Category Archive: Residential

Average rents rise across the North East region for third month in a row

After many years of landlords seeing their rental returns decline due to increased supply and the significant number of legislative burdens placed upon them, there is some good news for landlords. In the North East region, average rents rose for the third month in a row from February to April, and over the course of the previous year (April 2020-April 2021), average rents in the North East have risen by over 8% (source Goodlord Rental Index). This is partly due to the increased demand fuelled by the pandemic, and the decreased supply as some landlords look to off-load their portfolios.

With interest rates still relatively low, now is a great time for a landlord to look to increase their portfolio, or to become a first-time landlord. Using an agent to manage your property for you takes the stress and burden away from you, and ensures you are properly protected in terms of the legal requirements placed upon landlords. George F. White are an ARLA PropertyMark agent, meaning our teams are fully qualified and in the best position to manage your investment and maximise your return.

To talk to one of our friendly and professional team members, please contact us on 0333 920 2220.

Leasehold Reforms

The recent Queen’s speech emphasised that a key item on the Government’s agenda for this new parliamentary term is to introduce measures to end the practice of ground rents for new leasehold properties as part of an intended Leasehold Reform (Ground Rent) Bill.

This statement follows on from earlier comment made by the housing secretary, Robert Jenrick, earlier this year that the Government were looking to give “Millions of leaseholders… a new right to extend their lease by 990 years” and to “make it easier and cheaper for a leaseholder to buy their homes.”

As part of these new proposals, the Government will look to abolish marriage value, cap the treatment of ground rents at 0.1% of the freehold value and prescribe rates for the calculations at market value. The Government are also aiming to introduce an online calculator, further simplifying the process for leaseholds and ensuring standardisation and fairness for all those looking to enfranchise.

Existing discounts for improvements made by the leaseholder and for the security of tenure will be retained, alongside a separate valuation methodology for low-value properties known as ‘section 9(1)’. Leaseholders will also be able to voluntarily agree to a restriction on the future development of their property to avoid paying ‘development value’.

Under existing legislation, The Leasehold Reform Act 1967 (the 1967 act) gives leasehold tenants of houses the right to buy the freehold. The right to buy the freehold (and any intermediate leasehold interest, for example, the head lease) without the landlord’s agreement is called ‘enfranchisement’.

To be eligible for enfranchisement; a house must be a building that is reasonably considered a house i.e. divided vertically from any adjoining house; granted for a lease term of over 21 years and as the leaseholder, you must have owned the leasehold interest for at least 2 years.

By law, the freehold must be valued as if it was part of an open-market transaction between a willing seller to a willing buyer. The principles of the Leasehold Reform Act legislation are intended not to provide a bargain for the leaseholder but instead to adequately compensate the landlord for the loss of their property; by making sure the leaseholder pays a fair price.

However, it is also important to note that the most typical method by which houses are valued for leasehold enfranchisement purposes; also makes account for the leaseholder’s special interest in acquiring the freehold interest is reflected in the valuation as ‘marriage value’. Marriage value effectively represents the added market value provided to the property through the grant of a longer lease or the transfer of the freehold interest.
Marriage value becomes payable once the leasehold term reaches the threshold of 80 years remaining unexpired on the term.

Since the amount of marriage value payable is dependent upon the difference between the value of the house with its present lease and the value of the house after the leaseholder buys its freehold; there is the possibility of the marriage value being considerably more than the value of the landlord’s interest in the property otherwise.

70 years remaining unexpired is another key time threshold that is important for leaseholder house-owners to bear in mind; since most mortgage lenders will only provide mortgages for leasehold properties with remaining terms in excess of 70 years. A remaining lease term of fewer than 70 years may therefore have implications for leaseholders who are looking to sell their property in the near future.

Whilst the Government’s intentions should hopefully remove many of the risks associated with leasehold property ownership and streamline the enfranchisement process for leaseholders in the future; there has been no substantial legislative change yet.

It is therefore of great importance for leasehold-house owners to understand the implications, particularly upon the value of their home, that can arise from the existing leasehold legislation and to take professional advice at the earliest opportunity for any issues of concern in this respect, since time can be very much of the essence.

If you would like advice on leasehold properties please call us on 0333 920 2220.

Covid-19 Update on notice periods for rental properties

As landlords and tenants will be aware, there has been a lot of legislative change in the lettings sector due to Covid-19. New laws have been drafted and introduced on a regular basis as the pandemic has progressed, with regard to access for safety inspections, notice periods for possession, and guidance on viewing appointments, to name but a few.

The issue of serving notice on tenants has been a thorny one during the past year. Landlords have been unable to serve the usual two months’ notice on a tenant, with the current notice period being six months. Although this has undoubtedly aided tenants who may have struggled financially during the crisis, it has caused issues for landlords who rely on their rental income to cover their mortgages.

Landlords will therefore be pleased to know that the government has just announced a phasing down of the timescales of the notice required, with a notice of possession being four months from 1st June 2021. The Government are then expecting those notice periods will return to the usual two months from October this year.

This may mean an increase in the number of rental properties coming back to the market if landlords serve notice on tenants who are in arrears. With a shortage in the supply of rental property currently, this is also likely to lead to an increase in rental levels for the landlord.

As an ARLA PropertyMark agent, George F. White are in a prime position to ensure our landlords are kept up to date with the latest legislative changes and given the best advice regarding their investment.

For further information please contact us on 0333 920 2220.

Moving to the Country?

When we move house, what are we really looking for… is it a place to live or a place to work, a house or a community, a home or a lifestyle? It’s probably all these things and more.

Understanding the needs of rural communities and their businesses is a key priority as the nation emerges from the worst impacts of COVID-19. George F. White are pleased to be supporting researchers at Northumbria University and the University of East Anglia who are investigating what attracts people to smaller towns and rural areas. Plenty of what we have around here! Watsons, based in Norfolk but with offices up the east coast is also partnering with the project to encourage local homebuyers to take part.

If you are searching for a new home, or you have moved within the last year, you can assist in this ground-breaking research by completing a special survey designed to help you think about what you really want from your new home.

It should take about 10 minutes to complete and you can access it here: https://northumbria.onlinesurveys.ac.uk/move-to-the-country

Researchers are investigating how changing migration choices are influencing these rural communities. Analysis of data from the past decade shows that rural areas which attract new residents in their 20s and 30s also see more business start-ups. This suggests that the recent growth in demand for rural living and new ways of working in the wake of the COVID pandemic might launch a new wave of rural businesses – but which areas are best placed to benefit? The research seeks to understand what makes different rural places attractive and how we make housing choices from the information available to us.

So-called “counterurbanisation”, the movement of people from cities to rural areas, has been part of the UK housing market since the middle of the last century. In other countries, the lure of rural living has ebbed and flowed but here in the UK, it has been a continuing trend. The countryside holds a particular place in British culture. We cherish the timeless landscapes, natural beauty and traditional virtues of rural community life, but can this romantic vision of the countryside also offer a dynamic location for new businesses?

The attractiveness of living in the country has increased commuting, increased rural house-building and pushed up rural house prices in many of the more accessible and picturesque rural areas, but the impact of population growth for local economies has been mixed. In rural Britain today we have some of the wealthiest and some of the poorest people.  We have well-connected, well-served communities with diverse business populations but also internet “not-spots”, pockets of hidden deprivation and villages and towns that are losing their business centres.

The survey is part of an England-wide research project but the study has focused on case studies in County Durham and Norfolk. George F. White with offices across the North has been helping individuals and families buy, sell and rent properties across the region for over 40 years. Assisting with this study will allow us to understand our customers and their motivations better.

If you wish to find out more information, please contact Professor Gary Bosworth directly https://www.northumbria.ac.uk/about-us/our-staff/b/gary-bosworth/

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