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Home reservations agreements could bring an end to gazumping and gazundering in England’s property market.
The Government is to trial the legally binding agreements across England early next year.
The move aims to make property transactions more secure and stop the current third of all sales that fall through every year.
Right now any property sale in England hangs on a knife edge until contracts are exchanged, which could be weeks after an offer has been accepted.
That leaves both sides vulnerable to the other pulling out altogether, the buyer attempting to cut the price (gazundering) or the seller accepting a higher offer (gazumping).
In Scotland, neither gazumping nor gazundering are common because an offer, verbal or in writing, is binding on both sides once accepted.
Introducing home reservation agreements in England and Wales would have a similar effect in reducing the number of sales that fall through because one party pulls out.
It would also bring the sale of most property into line with the way new-builds are now sold. Developers insist on a reservation agreement and deposit that protects them when a buyer changes their mind.
Both buyer and seller would commit to the sale by signing the home reservation agreement and placing the deposit in an escrow account held by their conveyancing solicitors.
If one side pulls out and the other considers their reasons for doing so to be unreasonable, they could lose their deposit.
Radical reform of Stamp Duty Land Tax would take nine out of 10 home buyers in England out of paying the tax altogether.
The effect of raising the threshold at which the tax is paid would also revitalise the house-building sector as developers react to increased demand from buyers who would be free from paying the duty.
A report entitled Stamping Down by the Centre for Policy Studies (CPS) has called on the Government to consider reforming the stamp duty system, which currently brings in around £5.1 billion to the Treasury every year.
Alex Morton, the CPS head of policy, is a former adviser to David Cameron when he was Prime Minister and has written the report.
He says raising the threshold at which buyers must pay stamp duty from £125,000 to £500,000 would mean nine out of 10 buyers in England no longer have to pay the tax.
The current average cost of stamp duty in England is £2,300 with buyers in the south-east forking out more than £6,000 when they buy a property.
Morton says raising the threshold would cost £1.6 billion, but the spin-off benefits in increased transactions and a rise in house-building would replace that revenue for the Government.
His proposals would only affect residential property transactions. Buy-to-let landlords and those buying an additional property pay higher rates of stamp duty, and those would not change in this suggested reform.
Robert Colvile, director of the CPS, sayd: “It’s no coincidence that stamp duty is one of the taxes that people hate the most.
“It’s a huge barrier to people living in the kind of homes that best fit their families and their lives.
“And as our report has shown, the current sky-high levels are doing more harm than good.
“We urge the Government to take bold action to stamp down on stamp duty and get the property market moving again.”
London sellers are squeezing the supply of homes for sale on the property market as they sit tight over Brexit.
Rightmove’s latest analysis of the capital’s housing market suggests a lack of supply has helped prices rise slightly in the last month.
In its monthly asking price index, the online estate agent listings site says the average asking price for a London home was £618,432, up 2.4 percent on the month.
However, there are a third (30 percent) fewer new sellers on the market this year compared to the same month a year ago.
Many would-be sellers are keeping one eye on the uncertainty over the UK’s exit from the European Union, which was expected to happen on October 31 but may now be delayed into the new year following political turmoil.
Miles Shipside, Rightmove director, said: “In a strange Brexit-induced paradox, thousands of potential sellers are holding back compared to this time a year ago.
“Ironically, this means that those who are coming to market have a better chance of selling.
“So, while some would-be sellers are being put off, it’s actually a good time to sell.”
Shipside added: “Those who are ignoring the Brexit disruption have less competition from stay-away sellers. And their prospective buyers have less negotiating power with a reduced choice of suitable alternatives.
“London has spent a few months in the price doldrums, but the scarcity of properties coming to market is now helping to underpin prices, and the number of sales agreed is higher than the same month a year ago.”
According to Rightmove, the usual autumn bounce in the UK-wide property market has been less pronounced than usual, with the number of sellers down 13.5 percent year on year.
London’s first new high street in a century has been given the go-ahead by councillors in Southwark.
The £4 billion plan will create a new town centre at Canada Water in Rotherhithe, on a site that includes Surrey Quays and the former Dock Offices courtyard.
The project will create around 3,000 new homes – of those, 35 percent will be affordable.
The new town centre will also include 2 million square feet of workspace for up to 20,000 jobs, and around 1 million square feet of shopping, entertainment, leisure, community and education space.
With around 12 acres of open space, the new Canada Water town centre will also include its own town square, 16 new streets and a 3.5 acre park.
Peter John, leader of Southwark Council, said: “We are delighted that this major step towards our vision for Canada Water has been approved.
“The masterplan provides the blueprint for an exciting new town centre that will provide thousands of new homes, particularly hundreds of new social rent homes, new jobs and opportunities, new open spaces and a brand new leisure centre for Rotherhithe in the first phase of the work.”
Improved transport links in the area will mean increased capacity at Surrey Quays and tow new bus routes.
Londoners spent last Sunday freely walking, running and cycling on more than 200 car-free roads last weekend as part of the capital’s Car Free Day event.
The annual event aims to give millions of residents the opportunity to experience a day without heavy air pollution and to appreciate London’s green spaces.
With pollution levels in some part of the capital at illegal levels, the imperative from the Mayor’s office is to improve air quality and eliminate the pollution hotspots blighting the lives of residents.
Now home buyers are being offered the chance to find out if the area they intend to buy in is suffering from air pollution – and if it is, negotiate a discount on price.
Using data from King’s College London, www.addresspollution.org offers an air quality report for every postcode in London based on nitrogen dioxide readings, revealing if pollution levels exceed legal limits and giving each neighbourhood a score out of five.
The website has been established as a registered community interest, not-for-profit company that runs campaigns for people and the planet.
Its aim is to give users a report they can use to lobby local councils and MPs to demand improvement on pollution levels locally and nationally.
According to its research, more than three-quarters (76 percent) of Londoners think property for sale in areas with heavy pollution should be sold or rented at a discounted price because of the negative effects on people’s health.
Almost six in 10 of those who were questioned said they’d think about withdrawing their offer on a property if they discovered it was situated in an area with illegal air pollution limits that breach World Health Organisation levels.
Humphrey Milles, the organisation’s founder, said: “Air pollution is killing people across the country and London is worst hit, but people don’t believe it will affect them personally.
“The air quality rating is a tool to change these perceptions and show just how real, and dangerous, air pollution is across the capital, including in some of the wealthiest neighbourhoods.”
A £3.7 billion regeneration project is set to transform Canning Town in London’s east end.
Around 10,000 new homes will be built as part of the development with upgrades to the local transport network.
The biggest project is at Hallsville Quarter, where 1,100 new homes will be created on a 15-acre site near Canning Town station at a cost of £600 million.
Of those homes, a third will be affordable and marketed for those on low and middle incomes.
The latest part of the project will include a retail area with shops, restaurants and facilities such as a health centre.
Canning Town has an Underground station while the Docklands Light Railway (DLR) also runs through the station.
Crossrail, the rail project to connect London’s stations from east to west, will also stop near to Canning Town at the newly created Custom House station once complete.
Average property prices in Canning Town are now £439,000.
Meanwhile, Newham Borough Council is considering planning applications for the redevelopment of Custom House, plans that include 800-900 new homes, community facilities and improved local shops.
The house price premium for living close to the UK’s top 100 state secondary schools has dramatically fallen.
According to new research from Santander, the price premium for parents keen to secure a spot for their offspring at the best non-fee-paying schools has fallen from 15 percent to 5 percent in the last year.
That means an actual financial drop of £32,100.
In 2018, parents moving into the catchment area of the best state schools were paying a premium of £51,600. In 2019, that has fallen to £19,500.
More than a quarter (26 percent) of parents said they were willing to pay a premium to ensure their child got a place at their preferred state school, with £20,000 the average extra willing to be paid.
Parents rate proximity to a good school as more important than being close to good transport links, family and friends.
Meanwhile, the Santander research has revealed that parents start thinking about school places long before their child is ready to pull on a uniform for the first time.
Seven percent think about schools when planning a family, 6 percent when pregnant and 22 percent shortly after their child is born.
Miguel Sard, managing director of Santander UK, said: “The recent property market slowdown has seen house prices in many school catchment hotspots cool significantly, giving an unexpected boost to parents looking to move near to sought-after state schools.
“With many parents planning for their child’s education straight after or even before their baby is born, and properties in top school catchments now more accessible, competition for school places looks set to be fiercer than ever.”
The walls and roofs of London are helping to keep the capital green.
A decade-long policy, part of the creation of the Ultra Low Emission Zone, has led to the “greening” of buildings that has resulted in new developments that host roof gardens, create greener public realm and offer a home for wildlife.
New figures show that London has more than 40 percent of the UK’s green roofs and walls, representing around 1.5 million square metres of space. Green space that includes plants and vegetation helps to reduce air pollution.
In Barnet, urban greening is being promoted at a new development that is creating 2,900 new homes.
Covering 47 acres, Colindale Gardens will include parks and sports pitches as well as other facilities such as a primary school and retail units.
The homes will feature green roofs and podium gardens, while the development will also include wildlife habitats, allotments and an area for urban agriculture.
Home sellers in London have had some good news with new house price data showing the first year-on-year price growth in the capital since 2017.
Rightmove’s monthly house price index has revealed several reasons to be cheerful for those looking to sell up in London.
The price of property coming on to the market is up by 1.3 percent on the same month a year ago, the first time since August 2017 there has been an annual rise.
With the summer months usually seeing a flattening of asking prices, this marks a positive change for those keen to secure a sale before the autumn.
Meanwhile, the number of sales agreed in London is also up by 5.2 percent on the same period a year ago.
Miles Shipside, Rightmove director and housing market analyst, said: “Some potential buyers have sat back and watched the price of property coming to the market in the capital falling year-on-year for the last couple of years, giving many of them little incentive to do anything but sit on the sidelines.
“It’s always hard to spot the bottom of a market, especially in a massive place like London with its myriad of local markets.
“However, new seller asking prices are now 1.3 percent higher than at this time last year, and if that trend continues, buyers might decide to stop sitting it out before prices rise further.
“That could happen if we have more certainty on our Brexit outcome, and this annual price rise may be an indicator of more market activity to come.”
Chris Osmond, sales director at London-based Johns&Co, told Rightmove that his company has registered more buyers in the first seven months of 2019 than in the whole of 2018, suggesting that those keen to move are no longer inhibited by the prospect of Brexit.
He added: “It’s not surprising; it’s been three years since the vote and Brexit fatigue has kicked in.
“After all, life goes on and you can only put plans on hold for so long.
“We’ve also seen the number of vendors wanting to cash in on long-held investments increase, and there are plenty of canny investors on the periphery looking for good deals, so overall we expect the summer season surge to linger on into autumn.”
As house prices stagnate and even fall in London, new research has revealed the capital’s most affordable spots for first-time buyers (FTBs).
According to data from the Office for National Statistics (ONS), overall property prices across London fell by 2.7 percent compared to 12 months ago with flat prices showing the sharpest drop of all at 4.3 percent.
The research shows the average deposit is now more than £100,000 in the capital, and even with schemes such as Help to Buy, many newcomers to home ownership simply cannot afford to buy in London.
Savills and Zoopla looked at average incomes for 18-30-year-olds in each borough and compared those to the average price of a flat or terraced house locally.
The most affordable area is Beckton in the borough of Newham where the average price for a flat or terrace is £161,267. The average salary is just over £55,000 in Beckton.
Next most affordable is Island Gardens in Tower Hamlets. There the average salary among the younger demographic is £97,000, and that is reflected in the average price of a flat or terrace at £284,042.
Chelsfield and Pratts Bottom in Bromley and Kenley in Croydon are also within reach of FTBs. Flats and terraces in these areas cost 3.25 times the average salaries for 18-30-year-olds – the Bromley average property price is £220,604 and in Croydon £201,770.
The research revealed that even in the more expensive boroughs, FTBs on higher-than-average salaries can still get on the property ladder.
For example, the North End ward in Hammersmith and Fulham has flats or terraces selling for an average £520,000, fives times the average salary for younger people.
Lawrence Bowles conducted the research for the Telegraph. He said: “As many young people in London share properties, rather than living by themselves, household incomes can be rather high.
“But that doesn’t mean those households can or want to buy together, which partly explains why many are still struggling to get on the property ladder.”
And Richard Donnell, head of research at Zoopla, said: “While affordability in London has improved, deposit levels remain over £100,000, making schemes such as Help to Buy London an attractive proposition.”
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