PROPERTY UPDATE – THE THINGS WE KNOW THIS WEEK THAT WE DIDN’T LAST WEEK.

The Carlisle property market continues in it’s very healthy and buoyant state, with property flying off estate agents books in near record time. It must be noted, the current lockdown is causing a shortage in supply but the amount of buyers available outstrips the amount of properties. Basic economics shows that when demand outstrips supply, properties will sell more quickly and for a better price. I expect this to level off as restrictions are eased.

Follow the link below to see the Zoopla House Price Index Report

The rental market again is healthy, with the number of leads per property we are receiving at a record high. There is a particular shortage of 3 and 4 bed properties, so landlords, if you have a sizable family home you were contemplating letting out, get it on the market now.

So what’s been happening so far in March? These changes have national effects, not just in Carlisle..

A tapered extension to the stamp duty holiday and a government-backed mortgage guarantee scheme are among the measures aimed at helping home buyers and sellers delivered by Chancellor Rishi Sunak in the Spring 2021 Budget. 

Stamp Duty Holiday extension 

The temporary stamp duty holiday due to finish on 31st March 2021 in England has been extended by three months. 

The extension means if you are buying a home up to the value of £500,000 you will not pay any stamp duty if the purchase is completed by 30 June 2021. This is a huge relief to some very nervous buyers and will have a huge positive financial benefits to hundreds of buyers in Carlisle. The nerves of those sellers who might have lost their property sale have been eased.

Moving forward to smooth the transition back to normal, the nil rate threshold will be set at £250,000 until the end of September, before returning to the usual threshold of £125,000 on 1st October 2021.  

There are an estimated 628,000* sales in total still currently in the legal process across Great Britain, including those that were agreed last year and those that have been agreed so far this year.  *Rightmove figures as at 3rd March 2021

What is the mortgage guarantee scheme?

The government has introduced a 95 per cent loan to value (LTV) mortgage guarantee scheme to help buyers with small deposits get on the property ladder.  

Under this scheme, which launches in April 21, home buyers will be able to purchase homes priced up to £600,000 with a deposit of just 5%.  

The Treasury has said it will guarantee parts of the loans on properties worth up to £600,000 in order to encourage lenders to reintroduce low-deposit mortgages. 

Low-deposit mortgages have largely been withdrawn by lenders during the coronavirus pandemic, which meant many first-time buyers have faced raising deposits of 15-20% in order to secure a loan.  

Rishi Sunak said many of the big lenders, including Santander, Lloyds, Barclays and HSBC are backing the scheme and will be offering “government guaranteed” mortgages from next month. 

Personally I think the banks have been harsh on buyers with small deposits. Surely banks should base their lending more on affordability. How can decent hard working buyers demonstrate they have paid a £750 rent on a property for a sustained period but be refused lending where repayments on a mortgage are sometimes £300 less. It’s absurd.

Eviction Ban Extension and Extension of 6 Months’ Notice (England)

The government have announced that:

The eviction ban has been extended until the 31st May.

The requirement to serve 6 months’ notice has also been extended to the 31st May and will then be tapered off.  No details have been given as to how this ‘taper’ will take effect, with a government statement merely saying: “The government will consider the best approach to move away from emergency protections from the beginning of June, taking into account public health advice and the wider roadmap.”  The exceptions to the 6 months’ notice remain the same being, anti-social behaviour (four weeks’ notice), false statements provided by the tenant (two to four weeks’ notice), over 6 months’ accumulated rent arrears (four weeks’ notice), breach of immigration rules under the ‘Right to Rent’ policy (three months’ notice).

Please see full details at the following link: https://www.gov.uk/government/news/further-support-for-commercial-and-residential-tenants

If you have any property related questions, need advice on selling or letting, please feel free to get in touch with me on 01228 534000 or email me at carlisle@northwooduk.com

Eviction and the cost of getting it wrong

With the government’s recent announcement on the current rules in place around the banning of bailiff evictions (apart from in a set of specific serious circumstances) that were due to end on the 21st February and having been extended until the 31st March, I thought I would bring landlords up to speed with some information relating to the minefield in serving a Section 21 notice.

The pressures put on tenants and landlords alike through the pandemic are immense with some tenants losing their employment and landlords not receiving rent through rent arrears and therefore in some cases, defaulting on mortage payments.

HEADLINE FIGURES

300,000 case backlog in the court system

800,000 tenants in arrears

18 fold increase in arrears

200 new judges employed (some with and some without experience)

The figures above demonstrate we are in unprecedented times. The changes in legislation not only relate to a ban in bailiff evictions and the length of notice needed. The changes also relate to how a section 21 is served. This makes it so much more difficult for agents and landlords to get it right. Professional knowledge and experience is vital. Without the competency to get it right first time when serving notice could cause unbelievably lengthy delays but also cause huge financial headaches. Let’s face it, if landlords or agents make one small error in the serving a Section 21 notice, it is probably not going to be realised until the papers are served to the courts and go in front of the judge. More than likely some 9 months or more down the line.

To demonstrate this, I’ve listed below 15 reasons why a Section 21 notice may not be valid.

 Reason for Invalidity     Outline Description 
 Correct up to date form?  Form 6A is prescribed and must be the latest form published
  Served correctly?  Is there a service clause in the agreement?
  Has it been 4 months from start of tenancy? Check Agreement hasn’t renewed commencement date
  Notice expires before end of current term? Is there a break clause in the Agreement? (not periodic)
  Expiry date correct? 6 months from date of service (not sending)
  Is Notice still valid? (alive) Notice ceases to be valid 10 months from date of issue
  Deposit protected? Within thirty days from taking the money
  PI served within 30 days On all relevant parties (who paid deposit) including latest H2R guide
  GSC, EPC & Electrical Certificates served In date, current and served on time
  If PI not served by the LL, was it signed by Partner/Director  Requirements for formal signing under the Companies Acts 2006 s44
  Is property an HMO?  If yes, valid HMO Licence seen?
  Is property Licenced Accommodation?  If yes, valid LA licence seen?
  Has Local Auth issued a Relevant Notice?  If yes, has 6 months passed since issue of Notice?
  Is form 6A signed properly?  Can be signed by member of your firm.
  Tenants Fees Ban complied with?  Check deposit within limits and fees charged

At Northwood, we’re confident we have the correct paperwork, procedures and support in place to get it right first time and every time. If you’re a landlord and need some advice or have any concerns, please get in touch. Even if we don’t manage your property, I’m more than happy to give you my time on an initial consultation free of charge.

Call 01228 53400 or email carlisle@northwooduk.com

Follow the link link to download our ebook on all thing legal for landlords:

https://northwood.lpages.co/legal-landlord-carlisle

Carlisle Property Overview

I thought I’d take the opportunity to update everyone on how our fair city Carlisle is broken down by property type, are we a city of renters or home owners?, what type of properties do we live in and do we have enough property, so I’ll look here at what’s happening in the new build sector.

TENURE PROFILE

Carlisle has over 60% of people living in a property they either own outright or own their property with a mortgage. This outstrips both the North West and National average. Surprisingly there are only 15.1% of people who are privately renting. I personally thought this would be much higher and it does show we are still a country who have an obsession and drive to own our own property, unlike our European neighbours.

The next census figures should make for interesting reading. I expect a shift in these figures.

WHAT DO WE LIVE IN?

There are 35113 properties in our local area (CA1, Ca2, CA3, CA4, CA5, CA6 and CA8 post codes).

The most popular dwelling is not surprisingly a semi-detached property, very similar to the North West figures. Much less of us are living in flats or apartments, compared to the North West. I personally like this and believe Carlisle has enough flats or apartments to meet demand. Following the covid-19 outbreak, there has been a massive surge in people’s desire towards properties with gardens and home working space.

NEW HOMES

The trend is thankfully on the up but does still not meet demand. In the last 5 years there has been 1970 new homes built in Carlisle. Thankfully a proportion of the are low cost and affordable properties, meaning more are available to a greater proportion of potential buyers. this is great for those people with aspirations to get their own little bit of Carlisle.

I expect this trend to continue to rise and is not only good for our city and those people who want a new home, its positive for the overall housing market as well as there is a massive knock on effect with the current housing stock.

My next report will look at affordability but if anyone wants to pick my brains or needs any advice, please get in touch on 01228 534000 or gordonadamson@northwooduk.com

Stay safe everyone.

Best regards, Gordon

The Greatest Changes to Leasehold in 40 Years



Key Points

Houses and flats can now extend their leases by 990 years, at zero ground rent

Ground rent ban extended to retirement housing

Marriage value abolished and setting calculation rates for enfranchisement

A new Commonhold Council to be established

Legislation coming this Parliamentary session

Further legislation to follow for commonhold properties*

Robert Jenrick MP, the Housing Communities and Local Government Secretary announced sweeping reforms to leasehold, for houses, flats and retirement developments, with legislation coming this Parliamentary session. In addition, further legislation will follow, including for commonhold properties.
 
In 2020, the Law Commission published new reports surrounding leasehold enfranchisement, commonhold, and Right to Manage. The announcement released today is the Government’s response to the Law Commission reports, which is in reference to how to make purchasing the freehold of a property or extending a lease easier, simpler and cheaper for leaseholders and how best to pave the way for the widespread take-up of commonhold.
 
IRPM CEO Andrew Bulmer has provided the following comments “This is Government’s long-awaited first response to the Law Commission’s reports and heralds a multi-stage reinvention of tenure for flats in England; the biggest changes to leasehold law for decades. Stand by for more announcements on commonhold. IRPM professionals have long seen this coming and IRPM itself will be leading with all the essential training and learning materials for the exciting new world order.”

*The latest announcement from the Government around Commonhold is the culmination of years of consultation and is concerned with how to make leasehold work for the everyday person. This reference is fantastic for our industry, as the Commonhold debate has highlighted the value of replacing commercial freeholders with resident management companies and encouraging the management of buildings to be placed in the hands of the residents. Why is this extremely good for B-hive Property Solutions? Simply because resident management company directors, as lay people, need and want local agents to assist and help with the day to day management, particularly in a local, personal and tailored fashion, which in turn creates a new influx of opportunities for agents that specialise in working with resident management companies.

There were so many Carlisle property owners trapped by the old legislation where there property (mostly flats) had a short lease of less than 100 years and a prospective purchaser couldn’t get a mortgage, meaning these properties were rendered almost unsellable. Addresses that come to mind included Hodgson’s Court in the Lanes, Hebden Avenue, Greenacres in Wetheral, Newfield Drive to name but a few.

If you are effected by this and want any advice, please feel free to get in touch on 01228 53400 or email me at carlisle@northwooduk.com
 

Carlisle Property Blog – News update

STAMP DUTY

HMRC needs to urgently address the lack of clarity in parts of their stamp duty guidance, which has led to unnecessary confusion for solicitors and their clients, according to Cornerstone Tax

Stamp duty – prior to the existing holiday – typically costs homebuyers in the region £13bn a year collectively, but there has been no shortage of complaints from consumers and advisers over thousands of pounds being mistakenly added onto people’s property purchases, usually by solicitors who are unsure of the rules around the levy.

It has been estimated that more than £3bn worth of stamp duty was overpaid in 2015/16 due to mistakes in advice and confusing complex rules, and yet the tax remains poorly understood.

With the existing stamp duty holiday due to end in March, the complexities of the tax are no clearer, and remain complicated, not just for homebuyers, but often the solicitors and tax advisers employed to make sense of the rules and regulations surrounding the purchase of various types of property.

Comment – It has to be worth spending a few minutes to review what you paid in stamp duty if you bought a house in 2015/16

RENTERS WANT BIGGER

There has been a notable increase in rental demand for houses as tenants rush to upsize, new research shows.

Howsy, the lettings management platform, analysed tenant demand across 22 major UK cities and found that houses are currently more sought-after as more renters generally look to get more space for their money as a growing number of people work from home.

Howsy looked at what proportion of rental properties is being snapped up by tenants and how demand differed between property types. The analysis shows that demand for houses is currently at 29% while demand for flats averages 26%.

While the current pandemic is leading this trend for more space both in the home buying and rental markets, flats are still proving more popular than houses in some cities.

Comment – Carlisle is following the trend with massive demand for bigger house, more space and gardens. Flats are proving difficult to let with low demand.

TAX INCREASES ARE COMING

The message to vendors should be to sell now before tax rates increase. Every agent in the country has dozens or even hundreds of vendors who are dithering about whether to sell their property or not. So now would be a great time to write to them or phone them. If they are selling a second home, or an investment property, you can warn them that capital gains tax rates could rise from 18% or 28% to as much as 40% or 45%. So now is a good time to sell. If they are downsizing and planning to give part of the sale proceeds to their family by way of a potentially exempt transfer, you could warn them about possible changes to the inheritance tax rules. These may well change to prevent people from giving money away in the future. It may even be worth mentioning that there have been stories in the press about the possibility of the government taxing the profit that people make when they sell their primary residence.

For landlords, most particularly those with multiple properties, you might suggest that they consider transferring their properties into a limited company in order to protect themselves against a future increase in CGT rates. Most landlords will not take action on this but they will thank you for taking the time to discuss the matter with them. Perversely, an increase in CGT rates would have the effect of locking landlords into their buy to let investments as they would be very reluctant to sell if CGT rates were to rise to 40 or 45%.

Comment – Take stock of what you’ve got and choose which direction you take wisely. Is it worth selling if you’re going to leave the money sitting in the bank with no interest growth. Might be worth taking professional advice from an accountant. Armstrong Watson can assist with expert advice on 01228 690200

PET DISCRIMINATION

An online petition calling for pets to be allowed in private rental properties has gained thousands of signatures.

The petition – on the Petition Parliament website – is from Hannah Bennett and says: “I’d like the government to prevent discrimination of tenants and potential tenants with pets, including by preventing landlords from including a ‘no pets allowed’ clause in tenancy agreements. It is completely unfair that a person and/or family can be refused accommodation based on the fact they have a pet. Most of the time people only have a small dog or cat, and it can be incredibly difficult to find accommodation as it is let alone with this clause in place.”

The petition comes as Tory MP Andrew Rosindell is promoting the Dogs and Domestic Animals Accommodation and Protection Bill in the House of Commons.

The measure – which this week has its first reading – is urging a reform of rental laws allowing dogs and other animals to be kept in rented accommodation so long as owners can demonstrate their care for them.

Comment – It’s a tricky one as there are many advantages for a landlord to allow pets such as longer tenancies, however pets can damage properties. Northwood find that a pet is only as good as it’s owner and agent’s judgement is vital.

Carlisle Property Market update

CARLISLE PROPERTY BLOG 28/09/20

House prices continue to increase as demand runs ahead of supply across the UK housing market.

The annual UK growth rate is +2.6%, up from +1% a year ago. ZOOPLA 28/09/20

The Carlisle market mirrors the national trend and in my mind is as strong as it has been in over 14 years.

37% rise in demand, year on year

Further COVID restrictions to support demand in near term. We have previously highlighted how the strength of the housing market is being driven by a once in a lifetime re-evaluation of housing in response to COVID and the lockdown. Households are prioritising space and location as well as factoring in a shift in working patterns. Less time spent meeting friends and family in public locations will re-enforce the importance of the home. We believe that a second spike in new cases and a tightening of restrictions announced by the Government will only serve to support this trend, primarily for those households in more secure financial positions. However, the housing market is not immune to any prolonged weakening in the economy and the impact of less Government support. ZOOPLA 28/09/20.

In Carlisle, 3 and 4 bedroom properties are in high demand. Prospective purchasers have internal space and good gardens high on their agenda. Fast broadband is very important to them also.

Demand from first time buyers weakens but existing home owner demand remains strong.

Reduced availability of mortgages at or over 90% LTV – as lenders meet increased demand at mid to lower LTVs – is a primary factor behind weakening demand.

Those home owners with strong equity is the strongest market.

Renters Reform Bill pushed into the long grass

It appears that the Renters Reform Bill – a key measure in the 2019 Conservative General Election manifesto – has been pushed into the long grass.

The pledge was for this Bill to include the scrapping of Section 21 eviction powers and the start of the concept of lifetime deposits transferable from one property to another when a tenant moves.

No date has been made available in Parliamentary business for the Bill to be introduced, although it was announced in the Queen’s Speech last December as being a measure that would be initiated in 2020. Letting Agent Today 25/09/20

Did the chancellor ignore the private rental sector?

There was no comfort for landlords in the chancellor’s support measures. Landlords own one or two properties and rental is often their sole source of income, make up the majority of landlords in the UK and many are facing hardship. Lack of support may mean many will exit the private rented sector which will cause enormous problems for tenants in the coming year.

If you are thinking of selling or investing in property, please feel free to get in touch for a free valuation or no obligation chat.

Best regards

Gordon

Carlisle Millennials Moving Back in with Mum & Dad?

Roll the clock back 20 years and any self-respecting late 20/early 30 something would never say on their first date that they lived with their mum and dad. It was seen as a sign of immaturity being tied to your mother’s apron strings with as a failure to leave the family home. Yet over these last two decades, the age of leaving home has been increasing steadily from 20 years and 11 months in the late 1990’s to 22 years and 7 months today.

However, as with all the stats, the devil is in the detail. Although the age of leaving home has only risen by 8% between 1997 and today, those that didn’t leave home in their early 20’s tended to stay much, much longer.

In 1997, 11.26% of 25yo to 34yo still lived at home with their parents, yet last year that had risen to 15.74%, an increase of 391,000  ‘stay at home’ Millennials

However, before we deride these Millennials for still being tied to their mother’s apron strings, I would say those very same Millennials (the mid 20’s to 30-year olds) have been pragmatic, being attracted to sacrificing independence in order to achieve their long-term life goals as they have seen rents rise and an inability to save for the mortgage deposit. All of this has seen the first-time buyer levels in this millennial age range rise for the last three years … so good news for everyone!

However, is all that about to change?

Just as mum and dads in Carlisle had thought their late 20 something/early 30 something offspring had flown the nest, Covid-19 has blown some Carlisle ‘chickadees’ back into the nest. Back in March, the lockdown saw many Millennials flee the big UK cities, with their constrained and poky shared HMO’s and flat shares, swapping their city centre private rented home for their parents’ Carlisle home.

Yet with lockdown lessening, it isn’t just remote workers who are unenthusiastic and disinclined to return to the big cities (fearful of a second lockdown) – many of these Coronavirus blow-ins are deciding to stay put too! A recent YouGov poll asked Millennials of private rented homes what their plans were and 1 in 6 tenants planned to hand their notice in on their rented home and fly back to the nest of mum and dad. The advantages are quite plain, especially as it could enable them to save for a deposit to buy their future home.

There are 34,323 households in Carlisle, made up of 12,373 single person households and 20,065 family households (the remainder being made up of shared houses etc.)

Yet how many of those Carlisle family households had non-dependent children before Covid-19?

3,177 Carlisle households have children that haven’t flown the nest

That’s 15.8% of Carlisle families whose kids are still to leave home … and it’s only going to get worse!

So, what does this mean for Carlisle homeowners and Carlisle landlords?

It will mean that Carlisle parents and their children will get to know each other better, build stronger relationships and it will enable their children, if they are wise, to save for their deposit for their first home purchase – who knows maybe in Carlisle, as working from home could become the norm.

Also, with remote working, many tenants are looking for properties with bigger gardens which could translate into greater demand for property with bigger gardens? It will also change the property needs of those Carlisle parents and potentially could mean instead of those parents moving down market, they could end up staying longer or moving up market?

Now of course these polls could be a load of hot air? What I do know is that this thing has not played out yet and only time will tell if this will make a concrete change to the way people live, rent and buy property.

These are interesting times and thank you for reading this. Do let me know your thoughts on this matter.

The 2,967 ‘Trapped Landlords’ of Carlisle

Going into lockdown in March, the Government proclaimed a ban on tenant evictions, pledging that no tenant in a private rented home, who had lost their wages due to Covid-19 would be kicked out of their private rented home until the late summer. Fast forward to August and the press were being briefed as late as Wednesday 19th August that this freeze in evictions in England and Wales would cease on the 23rd August. That was until just after 4pm Friday 21st August when Mr Jenrick, the Housing Minister, announced that the eviction ban would be extended for a further four weeks and also buy to let landlords must now give their tenants six months notice to gain possession.

Cue crocodile tears for all the 2,967 Carlisle landlords

Not so ‘snappy’ with piping your eye there. I know many Carlisle landlords became landlords between 2000 and 2009 because they preferred bricks and mortar to investing in the stock market or gilts/bonds market. All they were looking for was a small pension income to top up their meagre state pension. Not all Carlisle landlords are akin to the 21st Century Rising Damp version of Leonard Rossiter with his ‘Rigsby-esqe’ or even ‘Rach-manism’ wicked landlord ways. Official estimates suggest there are 1.8m to 2.1m landlords in the UK, the vast majority doing the right thing by their tenants, many of whom have helped their Carlisle tenants in financial trouble during Covid-19 by acquiescing to short-term rent reductions or rent-payment holidays.

Also, many Carlisle landlords have mortgages (in fact, if we added all the UK buy to let landlord’s mortgages, they would add up to £216.65 billion). The Government and the Bank of England have applied political influence on the mortgage companies to be a little more flexible and sympathetic on landlord’s mortgage interest payments, yet the mortgage interest is still adding up. The issue is, some tenants are in arrears with their rent, meaning landlords aren’t receiving their rent, which means many buy to let mortgages aren’t being paid either.

So, how many tenants are in arrears? The National Residential Landlords Association stated that just 3% of landlords recently surveyed reported tenants are in arrears. This was backed up recently when Goodlord stated…

3.72% of tenancies in the UK are in arrears, although interestingly ours stands at 5.5%

These are only slightly above the pre-Covid arrears levels, yet still a strain for the landlords involved. Also, the two-month notice period of the section 21 Notice has been extended to six months, meaning it will be March before any tenants are made to leave, even if the notice was issued now.

So, does this leave Carlisle landlords trapped?

With regard to the arrears, only 1 in 17 landlords rent their property through a limited company, meaning the rest (i.e. the vast majority) rent their property as a person, thus giving themselves unlimited personal liability should their rental portfolio fail (i.e. the mortgage company could make a claim on the landlords own assets, including their main residence, if the property was repossessed and the shortfall wasn’t made up). Also, if the building society’s and banks turn against the Government advice and are too lenient with landlords with buy to let mortgages, there could be situations where the rental properties are repossessed, meaning the tenant will be made homeless.

One thing that this does also remind me of is the 2008 Credit Crunch. There were an awful lot of Carlisle homeowners who were unable to sell their home in 2008/9, so they converted their Carlisle property into a buy to let investment. There are going to be an awful lot of Carlisle landlords who will also want to sell in the next six to nine months, yet are unable to do so until the middle of next year without having to take a hit on the value of their home. For those Carlisle landlords that can relate to that, maybe we should chat to consider your options so you can mitigate any losses?

It seems Carlisle landlords have been used to saving the Government from a PR disaster of homeless tenants on the streets at Christmas, the least we should do in the country is stop disparaging landlords and lift them up from their pariah status.

Carlisle landlords are housing 10,761 Carlisle people in private rented accommodation…

… and so it is my opinion that the contribution made by these Carlisle landlords should be recognised. My fear is always of a danger of a widening schism between the landlords and tenants. Truth be told, both need each other, and I hope the Government extend help to landlords as they have with tenants, otherwise the Government won’t have any homes to house the British people if all the landlords decide to sell up. It is especially important that the supply of private properties doesn’t drop in Carlisle going forward when you consider…

Carlisle needs an additional 2,228 private rental homes by 2029

In the meantime, the Government have bigger fish to fry sorting out the economy as a whole, so if you are a self-managing landlord or even a landlord with another agent in Carlisle, feel free to pick up the phone or make contact with me and we can discuss your options without any obligation. There is no need to feel trapped, there are options for you and it is better to consider them now, set the foundations and motions going in the right direction promptly before it becomes a bigger issue in the future.

432 Carlisle Properties Sold in Stamp Duty Holiday Bonanza -Yet be careful of the sting in the tail

On the 8th of July 2020, the Chancellor announced the first £500,000 of any property bought was exempt from Stamp Duty until 31st March 2021. This also included buy to let landlords (although they would still need to pay the additional 3% stamp duty level for second properties). Talking to many of you Carlisle homeowners, I know lots of you are bringing forward your home moving plans to take advantage of this tax cut. Also, many Carlisle portfolio landlords are looking to save paying the tax by bringing their portfolio purchases forward.  Yet how do you ensure you sell and buy your Carlisle property whilst the tax cut applies (a saving of up to £15,000 of stamp duty on your next Carlisle home?).

The biggest issue whenever you are selling your Carlisle property is the properties that you are in competition with. Plenty of Carlisle homeowners have jumped onto the stamp duty holiday bandwagon since the announcement and there are 1% more properties for sale in Carlisle than there were during lockdown. The number of properties for sale in Carlisle can split down into type…

  • Detached Carlisle homes – down 3%
  • Semi-detached Carlisle homes – no change
  • Terraced / Town houses Carlisle homes – up 4%
  • Apartments in Carlisle – up 9%

So, now you know what you are up against, what do you need to know?

The most important factor is the time issue. It currently takes on average 17 to 19 weeks between a sale price being agreed and the keys being handed over, meaning you need to have found a buyer before the end of November or early December to enable you to complete the sale by the 31st March 2021. That means you really need to have placed your property on the market by the end of September and early/mid-October at the very latest to take advantage of the stamp duty holiday. Don’t get me wrong though, you could put your Carlisle property on the market after that date, yet the price you will be able to achieve for your property could be affected.

There are 1,074 properties on the market in Carlisle, of which 432 have sales agreed on them

Talking of price, or more specifically the asking price. There is a window of opportunity for Carlisle homeowners to take advantage of this stamp duty tax cut, yet don’t let local estate agents curry favour with you by tempting you with a high initial asking price to win the right to put their for sale board outside your Carlisle home.

A Which report stated in 2017 that many estate agents routinely over inflated the asking prices of the properties they brought to market. One might ask why this is an issue for Carlisle property sellers, as surely, they can just reduce their asking price at a later date? The excellent report proved that those estate agents who on the face of it appear to be doing you some kindness by endeavouring to get more for your home with a suggested higher asking price, the property often ended up selling for much less than similar properties that were realistically priced properties from day one and also, they ultimately took longer to sell!

This Which report compared the original asking price with final selling prices for 370,000 properties to ascertain how many estate agents had reduced the initial asking price of properties in order to sell them. Which found that 70,300 (19%) of all 370,000 properties sold had to be reduced by at least 5% in order to get the property sold, whilst the other 81% (299,700) had no or very minimal reductions to get them sold.

Of the 299,700 sold properties that weren’t reduced or reduced by less than 5%, the average initial asking price was £261,000, yet they eventually sold for an average sale price of £260,000. For those 70,300 homes whose asking prices were reduced by over 5%, whilst the average listing price was £266,000, their eventual sale price was only £241,000, a loss of £20,000 each. Even worse, those properties with the heavy price reductions (5% or more) took an average of nine weeks and one day longer to sell (when compared to the other properties with no or minimal reductions).

What that means is by over inflating your initial asking price of your Carlisle home, it will cost those Carlisle homeowners an extra nine weeks to find a buyer and they will lose out on the final sale price by some considerable margin (meaning you will also probably lose out on the stamp duty holiday).

Assuming your asking is price is realistic, you aren’t out of the woods yet. Other things that will help you get the best price for your Carlisle home in the best possible time (and thus save you money with the stamp duty holiday) are…

  • Everyone searches on the portals for their next home. Photos are therefore very important (a picture speaks a thousand words). If the weather isn’t good on the day of the photoshoot, ask the agent to revisit when the sun is out (and even tell them to hold off marketing the property until those pictures are perfect) … as you only get one go at being ‘new to the market’, with all the excitement and interest that causes.
  • Employ the services of a solicitor at the same time as instructing the estate agent. Bringing together the legal paperwork of the property you are selling. By doing so, you will save weeks between the sale agreed and completion. Also, solicitors will be really busy, juggling many property transactions at the same time in the next 200+ days. Anything you can do to get a head start on others can only help your cause.
  • Kerb side appeal. Look at your property from across the road. Does the front door need painting? Could a tonne of gravel spruce up your driveway? Maybe adding some hanging baskets and planted pots will help to make a home stand out for the best reasons?

The final piece of advice I can give you is if you are planning to sell your Carlisle home, make sure your Carlisle estate agent can show you proof of similar Carlisle properties and what they actually sold for to back up their suggested asking price. If the asking price isn’t realistic, the chances are you end up losing many thousands of pounds and wasting everyone’s time. If you would like to chat about selling your Carlisle home, please do not hesitate to pick up the telephone.

Nimbyism in Carlisle is Dead – Long Live the Planning Permission Rule Changes:

How will this affect the 40,229 Carlisle Property Owners?

The 1st July 1948 heralded a new dawn in how property was built, as the Town & Country Planning Act 1947 came into force, meaning no property could be built without the say so of the local authority. Now, Boris Johnson has announced a substantial change to that, by in effect, ending planning permission.
 
The decision of what gets built (and what doesn’t) will be removed from Carlisle District Council and replaced by Westminster governed ‘Zoning Commissions’. The anticipated reform will give presumptive building rights to any piece of land outside areas of outstanding natural beauty, green belt and national parks, although in the press release there was mention of protection for the countryside.
 
Travel to Europe and its common to see out of place haphazard development of new households or commercial buildings, surrounded by open countryside … so, I hope these new regulations protect us against that.
 
The principles of the planning rule changes are a departure away from looking at each planning application as a standalone application to a ‘zone-system’ of planning. Land will be divided into three classes: 1st for growth, 2nd for protection and 3rd for renewal. Anyone applying for planning permission to develop homes, offices and shops on land zoned for growth, will automatically be granted planning permission; whilst land zoned for renewal planning permission will be granted in principle while Government officers perform checks. Local authorities have until 2024 to designate areas for the three classes and once agreed, planning departments will have little or no say over individual applications that fit the rules.
 
Interestingly, these changes come on top of new planning regulations coming into force this September which gives implied rights to demolish any office building and replace with a block of flats, and the right to build extra floors/storeys on your home.
 
The Housing Secretary has specified the motive behind the changes to the planning system is not to make planning permissions easier to get (although 88% per cent of planning applications are approved by local authority’s already). Instead, they have been done to make the planning process quicker, less expensive and less likely to be held up by special ‘interest’ groups.
 
97% of planning permissions in Carlisle District Council were approved last year (compared to the national average of 88%)

Noteworthy, the planning rules were changed in 2016 to turn disused shops and office space into residential homes (called ‘permitted development’ rights), yet these new regulations about to be announced by Boris will take that right even further.  This is important because in 2019, there were 241,340 new households created in the country, yet 29,260 of those households came from turning disused shops and office space into residential homes (i.e. the planning permission rule changes made in 2016).
My concern is that the new planning rule changes do not make shop or redundant space into the new 21st Century ghettos. An RICS report in 2018 showed a massive difference between the conversion of office blocks with planning permission and those without (i.e. permitted development). What was interesting is that only 1 in 5 properties met the national space standards, a non-legally binding suggestion on the minimum size of home, minimum dimensions of bedrooms, natural light, storage & floor to ceiling height, whilst 3 in 4 of office block conversions that did obtain planning permission met the standard.
These planning changes cannot be a charter for cowboy builders or developers, otherwise your children or grandchildren could end up renting one of these sub-standard homes, thus stealing human dignity from thousands of youngsters who will end up renting these homes.
 
So, what does this all mean to Carlisle homeowners and Carlisle landlords? If you have been reading my articles you will know that one of the most important factors holding back the Carlisle property market is the lack of new properties being constructed and when they are, the lack of infrastructure surrounding them.
 
Since 1995, only 4,653 properties have been built in CA1/2/3
 
Yet, these new planning changes will also introduce a new method of taking a lot more money off landowners and builders, as the Government will take a larger share of uplift in land value (i.e. the increase in value from farmland to building land) to finance infrastructure around the development.  This would mean new housing developments would come with upgraded roads, GP surgeries, primary schools and shops that these new communities need to be viable. Also, communities will be asked to decide on their own standards on style and design for new developments in their area, allowing residents a greater say on the development in their locality.
 
Like all things, the devil is in the detail. All of us in Carlisle cannot deny that we need to build more homes to keep up with the ever-growing population and the fact that people are living longer. This new planning system should lead to more housebuilding, which in turn would increase the supply of property for those trying to get on the property ladder. Also, in the proposed legislation is the new ‘First Homes’ scheme, which would allow key workers, first time buyers and people who live or work in the Carlisle area to purchase their new home at 30% less than its market value and when they come to sell it, that 30% discount would be passed on to the new buyer (if they also met the criteria).
 
With regard to what can be built and where, Carlisle people will have a say upfront (i.e. between now and 2024 when the zoning rules are drawn up) but once the zoning has been established, then ‘nimbyism’ will become a thing of the past and hopefully we can construct the Carlisle homes we are proud of for our children and for Carlisle generations to come. 
 
Please do let me have your thoughts on this matter.