Category: News

A wet and frosty spring, followed by dry weather and sunshine, has provided it with the perfect growing conditions, according to solicitor Kate Bould, managing director of Index West Midlands.

“Japanese Knotweed is estimated to affect up to 1.45m homes across the UK, which equates to approximately five per cent of residential properties. It can devalue a house by between five and 15 percent, and in some extreme  cases, it has even almost completely devalued properties” she claims.

“Sellers and buyers must realise there is a distinct possibility they will face either a current infestation of the plant, or evidence of it at a property in the past, and that this could halt or totally derail a property sale.

“Home sellers have a legal obligation to declare Japanese Knotweed to buyers. The TA6 Property Information Form used to inform buyers of any negative issues affecting the home, includes a specific question pertaining to Japanese Knotweed.

“Getting a mortgage on a property with or which has had Japanese Knotweed is not straight forward, and in some cases impossible. Most home insurance policies will exclude Japanese Knotweed, and won’t cover owners for damage to their or neighbouring properties, nor the cost of damage to remove or eradicate the plant” she says.

Classified as a ‘controlled waste’ under the Environmental Protection Act 1990, Japanese Knotweed grows up to 20cm a day.

If left unchecked, its deep, wide-ranging roots can tunnel through and destroy foundations, drainage systems, and walls, putting properties at risk of damage as it can grow through cracks in concrete, brickwork, patios, asphalt, cavity walls, gutters, and drains, eventually forcing walls to break apart.

Removal and disposal of it has to be handled by a qualified expert, which depending on the size of the infestation, will cost anywhere between £3,000 and £10,000.

Last week RICS issued advice for the assessment of Japanese Knotweed in UK properties, to help affected homeowners and lenders.

That’s the view of property software company Openview – Powered by VTUK.

It says the holiday, coming alongside the pandemic and the government’s 95 per cent mortgage scheme, have all contributed to the increased housing demand across the UK.

Automating transactions, sales progression and tenant maintenance reporting could allow more time to speak to prospects, network with landlords or carry out viewings, Openview says.

By automating these processes in a way that tailors directly to the agency, automation could act as an assistant which supports everyone in the property industry.

“In house sales, quick speed and accuracy are fundamental, and if these are not achieved, they can cause backlogs” according to Peter Grant, chairman and chief executive at Openview.

“Transactions fall through if deadlines are not met and when errors are made. The current housing market continues to demonstrate that automated processes must be invested in to ensure efficiency all the time.”

Grant adds: “Automation has the potential to make these processes simpler, reduce paperwork, decrease the chances of error and avoid potential delays. Making the process quicker can help agents manage industry demands better on a single online platform. “

He says automation helps effectiveness across four key areas: business continuity, retaining clients, winning clients, and increasing profit with each transaction.

“By analysing the areas where speed and accuracy need improvement, you can streamline these tasks using a customisable automation system” Grant explains.

“Knowing the areas of improvement in your organisation will help select the right features that will benefit your agency and clients.”

He says there is peace of mind in knowing that the documentation and data that has been inputted is on one single, secure system.

“Also, there is an opportunity to focus on other important areas of the business that require attention,” he continues. “Time can be maximised when automation is at the forefront of the company’s structure. Maximising time means enabling growth, reliability, and stability at any chosen hour of the day.”

And he concludes: “Fastrt property transactions for estate agents can be facilitated with e-signatures and automated communication, as opposed to being completed manually.”

The BoE’s monetary policy committee yesterday voted 9-0 to keep interest rates steady at their current historic low of 0.1 per cent – the rate they have been at since the start of the pandemic in March 2020.

There had been fears the Bank may be nervous about consumer price inflation hitting a two year high of 2.1 per cent in the year to May – slightly above the Bank’s own 2.0 per cent target.

But the monetary policy committee believes the high inflation will be short lived.

“Financial market measures of inflation expectations suggest that the near-term strength in inflation is expected to be transitory,” the Bank said in a statement.

“Output in a number of sectors is now around pre-Covid levels, although it remains materially below in others. The housing market remains strong, and indicators of consumer confidence have increased” it continued.

“The Committee’s central expectation is that the economy will experience a temporary period of strong GDP growth and above-target CPI inflation, after which growth and inflation will fall back” it added.

“There are two-sided risks around this central path, and it is possible that near-term upward pressure on prices could prove somewhat larger than expected.

“Taking together the evidence from financial market measures and surveys of households, businesses and professional forecasters, the Committee judges that UK inflation expectations remain well anchored.”

A survey by an online comparison website for removal companies says that more than 500,000 people have moved in 2021 so far, across rental and sales sectors, with the average distance travelled between the old home and the new home 54 per cent from an average of 32 miles to 50 miles a home move.

The survey also appears to suggest a significant number of people moving out from the cities to towns or rural areas.

Of some 67,000 people have moved out of cities to towns or rural areas and just 30,000 ‘outsiders’ have moved in. This is despite companies and employees preparing for a return to office in July.

Between 2019 and this month, there has been a 20 per cent decrease in people moving from rural areas to cities.

“In the past year as offices closed and more people worked from home or were placed on furlough we witnessed a strong current of people moving out from cities into rural areas or towns, whether permanently or temporarily” says Angus Elphinstone, chief executive of AnyVan, the firm behind the survey.

“Now that offices are back open employers and employees face a conundrum as to whether they help the working from home trend continue. At the moment our data shows us that we haven’t seen the trend invert. In fact, our data shows there has been a significant decrease in people moving from rural to cities at the start of 2021 than in 2019.

“Many companies are phasing a return to office and there are many employees that either want to go back in full-time or with some working from home involved.

“This means that we may well see more people returning to the cities, but it will be a gradual move and one we may not see start to gather pace until the summer when high streets are fully open and the vaccine programme has given more confidence to people living their lives in more crowded cities.”

99Home has drawn up as list of online agencies and their number of listings on the major portals on February 1 and June 1 this year.

99Home claims the slump in online agency stock is typical of the slump across the housing market; it suggests that there are 25 per cent fewer homes on the market now than six months ago, and that this has hit the inventory of all agencies of all types.

Even so, the drop in instructions for online agencies appears particularly dramatic for Purplebricks.

The headline figures produced by 99Home appear to show Purplebricks as the biggest loser, with 12,008 instructions on February 1 falling to just 7,984 on June 1 –  that’s a collapse in instructions of just over one third.

Falls for Yopa, EweMove, Express Estate Agency, Doorsteps, Signature, Sellmyhome and 99Home itself are smaller but nonetheless significant – typically around 20 per cent. You can see the full table produced by 99Homes at the bottom of this story.

The one exception appears to be Strike, formerly HouseSimple, which has seen its instructions rise around 10 per cent over the same period, from 5,226 on February 1 to 5,756 on June 1.

99Home’s data also shows that across listings from  some 80 agencies, traditional and online, the market share of online firms has dropped from 13 per cent on February 1 to 12 per cent on June 1.

Purplebricks has been asked for its response to these figures, but says it cannot comment this close to the release of its next trading statement.

Last week the Swiss investment bank UBS advised investors to sell their Purplebricks shares as the market share for the controversial agency appears to have fallen sharply.

UBS cut its price target for Purplebricks shares to 78p from 85p, with the bank suggesting possible reasons for the falling market share of the controversial online agency.

The bank’s note to investors said: “We are currently seeing strong house price growth in the UK, which may have led to more consumers choosing to use a traditional agency to help them maximise the selling price.

“Further, Strike may be winning some customers from Purplebricks. It is also possible Purplebricks may be holding back marketing spend ahead of the launch of its new pricing model.”

Purplebricks delivers its full year results to shareholders, and its next trading statement, on July 6.

Savills in the Republic of Ireland took the unusual step of demanding detailed financial information from those wishing to view a new build scheme in County Dublin.

Savills in London told Estate Agent Today that this was following Covid-related advice from the Republic’s Property Services Regulatory Authority. “This is not policy over here [in the UK]” a Savills spokeswoman told EAT.

However now in the Republic there is a growing dispute over the vetting, with the country’s Data Protection Commission – the equivalent of the Information Commissioner’s Office in the UK – writing to Savills to express concern.

The Irish Times reports that the privacy watchdog in the Republic is planning to issue guidelines in relation “to the practice of seeking personal data in the context of property viewings”. The DPC is examining whether Savills had a legal basis to seek financial information from people wishing to view properties.

And the Irish Independent has carried an opinion piece with the headline: “Estate agent’s demand for proof of funds being seen as the latest example of the little guy getting kicked around.”

Meanwhile Irish housing minister Darragh O’Brien says he will contact agency trade groups about the practice by Savills.

“Requesting this level of info from a prospective buyer to view a home is simply wrong” he says.

“I’ll be writing to the Property Services Regulatory Authority on this and requests for excessive info prior to informing enquirers of house price.”

Agents in this country appear broadly supportive of the Savills tactic, with comments left on the EAT website suggesting this is a good way of ensuring viewings are for genuine buyers.

Here’s the background to the controversy.

Savills in Ireland issued a financial questionnaire. It asks whether those wishing to view are first-time buyers, investors or existing owners, and wants “evidence of all savings that will be used in the purchase” or “evidence of gifts from family members, if applicable.”

They are also required to provide “full proof of funds” in order to view the houses, which range in price from €395,000 for a mid-terrace to €565,000 for a detached house.

If it’s a cash purchase, Savills requests “a bank statement or letter from your solicitor confirming funds are available” and, at the very least, a mortgage approval in principle document, which includes the amount the bank is prepared to lend.

“Please note that if submitting letters from your mortgage broker, the loan amount must be visible. We cannot accept a redacted Approval in Principle” the email tells those who expressed an interest in viewing.

The data, from a Savills survey of around 750 buyers, adds that some 71 per cent of those currently mid-purchase have no expectation of completing ahead of the June 30 deadline.

Savills claims this means a potential stamp duty saving was not factored into their decision-making process.

A vast majority – 85 per cent- of those still hoping to complete in time said that failure to do so would not affect their transaction in any way, rising to 90 per cent amongst those buying above £1m.

“Lifestyle choices made during lockdown, or brought forward as a result of the experience of lockdown, have almost totally dominated decision-making in the prime market over the past year and look set to do so over coming months” says Frances Clacy, Savills’ research analyst.

She continues: “Buyer and seller commitment to moving over the coming year remains strong although slightly lower than in June 2020 when the market reopened after the first lockdown.

“The stamp duty holiday was announced in July, and while it may have brought forward some transactions, this survey tells us that it has not been the major motivator amongst equity rich home movers in the prime market.”

In its latest monthly market snapshot, the portal says asking prices rose 0.8 per cent – that’s the equivalent of £2,509 on the average asking price in just four weeks.

This was the largest rise at this time of year since 2015, and prices are now at a record in all countries and regions of Britain.

However, Rightmove says high prices combined with an all-time low in the number of available properties on agents’ books are starting to slow the pace. Buyer demand is still ahead of supply but  sales agreed in May were only 17 per cent ahead of the same period in 2019, slackening from April’s figure of 45 per cent.

The number of sales agreed on properties over £500,000 in May was 49 per cent above the same period in 2019, despite buyers knowing they will miss the maximum stamp duty saving that comes to an end in June.

In terms of the regional picture, Welsh prices rose by 14.6 per cent since March 2020; South West England prices are up by 11.4 per cent with properties selling more quickly than ever recorded previously by the portal.

Tim Bannister, Rightmove’s director of property data, says: “Buyer demand remains very strong, though with an all-time low in the number of properties available for sale on estate agents’ books and new stock at higher than ever average prices, there are early signs of a slowing in the frenetic pace.

“Since the market re-opened last May in England we have seen huge jumps in the numbers of sales being agreed, but these are now rising at a slower pace. Record low interest rates and stamp duty tax reliefs have helped many to afford higher prices, satisfying their pent-up desires for a new home fit for a new era.

“Some of that demand has now been met, and the phasing out of stamp duty reliefs has also taken away some of the urgency to move, though our high traffic and search data indicate that there is still strong buyer demand.

“However, higher prices combined with a lack of fresh choice coming to market are reducing some buyers’ ability or desire to move, and while we expect the market to remain robust, there are early signs of a slackening in the incredible pace of activity that we’ve seen over the last year. This super-charged activity cannot go on forever, but we expect the market to remain vigorous for at least the remainder of the year.”

CGT reform has long been mooted by the government’s own Office of Tax Simplification and announcements were expected in the Spring Budget, or later this year.

However, now Chancellor Rishi Sunak is reported to have dismissed the possibility of CGT increases as potentially too unpopular.

The government faces the huge cost of extravagant spending commitments over COVID 19, G7 climate change pledges, new social care policies and even a £200m Royal Yacht.

But The Times says Sunak has “ruled out a long expected increase in Capital Gains Tax on the grounds that it does not raise enough money to justify the political pain of introducing it, not least from [Conservative party] donors.”

In the spring a report commissioned by the government called for the doubling of Capital Gains Tax on profits from the sale of second homes including buy to lets.

The Office for Tax Simplification, set up by the government, said £14 billion could be raised by cutting exemptions and doubling rates.

If Sunak acted on the recommendation it is thought that basic rate taxpayers would be largely unaffected, but would still see their CGT tax bills rise from 18 to 20 per cent.

But higher rate taxpayers selling buy to let or second homes would see their CGT bills soar from 28 to 40 per cent, an increase that would amount to tens of thousands of pounds for many landlords in particular.

The OTS also wanted a major reduction in the Annual Tax Allowance, which currently sits at £12,300 but could be lowered to only £2,000.

The Times says the most likely target for raising money would be pensioners.

Treasury officials are examining plans to suspend the so-called ‘triple lock’ on pensions, saving £4 billion annually. Sunak’s department is also reported to be considering taxes for online businesses and gambling services.

This is down from a 9.9 per cent increase in the year to March. It’s the first fall in growth for almost a year, since last July.

The ONS data found that in the year to April average house prices rose by the greatest margin in Wales, up 15.6 per cent to £185,000. This was followed by England, up 8.9 per cent to £268,000.

In Scotland prices rose 6.3 per cent annually to £161,000, and Northern Ireland, up 6.0 per cent to £149,000.

For the fifth month on the trot, London had the lowest annual growth – 3.3 per cent. Amongst the other English regions, the North East saw the strongest growth at 16.9 per cent.

Experts are divided over how to interpret the reduced price growth.

PropTech entrepreneur and market analyst Anthony Codling says: “The data relates sold house prices, so the small reduction, in my view, will have reflected prices agreed by those who thought they might miss the March Stamp Duty Holiday deadline. Following the stamp duty holiday extension, I expect the house price data over the coming months show more ups than downs.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, comments: “The historic nature of these numbers, though the most comprehensive available, is likely to mean the small fall in monthly prices is a response to the anticipated end of the stamp duty holiday in March before they resume their upward trajectory following extension of the concession. Looking forward, our experiences on the ground tell us that market activity is set to continue at similar levels at least for the next few months, although increasing sales instructions will result in some price softening rather than a correction.

Karen Noye, mortgage expert at wealth management firm Quilter, states: “This may be the first signal of what is to come as it is likely buyers no longer feel that they can complete on a property before the June stamp duty holiday tapering and are exiting the buying market in response. The inflated house prices we have seen over the past year are linked to all the government schemes put in place to keep the market motoring during the pandemic so it is only natural that prices will drop as these schemes disappear.”

Meanwhile Nick Leeming, chairman of Jackson-Stops, adds: “Although the market has cooled ever so slightly following the mad rush at the start of the year, we still saw 13 buyers chasing every instruction across our branches in April. These buyers are very unlikely to meet the government’s stamp duty deadline and are proof that the market will remain strong during the second-half of the year, after the incentive has ended.”