First of all, happy new year!
I hope you all stayed safe and had a chance to relax. 2021 didn’t start how we were hoping with the announcement of the 3rd lockdown, however, we are still very optimistic for this year with the Brexit deal being agreed and the roll-out of the vaccine going forward. The property market has definitely started very strongly with some exciting projects on the horizon for this year.
That said, let’s take a look at the first property headlines of 2021 that caught our attention this week, I always try to summarise the links to save you having to click through.
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- Government introduces first leasehold reforms – I am really pleased about this and I hope that is the first of more to come. These new reforms mean that millions of leaseholders will be given the right to extend their lease by a maximum term of 990 years at zero ground rent. Under current rules, leaseholders can only extend their lease once for 50 years with a ground rent whereas leaseholders with zero ‘peppercorn’ rent can extend as often as they like for 90 years. Today’s changes mean both house and flat leaseholders will now be able to extend their lease to a new standard 990 years. What does this mean for leaseholders? Well, it means that any leaseholder who chooses to extend their lease on their home will no longer pay any ground rent to the freeholder and for some leaseholders, these changes could save them tens of thousands of pounds. A cap will also be introduced on ground rent payable when a leaseholder chooses to either extend their lease or become the freeholder. This is the first part of a package of reforms recommended by the Law Commission of England and Wales last summer. In a statement, the government says it will bring forward a response to the remaining Law Commission recommendations, including commonhold, in due course.
- Eviction ban extended in England and Wales – The ban on bailiff-enforced evictions for private renters has been extended in England and Wales and will now be until February 21st “at least” according to Housing Secretary Robert Jenrick. Landlords or agents acting on their behalf will still be able to enforce possession orders if tenants are more than six months in arrears irrespective of when the arrears accrued and therefore no longer have to pre-date Covid; however, these will go to court but cannot be enforced by bailiffs. There are still exceptions to the ban such as cases of domestic violence and anti-social behavior where bailiff-enforced evictions can take place. The government has also announced a further initiative for the private rental sector whereby they will introduce a new mediation pilot which will offer mediation as part of the possession process to try and help landlords and tenants to reach a mutual agreement and keep people in their homes. They hope this will enable the courts to not be clogged up and prioritize urgent cases.
- Almost half of BTL landlords remain optimistic despite potential tax hikes – So it seems with everything that has been thrown at landlords, tax hikes, and global pandemics, they are still wanting more with almost half of those who invest in the private rented sector remaining optimistic going into 2021. In a recent survey released by Property Master, 45% of landlords are confident about the buy-to-let market and only 10% of the landlords surveyed by Property Master planned to exit the buy-to-let market in 2021 and almost 70% said they were not about to sell any of their properties in the new year. Around 43% of landlords said they planned to buy more property in 2021 which further cements how the buy-to-let sector as a whole is resilient and those that came out the other side of a turbulent 2020 year may well be stronger and more confident going into this year.
- Rents shoot up in South of England – Research from Homlet shows the cost of renting has risen in the South of England which could be a sign of more people moving out of the city of London with the cost of renting there down by 4.5% to £1,556. Rents have risen by 10% to £942 in the South West, by 7.7% in the East of England to £983, and by 6.1% in the South East to £1,085. Andy Halstead, chief executive of HomeLet, said: “At a national level the latest data shows a continuation of the trends we’ve seen emerging since the national lockdown ended, with rents for new tenancies increasing across the UK, with the exception of London”. Renters seem to be moving out to commuter towns looking for more space both inside and outside the property.
That is all we have for you this week. If you have any comments or questions on this week’s news summary then please feel free to send us an email at [email protected]apital.co.uk – if not, see you next week.