As 2017 comes to an end we would like to thank all our clients for their valued business throughout the year and wish everyone a Merry Christmas and a Happy New Year. This year has seen a number of changes at Dack, welcoming new members to the property management team and the opening of our Residential Sales Department.
As always, we like to take a look back at the events that impacted the property industry this year and the predictions regarding the coming changes for 2018. With further interest rate rises expected, Brexit negotiations to overcome and the cost of living escalating, the property market could see significant changes across the board.
Rental Market 2017
Lettings in 2017 was an interesting year from a tenant’s, landlord’s and agent’s perspective. With the impending proposed ban on agency fees anticipated towards the end of 2018 we are all speculating on how this will play out. It will inevitably have an impact, not just on the lettings market but the sales market too, as some landlords may begin to consider other investment opportunities. Many are assuming costs are to be passed onto the landlords and therefore down through to the tenants via increased rents but until the draft bill is published it is hard to predict what impact this will have on the market. Rest assured that we will keep you updated on any developments as they unfold.
Other regulations are making their way through Parliament next year which, both existing and future landlords should be aware of, most notably the Minimum Energy Efficiency Rating for properties.
Since writing this article there have been further development in this upcoming legislation. Where it was originally only designed to affect new or renewing fixed term tenancies after the 1st April 2018, the Government has ‘moved the goalposts’ with the scope now encompassing any statutory tenancy as well 1977 Rent act tenancies. Any property not currently meeting the minimum standard will require works to bring them up to standard. We are already working closely with a number of our landlords to assist them with potential works but if you are unsure if your property is affected, you can check the energy rating on the EPC Register
Additionally as announced within the Chancellor’s autumn budget, the Government are conducting reviews into both longer term tenancies and a review of the housing courts which will potentially bring benefits to both tenants and landlords alike, cutting through the reams of red tape associated with the housing and legal system which I think everyone can agree, is never a bad thing.
Property Sales 2017
We were proud to open our Residential Sale Department at the beginning of the year and have serviced many of our clients through to a swift completion with many more to come. It has also been an exciting year for the housing market in general. The Government have pledged to improve the house-buying process, which is music to the industries ears, and with stamp duty relief for first time buyers coming into effect we are not alone in welcoming this move. However, looking ahead to next year many are predicting an increase in supply meeting an already elevated level of demand, meaning a higher overall level of transactions. With that being said there are a number of elements of the unknown, that we, like all industries must face.
Naturally many people may be considering a move in the new year for a number of reasons, be that a change of scenery, growing family or moving for a new job. Should you be thinking of selling, take a look at our article published in May this year regarding estate agency contracts to make sure you do not get caught out. We are always available to talk through any potential move to help you make an informed decision regarding your home. Equally if you are a first time buyer and considering taking advantage of the recent stamp duty relief, our partners at MoneySprite wrote a guest article on: giving yourself the best chance of getting approved for your mortgage full of great information and well worth a read.
Should you be considering renting or selling you home and would like a general “ball park” figure for your property, use our free instant online valuation software, however for a more accurate figure, we would always advise getting one of the team out to conduct a free market appraisal. As the year comes to an end we would again, like to say a big thank you to our long stand and new clients alike in wishing them a Merry Christmas and all the best for the New Year. We are all back in the office on the 2nd of January and you know where we are if you need us.
An ever increasing number of people purchase a leasehold property as their home, whether as a first time buyer, as a retirement home or an investment. This article explains the basic elements of leasehold ownership.
Leasehold properties have become a large proportion of the UK property market and this is also true in Portsmouth.
Leasehold living offers accommodation for the growing population of the city of Portsmouth and brings a variety of properties catering for varying occupancy needs. Although a seafront apartment with a balcony and sea views is an exciting prospect, it is important to understand the additional responsibility on the homeowner under the terms of the lease.
When buying a leasehold property it is crucial that individuals understand their rights and responsibilities as set out in the lease.
Many first time buyers in particular, may not even know what a lease is so it is important that they are given a copy of the lease and have it explained to them before purchasing their apartment.
For the wiser leasehold property owner they will be only too aware of the benefits and pitfalls of owning an apartmentin a leasehold building. This article aims to clarify some of the prominent aspects of living in a leasehold property.
WHAT DOES LEASEHOLD MEAN?
In it’s simplest form, owning a leasehold apartment is a long tenancy. You have the right to occupy and use the apartment for a long period of time – the ‘term’ of the lease. This will usually be for 99 or 125 years from the date the building was constructed.
As the leaseholder, you will usually own and be responsible for everything within the apartment. This will include the floorboards and plaster to the walls and ceiling. The structure, external walls and communal parts of the building, including the land it stands on, will usually be owned by the freeholder who is also the landlord.
The landlord can be a person or a company including a local authority or a housing association. It’s also quite common for leaseholders to collectively own the freehold through a residents’ management company, effectively becoming their own landlord.
KNOW YOUR LEASE
Your lease may be quite complicated but its fundamental role is simple. It’s a contract between you and the landlord, giving you conditional ownership of your apartment for a fixed period of time. It sets out your contractual obligations as a leaseholder and those of your landlord; therefore, it’s important you know the contents of the lease and understand them. This will include payment of ground rent and contributions to the costs of maintaining and managing the building through service charges.
The lease will also place certain conditions on the use and occupation of the apartment. It’s especially important to understand these before you purchase your apartment. It’s not uncommon for someone to move into their new home only to discover a beloved pet can’t come with them because they are not allowed under the terms of the lease. More recently, issues with subletting have been increasing with the rise of Airbnb and other short term holiday lettings businesses. Although potentially lucrative, check your lease to ensure you’re and not breaching your obligations to the landlord.
SERVICE CHARGES & GROUND RENT
The service charge is the payment made by a leaseholder to the freeholder or their managing agent to maintain, repair and insure the building as well as to provide other services such as lifts, central heating or cleaners. These charges are liable to change from one year to the next but at all times must be ‘reasonable’.
Leaseholders have the right to challenge the service charge if they feel this is ‘unreasonable’ via the Leasehold Valuation Tribunal (LVT). It is important to find out what the current charges are and the charges for the future years and what, if any, reserves are held to cover the cost of major works such as the external decoration of the building. The provison of the ‘reserve fund’ may be provided for within the lease to collect additional funds for the future works.
Details of what can and cannot be charged by the landlord and the proportion to be paid by the individual leaseholders should all be set out within the lease.
“Ground rent” is paid under the terms of a lease by the owner of an apartment to the owner of the land (freeholder) on which it is built. The charge for this is varying from lease to lease; however, it is important to understand as this can increase in increments over time. It is not unusual for the ground rent be renegotiated upon an extension of an existing lease.
With a well written lease and a professionally managed building, leasehold properties can be an ideal home and a secure investment. For more information on the leasehold management service we provide please see our leasehold management page. If you have any questions regarding the content of this article or would like impartial advice in respect to leasehold property matters in general please, contact us with your enquiry.