Labour Calls for Suspension of the Right to Buy Housing Scheme

Labour’s Andy Burnham is calling for a suspension of the Right to Buy housing scheme, claiming it exacerbates the housing crisis by reducing the stock of social homes. He argues that the scheme results in a net loss of social housing each year, hindering efforts to address the shortage of affordable homes.

Burnham, who was recently re-elected as Mayor of Greater Manchester, aims to build 10,000 homes across the county, with a focus on social housing. He believes that by suspending Right to Buy for new homes, local authorities can retain more social housing stock and address the housing crisis more effectively.

The Department for Levelling Up, Housing and Communities (DLUHC) defends the Right to Buy scheme, stating that it has enabled over two million social housing tenants to become homeowners. They emphasize the role of local authorities in managing the scheme and using proceeds from sales to fund new housing projects.

Mark Slater from Greater Manchester Tenants Union supports Burnham’s plan to suspend Right to Buy, highlighting the urgent need for more homes in the region. He argues that Right to Buy has significantly reduced the stock of social housing, contributing to the housing crisis.

In addition to addressing the shortage of affordable housing, Burnham aims to improve standards in the private rented sector by introducing a Greater Manchester Good Landlord charter. This initiative would give residents the right to request property checks if they have concerns about the safety or condition of their homes.

As Mayor of Greater Manchester, Burnham holds significant powers over various areas, including public transport, housing, and policing. His proposals reflect a commitment to tackling the housing crisis and improving living conditions for residents across the region.

Source : Property Notify

Taxes are Forcing up Rents

The rise in private rents across England, Wales, and Scotland over the past year has been attributed to various tax and regulatory changes affecting landlords, according to Propertymark, the letting agents’ trade body.

One significant factor contributing to the increase in rents is the tax relief reduction on mortgage interest costs initiated by Chancellor George Osborne in 2015. This measure, along with the removal of the 10% allowance for fully furnished homes, has led to decreased profitability for many landlords. These tax changes have made it challenging for landlords to operate profitably, prompting some to exit the sector altogether.

In addition to tax changes, landlords have faced increasing costs due to regulatory changes and expensive local council licensing requirements. The reduction in Capital Gains Tax allowances has further impacted landlords who choose to sell their properties.

Propertymark has highlighted the perspective of landlords, emphasizing that they feel unfairly targeted as the reason for rent increases. Landlords argue that government support, such as tax relief or relaxed thresholds, would be beneficial. They also call for greater recognition of the positive role landlords play in providing accommodation and urge the government to address biases towards tenants’ issues.

Propertymark’s data, along with insights from private landlords, indicates a decline in the volume of private rental properties available, leading to a shortage in supply. This scarcity, combined with increased demand, has contributed to rising rents as tenants compete for limited housing options.

To address these challenges, Propertymark is advocating for the UK Government to create an economic environment that benefits both tenants and landlords. This could involve implementing policies that support landlords while also ensuring affordability and access to rental housing for tenants.

Source : Property Notify

Interest Rates Held at 5.25%

Andrew Bailey, the Governor of the Bank of England, has signalled that interest rates will likely need to be cut in the coming quarters to maintain inflation at the 2% target. Despite policymakers voting to keep interest rates steady at 5.25%, Bailey emphasized the need for rate cuts, possibly exceeding current market expectations.

Money markets had anticipated two rate cuts by the year’s end before Bailey’s remarks. He stated that a rate reduction in June was not definitively ruled out nor guaranteed.

Bailey expressed optimism regarding falling inflation in the upcoming months, attributing it to encouraging economic indicators. He emphasized the necessity of observing sustained low inflation before implementing rate cuts.

Sir Dave Ramsden, the Bank’s deputy governor, supported calls for reducing borrowing costs, citing signs of inflation’s descent.

The Bank’s recent economic assessment revealed a 0.4% growth in the UK economy during the first quarter, marking a recovery from recession. It projected inflation to have eased back to the 2% target in April from 3.2% in March, with food prices stabilizing around this level for the remainder of the year.

Investors have adjusted their expectations, bringing forward predictions for rate cuts from August to June, with rates potentially dropping to 4.75% by year-end.

Source : Property Notify

The Mortgage Mistake Costing the Average Homeowner £3,000

New research by the personal finance comparison site shows that almost a third (31%) of homeowners have let their mortgage slip into a higher rate for at least 1 month after their fixed-rate deal has ended. The total amount of time during which people had let their mortgage revert to a higher rate was an average of 10 months over the course of their mortgage, according to the survey.

Someone paying off the cost of the UK’s average house, worth £281,913, on a competitive fixed 3-year rate* of 5.5% would pay £1,361 per month during those 3 years.

But if they didn’t remortgage immediately at the end of the initial fixed term, the interest rate would revert to the lender’s standard variable rate, which is typically around 7.5% at the moment. This would cost them £1,661 per month, which is an extra £300. The average person paying 10 months of this would therefore part with an extra £3,000 to pay the extra interest.

While the average time that homeowners in the survey had left their revert rate going was 10 months, over 1 in 10 (11%) had paid a higher revert rate for more than 1 year. Worryingly, 3% said they’d paid a revert rate for over 5 years. This would cost over £30,000 in extra interest.

To see the research in full visit:

Source : Property Notify

Only 1 in 10 Homebuyers Instruct a Home Condition Survey in Q1 2024

Countrywide Surveying Services (CSS), one of the leading suppliers of valuation panel management services, has released findings from its inaugural Home Survey Trends Index for Q1 2024 which found that fewer than 1 in 10 homebuyers instructed a home survey with their recent property purchase.

This worrying statistic of 9.7% includes those who took out a RICS Home Survey Level 2, RICS Home Survey Level 2 with Valuation and RICS Home Survey Level 3 and is applicable for purchases completed over the course of Q1 2024 in England, Wales, and Northern Ireland. 

In terms of a survey split, the Index shows that 61% of buyers commissioned the RICS Home Survey Level 2, with a third (33%) taking out a RICS Home Survey Level 2 with Valuation and 6% opting for a RICS Home Survey Level 3.

For those homebuyers electing for a RICS Home Survey Level 2 or a RICS Home Survey Level 2 with Valuation, the average property price for both survey types was £283,000 with an average £403 fee and £439 respectively. For those homebuyers selecting a RICS Home Survey Level 3, the average property price was £407,000 with an average £854 fee for this survey type.

On a regional basis, the largest uptake in a RICS Home Survey Level 2 and RICS Home Survey Level 2 with Valuation was evident in the North West at 15.5% and 15.6% respectively. While the largest uptake for a RICS Home Survey Level 3 was in the South East at 14.7%.

In contrast, the lowest uptake for a RICS Home Survey Level 2 was in the North East (5.7%), with the fewest for a RICS Home Survey Level 2 with Valuation being reported in East Anglia and Wales – both regions registered 6.5%. The lowest uptake for a RICS Home Survey Level 3 was in the North at 3.3%.

The RICS Home Survey Level 2 was previously known as the HomeBuyer Report and the RICS Home Survey Level 3 offers a more comprehensive structural overview which is ideal for old and more complex buildings, listed properties, houses with obvious defects, and unconventional homes.

Source : Property Notify