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Almost a third of property sales collapse because lenders ‘getting tougher’ – claim

Almost a third of property sales collapse because lenders ‘getting tougher’ – claim


There has been a notable rise in the number of property sales falling through due to tougher mortgage lending conditions, it is claimed.

According to new figures from Quick Move Now, 31% of agreed property sales collapsed prior to completion in the second quarter of the year.

Of the sales that fell through, the property buying firm claims that 30% failed due to buyers being refused funds by mortgage companies. Danny Luke, Quick Move Now’s managing director suggests that this demonstrates growing caution from lenders.

Luke commented: “It’s unusual, in this day and age, for buyers to have an offer accepted on a property without having an agreement in principle in place with their mortgage lender. This would suggest that the 30% of failed sales attributed to difficulty securing a mortgage are due to buyers being turned down during the formal mortgage application process after initially securing an agreement in principle. This indicates that underwriters are getting tougher in the level of risk they’re willing to accept, both in terms of buyer circumstances and finances, and properties they’re prepared to lend on.

“Overall, the fall through rate has remained stable throughout the first half of this year, falling just one percent between the first and second quarter, but the reasons for failed sales tell an evolving story about the challenges currently being faced by the property market.

“We’ve already touched on the 30% of failed sales attributed to difficulty securing lending, but it seems it’s not just lenders who are showing growing caution. An extraordinary 50% of failed sales were attributed to the buyer changing their mind, pulling out in favour of another property, or pulling out after an unfavourable survey report.

“Growing inflation and cost of living have made it inevitable that both lenders and buyers would start to show greater caution. We have also seen delays in the conveyancing process that are resulting in an increasing number of buyers being required to apply for extensions to their mortgage offers. Those that were initially offered a mortgage may find that they’re unable to secure an extension to their offer, even if their circumstances haven’t changed. With lending criteria toughening up, difficulty securing mortgage finance is an issue that I suspect we will see much more of in the coming months.”

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Online estate agency agrees partnership to help buyers raise a deposit

Online estate agency agrees partnership to help buyers raise a deposit

Proportunity, proptech neolender, has agreed a new partnership with online estate agency Griffin Property Co. to help home buyers finance the deposit needed to acquire a property.

The partnership will offer buyers alternative ways to finance their first home. Proportunity provides equity loans to homebuyers similar to the UK government’s “Help to Buy” scheme but available for any home not just new builds.

The initiative allows homebuyers to afford homes with only a 5% deposit, reducing the amount they need in savings. The Proportunity equity loan of up to £150,000 or 25% of the house price, sits on top of the maximum mortgage they get from a mainstream lender.

The equity loan, in addition to the mortgage of up to four and a half times income, means they can effectively borrow up to six times their income. For instance, a typical household income of £60,000 and a deposit of £25,000 could go from an affordability budget of £295,000 to £393,000, according to Vadim Toader, CEO and co-founder at Proportunity.

He said: “It’s our mission to unlock the future of home financing to meaningfully improve our customers’ lives. We’re always looking for ways to add value to our aim of assisting home buyers, which is why we’ve partnered with Griffin Property Co.”

“Griffin Property, like us, is committed to assisting customers by providing the most cost-effective access to the major property portals, as well as an experienced team to assist customers at every step of the process. We know our customers are in good hands when it comes to finding their dream home. We are delighted to have partnered with an award winning agency, providing the best in class service.”

Nick Neale. Director, at Griffin Property added: “Through Proportunity, we’re able to offer our home buyers more options to suit their budget. Our sellers also benefit from more interest in their properties. The fact that Proportunity uses proprietary machine learning technology to identify homes in high potential growth areas also gives our buyers and sellers confidence that they are buying at the right value.”

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Industry ramps up awareness of new ‘material information’ guidance for agents

Industry ramps up awareness of new ‘material information’ guidance for agents

The National Trading Standards Estate and Letting Agency Team (NTSELAT) has published new guidance to help agents meet their requirements under Part A of the process to improve material information in property listings.

The guidance, which is not compulsory, has been developed in partnership with industry leaders and the UK’s major property portals, including Rightmove, Zoopla, OnTheMarket and PropertyPal.

The guidance can be found on a new, dedicated webpage on the National Trading Standards (NTS) website, which will include all key documents published by NTSELAT as part of its material information work.

Part A of this three-phase process covers information considered material for all properties, including:

the property price/rental price
the council tax band (or property rates information in Northern Ireland)
tenure information (for sales).

The property portals have been working to include new data fields on their sites, many of which are now in place. If these new fields are left empty by an agent, this is flagged on the listing so consumers can see what information is missing. In many cases, the fields also include a link to advice for consumers as to why that information is important and how to find it.

James Munro, senior manager of the National Trading Standards Estate and Letting Agency Team, said: “For years, agents have been calling for clarity around the disclosure of material information and it’s brilliant to see the property industry coming together to deliver a better service for consumers looking to buy or rent a home. I’m particularly grateful to the portals for their commitment and efforts to get Part A off the ground and I hope the new guidance will help them as they support agents to make the required information available.”

David Cox, Rightmove’s Legal and Compliance Director, commented: “Our new fields for property listings will help agents to comply with the new material information guidelines from NTSELAT. We’ve also introduced a new glossary of terms on listings, to help home-hunters understand each of the material information terms and why they are important. Where information is not provided by the agent, a message will display on the listing telling home-hunters to get in touch with the agent for the missing information.”

Richard Donnell, executive director at Zoopla, said: “We’re supportive of any proposals that will improve transparency for consumers when it comes to buying or renting a home. The Part A requirements for property listings are a very important step towards this. To ensure this transition to more transparency is as seamless as possible, we’ve been collaborating closely with both our customers and NTS to implement these new changes. We look forward to working closely together on the next milestone in this journey to improve consumer awareness.”

Mairéad Carroll, RICS senior specialist, Land and Property Standards, remarked: “The guidance should provide greater clarity to agents when publishing property listings and aid prospective buyers looking through property portals. Upfront information will support buyers with initial decisions in inquiring about a property or arranging a viewing, but should be supported with professional advice such as that provided by a solicitor or a surveyor. The new guidance is a welcome step and is backed by RICS, but more can be done to support both buyers and sellers in understanding material information and we will continue to work with NTSELAT and the steering group to improve the homebuying process for consumers.”

Lesley Horton, deputy ombudsman at The Property Ombudsman, said: “This is very positive progress towards full disclosure of material information being embedded in property listings on the portals. By providing more material information at the point a consumer first becomes aware of a property, the less likely transactions are to fail, leading to higher consumer trust and confidence in the sector. We therefore welcome NTSELAT’s new ‘Part A’ material information guidance.”

Sean Hooker, head of redress at The Property Redress Scheme, added: “This has been an excellent example of collaboration across the industry. Agents now have both the tools as provided by the portals and the guidance clearly laid down in this document. This will help eliminate ambiguity on what should be disclosed upfront to consumers, increase trust and reduce complaints to the redress schemes. This demonstrates a responsible industry, supporting and protecting its customers and providers in a positive way.”

In its White Paper, Levelling Up the United Kingdom, published earlier this year, the Department for Levelling Up, Housing and Communities reiterated the importance of this process and signalled that the case for legislation would be kept under review.

A Government spokesperson said: “The Government is committed to working with the property sector to improve the home buying and selling process; supporting our mission to level up the country and create a fair housing system that works for everyone. We intend to set out our plans for the future of home buying and selling in due course, including improving the quality of upfront information available to buyers, and driving digitalisation of the residential property sector. We see this work led by NTSELAT as key to helping us drive this agenda.”

The list of material information required for Part A was announced in February this year and a further two phases are being developed. Part B will include information which must be established for all properties, such as utilities (and similar) where non-standard features would affect someone’s decision to look any further at that property. Part C will be additional material information which may nor may not need to be established, depending on whether the property is affected or impacted by the information.

The updated list of required Part A information can be found here. All important information about the phased changes being introduced on property portals is now available on the NTS website.

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Government considering 50-year mortgages that children can inherit

Government considering 50-year mortgages that children can inherit

The government is considering plans to offer homeowners longer mortgages, including 50-year deals, that can be passed between generations, in a bid to stimulate housing demand and help more people gain a foot on the housing ladder.

The Japanese-style longer lending agreements could see people being able to buy a home with little or no expectation of completing mortgage repayments during their lifetime.

Instead, the property and outstanding debt would be passed on to their children.

Longer loan durations would allow home buyers to pay more for properties because they would have lower monthly payments.

With the housing market slowing, the government is keen to boost demand and is also considering 30-year fixed rate home loans, mortgages worth almost 100% of the property and ways to blend renting and owning a property.

Government attempts to make UK housing more affordable could push up property price.

“We want to find all sorts of creative ways to help people into ownership,” Johnson told the pres. “We need young people to have the confidence, to have the deposits, the mortgage packages to be able to get into ownership.”

The most popular mortgage length among first-time buyers is around 30 to 35 years but a multi-generational approach could extend that by decades.

But some commentators warned it would not address problems of low housing supply.

Scott Taylor-Barr, financial adviser at Carl Summers Financial Services, said: “I feel that Boris Johnson is coming at this from the wrong direction.

“It is not the mortgage market that is preventing people from becoming homeowners; it is the cost of property in relation to people’s earnings.”

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How Long Does It Take to Move in 2022?

How Long Does It Take to Move in 2022?

We’re sorry for mentioning Christmas in June. But bear with us.

If you’re thinking of moving, chances are you’ve pictured yourself in your new home in time for the end of the year. What better place to spend the festive season, and kick off 2023, than in your new pad.

And the good news is, based on the average time it takes to buy a home, there’s still time to get over the threshold before Christmas if you start your search now.

Why is moving home taking so long at the moment?

From the time a home is marked sale agreed, it currently takes 150 days on average to reach that all-important completion day. But that’s 50 days longer than during the same period in 2019.

It’s taking longer for home-buyers to get into their new homes because there’s a backlog in the conveyancing process: the thing that happens between having an offer accepted, and getting the keys to your new home. With so many people looking to move home right now, this part of the moving process is taking much longer than usual. And there are currently more than half a million homes sold subject to contract, with buyers eagerly awaiting completion. That’s 44% more than in 2019.

While there’s been a slight easing in buyer demand since last month, this isn’t going to be enough to ease the delays we’re currently seeing. With lots of people still wanting to move, estate agents are still looking for buyers who are likely to result in a sale going through as quickly as possible. Oliver Gill, of Kirkham Property in Oldham, says:

“Short chains with good estate agents progressing them is certainly what we look for when negotiating with multiple buyers these days. My expectation of the near future is that things will continue as they are for the coming months. There are simply too many buyers wanting to purchase.”

How to give yourself the best chance of moving before Christmas

If you have a home to sell and want to move before the end of the year, our property expert Tim Bannister says one thing you should do is get your home on the market before looking for your next place.

Tim says: “Existing homeowners looking to buy again will still need to put themselves in the best possible position to secure their next home in this strong market by making sure they find a buyer for their current property before looking for their next home. This is all the more important for those hoping to complete the process as quickly as possible and enjoy Christmas in a new home this year”.

And whether you’re buying a home, selling a home, or both, there are things you can do to try and prevent any delays.

If you’re a first time buyer, make sure you have a Mortgage in Principle in place before you go on viewings. A seller’s estate agent will want confirmation from a lender that you are able to apply for a mortgage, and that you have the funds to cover a deposit.

Once you’ve instructed a conveyancer, there are also things you can do to keep the process moving.

Let your conveyancer know as early as possible if you need answers to specific questions, and press for regular updates on how the sale is going. You can also tell them when you’d ideally like to exchange and complete, so all parties have a date to work towards.

Read more tips on keeping the conveyancing process running smoothly here.

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Reminder to Agents – New Smoke and Carbon Monoxide Rules Coming Up

Reminder to Agents – New Smoke and Carbon Monoxide Rules Coming Up

A prominent agency lettings chief is alerting the industry that new smoke and carbon monoxide alarm rules are changing from October 1.

Since October 2015 there’s been a legal requirement for a smoke alarm to be fitted on every floor of a property where a room is used wholly or partly as living accommodation.

There must also be a carbon monoxide alarm in any room where a solid fuel such as wood, coal or biomass is being burned – and that includes open fires, although not gas, oil or LPG.

Landlords and agents are also expected to ensure that the alarms work at the start of each new tenancy.

Now the regime is getting tougher with further changes:

– carbon monoxide alarms will be mandatory in rooms with a fixed combustion appliance (excluding gas cookers) in both private and social rented homes;

– carbon monoxide alarms will also be mandatory upon installation of any heating appliance (excluding gas cookers) in all tenures through building regulations;

– private and social landlords will be expected to repair or replace alarms once informed that they are faulty.

These changes extend the existing provisions from devices like wood-burning stoves and open fires to include gas heaters, gas fires and gas boilers, but excludes gas ovens and hobs.

Propertymark has already advised letting agents that they should be aware that the changes will introduce an obligation on private landlords to repair or replace any alarm which is found to be faulty during the period of a tenancy.

The current regulations only oblige landlords to check that alarms are in working order on the first day of a new tenancy. Ahead of implementation, agents and their landlords should start now to plan for the changes and the impact on management practices going forward.

The group lettings technical director at Connells – Andrew Culverwell – issues the reminder to the industry in this exclusive interview with Angels Media’s Lee Dahill, which you can see in full below.

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The Party’s Over for Airbnb

The Party’s Over for Airbnb

Airbnb says that its so-called ‘party ban’ – introduced in 2020 at the height of the pandemic – is being made permanent.

The platform claims that there’s been a 63 per cent drop in reports of parties in Airbnb host homes the UK since the temporary ban.

Airbnb says it believes the ban has worked to reduce violence, rules violations and health concerns, with worldwide reports of parties at listed properties having dropped 44 per cent and over 6,600 guests suspended last year for staging parties in contravention of rules.

“The ban has been well received by our host community and we’ve received positive feedback from community leaders and elected officials. As we build on this momentum, we believe the time is right to codify this policy” says a statement from Airbnb.

However, at the same time as making the ban permanent Airbnb has scrapped its maximum number of occupants, which was previously 16.

This is apparently “based on feedback from a number of hosts who have listings that can house above 16 people comfortably.”

“Today’s announcement makes clear that there is no place for disruptive parties on Airbnb” says Amanda Cupples, general manager for northern Europe at Airbnb

She continues: “Since being introduced, the ban has led to a reduction in reported incidents and helped minimise the impact of noise and nuisance issues on communities. In the rare event of an issue, our Neighbourhood Support Line allows anyone with concerns in the community to contact someone at Airbnb directly so we can fully investigate.”

Meanwhile the Westminster government is launching a review into short lets in England.

Tourism minister Nigel Huddleston says: “We’ve seen huge growth in the range of holiday accommodation available over the last few years. We want to reap the benefits of the boom in short-term holiday lets while protecting community interests and making sure England has high-quality tourist accommodation.”

And housing minister Stuart Andrew adds: “Holiday let sites like Airbnb have helped boost tourism across the country, but we need to make sure this doesn’t drive residents out of their communities.

“We are already taking action to tackle the issue of second and empty homes in some areas by empowering councils to charge up to double the rate of council tax.

“This review will give us a better understanding of how short term lets are affecting housing supply locally to make sure the tourism sector works for both residents and visitors alike.”

The government says Airbnb listing data shows a 33 per cent increase in UK listings between 2017 and 2018 and the rise in the use of online platforms for short-term letting has brought many benefits – from an increase in the variety and availability of options to allowing people to make money from renting out spare rooms and properties.

But the government says it understands there can be an impact on housing supply and price in these areas and there are fears caused by evidence of a rise in anti-social behaviour including noise, waste and drunken behaviour in local communities. Lower protections for guests caused by negligence of health and safety regulations are also amidst concerns.

The review will also consider the operation of the provisions in London under the Deregulation Act 2015 to allow for measures to be taken against anti-social behaviour, whilst allowing Londoners to let out their homes.

The Westminster government’s review brings England in line with the devolved administrations.

The Scottish government set out legislation requiring all local authorities in the country to establish a licensing scheme by October 2022. In Northern Ireland tourist accommodation cannot be provided without a valid certificate issued by the national tourist board. And Wales has stated its ambition to establish a statutory registration or licensing scheme.

Merilee Karr – who chairs the Short Term Accommodation Association – says: “Short term and holiday rentals play an increasingly important role in the English tourism economy by contributing significant numbers of jobs in local communities and generating valuable sources of income for local homeowners and businesses.

“Any new regulatory solution should recognise this contribution and seek to support the industry as an important part of the wider UK tourism sector.”

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Ban On Charging Ground Rent On Leases Comes Into Force

Ban On Charging Ground Rent On Leases Comes Into Force

The government’s ban on charging ground rent on new leases in England and Wales comes into force today.

Starting June 30, anyone buying a home on a new long lease will now be freed from these annual costs.

Landlords are banned from charging ground rent to leaseholders, under a new law that the government hopes will lead to fairer, more transparent homeownership for thousands of homebuyers, helping to level up opportunities for more people.

In preparation, many landlords had already reduced ground rent to zero for homebuyers starting a new lease with them.

Leasehold minister Lord Stephen Greenhalgh said: “This is an important milestone in our work to fix the leasehold system and to level up home ownership.

“Abolishing these unreasonable costs will make the dream of home ownership a more affordable reality for the next generation of home buyers.”

Future measures, announced last year, include a new right for leaseholders to extend their leases to 990 years at zero ground rent and an online calculator to help leaseholders find out how much it would cost to buy their freehold or extend their lease.

Commenting on the changes, CILEX (Chartered Institute of Legal Executives) head of policy, Jonathan Walker, said: “The ban on ground rents is positive news for anyone considering buying a leasehold property and important progress towards ensuring safety and security for all householders.

“Problems still remain however, and it is disappointing that there is no retrospective inclusion of current leasehold tenants within the Act. They will still be obliged to pay their existing rents, even in cases where they are seeing those rents escalate – some doubling every ten years. Those attempting to sell on properties will find ground rents prove unattractive to buyers who now have the option of purchasing a rent-free leasehold property, and many will experience difficulties when looking to remortgage, or extend or vary their existing leasehold.

“Such fundamental changes to the leasehold market must be implemented alongside awareness raising and education amongst both consumers and professionals so that both understand the implications for property transactions.

“It is vital that we see a continued programme of reform that benefits those who are new to the leasehold market whilst not disadvantaging or restricting those currently within the system. We hope to see further measures to address residential leasehold houses and cap ground rent for all existing leasehold properties.”