can be extended as often as required, with a zero ground rent for 90 years.

Furthermore, the Government has said that ground rents should be set to zero for new leases and that these provisions should also apply to leasehold properties built with the retirement sector in mind.

This move follows some high profile cases where some leasehold properties had been sold with clauses that would see ground rents rise dramatically in future years.

There are costs associated with extending a lease but the Government has indicated that it will change the way these are calculated with the ‘marriage value’ (the potential profit a lease extension  might bring, being shared with the freeholder) likely to be abolished.

The move has been broadly welcomed by those bodies lobbying for change.

Hiromi Kuda – RRP Associates Property Partner also welcomed the changes:

“Leasehold is a common form of access to the property market. These changes are set to remove some of the downsides associated with leasehold purchase and will likely add additional confidence in the leasehold property sector. It will not remove the need for a thorough review of a leasehold agreement and guidance from an experienced property law specialist is very important.”

Those interested in acquiring or selling a leasehold property should contact Hiromi Kuda whilst those looking at extending a lease should contact Helen Searing

T: 0745 127 0008

E: info@rrpassociates.co.uk

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Despite the recent announcement of a second ‘lockdown’ in England, Robert Jenrick, Secretary of State for Housing, Communities and Local Government has said that the housing market would still be able to operate.

All involved in the conveyancing process will of course have to operate using Covid secure practices however, it has been confirmed that both house buyers and renters can move house. As such estate agents can remain active, as can removal firms, construction sites, financial service providers and law firms.

Commenting on the announcements RRP Associates Partner Hiromi Kuda said:

“We continue to see property transactions progressing through the latest lockdown. We are able to guide people through the process explaining what to expect and minimising any concerns they might have.”

To discuss your property needs contact our team on:

T: 0745 127 0008

info@rrpassociates.co.uk

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The Government has announced that to boost the property market, there will be a temporary stamp duty ‘holiday’ on the first £500,000 of all residential property purchases in England and Northern Ireland where the property is the main residence. This will apply throughout 2020 coming to an end in March 2021.

Stamp duty is a tax on property transactions that can run into many thousands. The Chancellor Rishi Sunak suggested that this move will mean that nearly 9 out of 10 house buyers will now not pay stamp duty at all.

For those buying a property of £500,000 or more there will also be savings given the tax will only apply to the sums above £500,000. Collectively it is suggested that the average stamp duty fee will fall by £4,500 with some buyers saving as much as £15,000. This has been welcomed by many in the property sector who see it as a valuable means of supporting the sector.

The RRP Associates property team has been fully operational throughout the recent lockdown and is ready to respond to the anticipated lift in new transactions. RRP Associates maintained its full staff throughout with none of the team furloughed.

Commenting on the move by the Chancellor RRP Associates Property Partner Hiromi Kuda said:

“This is a significant move by the Government which I am sure will prompt some people into making a move they may have been considering for some time. There is some pent-up demand within the market which we have seen through an up-surge in enquiries to our team.”

RRP Associates Managing Partner Rodolfo R. also commented:

“Unlike others we have maintained fully operational teams across the board. We were quickly able to adapt to remote working which was aided by a major IT upgrade in January. We are fortunate that our infrastructure allows us to adapt and shift pace quickly thus being able to respond to an upswing in demand.”

Anyone interested in discussing a property related purchase should contact us via:

T: 0745 127 0008

info@rrpassociates.co.uk

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The government has recently announced that estate agents can now re-open, viewings can be carried out and removal firms and conveyancers can restart operations. This is all subject to the social distancing and health and safety regulations that are now in place.

The BBC has estimated that there are approximately 450,000 buyers and renters with plans on hold whilst Zoopla was reported as saying that they estimate that £82billion of property sales had effectively been put on hold during the lockdown. This could now potentially flow through.

RRP Associates has continued to advise clients on sales during the lockdown and its team are in place to respond immediately to the increased flow of transactions.

If you need help with a sale or a purchase please contact our Property team by e-mail or phone.

T:0745 127 0008

E:info@rrpassociates.co.uk

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Property auctions could be set to rise as we come out of the pandemic. The impact of the lockdown may require property owners to change strategy and seek to dispose of stock superfluous to requirements.  Many pubs and restaurants if unable to trade until December could be severely impacted and investment owners may look to change the mix of properties in their portfolios.  Selling at auction for probate matters is a quick way to liquidate assets and this is usually a preferred option for beneficiaries.  But are auctions just for developers and landlords? In short no, but buyers should have researched the process in advance of any bid.

There are some very obvious differences between an auction and the conventional sales process. Most obviously the speed of the process. Once the hammer falls at an auction that’s pretty much the property sold. Bidding is normally open and transparent.

There are some downsides and risks associated with an auction but these are normally controllable by the buyer. Key issues include not getting carried away bidding beyond what you can afford or bidding on a property you have not viewed. It is also essential to consider the properties that you would be interested in bidding for at auction in advance.  Allow yourself enough time to appoint a solicitor to review and report to you on the legal pack  Often if your solicitor has sufficient time they will be able to raise enquiries on the contents of the legal pack early on.  Once the bid has been made and the hammer has fallen it is very difficult to raise enquiries or seek rectification of any issues.

Key points to check for are:

• Ensure the seller is the person/company named on the title.
• Look for restrictions and any matters registered on the title.
• Look out for random contracts, court orders and notices that might form part of the legal pack. These probably will impact the property significantly if not fully understood so it is vital you obtain legal advice on the implications before you bid.
• Make sure any mortgage will be cleared off the title when you take ownership and
• There are many other factors which need to be considered such as the structure of the building, rent arrears and the implication of occupying leases on the investment.

Budgeting for an auction purchase is crucial.  Not only must a buyer ensure they complete within the timeframe (usually 28 days) and ensure funding is in place there are other costs associated with buying at an auction. These include:

• An auction house administration fee
• Stamp duty
• Normal solicitors fees for the conveyancing, you may also be required to reimburse the seller for the cost of searches
• property insurance
• Investing in a full structural survey and even an investment review

If you need third party funding, you will need to have secured an ‘agreement in principle’ in advance of bidding. Once you have secured the property you will need to pay a deposit immediately and the balance purchase price on completion.

In recent times we have seen the emergence of the ‘modern method of auction’. This is a somewhat different approach whereby some estate agents allow buyers to bid on a property on line. There will be a reservation fee to pay but there is a longer period of time to complete the purchase allowing a buyer to apply for finance.

Generalisations are dangerous but auctions can offer significant value and there can be bargains to be had. If you are considering buying or selling via an auction give our property team a call to discuss your requirements.

T: 0745 127 0008

E: info@rrpassociates.co.uk

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Reasons to be optimistic in the mid-term?

One positive is that low interest rates should be available for a while and will likely be held low until the economy recovers. Although it is possible we could see some inflation as a result of quantitative easing, it is unlikely to happen quickly with businesses being encouraged to borrow to help growth recover. Consumer confidence will also need time to recover.

For buyers, this crisis could be a good time to begin a house hunt. Although some sellers will try to wait for the uncertainty to end, there will be some who are looking for a quick sale and so a deal can be done.

Landlords and investors, given the unpredictable nature of the stock markets, this could result in property beginning to look like a reasonable alternative. This has happened during previous financial crisis and we could see a similar pattern again.

Confidence

Confidence is the bedrock of the property market. It is hard to determine how things will play out in this respect although short-term confidence may be a little low this is often when the best bargains are to be had. Once the economy stabilises and begins to show signs of life, people will be more willing to commit to purchases.

It is possible that we may see some changes in Government policy in relation to taxation that could help boost confidence in the property sector. Property is often seen as personal indicator of economic well-being.

Although there are currently logistical challenges in marketing properties these will pass and we could see a degree of backed up demand finding its way through to the property market.

Affordability

The Evening Standard ‘Homes and Property’ section reported in February that:

“Housing affordability in the UK has increased at its fastest rate in eight years, according to new figures, which would usually set the scene for an active spring market.”

Recent times have seen average wages increase quicker than percentage price rises for property, collectively improving affordability. With average house prices at the start of 2020 just 0.2% higher than last years’ average.

There are therefore reasons to be optimistic about the property market, there will be bargains to be had, but the scale of any upswing will be reliant on multiple factors. Logistical challenges aside confidence will as ever be the key influencing factor.

Commenting on the state of the market RRP Associates Partner Hiromi Kuda said:

“Despite the challenges we face this could be a good time to review lending terms, leases and put in place a strategy to make the most of the opportunities that will undoubtedly arise.”

Should you require help with a property purchase, re-mortgaging or need assistance with a lease please contact Hiromi Kuda.

T: 01908 355743

E: info@rrpassociates.co.uk

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This finding does not in itself undermine leasehold as a method of property purchase but it does highlight the need for good legal advice when buying a property.

Some people are not clear in their understanding of what constitutes a leasehold property. Put simply it is a property that is owned for a fixed period of time under a lease and is ultimately owned by a landlord. That period can be incredibly long e.g. 999 years whilst others can be much shorter however, shorter leases are more difficult to secure a mortgage on and we would normally advise clients to look at periods of 80 years and upwards.

Leasehold properties typically come with less responsibility for buildings and maintenance, but will likely have regular ground rent, maintenance fees and annual service charges, which should be factored into the cost of the purchase by a buyer. There has been some coverage about cases where people have seen their ground rents rise dramatically. Often this increase is built into contracts, which can make it more difficult to sell a property.

Undoubtedly there is room for additional safeguards for buyers but given good legal advice, a clear understanding of the benefits and obligations of leasehold it continues to be a good means of securing a property. It is also worth noting that as a result of the Leasehold Reform Act 1967, leaseholders have a right to buy a home outright if they meet certain criteria. This process is called ‘leasehold enfranchisement’.

Property purchases are typically the, or one of the, biggest purchases people make in their lives. It is a process that requires the support of a skilled lawyer.

Leasehold, whilst it has picked up some recent bad press, continues to be a good route to purchase a property and is a method that many people use to get onto the property ladder. We can guide you through this process and help ensure your interests are represented during the purchase.

If you are considering moving home, buying a second home or a buy-to-let, contact our Residential Property Team on 0845-RRP -0000 , who will be happy to help.

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Interestingly there are some quite strong regional disparities with property values increasing by 300% more in Yorkshire as in south-east England.

Information from the Land Registry also suggests things have picked up after the recent General Election with London prices rising 1.6%.

Collectively this means that all regions saw a positive annual growth rate for the first time since February 2018.

As the BBC recently reported, UK average house prices increased by 2.2% over the year to December 2019, up from 1.7% in the previous month.

According to the Office for National Statistics: “Over the past three years, there has been a general slowdown in UK house price growth (driven mainly by a slowdown in the South and East of England), but there has been a pickup in annual growth since July 2019.”

The average UK house price of £235,000 in December 2019, is up £5,000 on the previous year.

If you are considering moving home, buying a second home or a buy-to-let, contact our Residential Property Team on 0845-RRP -0000 , who will be happy to help.

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One of them is how the property is going to be owned if there is to be more than one owner.

Maybe you are buying a property with a loved one? If so, this is an exciting time and you may not want to consider what might happen to the property if one of you passes away or if the relationship were to break down but by considering this now, you will ensure that you or your loved ones are not met with any surprises in the future.

There are two options to consider.

Joint ownership, more commonly known as ‘Joint Tenants’, is where each joint owner owns the whole of the property. The implications of this are that when one owner dies the ownership of the property falls to the other owner, no matter the wishes left in the Will of the deceased.

Ownership in common is usually known as ‘Tenants in common’.  Each joint owner owns a separate and distinct share of the property. They can agree to own equal or unequal shares of the property, for example 50% each or 80% and 20%. When one owner dies their share of the property is passed to who is named in the deceased persons Will, or the next of kin if the deceased owner did not have a Will. It is therefore important that if you choose ‘Tenants in Common’ that all owners have a Will and specify what happens to their share in the property upon their death.

So how do you choose what type of ownership is right for you. The factors that you should consider are if you are married, if you have children from previous relationships, if one owner put in more for the deposit or if there are unequal contributions to the mortgage payments.

If you decide to own the property as ‘Tenants in Common’ then it is recommended that the agreement between owners is set out in a Declaration of Trust, whereby it will be formally stated the share in the property to be held by each owner and how the proceeds will be split upon sale of the property. This will prevent any issues arising at a critical juncture in the future.

If you are unsure how you own your property, need some advice on your specific circumstance or would like a Declaration of Trust drawn up please do not hesitate to contact our Residential Property Team on 0745 127 0008 , who will happily help.

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In this article, Paul Stone a member of the Property Team explains some of the more common terms encountered in the world of Property

When you decide to purchase or sell a property, it is common to encounter words and descriptions that seemingly appear to be in a different language. This may be seen as an obstacle and barrier to understanding a legal transaction, but in reality is entirely logical in its approach.

When someone not immersed in the world of Residential Conveyancing encounters words such as ‘Covenants’, a ‘Chain’ and even ‘Conveyancing’, terms such as these can seem perplexing and complex legal jargon. In this short article I will attempt to translate some of these words and phrases so you can enter your next transaction fully abreast and with your legal dictionary expanded!

To start, ‘conveyancing’ simply means a sale transfer of a legal title of a Property from one party, to another. Therefore, in Residential Conveyancing, we would act on your behalf to transfer the property to your buyer (as a seller) or your seller (as a purchase). Archaic, formal sounding words such as ‘purchaser’ for buyer and ‘vendor’ for seller are still used in Conveyancing circles.

When you come to sell or buy a property, you may become involved it what is known as a ‘chain’. This chain, as the name suggests, is the link from one transaction to the next e.g. when you sell or buy a new property, your buyer or seller may then have a related transaction where they are selling on or buying too. More often that not, this chain is dependent upon one transaction following another; that is to say, someone cannot buy a property without first gaining the money due to them from their sell. A chain can sometime be complex or sometimes it can just consist of a buyer and a seller; occasionally you will know of its length from the start of your transaction.

As a seller or as a buyer, you may come across the word ‘covenants’ being mentioned to you by your conveyancer.  A covenant is merely a rule that affects the property, in order to restrict what you can and cannot do at a property. Example of covenants can consist of historical ones such as restricting the sale of ‘intoxicating liquor’ to more pertinent ones restricting any development on the land without prior permission. It is very important to familiarise yourself with any covenants affecting the property so you can know its limitations.

Another common word you will encounter is boundaries. Boundaries define the extent of the property land you are purchasing and not just the extent of the physical property. The title should also confirm furthermore who has responsibility to maintain such boundary. This is usually determined by a ‘T’ mark on a boundary on a Title Plan, Conveyance or Transfer document; however a ‘T’ mark is not always necessarily shown on the said documents. It must be noted that a ‘T’ mark does not necessarily determine the owner and is not conclusive, as it also relates to boundary ownership over time insofar as if a neighbour builds and maintains a fence on a boundary, they are presumed to then have taken responsibility of said boundary. Your legal advisor can provide you with full details as to the ownership of the boundaries, if indeed it is evident from the documents provided.

It is the hope of this article that by being given a few keys phrases, you can arm yourself when encountering your next residential transaction, and be sure to understand the terminology used between conveyancers. This article of course not exhaustive, however by using a trusted Residential Conveyancing team such as the one at RRP Associates , you can be sure that any other wording or terms you are unsure about, you can receive a plain English definition that you will be sure you can trust.

@Paul Stone has been with RRP Associates for 5 years and having originally worked in our Accounts and Data Department Paul made the transition to the Property Department two years ago and now handles all forms of conveyancing transactions from our India office.

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