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“In building this home, Bellway is taking a lead in the housebuilding industry to test technologies to help meet net zero carbon targets.
“However, with many of these innovations, we don’t yet know how they will function for real families in real homes, or what their running costs will be. This is particularly important when energy costs have risen so significantly, and homeowners are being hit heavily in the pockets.
“Energy House 2.0 will enable us to find out how everyone can operate their homes more efficiently and how new technologies can assist our efforts in reducing carbon emissions by building more efficient homes.
“The research will produce reliable data that can help us all to make changes. We will compare the theoretical and real performance of different energy methods, finding out how our habits impact on energy consumption and retention.”
Bellway started work building its energy house last month and the build programme is scheduled to be completed in October
Jamie added: “Many of the technologies we will be testing are due to be in common use in new homes by 2026. This project provides us with the opportunity to test their effectiveness and to create solutions to any challenges we encounter.
“The results will help us to deliver more energy-efficient homes and to advise people on how to make best use of new technology to control energy usage and running costs.”
Energy House 2.0 is one of a series of test sites Bellway has set up across the country to work with new energy efficient technologies.
Currently, four ‘Future Homes’ are being built in Callerton, Northumberland, which will be available for open sale and homeowners will work with Bellway to monitor energy usage as part of Bellway’s wider carbon reduction strategy.
The government’s ban on charging ground rent on new leases in England and Wales comes into force today.
From today, 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.”
Rental guarantor service Housing Hand, and renting firm Canopy, have announced a partnership that will further the companies’ missions to reduce barriers to private renting.
The partnership will see Housing Hand support renters who would otherwise be ineligible to move home. As a result, an increased number of tenants who were previously locked out of the housing market, will now have the ability to find and move into their new home. While doing so, they will use the renting process that Canopy provides.
Nearly 9% of all Canopy references over the last year required a Guarantor, and the company says there is no doubt this number will only increase even more over the next few months given the current economic climate. Canopy has already seen the proportion jump to over 12% in the last 3 months.
Housing Hand has operated as a guarantor services provider for over nine years. The company is backed by a strong financially rated UK insurer, to underwrite its rent default liability, and has partnered with and served over 7,000 accommodation providers. During that time, Housing Hand has processed more than 80,000 tenant applicants and guaranteed over £600m worth of rent. The company’s focus is on opening private renting to a wider pool of individuals by removing traditional barriers.
Canopy provides an ecosystem for renters, letting agents and landlords, improving the lives of rental households by providing access to tools, services and products that fix pain points and enable them to improve their financial health.
From July 2022, Housing Hand will be working with Canopy to serve as a rental guarantor for those who want to rent but don’t meet traditional referencing requirements.
Individuals usually have to earn 2.5 to 3 times the annual rental amount in order to be eligible to rent a property. With Housing Hand, they only need 1.5 times net earnings to qualify, which significantly lowers the threshold for accessing a rental property.
Housing Hand serves as the individual’s guarantor, which means that the risk sits with Housing Hand, and not with the landlord. 100% of rent is covered 100% of the time, meaning that the landlord can access a wider pool of potential tenants and renters can unlock their next move.
Chris Hutchinson, Chief Executive Officer of Canopy, said:
“We often hear about renters who are likely great tenants but are unable to meet the minimum criteria expected by the housing market. By partnering with Housing Hand, the biggest rent guarantor service in the UK, we are able to support more of these renters in finding a new home, while ensuring that landlords actually have even more protection.”
“Rising uncertainty in the wider economy is leading to a growing need for guarantor services and now our housing market partners can say yes to more potential renters while at the same time, reducing the risk they face.”
“For renters, choice is key. For those who are asked to provide a Guarantor but are unable to find one, or don’t wish to use a family member, this service enables them to move into a property without having to pay more rent upfront.”
James Maguire, Head of Sales and Business Development at Housing Hand added:
“We are delighted to be partnering with Canopy to make renting more accessible and to ease the process for tenants, agents, and landlords alike. With no cap on the number of professional renters that Housing Hand can guarantee, we are opening the market up to a wider pool of tenants for our partners, while reducing risk and increasing occupancy across the private rental sector.
“We look forward to a long and successful partnership with Canopy and further collaborative innovations over the coming years.”
In a move that will have surprised no-one, the Bank of England’s Monetary Policy Committee lifted borrowing costs by 50 basis points, taking UK interest rates to a 13-year high of 1.75%
It is the largest rise in UK interest rates since 1995 but the rate remains far below what was considered ‘normal’ before the financial crisis of 2008.
The MPC took decision in the face of rising inflation and projections indicating that the UK will enter recession in the final three months of the year.
Industry Reactions
Simon Gammon, Managing Partner, Knight Frank Finance:
“Mortgage rates are now changing on a daily basis and lenders are giving borrowers and brokers little notice about repricing.
“We’re seeing two significant impacts on borrowers. Firstly, some homeowners who are nearing the end of their terms are facing a shock when they come to refinance, because they are unable to borrow as much as they hoped.
“Secondly, those who are looking to buy are realising once obtainable properties are now out of reach. The question for them is now not “how much can I borrow?” but “how much can I afford to borrow?”. This is a subtle but very important shift in borrower behaviour that is driving people to re-evaluate the price at which they can buy.”
Nicholas Hyett, Investment Analyst, Wealth Club:
“The Bank of England is playing catch up after some bumper rate rises from the ECB and Federal Reserve in the last month. The resulting rate hike may be the largest in nearly 30 years, but it was also widely expected, and the market reaction has been modest. Instead, the real focus today is on how much further the bank is willing to go as it seeks to bring inflation back down to its 2% target.
“The current inflationary spike is being driven by global food and energy prices, and higher interest rates in the UK will do little to alleviate those pressures. Stronger sterling has the potential to provide some relief. However, rising rates in the US and Europe mean the BoEs actions haven’t helped the pound much, and sterling is currently trading near its weakest level against the dollar in over 40 years.
“The risk now is that higher interest rates start to squeeze consumer and commercial borrowers too much, strangling the life out of the economy without significantly easing the cost-of-living crisis.
“Markets still think the Bank has a rate rise or two in the tank, but to some degree UK monetary policy is now caught in global forces over which the Bank has little control. Inflation will rise or fall according to what happens in Ukraine not Threadneedle Street, and rate decisions are dictated by moves at other central banks as much as by the MPC.”
Tom Bill, head of UK residential research at Knight Frank:
“Rising rates will dampen demand in the UK housing market but there won’t be a cliff edge moment. With mortgage offers lasting for up to six months and the majority of homeowners on fixed-rate deals, the impact will be more gradual.
“The Bank of England’s decision is a step back towards normality after 13 years of ultra-low borrowing costs. At the same time, supply is rebuilding following the distortive effects of the pandemic and stamp duty holiday.
“As rates and supply normalise, the current period of double-digit house price growth will come to an end.”
Iain McKenzie, CEO of The Guild of Property Professionals:
“Wrestling inflation under control and reducing the cost of living is the number one priority at the moment. Ultimately, this is key to ensuring that people can keep up with their mortgage and rent payments.
“Those on a tracker mortgage or people moving onto a standard variable rate will see their repayments increase again, adding to the pain from the surge in the cost of energy and essential goods.
“Homeowners on fixed-rate mortgages are in a better position, with no immediate effect on repayments. Keep an eye on the date when you are due to remortgage, as our research shows that around 1.5 million fixed-rate mortgages will end this year.
“These decisions could also affect house prices in the coming months. Over the last two years, we have seen unprecedented demand for property, which is in large part due to the ultra-low interest rates that have made getting a mortgage easier.
“As more people have wanted to get their foot on the property ladder, house prices have soared. Another consecutive interest rate rise could make potential buyers more hesitant about taking on a mortgage. If it does, we will likely see property prices cool off in order to entice more people to buy.”
Jason Tebb, CEO of OnTheMarket:
“This latest rate rise was widely expected, given continued high inflation, but we don’t expect it to quash positive buyer and seller sentiment in the housing market.
“As long as buyers remain confident about obtaining the mortgages they need and being able to afford them, increases in rates, while unwelcome, are unlikely to result in a slamming on of the brakes.
“Even with this half-point rise, it is still a comparatively cheap time to borrow money; in a few months’ time, the picture could be very different.”
Frances McDonald, research analyst Savills:
“Today’s increase was not unexpected and will have been factored into many buying decisions, though successive rate rises are undoubtedly contributing to slowing house price growth. Rates are in line with our forecast assumptions for 2022, with the expectation that annual price growth will slow to 7.5% by the end of the year, down from its current 11.0%.
“The five base rate rises we have already seen over the last six months have caused a significant increase in the cost of mortgage debt. For someone borrowing a 75% mortgage, the average quoted 2-year fixed rate more than doubled over the year, from 1.39% in June 2021 to 2.88% in June 2022.
“Although these rate rises will have the greatest impact on new entrants to the market and those on variable or tracker mortgages, they will also affect those wanting to trade up the housing ladder, particularly given the strong price growth we’ve seen of late, unless we see lenders absorbing some of the increases.
Second home owners face higher bills that could run to more than £1,000 a year under fresh government plans to close a tax loophole.
Michael Gove, the Levelling up Secretary, is set to announce new rules that will mean second home owners can only register for business rates if they can prove they let the properties for at least 70 days in a year.
Currently, they are permitted to pay business rates, which are cheaper than council tax, if they make their property available for letting for 140 days in a coming year.
The move comes following a surge in the number of holiday lets in England, with around 65,000 residential units currently registered, up from 50,960 in 2019.
About 97% of the 65,000 holiday let properties have a rateable value of £12,000 or less, making them effectively exempt from paying business rates.
Housing minister Chris Pincher told the press: “We have committed to close the loophole in the business rate system.”
The government’s proposals are expected to be announced very soon.
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.”
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.”
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.
