Homes for £1! Sounds almost too good to be true!

Homes for £1! Sounds almost too good to be true!

This is a project run by local authorities firstly in Liverpool and now in Stoke-on-Trent, where run down properties are sold for £1 each and a loan of £30,000 is given to complete necessary repairs on the property.

There is a range of properties available 2 bed terraces, three bedrooms hours and even some flats. There have been thousands of applicants for the project and the properties are allocated randomly to successful applicants. To qualify for the project you have to meet the following criteria:

·         You must have lived in the area for the past 3 years

·         Have a joint income of £18,000 - £25,000 or £30,000 if you have children

·         Must not own any other property

·         Must have been employed for the past 2 years

·         The new house must be your main home for at least 5 years

·         You must have the right to live permanently in the UK

The £30,000 loan is required to be paid back over the next 10 years, with an interest rate of 3% above the base rate.  This currently works out around £293 per month, which is cheaper than a mortgage or renting.  People who are lucky enough to get one of the £1 properties are required to renovate it and bring it back life. The aim of this is to reignite run down, derelict areas into family homes. This will have a knock on effect to current residents living next door to these vacant properties and will hopefully build community spirit throughout the neighbourhood.

 

There are 710,000 vacant homes in England which has been a trigger for the £1 home scheme. In the current economy with housing lacking, it is vital to bring these empty properties back to family homes. The £30,000 loan from the council towards refurbishing each property will be spent on council approved contractors with the owners choosing which type of kitchen and bathroom they like. If the house is sold within 10 years the owner will be required to hand over a share of the profit made.

What’s your opinion on the £1 home scheme?

Second Part of the Help to Buy Scheme Revealed by George Osborne

Second Part of the Help to Buy Scheme Revealed by George Osborne

In a recent meeting with mortgage lenders and housebuilders, George Osborne explained the terms of the second part of the Help to Buy Scheme to be launched in January 2014 on property purchases up to the value of£600,000.

There are worries that the Help to Buy Scheme will inflate house prices and lead to a housing bubble. The Homeowners Alliance is also sceptical that it may cause people to take on huge mortgages.

George Osborne has laid out strict terms for the scheme hoping to avoid these negative issues. Purchasers applying for the scheme will undergo strict income checks and will be made to sign a declaration to declare that they are not using the loan guarantee to secure a second home. These checks will determine whether the buyers can afford the mortgage.

The aim of the scheme is to allow more people to be able to afford a home loan without having to save for a large deposit. Ministers claim that the second part of the scheme could enable up to 190,000 new mortgages each year over the 3 years of the scheme.

Lenders will have to pay a fee, the amount which has not been concluded yet, for each mortgage guarantee. The lowest interest rates are usually on mortgage with a LTV of up to 60%. This makes borrowing a lot more expensive for potential buyers with small deposits. The second part of the scheme aims to enable lenders who offer mortgages with a high LTV a chance to buy a ‘guarantee’ on the portion of the mortgage between 80% and 95%.

Potential borrowers have to go through ‘stress testing’ and income verification to ensure they can afford the mortgage. Anyone with a bad credit history will not qualify for the scheme.

For more information visit our dedicated Help To Buy website www.helptobuy.me.uk

Is planning consent needed for a conservatory?

Conservatories are often a bone of contention between Conveyancers with one saying that the Conservatory should have had Planning Consent and/or Buildings Regulations Approval and another saying that this was not needed – such arguments are often the cause of unnecessary delay in the sale and purchase of a property.  

 

So what is the answer?

Planning Consent

As a general rule Planning Consent is not required as a Conservatory (unlike a house extension) is considered to be permitted development. As always there are exceptions and this is what causes the arguments. A Conservatory will not be permitted development (and will therefore require planning consent) in the following instances:

 

·         Just as in the case of a house extension the conservatory does not take up half the garden (this refers to the garden of the house when it was originally built – so if there have been previous house extensions there could be an issue)

·         The roof must not be higher than the roof of the house. Again this same rule would apply to a house extension.

·         The conservatory is more than 3 metres (4 metres in the case of a detached house) beyond the rear wall of the original house - again beware if there has been a previous house extension.

Conservatories and house extensions will nearly always require planning consent if the property is within either of a National Park, the Broads, an Area of Outstanding Natural Beauty or a World Heritage site.

·         The property is within a conservation area or is a listed building.

·         The Local Council have imposed an Article 4 Direction on the area in which the property is situated. This in effect cancels the General Permitted Development Rights in the area meaning that planning consent will be required for any house extension or conservatory.

·         The property is a flat or a maisonette. The General Permitted Development Rights do not apply to flats or maisonette.

·         The permitted development rights were excluded from the property as a condition of the planning consent for the original construction of the property. The planning condition usually specifically states that house extensions and additions or any external alterations will require express planning consent.

 

 

Buildings Regulations Approval.

As a conservatory is in affect a type of house extension, it will require Buildings Regulations Approval – however unlike house extensions, there are exceptions:

·         If the conservatory is at ground level and less that 30 square metres

·         The conservatory is separated from the house by a door or window.

·         The conservatory has an independent heating system

·         Electrical installations involved will be subject to the usual Buildings Regulations Approval regime.

 

Help to Buy showing positive impact upon the housing market!

Help to buy showing positive impact on the housing market!

The new government Help to Buy scheme is proving to be a big success. The scheme has beaten forecasts which were predicted to show positive signs regarding the housing market. According to the Home Builders Federation (HBF) 4,000 people have reserved a new home under the Help to Buy scheme since it has been live over the last 2 months. In conjunction with this the interest in the scheme has been huge and more than 500 buyers each week are signing up for the new scheme.

 

House prices rising

Halifax has also pointed out that UK house prices are rising at their fastest rate since September 2010. Launched in April 2013 the Help to Buy scheme offers first time buyers and existing homeowners an interest-free (for the first 5 years) loan to build upon a deposit to help them buy a new build property. The buyer only needs to raise a 5% deposit to qualify for the scheme and the government then contribute a further 20% enabling the buyers to get a better rate, more affordable mortgage and move on/up the property ladder.

Experts Criticism

However the data showing evidence of house prices increasing is likely to cause criticism of the Help to Buy Scheme. Some experts have warned of a housing bubble with house prices inflating to high levels. The scheme is currently set to run until 2017. Halifax have stated that the average price of a UK home is now £166,898 which is an increase of 3.75 compared with May 2012 when the average UK house price was £160,906.

Although there are signs of improvement regarding the housing market these are still limited with our low economic growth and weak income growth. These issues will be a constraint upon the housing market in the long term.

First time buyer’s increase

The number of first time buyers taking on mortgages increased by 15% in April when the scheme began, according to property group LSL. This may have been due to the support of the scheme and lenders becoming more flexible about offering mortgage with high Loan to Value proportions.

If you want more information about the Help to Buy scheme or a quote for your conveyancing Help to Buy transaction then visit our dedicated Help to Buy website.

Click here for more information about Help to Buy

Generation Living: Could you live with your in-laws?

Generation Living: Could you live with your in-laws?

In our current economic climate our older relatives generally benefited from the housing boom. Many parents and grandparents have made large amounts of money in property thanks to the steep incline in property prices over the years. On the flipside this is currently an issue among the present generation. Unable to obtain the initial finances for a deposit to get onto the property ladder or to afford moving into a larger home to start a family, with housing prices rising and the average salary generally not increasing, getting onto that first rung is proving difficult for the younger generation.

The perfect family home life

However, living with extended family can solve a lot of these problems and has its benefits at each level. In some cases three to four generations can live together in perfect harmony. With parents and grandparents putting their money together a new level of luxury becomes available. Large houses with lovely gardens, swimming pools, paddocks or a games room now become a reality. The children are brought up in a picturesque family home around their grandparents, the parents benefit from the grandparents being around for child care (saving costs) and the grandparents get to see their grandchildren frequently and also get cared for in their old age in return.

According to Managing Director of Stacks Property Search the number of people looking for properties with a ‘granny annexe’ or an outhouse is increasing by 50% each year. As long as the house is large enough, or has a separate wing or annexe generation living can work.

Could it fuel family feuds?

On the other hand, combined generation living can cause a number of issues too. It can lead to tense feuds between family members and issues with who does what around the house. The property may not be large enough to accompany everyone’s ‘space’ requirements. It needs to be clear whose space is whose and which areas are exclusive and shouldn’t be intruded. Ideally the property would have an annexe or separate wing and also separate entrances. Personally I think you need to be a close family for this to have a chance to work.

In the past generation shared living was more common, also in many other countries it is seen as ‘the norm’. Combining resources between generations can be very beneficial on many levels however it is definitely something which needs a lot of thinking before jumping on board we are not all cut out for it.

Would you cope, living with your in-laws or parents?  I'm interested in any comments from families who have done this and how it all turned out?

The Waitrose Effect

The Waitrose Effect

Would a Waitrose in the vicinity of a property sway your decision in buying a home?

Savills have released recent research which showed having a Waitrose nearby increased property prices in the area. There are two ways to look at this, firstly people want to live close to a Waitrose or secondly areas which Waitrose locate are where property prices are increasing.

In London the ‘Waitrose Effect’ shows a significant difference. There is a 50% increase in property prices in areas with a Waitrose, compared with areas that do not have a Waitrose. This difference is not as drastic in other areas but still apparent.

The outcome of this research was that the typical price of a property with a Waitrose nearby was 25% higher than if there was no Waitrose. Although the answer is not determined by the increase being due to a Waitrose, there sure is a definite trend in the relationship. However it does seem bizarre that the arrival of a supermarket should have this effect on property prices.

Waitrose is known for its higher end groceries and perhaps by placing a branch in a particular area represents the area as being socially approved and an aspirational area to live in. There is always the argument of which came first however, was the area upmarket and attracted a Waitrose branch or did Waitrose place a branch in an area and this lead to a positive knock on effect on the prices of property.

What’s your opinion? Would you pay a little more to live somewhere you had a nice deli selection?

Help to Buy Scheme

Help to Buy Scheme

The new government Help to Buy Scheme was launched in April 2013 as a result of the Budget 2013. As always there are mixed opinions regarding whether the scheme will benefit the UK property market or not. In my opinion anything which makes homes more affordable and enables people to get onto/move up the property ladder is a good thing in today’s market, as long as it doesn’t lead people into money difficulty in the long term.

How does it work and who can qualify?

To qualify for the Help to Buy Scheme there is currently no cap on income and the scheme is available on properties up to the value of £600,000. Unlike many of the other schemes aimed at getting the property market moving Help to Buy is open to first time buyers AND existing property owners. As the buyer you will be required to raise a 5% deposit and the government will then provide you with an added 20% equity loan resulting in you needing a 75% mortgage, this will enable you to achieve lower (affordable) monthly payments and a much better interest rate. The equity loan provided by the government is interest free for the first 5 years and then incurs interest of 1.75% by year 6, which rises annually by 1%. The loan can be repaid at any time or upon sale of the property.

Currently the Help to Buy Scheme is only available on new build properties; however as of January 2014 the scheme will be available on new build and existing properties, making it available to the vast majority of the property market. It has been queried that this will just fuel the rich enabling them to buy second homes and more buy to let properties, however the scheme is only available if the property is your main home and it is not available on buy to let’s or second homes, eliminating people from abusing the scheme.

 

Help to Buy Conveyancing Services

As professional property solicitors we are well experienced in new government property schemes and will be able to deal with your conveyancing requirements efficiently and effectively. We have dealt with many similar transactions such as HomeBuy, FirstBuy, Shared Ownership and Shared Equity. We can offer you expert advice on the services you require for your Help to Buy transaction. If you want to read more about the Help to Buy scheme visit our dedicated Help to Buy website: www.helptobuy.me here you can find out more information, obtain a conveyancing quote and use our Help to Buy calculator to find out what you can afford.