Russell & Russell - Solicitors since 1887 Call us now on 0800 103 2600

News (Conveyancing)

Fewer Middle Earners are Getting on the Property Ladder (19/02/2018)

Figures released by the Institute of Fiscal Studies has revealed an alarming decline in the number of middle earners who are able to get on the property ladder.

Over the last 20 years, the amount of 25–34 year olds with middle incomes – those defined as having a take home pay of £22,200 to £30,600 – have dropped considerably. In 1995-96, 65% of this group owned a home, but this has fallen to just 27% in 2015-16.

Predictably, increases in property prices across the South East resulted in the largest fall of home ownership amongst 25–34 year olds (64% to 32%), however, every region of Britain has seen a 10% fall over the same period.

A key reason behind the findings is that wages have failed to keep up with the sharp rise in house prices. Allowing for inflation, in 2015–16 the average cost of a house in Great Britain was 152% higher than in 1995-96. In comparison, real net family incomes of those aged 25–34 only grew by 22%.

Defending the government’s position, Housing Minister, Dominic Raab said that schemes such as Help to Buy and the removal of stamp duty for most first-time buyers had assisted people in purchasing their first home. Many argue, however, that while the government is pulling out the stops to help people get on the property, little is being done for ‘second steppers’ who are unable to trade up to larger properties, making it difficult for growing families.

Russell and Russell welcomes Housing White Paper measures (21/02/2017)

As members of The Conveyancing Association (CA), the leading trade body for the conveyancing industry, Russell and Russell has welcomed a number of measures announced in this month’s Housing White Paper and is backing the CA in its ongoing attempts to deliver change and progress for the conveyancing market.

In particular, Russell and Russell is behind measures to improve land registration and to promote fairness and transparency within the leasehold process.

Firstly, the Government’s White Paper appears to show strong support for the Land Registry’s overall aim to complete the Land Register – the White Paper says it is ‘committed to becoming the world’s leading land registry for speed, simplicity, and an open approach to data and will aim to achieve comprehensive land registration by 2030’.

As members of the CA, Russell and Russell is fully supportive of this as it will create a clear line of sight of ownership and beneficial interests generally.

The CA provided a considerable response to a consultation on the Land Registration Rules 2017, proposing both a registration of options and the beneficial interests in restrictive covenants as a means to provide oversight, and to complete the Land Register. It recently announced it's pleased that both these suggestions appear as measures in the Housing White Paper.

With regard to the various issues around the leasehold process, and the costs and delays within it, we're encouraged by the focus on leasehold in the Housing White Paper. It refers to developing greater fairness and transparency in leasehold generally and tackling buyer’s lack of awareness of associated costs. It also refers to its plans to tackle all unfair and unreasonable abuses of leasehold.

The Government plans to consider further reforms to improve consumer choice and fairness in leasehold, including working ‘with the Law Commission to identify opportunities to incorporate additional leasehold reforms as part of their 13th Programme of Law Reform, and will take account of the work of the All-Party Parliamentary Group on Leasehold and Commonhold’.

The CA has provided significant input into the 13th Programme of Law Reform and continues to liaise, and work closely, with the All-Party Parliamentary Group in order to develop solutions to these issues.

Stephen Crompton, partner and head of conveyancing at Russell and Russell, said: “As members of the Conveyancing Association we're absolutely committed to helping it develop its status and standing within the industry, and to supporting its work in bringing about tangible change in the house purchasing process. The Government’s Housing White Paper appears to be heading in the right direction in a couple of key areas, namely improving land registration and cutting out the greater costs and delays that can blight the leasehold process. We're working via the CA to ensure these measures translate into tangible action and improvement and look forward to working closely with our peers to make this happen.”

Beth Rudolf, director of delivery at the Conveyancing Association, added: “There are many measures within the Government’s Housing White Paper that we are fully supportive of, indeed, we have advocated and pushed for many of them, alongside other industry stakeholders, so it is very positive to see these will be adopted. Clearly, developing a stronger and more transparent Land Register is vitally important, as is the focus on leasehold costs and delays. The CA’s leasehold campaign has particularly focused on Lease Administrators’ charges and the delays that can hold up the leasehold process and we will continue to offer our views on how these can be overcome including measures for the adoption of a charging structure, a register of Lease Administrators, plus a redress scheme for consumers and a commitment from those companies to respond within a required timescale. We will certainly be contributing to forthcoming consultations in this area.”

VAT Added to Local Authority House Searches (24/01/2017)

A surprise move by HMRC has seen local councils impose vat on searches.

Council searches, carried out on the Law Society’s CON29 and CON29O forms, provide information for buyers and lenders on issues surrounding planning decisions, building regulation consents, highway information, road schemes and public footpaths. The forms contain standardised questions to make conveyancing searches quicker and more efficient for both local authorities and buyers.

Although HMRC has not been clear in its reasons for the change, it’s widely believed that it is to level the playing field between local authorities and private search organisations (PSOs), which already add vat to their searches.

The move was introduced on the 1st January, however, not all councils have implemented the change. This has left conveyances having to verify with each authority before submission to check whether fees have increased.

Lee Holehouse, head of operations for Russell and Russell’s conveyancing department, said: “While it makes sense to even the market out, it’s frustrating that despite various attempts made by organisations across the legal sector to clarify the situation, HMRC would neither confirm nor deny the changes were coming in. This has resulted in the onus being put on conveyancers to check whether local authorities are imposing the increase, which just adds to the time it takes to purchase a property. Even the smallest of delays in the process can have huge consequences and I would have expected HMRC to understand this and be transparent rather than creating unnecessary confusion.”

The Housing Market in 2016 (01/09/2016)

Despite fears about Brexit, the economy and lending criteria, house prices have continued to rise in 2016.

Figures recently released by the Office of National Statistics (ONS) reveal that the average house price in the UK rose 8.7% in the year to June 2016.

The price tag of £214,000 is £24,000 higher than the £190,000 buyers could expect to pay in September 2007 when the market was at its peak. All good news for anyone looking to sell, but this presents a problem for anyone wishing to get on the property ladder and those looking to upsize.

The house price increase has been reflected in the number of 25 – 29 year olds owning their own home, which has fallen from 55% in 1996 to 29% in 2015. The number of people aged 30 - 34 owning their home has also dropped from 68% to 45% in the same time period.

But it’s not all bad news. The recent cut in the base rate has seen lenders following suit. Fierce competition between mortgage providers will present a window of opportunity to anyone thinking of buying into the housing market. And, for those who already own a property, it’s a chance to lock into a low rate fixed deal to shelter against further uncertainty.

As with all things, however, these historically low rates won’t last forever. As the economy begins to stabilise and recover, the Bank of England will raise interest rates again.

Law Society Renews Russell and Russell’s Accreditation to Conveyancing Quality Scheme (06/07/2016)

The Law Society has renewed Russell and Russell’saccreditation to the Conveyancing Quality Scheme (CQS), a quality standard for residential conveyancing practices.

Membership of the Conveyancing Quality Scheme is based on passing a number of assessments to assure regulators, lenders, other professionals in property together with the general public that a firm’s practices meets the CQS protocol and high standards for best practice and professional integrity. All members have to re-apply each year to ensure that they are continuing to meet the schemes criteria. Many lenders require that solicitors are credited under the scheme before they allow them to act on new mortgages.

“This is great news for the department and Russell and Russell as a whole”, said managing partner, Stephen Crompton. “Our conveyancers pride themselves on providing an exemplary service and our re-accreditation is testament to the continued effort the team puts in to help people move home.”

Help to Buy ISA for First Time Buyers (19/02/2016)

People saving for their first home have received a boost from the Government with a new ISA designed to help first time buyers get on the property ladder.

The Help to Buy ISA, which was introduced by the Government on the 1st December last year, will enhance people’s savings by 25%.

Aside from the cash incentive, the ISA is available on an individual basis so people buying a home together can benefit from both of them opening an ISA. The only criteria for anyone setting the ISA up is that they are a first time buyer.

An initial deposit of up to £1,200 is required to open the ISA, which is being offered by a range of banks and building societies, followed by monthly deposits of up to £200.

While the maximum bonus the Government has committed to is £3,000, savers will only need to have a balance of £1,600 before they become eligible for the minimum bonus which the Government has set at £400. This can be achieved in as little as three months from the date of opening the ISA.

Russell and Russell is registered as a member of the Help to Buy ISA panel. We have already acted for clients who set up their ISAs and have just had their £400 bonuses approved. If you’re looking to buy your first home through a Help to Buy ISA, we can help with your bonus application and ensuring the property being purchased meets the eligibility criteria. 

ONS Releases Annual House Price Statistics for Small Areas (08/07/2015)

The Office for National Statistics (ONS) has published the annual House Price Statistics for Small Areas (HPSSAs) and the figures show a vast difference in the range of property prices being paid across the country. The local authority with the highest house price in 2014 was Kensington and Chelsea, where on average a property now costs £1,195,000. In comparison, Blaenau Gwent recorded the lowest average price of £75,000.

Between 2013 and 2014, 336 of all 348 local authorities recorded an increase in the average property price. Of the remaining 12, six local authorities had a price decrease and six remained the same. The largest increase was in South Bucks where an increase of 23% took the average price from £390,000 to £480,000. In contrast, the local authority with the largest decrease was the Isles of Scilly where the average price fell from £275,000 to £235,000 - a drop of 15%.

Along with house price increases, the numbers of sales of all types of properties also grew. The highest was flats and maisonettes which experienced an increase of 18%, followed by terraced houses (14%). Sales of detached homes rose by 13%, while semi-detached houses increased 11%. Overall, sales of all property types swelled by 14% in 2014 compared with the previous year.

House price statistics for small areas are calculated using data from the Land Registry and report the total number and average price of all homes sold and registered in a one year period. They cover local authorities, parliamentary constituencies and middle layer super output areas (areas which have on average a population of 7,200) in England and Wales.

ONS Releases Annual House Price Index (25/06/2015)

The latest figures released by the Office for National Statistics (ONS) show that the rate of house price increases has slowed to 5.5% in April, down from 9.6% in March this year.

A reduction of £5,000 in the asking price of homes in London, where a property now costs £493,000 on average, has been attributed to the deceleration. On a more positive note, however, increases in the average asking price for homes in the East and South East have led to an overall increase in asking prices across England.

Pressure on first time buyers remains high with the average price paid for properties being 5.8% higher in April 2015 compared to the same time last year. Owner-occupiers (existing owners) fared no better, paying on average 5.4% more for the same period.

The ONS report states: “April’s figures are a continuation of the softening of the housing market that has been evident since the third quarter of 2014. Since September 2014, the rate of annual house price inflation has been declining gently, subsiding from 12.1% to 5.5% in the latest data. This easing is reflected in a number of indicators of the housing market, which suggest demand and supply are now more balanced than in recent months.”

Whilst these figures are for the whole country, it will be interesting to see how house prices have performed on a more local level when the Small Area House Price report is published.