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Written by Mouriya

Category: Local Events

Published: 25 August 2021

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Leaseholders have long argued that leasehold reform is overdue. Finally, in 2021, we have seen a significant breakthrough.

The UK Government has agreed that the leasehold sector has far too many problems, including “disproportionate costs to extend leases, poor value property management and a slow and costly sales process”. In June this year, the Competition and Markets Authority (CMA) announced that multinationals Persimmon and Aviva had agreed to pay back money to some of their customers. The repayments resulted from an ongoing investigation by the CMA into what has been described by some as a ‘leasehold scandal’.

What Were the CMA’s concerns?

Flats are generally owned on a leasehold basis. However, in recent years, the leasehold has increasingly been used for new build houses. There have been instances where leaseholders were quoted a price to purchase the freehold of their property, only to find that the price had changed – sometimes by thousands of pounds. At the same time, leaseholders of new-build properties discovered that clauses in their contract led to ever-increasing bills for ground rent.

Why Did Aviva and Persimmon Make Repayments?

The REaLM Ground Rent Fund, with approximately 44,500 leasehold units, is owned by Aviva Investors. Leaseholders anxious for ground rent reform had complained about clauses in their contracts that allowed the company to double the ground rents payable, with costs rising at regular intervals of 10 to 15 years. Doubling clauses can affect leaseholders’ property rights, causing difficulties for people who want to sell or mortgage their homes.

Following the CMA’s investigations, Aviva has agreed to refund the money paid out by homeowners under this contractual agreement. The company has also pledged to remove the clauses that inflated ground rent payments from future contracts.

The CMA also investigated construction giant Persimmon plc. Although the company has stopped selling leasehold houses, problems arose over high charges for leasehold enfranchisement. Following the CMA’s intervention, homebuyers will now have the option to purchase the freehold at a discount. Persimmon will also refund some money to customers who previously bought their freeholds.

What Progress Has Been Made So Far?

The CMA has opened a number of cases investigating potential breaches of consumer protection law in the residential leasehold sector. Throughout this year, the organisation has continued to engage with relevant businesses, gathering information and resolving instances of mis-selling and unfairness. After its recent successes, the CMA has urged other companies under investigation to follow the example of Persimmon and Aviva or face legal action.

The Law Commission has also reported on leasehold reform in response to a request by the Government. Since then, legislation has been introduced to give watchdogs more power to intervene. In June this year, the Government published a bill intended to enhance legislation enacted in the Leasehold Reform Acts of 1967, 1993 and 2002. The Leasehold Reform (Ground Rent) Bill permits Trading Standards to demand fines of up to £5,000 from freeholders charging unfair prices.

There is still a long way to go, but the new Bill, together with actions taken by the CMA and the Law Commission, should send a strong signal to any developers or investors who levy inappropriate charges.

As leading estate agents in London, we aim to keep up to date with information that could benefit our clients, so we have been watching these developments with interest. If you are currently looking for properties for sale in London, we would be happy to help you find your ideal home. Simply contact one of our property experts and let them know what you are looking for. 

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Written by Mouriya

Category: Local Events

Published: 11 August 2021

Hits: 2032

Our attitude to property ownership is changing. These days, a second home investment means more than simply having a lovely pied-a-terre to visit from time to time. It seems that we are moving away from the traditional idea of staying in a single, primary residence for most of the year.

The Lifestyle Advantage Of Multiple Homes

Regular business commitments, the pursuit of leisure opportunities and catching up with family are just some reasons why homeowners nowadays prefer to share their time between several homes.  

Another important consideration is convenience: when you turn the key in your own front door, you know that everything from the configuration of your TV and sound system to the wine in your fridge will be just as you want it to be.  

For those who regularly travel between different countries for business, a second investment property can significantly improve work/life balance. While staying at a hotel may offer certain benefits, you can avoid the hassle of having to pack and unpack, not to mention the disturbed sleep patterns that often result from sleeping in an unfamiliar bed. 

With no check-in, no fuss and no time needed for ‘settling in’, you can get on with your busy schedule as soon as you arrive.

Buying A Second Home In London

The UK property market has long been recognised as an investment haven, offering excellent returns for long-term investors. So naturally, many second time home buyers in the UK are attracted to London because of its status as a global business and cultural hub. 

Prime London prices are just beginning to rise again after five years of political and economic uncertainty, so this could be the ideal time to buy a second home in the capital.

But how do you obtain a mortgage, and what are the tax implications, mainly if you are an overseas buyer purchasing a property in London?

Securing International Mortgages For Uk Properties

This year the number of mortgage products on the market has reached an all-time high. However, while UK-based buyers will find plenty of products available, overseas investors seeking a mortgage for an international property purchase may have a more limited choice. 

If you are a non-UK resident, most lenders will undertake thorough identity checks and expect you to have a traceable credit history within the UK. 

If you are paying a mortgage on your present home, you may find the mortgage requirements are more challenging when you apply for a second mortgage, as you will be seen as a higher risk by the lender. 

This will apply even if you eventually intend to make your second home your primary residence.

Generally speaking, if you are seeking a mortgage for a second home, it is advisable to obtain specialist advice from a mortgage broker.

How Much Stamp Duty Will I Pay For A Second Home In 2021? 

Homebuyers purchasing a second UK residential property (whether that is a second home, buy-to-let investment or holiday home) will pay a 3% Stamp Duty Land Tax (SDLT) surcharge on top of the usual Stamp Duty rate. 

The Stamp Duty holiday is now drawing to a close. Still, currently, no Stamp Duty will be payable on £250,000 of a residential property's value if the property transaction completes by 30th September 2021. After that date, the SDLT rate will return to £125,000.  

Buyers who are not residents in the UK must also pay a surcharge of 2% when purchasing a residential property. Individuals who have spent less than 183 days in the UK in the twelve months before the date of their purchase will be treated as non-UK residents. 

However, if they spend a minimum of 183 days in the UK in the 12 months following the purchase, they may be eligible to claim a refund.

Next Step Towards Your Second Home Investment

If you are thinking of buying a second home, our experienced sales team would be happy to advise you. As estate agents specialising in both London luxury homes and overseas investments, we can offer you the widest possible choice of properties.  

Why not browse our properties for sale in London or get in touch and tell us what you are looking for?

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Written by Mouriya

Category: Local Events

Published: 06 August 2021

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With just a few weeks to go until the start of a new school year, many wealthy families are settling into homes that have ensured places in some of London’s most sought-after schools.

Even the exceedingly wealthy are forgetting private schools, which are culturally passé. More than that, boarding has lost its charm too, says Nina Harrison at Harington buying agency. “Even if you’re considering it, [it’s not] a gentle walk through beautiful Knightsbridge streets with the nanny and the Cockapoo,” she explains. “The closest ones are an hour’s drive if you’re lucky.”

Instead, residents of areas where the average house price runs into multi-millions are looking to state education.

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Written by Mouriya

Category: Local Events

Published: 30 July 2021

Hits: 1836

City centre landlords are cashing in as surging tenant demand means yields have jumped this year.

So far in 2021, the average investor purchasing a buy-to-let in a city achieved a gross yield of 5.3pc, according to Hamptons estate agents. This was boost of 0.6 percentage points from 2020, when returns slumped in the wake of the pandemic.

By contrast, rental yields of properties in the countryside fell 0.2 points due to rapid house price growth in the past year.

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Written by Mouriya

Category: Local Events

Published: 28 July 2021

Hits: 1739

Our recent experience with a first-time buyer demonstrates that clients aren't always aware of the right questions to ask when viewing a house. When our BHHS Sales team encountered a young mother-to-be whose heart was set on buying a Marylebone apartment, we were able to support her to make the right decision.

When one of our sales advisors took a call from a young woman called Sofia Chiellini, they were happy to arrange a viewing with her for a two bedroom property in Marylebone which she liked because it looked “light and airy” and aesthetically pleasing.

Once booked, it was at this stage she mentioned she was a single, first-time buyer looking for an apartment in central London and was expecting a baby in the next few months. Our sales agent wanted to suggest some more properties that may also be suitable for her needs to compare but she emphasised that she was only interested in this apartment.

Viewing an Older Property

The property was a well-appointed two bedroom apartment located in one of Marylebone’s attractive, Edwardian red brick mansion blocks. On the day of the viewing, Sofia was met by the member of our sales team, with the appropriate keys and brochures.

Although Sofia was excited to view the apartment, she was also keen to take in the aesthetic of the lovely period building as she had always wanted to live in something that looked historical but elegant. Our agent was starting to become aware that she was focussing more on the aesthetics than the practicality of the building so in the meantime, he was able to tell her something about its history, which he discussed can improve the value of a property.

While age and history can add value to a property, as a buyer it’s important to know what to look out for when you are viewing a listed house, or an apartment in an older building. If the property is listed, you should be aware of the implications of the grading system with regard to any future changes you might want to make. In the UK, historic buildings are listed as Grade II, Grade II* or Grade I, with Grade I being the most unique and important classification. With appropriate permissions you may be able to make some modifications to a listed building, but the higher the grade, the stricter the rules concerning alterations. You should also check whether any unauthorised changes have been made since the building was listed and what routine maintenance it will need.

All older properties may need more care and attention, and that’s something that our agent was able to mention during his discussion with Sofia.

The Risk of Buying with Your Heart

After several minutes admiring the block’s architecture, the pair took the lift to the third floor. On entering the apartment, Sofia excitedly rushed from room to room: commenting on everything from the attractive wet room tiling to the view from the master bedroom. It was clear that she had set her heart on the property, but our agent was aware that Sofia was in danger of buying with her heart, not her head.

There were several things she needed to consider. For instance, would she be able to fit her baby buggy in the small, old-fashioned lift? Had she considered she was slightly further away from the desired local schools? Although Sofia was keen to make an offer then and there, our agent felt that with a baby on the way, it was essential for her to be fully aware of anything else that might effect her when buying a house and any complications it could bring to her required lifestyle needs.

He went on to suggest that they make a quick house viewing checklist together. When you are viewing a property, it’s always advisable to come equipped with a list of questions to ask. Aside from the more obvious things, such as the size of rooms and overall condition of the property, you could look out for:

• Heating – when were the boiler and heating system last updated?
• Electrics – is the distribution board and wiring up to date?
• Security and safety – is the property overlooked, how secure are the access points?
• Kitchen – does the integrated equipment (washing machine, drier, fridge dishwasher) fit your lifestyle needs?
• Outdoor space – what is the orientation of your outdoor space? Will it receive the sun such as south-facing?
• Parking – is there the added benefit of parking or if not, what is the price of street parking and relevant permits?
• Neighbourhood - is the street noisy or quiet? Is the property close to local shops, bars and restaurants?
• Transport - are there bus routes, underground stations or train stations within easy reach?

An Informed Offer

Thankfully, our agent was able to go through everything with Sofia that might affect her and her baby’s life not only now but in the future and was able to answer anything specific in regards to her pregnancy needs that she hadn’t been focussed on asking before. Once she was aware of the all the advantages and disadvantages, she felt even more confident to make an informed offer guided by our agent. A few days later, our agent was delighted when Sofia's offer to the vendor was accepted.

While our agent felt that the apartment would have always been a great option for Sofia, he wanted her to consider her particular lifestyle needs first and all the practicalities they may bring. One advantage that he considered early on was that the apartment block was portered, an option that Sofia had previously been unaware of. Our agent was able to point out that it could be a real bonus in terms of the added security, support and trust she could expect as a single mother with a baby.

We Thrive on Happy Property Journeys

Owning a property is a big responsibility, and with most first time buyers there comes a moment when they experience doubts. As the transaction progressed, our agent was always there for Sofia, talking things through whenever she needed reassurance.

Fortunately, owning the apartment has turned out to be an excellent move for Sofia. Her baby, Theo - now six months old - is thriving, and she enjoys taking him to meet other young mums in nearby Regent's Park.

The support we were able to offer Sofia demonstrates BHHS London Kay & Co's commitment to be a 'Forever Agent.' As experienced estate agents in London, we'd love to help you find your ideal new home, so why not call us to start your home search today?

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Written by Mouriya

Category: Local Events

Published: 27 July 2021

Hits: 3062

The Westminster City Plan 2019-2040, formally adopted on 21 April 2021, sets out policies that will determine all future planning applications in Westminster for the next nineteen years.

It has been one of the most highly anticipated local authority policy documents of recent years, but one aspect of the plan has raised questions amongst property investors and developers.

What Does the Plan Aim to Achieve?

Westminster is one of the capital’s largest boroughs, extending from St John’s Wood in the north to Pimlico in the south. This area is densely populated area (with 12,000 residents per square mile compared to the London average of 5,700) but is, understandably, also a place of sharp contrasts, where pockets of less wealthy communities are found within walking distance of some of London’s most expensive homes.

Westminster Council’s commitment to providing priority housing for less wealthy residents has been demonstrated by their choice-based lettings scheme, which has been operating in Westminster since 2004.

Therefore, it is not surprising to hear that the council aims to provide more affordable apartments and houses for sale under the new Westminster City Plan.

Under the Plan, the current minimum percentage for developing new, affordable Westminster real estate is set to increase, rising to 35% for new developments or 50% if homes are built on land owned by the public sector.

In recent years the borough has been keen to show that it is pushing back against the ambitions of super-rich developers and homeowners.

In 2016 it introduced rules to limit the size of basement developments, and it has also rejected some high profile planning applications. One example is the Qatari royal family’s plan to combine two Grade I listed mansions in Regent’s Park into a lavish palace with 17 bedrooms and 14 lounges.

Westminster Council also aims to create a positive environment for business growth and improve retail and cultural offers whilst enhancing the area’s built and natural environment. Another important aim is that of reaching carbon neutrality by 2040. The Plan states that all significant developments must be zero-rated for carbon, with a payment system in place to offset any emissions above zero.

Why is Westminster’s New Homes Policy Creating Controversy?

One of the more controversial aspects of the plan is the decision to cap the size of any future developments, and in future, they will be limited to just 200 square metres.

The council intends to optimise land use by encouraging the construction of more individual units. However, their decision, which effectively rules out the construction of super-apartments, has implications for the prime and super-prime property market.

Going forward, there will be two choices for buyers in Westminster: either purchase one of the smaller properties that will become available through new development projects or buy existing housing stock.

Creating a Rarity Value for Large-scale Properties

Over the past few years, developers have been busy building apartments that exceed the 200 sqm minimum size in anticipation of the rule change. They are aware that the size limitation for future developments has the potential to drive up the value of existing large-scale properties in Westminster.

At the same time, the desirability of larger homes has been further enhanced during lockdown: spacious, light-filled properties with home office rooms and views over open green spaces are now greatly in demand. Owners of super-sized apartments in Westminster are therefore likely to see a significant rise in the value of their properties in future. This is likely to create a two-tier market where the price per square foot of homes in excess of 200 square meters are likely to be higher than those sub-200 square metres. This would suggest a potential higher capital value gain for those who purchase these homes now while there is still new supply in the marketplace.

Berkshire Hathaway HomeServices London is one of the leading estate agents in London. As specialists in luxury property, we have been watching recent developments with interest.

If you are interested in large residential properties in the City of Westminster area, either as a home or an investment, we would be delighted to advise you on your search.