Tag: Property for Sale

Government leaks to mainstream and building trade media suggest the controversial Help To Buy scheme will be extended beyond its end-of-2020 deadline.

An announcement is expected shortly.

Some suggestions say the extension could be just three months, to allow the clearance of as many as 18,000 H2B purchases delayed by Coronavirus, while other suggestions put the extension as considerably longer because of wider concerns about the economy and unemployment in the construction sector.

Either size extension would probably be controversial.

On the one hand, some agents and almost all housebuilders see the scheme as a means of improving their sales figures, especially to younger or first time buyers. Between its introduction in early 2013 and March this year – before the housing market was frozen – some 272,000 purchases had taken place via Help To Buy.

On the other hand, a slew of reports and analyses suggest that H2B does little to improve the quantity of housing stock and possibly increases prices – ironically making homes less affordable rather than more.

Last year a National Audit Office analysis revealed that 63 per cent of people buying a home under the scheme could have afforded to do so anyway; more households with incomes for £80,000 and above purchased via H2B than households with less than £30,000.

Bruce Burkitt, founder of the Property Experts consultancy, wrote last year in Estate Agent Today: “Developers are aware that Help to Buy is a closed market, and many properties are sold for premiums of 15 to 20 per cent, a surprising statistic that may come to harm first time buyers perhaps more than it is helping them.”

Recent figures suggest that the average price paid for a H2B property across the UK is some £307,000.

HM Land Registry is now accepting witnessed electronic signatures on documents for the  transfer of ownership of property, the creation of leases, and on securing mortgages.

It says this should allow a substantial simplification and faster execution of conveyancing – although it warns that some electronic signature providers may need to make some minor changes to meet its security requirements.

It will work like this: a conveyancer must  upload the deed to an online platform which sends a link to the signatories.

Once they have completed the necessary authentication checks, they would then ‘sign’ the document electronically in the physical presence of the witness who then also signs.

The conveyancer is then notified that the signing process has been concluded and, once they have effected completion of the deed, can submit the completed deed to HM Land Registry with their application for registration.

In every case the online platform would need to include two-factor authentication to authenticate the signatories and witness accessing the deed and provide assurance that unique individuals have signed.

A link to the document is emailed and then an authentication code sent to the individual’s mobile phone.

“What we have done today is remove the last strict requirement to print and sign a paper document in a home buying or other property transaction. This should help right now while lots of us are working at home, but it is also a keystone of a truly digital, secure and more efficient conveyancing process that we believe is well within reach” explains Simon Hayes, the Registry’s chief executive and chief land registrar.

“The more sophisticated qualified electronic signatures are a part of that vision and encouraging those is where our attention will be directed next” he adds.

Agents have almost unanimously been reporting a big surge in business since the reopening of the housing market, but new figures from HM Revenue & Customs suggest there is still some way to go before normal volumes are seen.

A total of 68,670 residential properties were sold in June according to HMRC data.

While this was predictably a huge 50 per cent up on May, it was still 31.5 per cent down on the same month a year ago.

The figures obviously pre-date the stamp duty holiday and other purchase tax changes in different parts of the UK, introduced only this month.

“Transactions, not more volatile house prices, are always a better indicator of market strength. These figures show activity is moving in the right direction but will clearly take time to be reflected in the figures as we emerge from lockdown and associated restrictions” notes former RICS residential chairman Jeremy Leaf, who also runs his own London estate agency.

“Nevertheless, we have noticed at street level that many buyers and sellers are bringing forward moving decisions to take advantage of the stamp duty holiday and continuing lower interest rates. There is still concern that improved conditions will be relatively short-lived as economic news deteriorates and furlough support falls away” he adds.

The chief analyst at online agency Yopa, Mike Scott, says it’s possible that these HMRC figures may be worse than reality.

“Note that these are provisional figures. Transaction data may be being processed more slowly than usual due to the effects of the pandemic, which means that there may still be more June sales to be reported and the true year-on-year fall may not be as bad as it is in this report” he suggests.

And Tomer Aboody, director of property lender MT Finance, says: “We are still below last year’s numbers, which in turn were down on the previous year, but confidence is creeping back up.

“If the government increases capital gains tax on principal home sales, it will push us back again so any progress made  by the stamp duty reduction will be swiftly lost. We need more stimulus via reduced stamp duty to the upper end of the market and hope for this in the autumn Budget.”

There’s more confirmation this morning that the housing market is enjoying a short-term bounce – and that’s before the effect of yesterday’s stamp duty initiatives.

The latest market snapshot from the Royal Institution of Chartered Surveyors, out today, shows a net balance of 61 per cent of its monthly survey respondents seeing a rise in new buyer enquiries over the past four weeks.

The number of new properties being listed for sale also rose over the month, with a net balance of 42 per cent of survey participants noting an increase rather than decrease.

As agents continue to deal with a backlog of sales held up by lockdown, the number of newly agreed sales moved into positive territory for the first time since February, with a net balance of 43 per cent citing an increase in completed transactions.

However, the average number of properties on agents’ books remain close to all-time lows – just 39 on average per branch, says RICS. And on prices, for the third successive report respondents have reported a decline in house prices.

“Key activity indicators in the RICS survey suggest that the market is enjoying a short term bounce following ending of the lockdown, with sharp spikes in the metrics tracking both buyer enquiries and new instructions” explains Simon Rubinsohn, RICS chief economist.

“However, there are worrying signs that this rebound may quickly run out of steam against the backdrop of a tightening in lending criteria by mortgage providers, and the uncertain macro environment particularly with regard to the employment picture. Respondents to the survey highlight both of these issues in explaining the broadly flat picture regarding sales expectation beyond the immediate uplift.

“Meanwhile, the issues around the sales market appear to be shifting sentiment in the lettings market with, somewhat ominously given the prevailing economic climate, rent expectations beginning to edge upwards once again.”

A new estate agency Code of Practice is to be written by a group set up by the Royal Institution of Chartered Surveyors and The Property Ombudsman.

It will be led by a Labour peer and should produce the code by the end of this year.

The steering group – which also includes representatives from ARLA and NAEA Propertymark, Trading Standards and sales and lettings industry trade bodies – is charged with developing what RICS and TPO call “an overarching code of conduct for residential property agents”.

It will be independent under the chair, Baroness Dianne Hayter, and is the first attempt to enact one of the many recommendations put forward a year ago by the Regulation of Property Agents Working Group.

That group called for an independent regulator, licensing for all agents, a new code of conduct, mandatory qualifications and a new form of redress more powerful than existing operators: until now, none of these recommendations had been acted on, and even this morning’s new announcement addresses only one of the proposals.

The new Code of Practice is likely to be a single, high-level set of principles to be applied to all residential property agents; there will also be a number of other more detailed sections developed that are specific to various aspects of the residential property agent sector, such as sales, lettings and management.

A statement from RICS and TPO says the code is being prepared so that it can be “handed over” to the new regulator once that role is established.

The Code of Practice Steering Group will consist of consumer and sector representatives who “will work collaboratively and in the public interest, and those participating in the group do so voluntarily, in good faith.”

No names or organisations have been named so far as being involved.

A draft on the new code will go out for consultation this month, July, when according to the TPO and RICS “feedback from users, professionals, buyers, sellers, lenders, tenants and landlords will be sought.”

Baroness Hayter is a Labour peer whose CV includes being Chair of the Legal Services Consumer Panel, Vice Chair of the Financial Services Consumer Panel and a member of the National Consumer Council. She also chaired the Property Standards Board.

“The forthcoming combined code will ensure that consumers are clear what standards they should expect from property professionals, and it will enable them to be confident that all residential property agents will be held to account in meeting them” she says.

“The independent Steering Group is undertaking this work to prepare an over-arching Code of Practice for the new regulator, very much within the public interest.  With both consumer representatives and cross-sector support and commitment to achieving this goal of a combined code, as proposed in the Regulation of Property Agents Report, it will raise standards and trust in the industry” she continues

The launch statement of the new body includes a quote from Housing Minister Chris Pincher who says: “Baroness Hayter’s appointment is an important development for property agents as they further raise standards in their industry and protect their customers. I look forward to continuing to work with all to ensure customers are treated fairly and that all agents work to the same high standards.”