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Short-term LETs rules to Protect Communities and keep Homes Available

Short-term lets rules to protect communities and keep homes available

Local residents will be protected from being pushed out of their communities by excessive short-term lets thanks to changes in planning rules.

  • Planning permission will be required for future short-term lets
  • Mandatory national register will provide valuable information and help ensure accommodation is safe
  • Proposals will give communities greater control over future growth
  • Homeowners can continue to let out their own main or sole home for up to 90 nights a year

Local residents will be protected from being pushed out of their communities by excessive short-term lets thanks to changes in planning rules announced today.

Under the reforms councils will be given greater power to control short-term lets by making them subject to the planning process. This will support local people in areas where high numbers of short-term lets are preventing them from finding housing they can afford to buy or to rent.

These changes are part of a long-term plan to prevent a “hollowing out” of communities, address anti-social behaviour and ensure local people can continue to live in the place they call home.

Meanwhile, a new mandatory national register will give local authorities the information they need about short-term lets in their area. This will help councils understand the extent of short-term lets in their area, the effects on their communities, and underpin compliance with key health and safety regulations.

Short-term lets are now a significant part of the UK’s visitor economy, and can provide increased choice and flexibility for tourists and business travellers. To recognise this, homeowners will still be able to let out their own main or sole home for up to 90 nights throughout a year without planning permission and Government is considering how to apply the register so it does not apply disproportionate regulation for example on property owners that let out their home infrequently.

Secretary of State for Levelling Up Housing and Communities, Michael Gove said:

Short-term lets can play an important role in the UK’s flourishing tourism economy, providing great, easily-accessible accommodation in some of the most beautiful parts of our country.

But in some areas, too many local families and young people feel they are being shut out of the housing market and denied the opportunity to rent or buy in their own community.

So the Government is taking action as part of its long-term plan for housing. That means delivering more of the right homes in the right places, and giving communities the power to decide.

This will allow local communities to take back control and strike the right balance between protecting the visitor economy and ensuring local people get the homes they need.

Tourism Minister Julia Lopez said:

Short-term lets provide flexibility for homeowners and give tourists more accommodation options than ever before, but this should not prevent local people from being able to buy or rent homes in their area.

The Government is committed to getting the balance right to ensure both local people and our visitor economy can thrive.

Amanda Cupples, General Manager for Northern Europe, Airbnb said:

The introduction of a short-term lets register is good news for everyone. Families who Host on Airbnb will benefit from clear rules that support their activity, and local authorities will get access to the information they need to assess and manage housing impacts and keep communities healthy, where necessary.

We have long led calls for the introduction of a Host register and we look forward to working together to make it a success.

The proposed planning changes would see a new planning ‘use class’ created for short-term lets not used as a sole or main home. Existing dedicated short-term lets will automatically be reclassified into the new use class and will not require a planning application.

The changes are part of the Government’s long-term plan for housing, unlocking more of the homes this country needs and meeting the target to deliver one million homes this Parliament, backed by £10 billion investment.

The Government also intends to introduce associated permitted development rights – one allowing for a property to be changed from a short-term let to a standard residential dwelling, and a second that would allow a property to be changed to a short-term let. Local authorities would be able to remove these permissions and require full planning permission if they deem it necessary.

Both of these measures are focussed on short-term lets, and therefore the planning changes and the register will not affect hotels, hostels or B&Bs.

Further details of these measures will be set out in the Government’s response to the consultations, including the timeline for implementation of the register, the use class and the individual permitted development rights – with the changes being introduced from this summer.

Original Post from gov.uk

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‘How councils deal with private sector landlords is the next Post Office scandal’ – claim

Des Taylor

The way private landlords are treated by councils will be exposed as the ‘the next Post Office scandal’ it’s been claimed.

Des Taylor, a director of Landlord Licensing & Defence, a company that helps landlords comply with regulations and defend themselves against council actions, said that tenants are treated in a substandard way by local housing authorities, and yet nothing is done about it.

Instead, he believes that councils are guilty of severe maladministration, excessive enforcement and unfair licensing conditions against private sector landlords.

Taylor highlights that many local authorities fail to implement repairs and deal with anti-social behaviour for their own housing stock, while imposing criminal liability on landlords in the private sector for matters beyond their control.

He said: “Councils are the next Post Office scandal – the makings are all there.

“Tenants are human beings who deserve decent living conditions, but they are let down by councils who make nonsense PR statements about learnings and not meeting their own high standards, when they are found guilty by the Housing Ombudsman for severe maladministration.”

He points to the recent £18,800 compensation order from the Housing Ombudsman for Waltham Forest Council failings in three different cases, where the council closed a file on a tenant’s desperate repair request and did not do the repair for 11 months, despite the property having severe issues of mould and damp.

He commented: “It is disgraceful that they would ignore a tenant’s plea for help and not do the repair.

“In the private rented sector, a landlord would be hounded by enforcement operatives from the council, have Abatement Notices, Improvement Notices imposed upon them, and face serious trouble and legal action if they did not act promptly or dared to challenge the council’s demands, even if they were incorrect.”

He also accused councils of subcontracting tasks to firms that misadvise landlords and tenants, and of imposing licence conditions that are entrapment and unfair.

Taylor continued: “One of the council advisors asked a landlord if he would consider letting the tenant sublet, which would make a HMO, even though the area is both Article 4 (Planning Restricted) and a HMO Additional Licensing area, which would entrap the landlord if he had unwittingly agreed.

“Of course, they work for a landlord adversary, tenant loving company.”

He added: “Waltham Forest is a very regulated borough with Selective Licensing across the borough, with licence conditions that impose on licence holders the responsibility for ensuring compliance with its conditions at all times, and the criminal liability for anti-social behaviour, which the council and the police have proven themselves incapable of controlling.

“The council are not held to any standard and a Public Enquiry into this must happen for this and all local housing associations.”

He said that there are 10,000s of landlords who have been punished far more for far less serious matters, and that this will continue until the Public Enquiry takes place.

Mr Taylor said: “These articles show that the CEOs of these authorities are asleep at the wheel and incompetent, and at the same time the council staff in another department can punish private sector landlords who do the best they can, and spout lies and misinformation about landlords in the private rented sector, this is scandalous.

“How councils deal with Private Sector Landlords is the next Post Office scandal, and they will be exposed and held accountable for their actions.”

Original Post from propertyindustryeye.com

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Affordable housing loan scheme gets £3bn boost to build 20,000 new homes

Lee-Rowley

Government-backed loan fund known as the affordable homes scheme is getting a £3bn uplift, which is expected to deliver 20,000 new homes.

The expansion of the Affordable Homes Scheme, which provides low-cost loans to housing providers, will support thousands of new homes. For the first time, the scheme can also be used to upgrade existing properties, making them warm and decent for tenants.

Providers will be able to apply for loans to carry out vital building safety works, such as the removal of dangerous cladding.

Backed by the Department for Levelling Up, Housing and Communities, the now £6bn fund will help housing providers access low-cost loans so they can expand their business, build more affordable homes and upgrade their existing stock.

Housing Minister Lee Rowley said:  “We know getting cost-effective loans can be a stumbling block for many developers building more affordable homes or upgrading their existing stock, so it is of the quality tenants deserve.

“This new round opening today will not only improve the lives of those already living in homes, but help thousands of families benefit from new, high-quality, affordable housing.”

Launched in 2020, the scheme, delivered by ARA Venn, is already helping 12 providers to deliver 6,290 new homes, with thousands more to be built in the coming years.

Among the beneficiaries of the scheme is Watford Community Housing. They first accessed the scheme back in November 2021 and it helped them build 200 new homes, including the firm’s first modular development.

As part of a second funding application made in December, they are set to build a further 100 affordable homes.

Watford Community housing deputy chief executive, Paul Richmond, said: “We were delighted to work with ARA Venn for a second time under the current Affordable Homes Guarantee Scheme. The funding represents excellent value for the sector and offers best value for fixed rate debt for our organisation.

“The benefit of using the Affordable Homes Guarantee Scheme in terms of pricing over our 30-year plan is worth nearly 100 additional homes being delivered into our local community. This has significant commercial benefit to us but more importantly has a direct impact on the wider need to build more housing across the country.”

Richard Green, portfolio manager for AHGS20 and partner at ARA Venn, added:  “We are delighted that we will be able to provide low-cost loans to private registered providers across England to now facilitate investment in existing homes, in addition to new ones.

“We look forward to continuing and building on the success of the Affordable Homes Guarantee Scheme, that has already proved a key source of funding for the sector.

“This timely expansion of the scheme allows us to support the sector’s balancing of investment priorities between providing new homes and ensuring the quality and energy efficiency of existing homes.”

The government says it is making good progress and is on track to meet its manifesto commitment to build 1 million homes this Parliament and the target to deliver 300,000 homes a year remains.

This work is being supported by £10m investment to boost housing supply since the start of this Parliament. This is alongside the £11.5bn affordable homes programme, which will unlock £38bn in additional private investment.

Original Post from propertyindustryeye.com

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Bournemouth high rise fire caused by electric bike

Bournemouth high rise fire caused by electric bike

Over 50 firefighters were called to YMCA Bournemouth on Westover Road at around 1.30am on December 18 after a fire erupted in one of the flats on the fifth floor.

Following an investigation by Dorset and Wiltshire Fire and Rescue Service it was found that a converted electric bike was the cause of the fire.

The fire service is now warning the public about potential fire risks with lithium-ion batteries and to only buy from reputable sellers.

Station Manager Shaun Milton said: “We know that e-bikes and e-scooters are increasingly popular, but it’s vital that owners understand what to look for when buying them, and how to charge them safely.

“Anyone buying an e-bike conversion kit should always purchase from a reputable seller, and check that it complies with British or European safety standards. You should also check that the various components are compatible.”

Original Post from bournemouthecho.co.uk

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Up to ONE MILLION new rental homes needed in just seven years

PropertyStats

A new analysis of the private rental sector suggests that between 800,000 and one million more homes are required to meet growing demand by 2031.

Savills – an estate agency which is a long-time stalwart of Build To Rent – has looked at the private rental sector overall, and not just BTR. It has calculated the propensity of different age groups to rent and applied this to government household projections.

Savills says: “These projections point to an additional 800,000 to 1,000,000 Private Rented Sector households by 2031, under three scenarios. Our base case scenario identified that between 2021 and 2031, the greatest growth in the number of PRS households will be in the 25–34 year old age group, with an additional 370,000 during this period. There will [also] be an additional 229,000 35–44-year-olds.
“Other scenarios involved a ‘Help to Buy 2’ stimulus or an ‘Affordable Home Building Programme’. Our projections indicate that a stimulus package similar in scale and impact to Help to Buy would soften future PRS demand by 20 per cent (c.200,000 households) and an affordable homebuilding programme would soften demand by 11 per cent (c.110,000 households).“While a Help to Buy 2 would deliver more houses, it would come at the cost of fuelling further house price inflation, which has the dual effect of (i) pushing home ownership further out of reach for middle-income earners, whilst (ii) simultaneously putting increased pressure on PRS rents.”The analysis appears in a Savills report backing the development of much more BTR housing in the UK.The agency says some £250 billion of investment is needed to meet the growing rental demand by 2031, while it suggests that demand will be greater for so-called ‘single-family homes’ rather than blocks of rental flats.“We need to adopt a positive response to the housing crisis, across all tenures” says Jacqui Daly, director of residential research at Savills. “Build To Rent can help to deliver many more homes, more quickly, and secure investment that improves the energy efficiency of the private rented sector, while meeting the needs of young, middle-income households.”Savills calculates that £3.5 billion has so far been spent building over 10,000 purpose-built BTR homes; to build another one million would cost £250 billion.

Original Post from landlordtoday.co.uk

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Tenants face losing deposit as 83% of landlords report tenancy agreements being breached

Tenants face losing deposit
  • A total of 83% of landlords have had tenants breach their tenancy agreement
  • Most common breaches include not keeping the property sufficiently clean
  • Other breaches include keeping a pet without the landlord’s permission 

More than eight out of ten landlords say they have had a tenant breach their tenancy agreement, according to new research.

Direct Line surveyed 500 landlords in October and November last year and found that 83 per cent had experienced a tenancy breach.

The most common breaches included not keeping the property sufficiently clean and maintained – at 36 per cent – and failing to notify a landlord of required repairs at 29 per cent.

Other breaches include damaging or making alterations to the property, keeping a pet in the property, smoking or vaping in the property and redecorating without permission.

All of these other breaches were reported by more than a quarter of the landlords surveyed.

The most common sanction for broken tenancy agreements is to have money deducted from the tenant’s deposit, to issue the tenant with a written or verbal warning, or to ask the tenants to pay for the damages or work themselves.

Landlords are being urged by Direct Line to have their properties inspected regularly to help check for any breaches.

Left unaddressed, issues such as required repairs may cost more money to rectify if they are left in the long run.

BREACHES IN TENANCY AGREEMENTS EXPERIENCED BY LANDLORDS
Reason for breach Proportion of breaches
Failing to pay rent on time (or not at all) 38 per cent
Failing to keep the property sufficiently clean and maintained 36 per cent
Failure to notify the landlord of things that need repairing 29 per cent
Damaging or making alterations to the property 28 per cent
Keeping a pet in the property 28 per cent
Smoking/vaping in the property 27 per cent
Redecorating without permission 25 per cent
Causing a disturbance or nuisance to neighbouring properties 23 per cent
Subletting or moving in people without notifying the landlord 15 per cent
Changing locks 15 per cent
Tampering with or covering smoke or carbon monoxide alarms 10 per cent
Other 1 per cent
landlords who have not experienced any breaches in tenancy agreements 17 per cent
Source; Direct Line
ACTIONS IMPOSED ON TENANTS WHO HAVE BROKEN AGREEMENT RULES
Action Imposed Proportion of actions
Money deducted from their deposit 38 per cent
Gave them a written or verbal warning 32 per cent
Made them pay for the damages or work 28 per cent
Did not return the deposit 26 per cent
Evicted the tenant 23 per cent
Made them rectify the issue 23 per cent
Other 2 per cent
Landlords who did not take any action 6 per cent
Source: Direct Line

Despite this, just over half of landlords – at 55 per cent – conduct six-monthly property inspections, according to the Direct Line research.

A further 21 per cent make only annual checks, while 10 per cent of landlords admit that they only visit their properties at the start and end of the tenancy.

Fourteen per cent of landlords visit their properties less often than that, or only if they suspect there is an issue.

Harriet Scanlan, of Richmond estate agency Antony Roberts, said: ‘When it comes to lettings, landlords often find themselves juggling numerous responsibilities to ensure the seamless management of their investment.

‘Many will have a full-time job, renting out a property or two in order to supplement their income.

‘From marketing the property to vetting tenants, ensuring you secure the very best offer out there and get the best return on your investment, is a constant juggle.

‘This is where the expertise of a lettings agent can be invaluable, serving as a valuable guide through the intricate web of regulations and responsibilities, and keeping an eye on your investment.’

Sarah Casey, of Direct Line, said: ‘Property inspections shouldn’t feel intrusive for tenants and are all about building good relationships and keeping an eye out for any emerging issues.

‘Early intervention can often stop these from developing into a bigger problem that requires landlords to take further action.

‘Landlords should also make sure that tenancy deposits are held in a government-approved tenancy deposit scheme to help cover costs if, for example, the tenant leaves the property in a filthy state, has broken furniture or removed property supplied by the landlord.’

Original Post from thisismoney.co.uk.

 

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Cheapest mortgage of 3.94% hits market, but will rates fall further?

Lenders

Rates have dropped significantly since summer – with small lender Generation Home now leading the way

Lenders
Lenders have continued to cut rates following a drop in inflation to 3.9 per cent in November (Photo: Isabel Infantes/Getty)

A new mortgage deal priced below 4 per cent has hit the market just before the new year, sparking hope rates could come down further in 2024.

Generation Home, a small lender, has today launched a five-year rate for 3.94 per cent for people with a 40 per cent deposit. This comes with a £999 fee, and is currently the cheapest rate on the market.

Despite the mortgage market usually getting quiet around Christmas time, lenders have continued to cut rates following a drop in inflation to 3.9 per cent in November.

The surprising drop in inflation was very good news for homeowners who could see mortgage deals drop even further in the coming weeks as a result, as pressure mounts on the Bank of England to cut interest rates.

Swap rates, a measure that indicates what the market thinks interest rates will be in future, fell by 0.2 points in just a few hours on both two and five-year fixed rates.

It comes following a tumultuous year for mortgage costs. At their highest average level, rates were 6.86 per cent for a two-year fix in July. Experts are predicting even more rates of below four per cent by early next year.

Any further changes will be affected by the base rate, which determines the rate at which the Bank of England lends to other banks. If it stays at 5.35 per cent of falls, which is is now predicted to do, as early as next March, it is likely that deals will also become better value.

David Hollingworth, associate director at L&C Mortgages, added: “Competition between lenders remains strong in a housing market with lower activity levels.

“As market expectation of the chance for the next move in base rate to be down has grown, lenders have passed through improvements in funding costs.

“Today’s news is likely to further that trend, which could soon see five-year fixed rates closing in on the four per cent marker.”

Lenders battle to lure customers as mortgage applications fall

Currently, an average two-year fix is 5.95 per cent and a five-year one is 5.55 per cent, according to the mortgage analytics firm Moneyfacts. However, much lower deals can be found.

Lenders started cutting rates towards the end of 2023 to lure more customers as the number of people applying for mortgages has fallen.

They will continue to make up for lost business in the new year, which could mean more criteria changes to try to soak up as much business as possible. For example, high-street lenders may try and take some of the business away from specialist lenders.

Chris Sykes of brokers Private Finance added: “While there is no crystal ball to determine what mortgage rates will be in 2024, it is looking increasingly likely that we have now passed the peaks of mortgage rates for the time being.”

Although not yet under 4 per cent, major lenders are offering cut-price deals, including Barclays, which earlier this week announced fixed-rate cuts of up to 0.43 percentage points. The cheapest rate it offers is now a five-year at 4.32 per cent, although it does come with a £1,999 product fee.

Halifax is offering a five-year fix at 4.28 per cent as of this week, down from 4.27 per cent.

Should rates stay (relatively) low, or fall further, first-time buyers are likely to benefit as lenders tend to offer cheaper purchase rates for new buyers than they do for those remortgaging.

Anyone on a standard variable rate, which tends to follow the base rate, are likely to find they are paying a similar rate to what they are already.

But for those on fixed rates about to end, although rates are coming down, they will still be likely find they are paying more than they were before, as thousands move off deals that were as low as one per cent.

Brokers suggest looking for a deal six months before your mortgage comes to an end, and locking in a new one. You will be able to change it nearer the time, if a better offer opens up, but will have one secured if rates increase again.

Original Post from inews.co.uk

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Landlord to lose £643,000 leasehold flat after listing on Airbnb

Landlord to lose

A landlord looks set to lose his leasehold flat after being caught renting it out on Airbnb by his freeholder.

A First Tier Property Tribunal ruled that Gabriel Ben-Soussan had breached the clause of the lease which stated it was not to be used other than as a single private residence “for occupation by an individual or an individual and his family as his or their only or principal home”.

It heard that the leasehold services team at Westminster City Council received a complaint that the one-bedroom ground floor flat in Harewood Avenue, central London (pictured), was being used for short-term letting.

It had also been tasked with removing two key safes that were fixed to the exterior wall of the building. It then wrote to Ben-Soussan, asking him to stop the practice.

Airbnb booking

When a council officer visited the property, thought to be worth about £643,000, he found a guest staying there who had booked it via Airbnb for the period of 2nd-17th July. The council confirmed that the flat had been advertised on www.booking.com and Airbnb.co.uk.

The judge said the property was not used as a single private residence by an individual or his family as their only or principal home, given that it was being used for short-term occupation by a paying stranger.

He added: “The tribunal finds, on the balance of probabilities, that the respondent, whether themselves or by an agent, advertised and allowed the property to be used as accommodation for paying guests in breach of clause 18 (a) of the seventh schedule of the lease.”

Ben-Soussan failed to take part in the tribunal proceedings. He has a month to appeal.

Original Post from landlordzone.

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Government allows houses to be split into flats without planning permission: Who are the winners and losers?

Landlord exodus Some reports suggest that buy-to-let investors
  • Chancellor Jeremy Hunt set out the measures in the Autumn Statement 
  • Supporters say it will create more homes, helping first-time buyers and renters
  • But others have warned it could create controversy among neighbours 

The Government is planning to scrap the need for planning permission for property owners who want to convert a house into two flats.

Chancellor Jeremy Hunt announced the plan in the Autumn Statement as part of a package aimed at slashing red tape and increasing the number of new homes.

The new rule, known as a ‘permitted development right,’ will apply so long as the external appearance of the building does not change.

But the idea has already proved controversial.

The Government is planning to scrap planning permission
Twice as nice? The Government is planning to scrap planning permission for property owners who want to convert a house into two flats

Supporters believe it could lead to a greater supply of homes for both renters and homeowners, helping to combat increasingly unaffordable house prices and rents.

However, some worry that removing the need for sign-off from the local council could have a detrimental impact on communities, changing the character of neighbourhoods forever without giving residents their say.

We explain how the new system could work, and ask property experts for their thoughts on whether or not it is a good idea.

Peter Bill, co-author of Broken Homes: Britain’s Housing Crisis: Faults, Factoids and Fixes, says there will be pros and cons if the proposals are implemented.

‘Cutting red tape for those looking to convert is a good idea and should result in a marginal increase in the number of flats available.

‘The downsides are the inevitable parking problems, and the worries of long-term owners.

‘They may be thinking, “Will these new people affect the tone of the neighbourhood, and bring down the price of my house?”‘

What are permitted development rights?

In essence, permitted development rights cover the most significant changes someone can make to a home without needing planning permission.

The rules of permitted development are set by central Government, and they vary depending on whether you are in England, Wales, Scotland or Northern Ireland.

Local authorities can also make amendments to permitted development rights within their areas, which means planning permission may be required for an extension in one place, and not in another.

The rules of permitted development
Is it allowed? The rules of permitted development are set by central Government, and they vary depending on whether you are in England, Wales, Scotland or Northern Ireland

It is also important to note that permitted development rights which apply to many common projects for houses, do not always apply to flats or maisonettes.

Paula Higgins, chief executive of the Homeowners Alliance says: ‘Permitted development rights entitle you to extend or renovate your home without the need for a full planning application.’

‘This is a fantastic option for anyone who is looking to avoid the subjective nature of a traditional planning application – not to mention the administration, time and costs involved.’

Why could the plans prove unpopular?

Other notable permitted development rights already in place include the right to extend a building’s height by one or two storeys in some circumstances, and to convert certain office buildings into flats.

Both of these have also been controversial and viewed by some as watering down safeguards to over-development.

Jeremy Leaf
Jeremy Leaf, north London estate agent, says the proposals could have a detrimental effect on communities

Jeremy Leaf, north London estate agent and a former Rics residential chairman believes the Government’s latest proposal could be met with similar condemnation.

He says: ‘This idea is similar to the one where you can build on rooftops – it sounds great in theory but doesn’t suit every area, particularly those where there is a pre-dominance of family housing.

‘While you may not be changing the external appearance of the property, you are changing the culture and making it multi-occupation, which could have a detrimental effect on the community.

‘The character of the area needs to be taken into consideration, along with practical concerns such as the potential increase in parking created by having more households in one property.

‘But on the other hand, in areas where there is a greater mix of accommodation and perhaps a lack of affordable property to rent or buy, it could be a good idea.

‘Whatever is implemented, there needs to be careful control to make sure it doesn’t cause more problems than it solves.

‘We don’t know what right of objection neighbours will have. It is important that there is an objective assessment in terms of parking or the character of the neighbourhood.’

Concerns have also been raised about the quality of the homes created when existing buildings are sub-divided into smaller units, and about the need to retain a supply of larger properties for families who need them.

Who benefits from permitted development rights?

The proposals will be attractive to some homeowners, landlords and developers as they could make sizeable returns on their investments by converting houses into flats and then selling them on or renting them out.

Although not true of all neighbourhoods, a house divided into two flats will tend to sell or let for more than if it was left as an individual home.

‘Two flats tend to be worth more than a single house, in selected areas,’ adds Peter Bill.  ‘The ability to turn a detached home or even big Victorian semis into a pair of apartments without planning permission could work well for the owner or landlord.

‘Squeezing two pokey flats into a terraced house can also be profitable, as a legion of landlords can testify.’

Landlord exodus Some reports suggest that buy-to-let investors
Landlord exodus: Some reports suggest that buy-to-let investors are being forced to sell up amid soaring mortgage costs

The changes could also be beneficial for both renters and aspiring first-time buyers.

There are growing concerns that the rental market is suffering from a severe housing shortage.

There are roughly 4.6 million households within the private rented sector, according to Government figures, representing 19 per cent of all households in England.

Meanwhile, the social housing sector is made up for a further 4 million households representing 17 per cent of the housing stock.

In recent years, more private landlords have been exiting the market than entering it, all the while demand from renters is increasing.

By the end of this year, private landlords will have sold almost 300,000 more homes than they have bought since 2016, according to analysis by the estate agent Hamptons.

This is putting upward pressure on rents. In the last three years between October 2020 and October this year, the average UK rent has risen by almost 32 per cent from £974 a month to £1,283, according to the Homelet Rental Index.

Leaf says: ‘In the right areas and circumstances, the new permitted development right will potentially provide more affordable accommodation which is in such short supply to rent.

‘This should help keep prices and rents in check so if properly controlled, it will be a good idea.

‘It was always that way anyway with conversions but it remains to be seen what difference this proposal will make.

‘It should alleviate pressures on housebuilding and provide a greater supply of property for rent, particularly smaller, affordable properties, which are in short supply.’

housing shortage
Housing shortage: According to Zoopla, there is currently a larger disparity between supply and demand for three-bedroom homes than any other type of property in the UK

Meanwhile, barriers to becoming a homeowner remain high, with first-time buyer mortgage lending down by almost a quarter in the last year, according to UK Finance.

Earlier this year Leeds Building Society revealed that 426,000 fewer first-time buyers would be able to buy their first home over the next 5 years compared to the past 40-year average if current economic projections play out.

If it becomes easier for homeowners, landlords and developers to divide a house into flats this could benefit the buyers alongside renters.

Henry Pryor, a professional buying agent, welcomed the proposals.

‘It’s actually quite a clever idea,’ says Pryor. ‘Increase the housing stock without actually building anything new.

‘Does it solve all our problems? No, it doesn’t – but like converting commercial buildings – offices in old houses in the High Street for instance – this will make a positive contribution to the housing stock.

Aneisha Beveridge
Aneisha Beveridge doesn’t think this policy will have much of an impact at all

‘It may make a significant impact on the supply of available rented properties at a time when they are badly needed.

‘There will doubtless be some chancers who try to take advantage of the initiative, but on balance and perhaps unusually I think that this is a good idea and will make a positive difference to people.

‘Whilst he could and should have done much more for housing I say – two cheers for the Chancellor.’

However, Aneisha Beveridge, head of research at Hamptons believes the changes will have minimal impact.

‘Generally we don’t think this policy will have much of an impact at all,’ says Beveridge.

‘If anything, it’s more likely to provide developers and landlords clarity and scope to split a house into multiple dwellings, which could increase densification for homes in some areas.

‘First-time buyers are unlikely to want to take on the work, particularly given the costs associated with purchasing a larger home and then do the works to divide it up.

‘As always, the devil’s in the detail and it will be interesting to see what the criteria is to keep the façade the same. For many houses, this simply won’t be possible.’

Could it lead to a shortage of larger homes?

There are also concerns that it could lead to a shortage of exactly the type of homes that are currently in short supply.

According to Zoopla, there is currently a larger disparity between supply and demand for three-bedroom homes than any other type of property in the UK.

Zoopla says that this impacts those going from their first home to a larger property, but it also impacts first-time buyers who make up a third of the market.

The average first time buyer is now 34, compared to 30 a decade ago, meaning many now need a family-sized home from the get-go.

Daniel Copley, consumer expert at Zoopla said: ‘We know that three bedroom homes are very popular for families and first-time buyers, but there are simply not enough on the market.’

Jeremy Leaf adds: ‘It could mean fewer larger homes, which is why there needs to be some control.

‘This is what planning offices and local authorities are for. It doesn’t have to be full planning permission, but a bit like with extensions and loft permissions, just some checks and balances.’

When will new permitted development rules come into force?

The policy is set to be consulted on early in the new year and then implemented later in 2024.

Paul Higgins of the Homeowners Alliance says the government doesn’t have a good track record on extending permitted development rights.

‘The quality element can be missing and is too often not up to standard, as we have seen with these office to flat conversions,’ says Higgins.

‘Standards need to be maintained as deregulation in this area does mean a greater risk of bad conversions – for example, minimum space standards are often not adhered to.

‘And unlike when you buy a new home, buyers of these conversions will not be given a warranty.

‘Potential buyers will need to be educated about the risks and an independent survey will be a must.

‘Newly converted flats without planning permission should be required to be subject to more stringent building control checks.’

Original Post from thisismoney.co.uk

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‘Airspace’ above Battersea house to be auctioned

'Airspace' above Battersea house to be auctioned

The future of London housing might lie in the sky, as a plot of “airspace” goes under the hammer this month in Battersea, south-west London.

Space at 47 Northcote Road is being offered with a guide price of £10,000.

Despite there being no planning permission to build, auctioneer Phillip Arnold thinks it could fetch more.

The sale listing states the freeholder “will be providing landlord’s consent to develop” on top of the roof of the flat below.

Mr Arnold explained that the plot next door was currently being redeveloped with an additional storey and another, two doors down, had permission for the same.

“You’d like to think there’s a better chance than most with this,” he said.

Located within walking distance of Clapham Junction railway station, the plot sits above two self-contained flats and a ground floor restaurant that is being redeveloped into a café.

The airspace is offered “with vacant possession” and the auctioneer’s website says “a new 150-year lease with a peppercorn ground rent will be granted upon completion”.

‘Phase’ in London’s market

But why would anyone bid on what is essentially thin air?

Mr Arnold, who has been in the auction trade for almost three decades, said it was a cheaper way for people to “have their dream” in a neighbourhood where the average price for a flat is more than £600,000, according to RightMove.

He argued that at a time when house prices and rents were skyrocketing, the plot could make an attractive investment.

Mr Arnold pointed out that although the project would not be “a straightforward build” and there could be extra costs – for example, if a crane was required – the low initial cost for the space gave it “hope value”.

“London has been through a big period of flat conversions. You get phases, and I think this will be one of them and people will just actively look for these things,” he said.

“They’re like buses; it’s the first one I’ve had for ages but about 18 months ago I had nine.

“I think you’re going to see a lot more of them. Sometimes if you’ve got a couple of people bidding the price will go through the roof.”

Property writer Anne Ashworth said the concept of selling airspace was “massive” in places like New York a decade ago, where “one building would sell space to a neighbouring building”.

She has already seen airspace development in parts of central London like Fitzrovia and said this kind of building sometimes “happens when the roof needs doing” if freeholders believe it’s a better option, but she added she was not sure it would become widespread in the UK.

“There is a massive new home shortage,” she said, “so maybe it’s a way to make this happen – at some point as mortgage rates start to fall maybe people will look for these things”.

Ms Ashworth said that while it might be the case that “the only way is up” for development in the capital, she would advise those renting top-floor flats to “start thinking whether this could be happening” to them in the future, if the freeholder sold the rights to the roof.

The auction takes place online on 7 December.

Original Post from bbc.com