Housing Secretary Robert Jenrick has announced changes to the way councils use Right to Buy funds, giving them more freedom to build the types of homes needed in their communities. Taking effective from 1 April 2021, this will include shared ownership, First Homes (first-time buyers) and housing at affordable and social rent. The programme also allows councils more time to develop larger building programmes in their area. Local Government Association Chairman Councillor James Jamieson said "...Extending the time limit for spending Right to Buy receipts and increasing the proportion of a new home that councils can fund using receipts will boost councils’ ability to build desperately-needed affordable housing for local communities….”.
The RICS has issued new guidance to help valuers understand when an EWS1 form should be required due to visible cladding. The guidance should help to create consistency across the valuation market. The web page includes example case studies and has a useful decision tree to help decide if an EWS1 form is required.
The new guidance is effective from 5 April 2021, but early adoption is encouraged. Click here to read more.
The Construction Leadership Council (CLC) has launched the programme CO2nstruct Zero in which they aim to play a collaborative role across the industry to drive carbon out of all parts of the construction sector. In recognising a need for significant change, the CLC believes the industry must work more effectively together. The key elements of this programme include:
- Consolidation of current industry efforts into a single programme and plan of action to deliver against the CO2nstruct Zero priorities.
- Setting out clear and ambitious targets to demonstrate that the sector is making the right progress.
- Championing the policy change needed from the Government.
- Signpost people across the industry towards the action they can take.
The CLC acknowledges how well the industry worked together during the pandemic and wants to use this momentum to start tackling climate issues. They will be publishing performance data each quarter which will be available to both government and the public. Andy Mitchell, CLC Co-chair said, “… we have a responsibility to the people who work on our projects and to those who use our buildings and infrastructure to find a better way to build…"
The 2021 Budget has been announced and it was confirmed that the stamp duty holiday on house purchases in England and Northern Ireland has been extended to June 2021. Therefore, there will continue to be no tax liability on property sales of less than £500,000. After this date, the starting rate of stamp duty will be £250,000 until the end of September. Stamp duty will then return to the usual threshold and will apply for properties sold for more than £125,000.
The RICS is looking for technical and general feedback on the draft guidance note Valuation of residential leasehold properties for secured lending purposes in England and Wales to ensure it is understandable and covers the key challenges. RICS would like respondents to highlight anything that is missing from the guidance and make sure it suitably highlights good practice and impending reform.
The draft guidance covers the key challenges in valuing residential leasehold properties such as lease terms and costs of occupancy (e.g. service charge, ground rent). Some leasehold charges have proved controversial in the market and the guidance raises awareness of their implications. The guidance discusses the legislation that allows leaseholders to secure a lease extension or purchase of the freehold under certain circumstances and their implications for valuation. The UK government set out summary proposals committing to further leasehold reform in a written statement of January 2021. At the time of consultation, the UK government has not produced a detailed timetable for proposed reforms. However, the subject guidance brings attention to the issue for valuers and wider stakeholders.
The consultation closes on 5 March 2021. You can find the consultation page here.
On 16 February, a new five-year lending alliance between United Trust Bank (UTB) – an established specialist lender – and the government’s housing delivery agency Homes England, was announced. The new £250m fund will support small and medium-sized builders with development finance up to 70% Loan to Gross Development Value (between £1m and £10m). This funding should help to drive diverse housing in the years to come.
Noel Meredith, Executive Director, United Trust Bank said: “SME housebuilders have a vital role to play in delivering the UK’s new housing needs and UTB has amassed considerable experience helping such businesses to complete thousands of successful developments. This is an exciting new partnership with Homes England which will make a real difference to both long established and newly formed development companies requiring competitive funding and the long-term support of a knowledgeable and experienced specialist lender. This alliance will help to reinvigorate and increase diversity in the SME housebuilding sector, and boost housing supply in areas under the greatest affordability pressures.”
Read more here.
The Intermediary Mortgage Lenders Association (IMLA) has issued a response to the Department for Business, Energy and Industrial Strategy’s (BEIS) ‘Improving home energy performance through lenders’ consultation, which closed on 12th February. IMLA accepts that lenders have a pivotal role to play in tackling climate change and recognises the increasing number of green mortgages on the market. However, they are concerned that reporting on the average EPC rating of all properties they lend against is a potential waste of time and resources for the lender. Wanting them instead to be able to devote this time to helping homeowners to make improvements to their property, IMLA’s executive director Kate Davies said “…these latest proposals from BEIS are highly unlikely to bring about real change. Rather, they would oblige lenders to devote way too much time compiling and disclosing data in an exercise which – at the end of the day – won’t change a single low-energy lightbulb.”. Read the IMLA article here.
The Health and Safety Executive (HSE) has announced that Peter Baker, their current Director of Building Safety and Construction, will start in the new post of Chief Inspector of Buildings immediately. This comes following recommendations in the Dame Judith Hackitt report, ‘Building a Safer Future’ following the Grenfell tragedy. In response to the appointment, Peter Baker says “I am honoured to be appointed as the first Chief Inspector of Buildings and for the opportunity to play a lead role in bringing about the biggest change in building safety for a generation. I look forward to working with government, industry, partner regulators, and residents to shape and deliver a world-class, risk-based regulatory system for the safety and standards of buildings that residents can have confidence in and that we can all be proud of.”
HSE’s announcement can be found here.
The Chancellor has announced that the next Budget will take place on 3 March 2021, after having moved it from Autumn 2020 due to the coronavirus pandemic. Clearly, it comes at a very difficult time as the economy deals with the fallout from the pandemic and Brexit. Indeed the Office for Budget Responsibility indicates the country has seen “a steeper decline than experienced in any quarter during the financial crisis or in any post-war recession”. Keen for the government to appreciate how the building industry has helped and can continue to support the economy in these difficult times, Andy Mitchell, co-chair of the Construction Leadership Council has written an open letter to Rishi Sunak. Recognising the support and guidance the UK government has given the industry in keeping sites open, he urges the chancellor to consider some key interventions to continue to build growth and confidence in the sector. These include; committing to a national retrofit strategy, extending the stamp duty holiday and the extension of employer apprenticeship incentives. Read the full letter here.
The Ministry of Housing, Communities and Local Government has opened a consultation seeking views on the draft revisions to the National Planning Policy Framework and the draft National Model Design Code.
The Framework is not yet going to be renewed in its entirety and a fuller review is likely to be required in due course. However, this consultation seeks views on the revised text to implement policy changes in response to the Building Better Building Beautiful Commission “Living with Beauty” report. Here is a summary of the proposed amendments to the Framework:
- Implements policy changes in response to the Building Better Building Beautiful Commission recommendations
- Makes a number of changes to strengthen environmental policies – including those arising from our review of flood risk with Defra
- Includes minor changes to clarify policy in order to address legal issues
- Includes changes to remove or amend out of date material
- Includes an update to reflect a recent change made in a Written Ministerial Statement about retaining and explaining statues.
- Clarification on the use of Article 4 directions
The draft National Model Design Code provides detailed guidance on the production of design codes, guides and policies to promote successful design.
The government would like views on the National Model Design Code, in terms of
a) the content of the guidance
b) the application and use of the guidance
c) the approach to community engagement
The consultation will close at 11.45pm on 27 March 2021. You can find the consultation page here.
The government has announced an extra £3.5 billion of funding to remove unsafe cladding for all leaseholders in residential buildings 18 metres (6 storeys) and over in England. The press release published today (10 February 2021), lists the 5-point plan announced by government:
1. Government will pay for the removal of unsafe cladding for leaseholders in all residential buildings 18 metres (6 storeys) and over in England
2. Generous finance scheme to provide reassurance for leaseholders in buildings between 11 and 18 metres (4 to 6 storeys), ensuring they never pay more than £50 a month for cladding removal
3. An industry levy and tax to ensure developers play their part
4. A world-class new safety regime to ensure a tragedy like Grenfell never happens again
5. Providing confidence to this part of the housing market including lenders and surveyors
The press release also confirms “Lower-rise buildings, with a lower risk to safety, will gain new protection from the costs of cladding removal with a generous new scheme offered to buildings between 11 and 18 metres. This will pay for cladding removal – where it is needed – through a long-term, low interest, government-backed financing arrangement.”
This is a really interesting question and one that was recently raised by PropertyChecklists.co.uk here. Most of us perceive it to be beautiful and undulating countryside which is protected from building on at all costs. But, this is not the case and the Green Belt can include power stations, hospitals and schools for example. Designated as such in the 1930s, the Green Belt was intended to stop cities merging and encroaching on the countryside. England has around 1.6 million hectares of Green Belt and this is in addition to protected areas such as National Parks and Areas of Outstanding Natural Beauty. According to the government’s National Planning Policy Framework, the purpose of the Green Belt is; to check the sprawl of large built-up areas, prevent towns merging, safeguard the countryside, preserve the character of historic towns, and encourage the recycling of derelict and other urban land. While development considered harmful to the Green Belt should not be approved, there are exceptions such as limited infilling in villages, limited affordable housing for local community needs. Each year, between two and three per cent of new homes are built in the Green Belts in England. Read the article here.
The RICS has published an article about Hart v Large, written by the law firm RPC. The article looks at the facts of the Hart v Large case, and addresses surveyors’ duties, following the ruling, in context of the new RICS Home Survey Standard which is due to come into force on 1 March 2021. Concerning surveyors’ duties, the key areas covered include:
- Expertise and type of survey
- Further investigations
- Professional Consultants Certificates
- Continuing obligations
It points out that this case turned on the unusual facts and does not represent a departure from the principles governing the measure of loss in claims made against surveyors. However, the Home Survey Standard gives surveyors an opportunity to review their duties and obligations when carrying out building surveys of any kind.
You may recall that in October 2019 the government released a consultation on the proposed changes to Part L (conservation of fuel and power) and F (ventilation) of the Building Regulations – called 'The Future Homes Standard’ (as we reported here). The second part of the consultation has now been published (here) as 'The Future Buildings Standard’.
This consultation closes on 13 April 2021 and looks at changes to Part L and Part F of the Building Regulations for non-domestic buildings and dwellings; and overheating in new residential buildings.
Prior to this consultation, and accordance with the Climate Change Committee’s statutory report in 2015, the government conducted research (report here) into overheating in new homes. It highlighted that during warm years most new homes in England would experience overheating, with London having a particular issue because of its higher temperatures. Overheating can impact on the health and welfare of the occupants and these issues can be associated with sleep loss. One of the questions posed in this consultation is whether the reduction of window sizes to mitigate overheating would provide adequate daylight and avoid the need for excess lighting in winter. As part of the consultation, internal curtains and blinds and overshading from trees are to be excluded as means of shading.
The government has announced a new national regulator for construction products to ensure houses are built from safe materials. This has come in response to the ongoing Grenfell Tower inquiry which highlighted safety rules had been ignored by manufacturers. This new regulator will be able to complete tests on products of concern and will also have powers to remove products from the market if they are deemed to pose a significant safety risk. Chair of the Independent Review of Building Regulations and Fire Safety, Dame Judith Hackitt, said: "This is another really important step in delivering the new regulatory system for building safety. The evidence of poor practice and lack of enforcement in the past has been laid bare. As the industry itself starts to address its shortcomings I see a real opportunity to make great progress in conjunction with the national regulator". Read the government announcement here.
Last week Housing Secretary Robert Jenrick announced ‘Right to Regenerate’ proposals which would make it easier for the public to challenge councils and other public organisations to release land for redevelopment.
According to the latest figures, there are over 25,000 vacant council-owned homes, and 100,000 empty council-owned garages.
Housing Secretary Rt Hon Robert Jenrick MP said:
"Right to Regenerate is the simple way to turn public land into public good, with land sold by default, unless there is a very compelling reason not to do so.
"We are cutting through red tape so that communities can make better use of available land and derelict buildings, which means more new homes, businesses, and community assets.
"Millions of people will now be able to buy that empty property, unused garage or parcel of land and turn it into something good for them and their community.”
Read the press release here.
The consultation can be found here and closes on 13 March 2021.
It has been reported that over 50 key industry bodies and estate agents have written to the housing secretary Robert Jenrick urging the government to adopt UPRNs (unique property reference numbers) across the housing market. It is claimed that UPRNs will improve building safety, help enforcement, weed out rogue landlords, speed up the home buying process, empower the consumer and, increase income for the Treasury.
The letter also outlines conditions to avoid bureaucracy within the housing market, which some agents fear may occur. Read more in this article from The Negotiator.
The requirements for an EWS1 form are rapidly changing; in November we reported that forms were no longer required for buildings which did not have cladding. New proposals from RICS could potentially see many more buildings taken out of scope. RICS has launched a public consultation on guidance called "Valuation of properties in multi-storey, multi-occupancy residential buildings with cladding". The intention is to help by setting out a consistent position for valuers carrying out mortgage valuations on when EWS1 forms should be requested for buildings with cladding, before valuing a property, to avoid unnecessary delays. The press release from RICS (here) includes more detail on the criteria proposed, and contributions are welcome from all. You can find the consultation here.
This article from Mortgage Solutions includes a summary of the proposals and comments from RICS head of valuation standards Ben Elder, and Joe Arnold, managing director of Arnold & Baldwin Chartered Surveyors. Read here.
Further to the government’s recent announcement on leasehold reform, an article from Leasehold Solutions reports the ability to extend a lease to 990 years is just "window dressing" and falls short of what is needed. Anna Bailey, Founder and CEO of the Leasehold Group, believes the extension is likely to further confuse the market, saying: “Giving leaseholders the opportunity to extend their lease by 990 years is actually a moot point; a leaseholder already has the right to extend their lease by 90 years and reduce their ground rent to a “peppercorn” (i.e. zero) under existing legislation, and, arguably, there is virtually no difference in the value of a leasehold property with a 990-year lease compared to a 160-year lease.” Welcoming the announcement that a Commonhold Council will be formed Anna said: “The composition of the Council also needs to be representative and must include a wide range of experienced, expert voices, including those leaseholders and managing agents with first-hand experience of running blocks of flats, to ensure that any proposals are realistic and workable.”
The Halifax and Nationwide Banks both form part of ‘The Big Six’ mortgage lenders, who are said to account for most of the UK’s mortgage lending (source). They report that whilst house prices increased by around 6 or 7% last year, taking into account the slow start followed by the boom in the second half of the year, the trend isn’t expected to continue throughout 2021. Russell Galley, managing director at the Halifax believes the latest lockdown and job losses are likely to impact house prices in a downward direction throughout 2021. See the article here.
On 7th January Housing Secretary Robert Jenrick announced reforms to the laws around leasehold, said to be the biggest reforms to English property law in 40 years. There has been much attention on the matter in recent years and the difficulties leaseholders face with ground rents and lease extensions. New reforms mean millions of leaseholders will be given a new right to extend their lease by 990 years at zero ground rent. These changes could save households from thousands to tens of thousands of pounds. The elderly will also be protected by reducing ground rents to zero for all new retirement properties. This announcement will be welcome news for many.
This article predicts the top three trends for the housing market in 2021 following the events of 2020. Although the article relates to the US, it is a similar situation here in the UK too.
As the vaccine is rolled out this year, it is hoped that housing stock (or inventory, as Americans call it) increases and more properties are put on the market as people will feel more comfortable having people come and view their home.
To continue the 2020 trend, city living may become less appealing for those who continue to work remotely post-pandemic as they will no longer need to live near their place of work and people appear to be looking for more space in rural locations. This demand is predicted to drive-up prices in rural locations and for prices in the city to drop as there will be less demand. This article from Rightmove describes how the quaint Somerset town of Bruton saw the biggest increase in buyers searching for places to move to in 2020.
Rightmove’s Director of Property Data Tim Bannister said: “This year we’ve seen an uplift in the number of home-movers escaping to the country and we think this trend will continue for now as people show their willingness to make significant life changes. The data highlights just how influential the unexpected events of this year have been in shaping the nation’s housing priorities, with many buyers determined to swap city streets for rural and coastal retreats.”
It will be interesting to see how the market unfolds later in the year, but it should not come as a surprise if these trends continue.
To read our December update, please click here.
This edition includes articles on:
- Flipped properties increase in 2020
- SDLT deadline gives rise for concern
- 84% of homeowners plan "green" improvements
- The latest English Housing Survey
- Powering our Net Zero Future (energy white paper)
- Ikea's tiny eco-house
- An early Christms present from Banksy
The latest EHS has been published for the year 2019 to 2020. The findings show that owner-occupation rates did not increase between 2018-19 and 2019-20, but rates are 2% higher than in 2016-17, with owner-occupation sitting at 65%. Of those, 35% of households were outright owners while 30% were buying with a mortgage. There have been more outright owners than mortgagors since 2013-14. The proportion of households in the private rented sector have decreased since 2016-17 but did not change between 2018-19 and 2019-20. To read the whole report, click here.
A survey from City Plumbing has found that 84% of homeowners are planning to make energy improvements to their home in the coming year, with the key motivation being reduced energy bills.
Steve Alldritt, technical director of City Plumbing’s Energy Efficiency Team, said: “For homeowners, making energy efficient changes saves money in the long run, reduces environmental impact and can even make a property more appealing to future buyers. It really is a ‘win-win’ situation.
“The research shows that demand for ‘green’ upgrades is high, whether it is low carbon heating, biomass boilers or heating controls. The opportunity is there for tradespeople to benefit from.
“We are supporting tradespeople who are interesting in signing up for the Green Homes Grant scheme, with impartial advice, indemnified designs, project solutions and fast quotation turnaround.”
This follows the extension of the Green Homes Grant until 2022. Read more here.
There was great disappointment across the property industry last week when Chancellor Rishi Sunak stopped short of extending the Stamp Duty Land Tax (SDLT), despite growing calls from the industry to extend it or at least taper it off. Due to the backlog of work from the first lockdown and subsequent boom, the average property transaction is taking 20 weeks to complete, up from 12 weeks on average. Conveyancers are concerned some transactions may not complete before the 31st March deadline, leaving thousands of homeowners with an unexpected SDLT bill and in further debt. Today’s Conveyancer goes on to report that nearly two million homebuyers have already had to arrange additional finance to cover the extra costs of SDLT. HMRC figures indicate around 105,630 transactions in October made it the busiest of Octobers in the last ten years and up by almost 10% on September transactions. Lloyd Davies, Operations Director of the Conveyancing Association said “…We at the CA have been involved in discussions with Treasury around the current situation, the likelihood of large numbers of transactions not completing before the deadline, and what this might mean for the overall housing market. Plus, no-one wants a cliff-edge situation should the holiday come to an abrupt end on the 31st March next year. There are strong arguments to be made for an extension, not least the overall benefit a healthy and buoyant housing market can deliver for UK plc…” Find the article here.
The 2020 lockdown saw a pause in house sales and a subsequent boost as homeowners looked to move to properties that suited the home-working lifestyle. Houses are now in higher demand compared to flats because more people are looking for larger properties. This has been no different for developers who have been actively purchasing properties to renovate and sell on quickly. Any property that goes through this process within 12 months is known as a "flipped" property. Land Registry and Hamptons International data project that by the end of the year, a record number of properties will have been flipped. The data suggests around 23,000 properties will fall into this category by year-end and, with developers purchasing more homes rather than flats to meet the change in demand, they have seen an average increase in profit of £10,000 per property. Hampton's head of research Aneisha Beveridge said “…. Flippers play an important role in the housing market by improving housing stock and taking on projects other buyers often won’t touch.” Read more in the article here.
The latest Technical Bulletin for residential surveyors is now available here. Please note; to download and view the full bulletin, you will need to be logged in to Sava EDGE. If you are not already logged in, please click here to log in. If you do not yet have an account, please click here to register. This bulletin aims to bring you quality technical information that will help you in your day to day work and includes articles on the following:
Ash -v- Powell – A lesson for surveyors
In this article Hilary Grayson, Director of Surveying Services at Sava, and Nik Carle, Partner at Browne Jacobson, review the recent case of Ash -v- Powell and what would have been the case if a surveyor had been instructed and the RICS Home Survey Standard were in force.
Read the article here.
The draft Building Safety Bill and higher-risk buildings
Professor of Land Law at Oxford University, Susan Bright, focuses on the provisions that relate to the occupation phase of residential buildings contained in Part 4 of the draft Building Safety Bill and sets out her initial, tentative, understandings of how they will work.
Read the article here.
Radiators – what you can check for during a survey
Radiators are the most common heat emitter in residential dwellings and they play an important role in heating our homes yet generally, radiators are not reported on in surveys. Older, unmaintained radiators can be inefficient, and this article explains the reasons why and simple checks you can make during a survey to provide clients with useful information with regards to the often-overlooked radiator.
Read the article here.
Corporate governance -v- leasehold management
In this article, solicitor and residential leasehold specialist Cassandra Zanelli considers the recent case of Houldsworth Village Management Co v Barton which explored when a leaseholder is also a shareholder and the correct approach to requests made to lessee-owned property management companies under s.116 Companies Act 2006.
Read the article here.
The government published a press release on Saturday explaining they have stepped in to help those caught up in the EWS1 form process. Many people were in limbo and unable to sell their property due to the requirements to have a form and long delays in obtaining one due to a shortage of trained assessors. The government, RICS, UK Finance, and the Building Societies Association have agreed that the form is not required on buildings that do not have cladding. Around 450,000 people will potentially benefit from this and be able to progress with selling or re-mortgaging their property.
Also, almost £700,000 of funding will be provided to train more industry professionals to carry out the EWS1 assessment. RICS CEO, Sean Tompkins said "...we recognise the acute market shortage of fire engineers to carry out EWS1 assessments and welcome the Government’s support on working with us to upskill other regulated professions, such as Chartered Building Surveyors, to create additional capacity in the market."
The government will also explore ways to address the concerns on the availability of professional indemnity insurance.
The government has published a consultation on setting requirements for lenders which will help householders improve the energy performance of their homes. This consultation builds on feedback from the Call for Evidence on "Building a Market for Energy Efficiency" which was published in 2017. This new consultation explains that "mortgage lenders could play a vital role in driving the home energy performance improvements required to meet our Carbon Budgets and net zero target. They are uniquely placed to influence mortgagors at critical trigger points, such as home purchase, renovation or re-mortgage."
The proposals in the consultation are based on the use of EPC data which is publically available and include annual reporting of average EPC ratings by mortgage lenders. This could be accompanied by setting improvement targets which lenders could meet through measures such as energy performance awareness campaigns, cashback incentives or free energy assessments if carrying out energy improvements, or even offering to lend a higher mortgage at a lower cost for those carrying out improvements.
The consultation ends on 12 February 2021 and those in the industry or anyone affected by the proposals is invited to respond. You can read the consultation and respond here.
Boris Johnson has announced a ten-point plan for what he is calling a "Green Industrial Revolution". The blueprint covers clean energy, transport, nature and innovative technologies in order to "forge ahead" with eradicating the UK contribution to climate change by 2050.
The first point is the ambitious target to produce enough offshore wind to power every home, which will be four times what we are currently producing. Point 7 covers homes and public buildings and says "Making our homes, schools and hospitals greener, warmer and more energy efficient, whilst creating 50,000 jobs by 2030, and a target to install 600,000 heat pumps every year by 2028."
It goes on to say "Homes and public buildings: £1 billion next year into making new and existing homes and public buildings more efficient, extending the Green Homes Grant voucher scheme by a year and making public sector buildings greener and cutting bills for hospitals and schools, as part of the Public Sector Decarbonisation Scheme."
Other plans include working with industry on low carbon hydrogen production to develop the first hydrogen heated town, an end to the sale of new petrol and diesel cars and vans by 2030, and planting 30,000 hectares of trees every year.
Whilst there is not much detail included on how these points will be achieved, the press release confirms that further plans will follow over the next year.
We have reported in the past that only around 20% of homebuyers have a survey completed for a property purchase, which remains surprising when two-thirds of those choosing to get a report used it to either negotiate a lower purchase price or get defects addressed. A survey conducted by Insulation Express found that searches relating to asbestos went up by 82% in the last two years. Houses built before the mid-1980s may have asbestos materials and if in good condition and undisturbed it shouldn’t cause any problems. However, anyone needing to have it removed can be looking at stumping up a few thousand pounds to get a specialist in. Searches relating to structural movement and damp were also up by 82% in the same period. Whilst Japanese knotweed and invasive plants have been pretty high profile over recent years, those searches increased by 45%, but the actual average number of monthly searches is an eye-watering 110,000. The public seems to be warming up to the benefits of insulation as enquiries for cavity wall, loft and floor insulation are up 55%. The survey also highlights how a number of small defects can end up being costly from say a replacement roof tile at an average of just under £200, to around £4,00 for a rewire and an average of £13,500 to deal with movement and settlement. Read the results here.
The government are currently reviewing the results from the Planning for the Future consultation, published in August this year. Its focus was on design, sustainability and the availability of suitable land for development in England. On the back of this, the government announced a further review on ‘Right to Build’ day (30 October each year) which is when local councils should have granted enough planning permissions for self-build properties to meet demand. This review intends to find ways to improve the process for people wishing to build their own home. Whilst self-builds have increased in number by 50% in the last couple of years, it equates to 15,000 per year, and government plans to increase this, offering more support for the industry, said to be worth around £4.5 billion. CEO of the National Custom & Self Build Association, Andrew Baddeley-Chappell, said: “England has the lowest known rate of self-commissioned homes in the developed world. Our new homes market is crying out for the greener and higher quality build that goes hand-in-hand with more consumer choice. Housing diversification is key to the government’s housing strategy.
“This excellent announcement today by the government should help many more people achieve the dream of living in better and more beautiful homes.”
Image: The Guardian
On Monday evening, two terraced houses in Chelsea, West London, collapsed resulting in the evacuation of around forty people in nearby homes. One of the properties in question was reportedly undergoing development works according to this article from The Guardian. It reports that "Planning permission submitted by the Seabrook Properties was granted by Kensington and Chelsea council in August.
"A council document detailed the works to be carried out as a rear extension to the lower-ground floor with a terrace on the upper level, which was an amendment to a previous application granted in July 2018."
However, the Evening Standard reported that a spokesman for a company which is carrying out the basement dig said the firm’s work had nothing to do with the collapse.
The Health and Safety Executive will be investigating the cause of the collapse.
In June of this year, the Financial Conduct Authority (FCA) published guidance to ensure people who were impacted by coronavirus received support from their lenders. This included 3-month payment holidays and a hold on repossessions, regardless of what stage proceedings have reached. The previous guidance expired on 31 October and the FCA has announced what the next steps will be for mortgage borrowers. This most recent approach encourages lenders to take a bespoke approach to meet the needs of their customers who are in financial difficulty due to coronavirus. The FCA’s Interim Chief Executive Chris Woolard said: “Some consumers will continue to be impacted by coronavirus in the coming months, or be impacted for the first time. Consumers in these situations will benefit from firms providing them with tailored support. “However, it is very important that consumers who can afford to resume mortgage payments should do so for their own long-term interests and so that help can be targeted at those most in need.” You can find out more and download a copy of the FCA's guidance here.
The implementation date for the RICS Home Survey Standard is now 1 March 2021. RICS has confirmed the date has changed from 1 December 2020 to March next year because of the upheaval from Covid-19. Ana Bajri, RICS Global Property Standards Associate Director, said “We’re listening and responding to what our professionals are telling us on the ground.
“A cocktail of changing Covid-19 measures requiring changes to business practices, alongside a busy marketplace after the stamp duty holiday, mean more time is needed to make sure these changes are included in members’ current survey standards and processes.”
Read more here.
John Lewis and Partners have confirmed that they have identified 20 of their sites which they plan to use to benefit local communities through the ‘build to rent’ market while providing a stable income for the Partnership. A statement outlining how they propose to reach more customers said “The nature of the Partnership model allows us to invest with a longer-term perspective than a conventional business, even in challenging times and amidst a very uncertain economic outlook. With this in mind, our five-year plan is self-funding and takes into account uncertain trading.”
Their goal is for 40% of their profits to come from new areas by 2030. As well as rented housing, other new areas include financial services, outdoor living and rental/resale/recycle.
Sharon White, Chairman of the John Lewis Partnership, said: “We’ve seen five years of change in the past five months and Waitrose and John Lewis have responded with great agility. Our plan means the John Lewis Partnership will thrive for the next century, as it has the last.”
During the lockdown earlier in the year, we saw pollution levels drop significantly as the majority of people were no longer driving into work. The weather was warm and we didn’t need to have the heating on, but as we move into winter, those of us working from home will no doubt have the heating on at home more often than usual, and those offices that are open for those who still need to be at work will also have their heating on. This means that more pollution than normal is expected throughout the winter months. A report from think tank ECIU (Energy & Climate Intelligence Unit) advises that a spike in nitrogen oxides (NOx), emitted from gas heating systems, could compromise meeting the country’s legally binding air quality targets. Their modelling predicts there will be a 56% rise in boiler use this winter due to changing working patterns.
The report also highlights the implications of higher pollution levels to our health, explaining “Air pollution in the UK is a major issue. It contributes to about 40,000 early deaths and costs the economy more than £20bnper year. This is rising –respiratory disease now affects one in five people and is the third-largest cause of death in England. Hospital admissions are on the increase too, as admissions for lung disease have risen at three times the rate of all admissions generally over the last seven years.”
The government are expected to publish their 'Heat and Buildings Decarbonisation Strategy' in November, which should lay out the plans to switch homes to cleaner sources of energy. Read more from the BBC here, or find the report from ECIU here.
The Nationwide Bank recently highlighted how unnecessary enquiries from conveyancing solicitors causes delays in the homebuying process. This article in Today’s Conveyancer suggests these delays can be avoided if the conveyancing solicitors were to refer to the UK Finance Mortgage Lenders’ Handbook in the first instance. Robert Stevens, head of property risk operations, data and strategy at Nationwide, provided a few examples at the Law Society’s National Property Conference and you can read more here.
On a slightly lighter note, conveyancing professionals recently shared some of the strange enquiries they have received. Whilst some were shocked that such queries were even raised, they couldn’t help but find them amusing. Read more here.
Housing Secretary Robert Jenrick has recently confirmed that new homes delivered through Permitted Development Rights (PDR), where a full planning application is not required, must meet the following space requirements:
“The space standard begins at 37m² of floor space for a new one-bed flat with a shower room (39m² with a bathroom), ensuring proper living space for a single occupier.”
The press release describes how permitted development (PD) homes make an important contribution to delivering the housing the country needs. It also says: “While homes delivered through Permitted Development Rights have little difference in quality compared to homes following a planning application, a minority of developers have been delivering small homes without justification. The changes announced today will put an end to this.”
However, a report published in July 2020 following research into the quality standard of homes delivered through change of use permitted development rights said: “…we would conclude that permitted development conversions do seem to create worse quality residential environments than planning permission conversions in relation to a number of factors widely linked to the health, wellbeing and quality of life of future occupiers.”
This report also confirmed that “Overall, only 22.1% of dwelling units created through PD would meet the nationally described space standards (NDSS), compared to 73.4% of units created through full planning permission. In many cases, the planning permission units were only slightly below the suggested standard, whereas the PD units were significantly below (for example, studio flats of just 16m² each were found in a number of different PD schemes). 68.9% of the units created through PD were studios or one-bedroom compared to 44.1% of the planning permission units.”
Of course, size is just one aspect and other factors impact quality. Hopefully, this is a step in the right direction to improving residential homes delivered via Permitted Development Rights.
We reported recently that the volume of mortgage products available on the market has dropped significantly, particularly for those with a low deposit. First-time buyers may therefore be looking to shared ownership or the Help to Buy schemes to get onto the housing ladder. Yet, despite rising house prices, Which? reported earlier this year that around 5,000 homes in England were sold at a loss having been originally purchased under Help to Buy, read here.
The Help to Buy scheme varies around the UK, for example in Wales home-movers and first-time buyers can obtain a 20% equity loan from the government and in Scotland, buyers can benefit from an interest-free loan of up to 15%. Northern Ireland hasn’t had a Help to Buy scheme since the end of December 2016 and have focused more on shared ownership and the Rent to Own Scheme. Scotland and Wales have extended their schemes until 2022, whilst in England, no further extension has been announced. Read more about what is planned for Help to Buy in the UK here.
Trade bodies who wish to follow the recommendations made after the Grenfell fire will be imposing stricter rules on existing and new members to ensure they meet required standards. David Frise, chief executive of the Building Services Engineering Association said: "We've changed our technical competence standard for membership. If you want to join BESA you can't just pay your money and sign up, you have technical competence standard…This assesses your commercial viability and your competence operationally, but also your technical standards." Read more on this story here.
To improve standards in the built environment, the Competence Steering Group was set up in 2017 at the request of the Industry Response Group. Having published their interim ‘Raising the Bar’ report in August 2019, the final ‘Setting the Bar’ report is available here.
This article from Future Net Zero explains that research recently published by UK100 suggests the urgency to meet our net-zero goal by 2050 could generate 455,076 jobs in the construction and property sectors alone. UK100 is a network of local government leaders who have pledged to secure the future for their communities by shifting to 100% clean energy by 2050. The article confirms that at least three million jobs will be in demand or created by moving to a green economy across a range of sectors. It is suggested that a £5 billion investment by the government could unlock £100 billion of private sector investment towards meeting the net-zero by 2050 goal.
Polly Billington, Director of UK100 said: “From Essex to Edinburgh, the move to a greener economy will create thousands of new jobs. By unlocking private sector investment through a Net Zero Development Bank, we can reduce the taxpayer burden and ensure the money is spent prudently by disciplined allocators of capital.” Read more here.
The government recently announced an expansion of education for adults. Those over the age of 18 who do not hold an A-Level qualification (or equivalent), will be offered a free, fully funded college course. The objective is to provide more skills and training to help the country 'build back better'. The offer will be available from April and courses included in the offer will be set out shortly. Hopefully, this could help contribute towards building a ‘retrofit army’ as described in the article from Future Net Zero, above. Read the press release here.
The NHBC Foundation has issued a publication called The Future for Home Heating - a life without fossil fuels. The guide, written and researched by Cutland Consulting Ltd, follows the reports published in 2019 by the Committee on Climate Change which stated from 2025, all new houses being built should not be connected to the gas grid. This guide explores the implications of designing and building low-energy homes without gas boilers, explains the key technical issues, and discusses the choices facing housebuilders and their designers/architects when specifying alternative heating systems. To download the guide, click here.
In a recent announcement, Cabinet Minister Lord Agnew outlines how the government will provide a £30m boost to the Land Release Fund (LRF) and One Public Estate (OPE) programme.
Councils will be able to bid for £20m which can be used for infrastructure and remediation works. 73 councils are on track to free up land for 6,000 homes early next year using the LRF, while the OPE will be supporting early stages of development with an additional £10m.
Housing Minister Christopher Pincher says “….This new funding will help councils right across England to turn unloved, unused land into new homes and communities where they are needed most. It is an important part of how we are working with local government and the housing industry at every level to support our recovery from the impact of the pandemic." This is in addition to the £400m Brownfield Fund designed to protect greenfield sites and provide over 25,000 new homes. Read more about this here.
The Competition and Markets Authority (CMA) has launched enforcement action involving four leading housing developers: Barratt Developments, Countryside Properties, Persimmon Homes and Taylor Wimpey. It is believed the developers may have broken consumer protection law relating to ground rents in leasehold contracts. This article from Today’s Conveyancer explains that the CMA has written to the developers outlining the concerns and request further information, the evidence will then be assessed. If necessary, the CMA could take the firms to court. Read more here.
You may also find our article on escalating ground rents useful, here.
In July, we reported on the announcement from Chancellor Rishi Sunnak about the Green Homes Grant Scheme intended to cover up to £5,000 per household for energy improvements to the home. At the time, further details of the measures and eligibility for the scheme were yet to be published. The government has now released guidance explaining that measures will fall into one of two categories: ‘primary’ and ‘secondary’. Before any secondary measures are installed, the home must have had one of the primary improvements completed using the voucher. Funding for any secondary improvements will be capped at the same amount the household received for the primary measure. Vouchers can be applied for from the end of September and improvements must be completed by 31 March 2021. Aiming to improve over 600,000 homes across England, the government suggests each household could cut energy bills by around £200 and reduce CO2 emissions by 700kg annually. Primary measures include improvements such as wall, floor and loft insulation and low carbon heating. Secondary improvements include draught proofing and upgrading windows, doors and heating controls. HomeOwners Alliance has summarised the details here.
Low deposit mortgage products have been hit hard since the pandemic struck the UK earlier in the year. According to Mortgage Solutions, in March borrowers looking for a mortgage with a 10% deposit had a range of 779 products to choose from. Fast forward 6 months to September and the impact of COVID-19 on the market has reduced the range of choice down to just 62 products. The mortgage market has undoubtedly been impacted amid all the financial uncertainty this year and even the amount of higher value deposit products have dropped by almost 30%.
House prices have weathered well despite all the turmoil and strong demand means it’s not all bad news for those already on the property ladder. David Thomas, chief executive of Barratt Developments says “Covid-19 had a significant impact on our results. But we are seeing very strong consumer demand, and our robust financial position means we enter the new financial year with cautious optimism." Read more here.
As reported in a recent post, village life is currently very sought after and estate agents are witnessing a "rural renaissance". Just for fun, Rightmove have put together a selection of the most expensive villages in different parts of the UK with average prices in one area reaching £2.1m! This is certainly one way to bring the outside inside...
BEIS has published analysis carried out in conjunction with the University of Cambridge on the relationship between the SAP rating on the EPC and house prices. The study found that there was a statistically significant relationship between the energy performance rating and sale price. Their results found that there was a 5% premium for properties in EPC bands B/C and a 9-11% discount on F/G properties when compared to Band D properties. This is good news for the UK's energy efficiency targets and would indicate that buyers are becoming more aware of the EPC and its contents.