Property Doctor Archives

Jul 27

Leasehold Law Review welcomed, but developers will find a way around it

With the news that the Government is planning to scrap ‘unfair’ leaseholds on new build houses in England, Emyr Pierce, Managing Partner at Emyr Pierce Solicitors, thinks this could have major repercussions for Wales where there are significantly more leasehold houses.

Emyr said, “In England the existence of leasehold houses is a relatively rare commodity whereas in Wales, historically, it has been more commonplace.

“For example, a large part of Cardiff at one time consisted of leasehold houses let on 99 year leases at a nominal ground rent as the land was owned by wealthy land owners such as the Marquess of Bute and Earl of Plymouth. As a result, the purchase of freehold interests in leasehold houses is something with which Welsh lawyers are more than familiar.

“It seems that politicians in England are focusing on the fact that developers nationally are looking to make an even larger profit on the sale of properties by selling them as leasehold and then selling their freehold portfolios in their developments to investors.

“Investors will buy freehold portfolios as they can prove very profitable initially, by charging for consent to carry out alterations which in turn can result in a higher rent or ultimately, charging for either extending the lease term or simply selling the freehold interest of each individual house.

“The mechanism for selling freehold interests in leasehold properties has been governed by the Leasehold Reform Act since 1967 and, in its amended form, enables an owner of a leasehold house the right to purchase the freehold interest after owning the property for two years (no longer having to actually occupy the property for this period) provided the property meets certain valuation criteria set out by the Act. The method of calculation is laid down by statute and the ultimate remedy for unhappy purchasers is to refer the matter to the Lands Tribunal.

“The news this week appears to focus on the fact that developers are now looking to add to their source of huge profit by selling new plots to unsuspecting purchasers as leasehold, and not freehold, without fully explaining what this entails.

“Ultimately it is the buyer’s lawyer’s responsibility to explain to purchasers the difference between freehold and leasehold and the possible cost implications of purchasing a leasehold property.

“This attempt to outlaw the sale of new build properties as leasehold rather than freehold is indeed welcomed as the only people losing out would be the developers. It would remove the opportunity to make more money at the expense of the home owner in the future. However, it will not control the prices at which these new build houses are sold, so the developer may respond to such legislation by simply adding on an additional figure to the asking price to compensate them for any sum that they would otherwise have obtained from selling the freehold interest to an investor. The consumer would therefore not necessarily be protected, contrary to the intention behind any such legislation.”

Emyr Pierce is Managing Director of Emyr Pierce Solicitors in Rhiwbina, Cardiff, specialising in Domestic and Commercial Property.

For an immediate quotation or discuss your requirements with a specialist, please telephone us on 029 20 616002 Monday to Friday 9am to 6pm and on Saturday 10am to 4pm or visit www.emyrpierce.co.uk or email us at law@emyrpierce.co.uk. For more information on our commercial property expertise, please visit https://www.emyrpierce.co.uk/commercial-property.

Nov 10

Take the stress out of moving

You’ve had an offer accepted on your dream house. Now what? In the first instance you need to instruct a Solicitor who will liaise with the Sellers’ Solicitors to ensure that appropriate searches are carried out, that all enquiries are dealt with, that your mortgage offer is in hand and that the title to your property is in order before you commit to the purchase.

But how do you know who to choose? Here, Emyr Pierce, Managing Partner of Emyr Pierce Solicitors in Rhiwbina, sets out your eight-point guide to appointing your Conveyancing Solicitor.

Get advice early – moving house can be a daunting journey particularly if you are a first time buyer. A firm such as Emyr Pierce Solicitors are happy to listen to your concerns and discuss preliminary issues or queries to help steer you in the right direction and point out potential pitfalls at the very outset.
Speak to your Solicitor first before you do anything else so that you can receive impartial advice and guidance before you commit to any other financial obligations.
Do not necessarily go with your estate agent’s recommendation – particularly if there is commission payable to the agent for such a referral.
Fixed fees — specialist Conveyancing Solicitors, like us, will charge fixed fees. We offer highly competitive quotations and happily provide a detailed breakdown of costs and disbursements at the outset, calculated to the penny, so you can budget accurately and with confidence so there are no “hidden” extras to surprise you at the end of the transaction.
Choose genuine specialists – Solicitors accredited with the Conveyancing Quality Standard (CQS) are experienced specialists in the field of residential conveyancing so that you can be sure that you are being looked after by experts.
Accessibility – choose a Solicitor who is available at times to suit you. We recognise that our clients have busy schedules so our offices are open on Saturdays and later than you would expect on weekdays.
Competent and quality services — our lengthy list of positive client testimonials emphasises the level of our competence and endorses the quality of our services.
Access to other quality professionals — it is equally important to have access to other reputable and respected professionals. We work closely with established specialists in other professional fields in order to provide you with access to a wider range of expertise if required during the house buying process.

Emyr Pierce Solicitors provide a comprehensive range of Conveyancing Services to include, sales, purchases, re-mortgages, deeds of gift, equity releases, transfer of equity and a dedicated auction service.

For an immediate quotation or discuss your concerns with a specialist, please telephone us on 029 20 616002 Monday to Friday 9am to 6pm and on Saturday 10am to 4pm or visit www.emyrpierce.co.uk or email us at law@emyrpierce.co.uk.

Aug 10

Cut in Interest Rates

Interest rates cut after brexit

The Bank of England has cut the benchmark base rate from 0.5% to 0.25% after more than seven years of no change. This is clearly a direct attempt to boost the UK economy in the wake of the ‘Brexit’ vote on 24 June.

There is no question that the immediate effect of the referendum vote has had a dramatic impact on the financial markets and the Bank of England is clearly stepping in now, rather than next month as was originally anticipated, to make this cut.

This is usually an indication that the value of the British Pound, share prices and decision making on the part of potential house purchasers have all taken a substantial hit over the past few weeks.

We have found that particularly in the South East of England buyers have withdrawn from on-going transactions concerned that the fall in the value of the Pound and the adverse impact on financial markets could result in a fall in house prices. With house prices raging ever upwards in London and the South East in particular any drop in prices will have a substantial impact in those areas.

Arguably in Wales, the impact should be somewhat smaller but this does not detract from a general nervousness on the part of purchasers who clearly do not want to pay over the odds for properties which in 12 months’ time could be worth substantially less.

Information coming through indicates that the construction industry have identified a sharp slowdown in production recording its worst month in seven years for June 2016.

What effect of the Brexit vote have we seen locally?

The reality is very little, but the signs are that the nervousness and the inevitable impact by way of falling house prices, will make mortgage companies more cautious, valuers will be cautious when valuing properties for mortgage purposes and potential buyers will be extra cautious in their pursuit of new properties.

One major effect of a reduction in price of property will be the hit to investors who have increasingly been investing in the property market rather than savings due to low interest rates. This further reduction in interest rates will put greater pressure on investors to look elsewhere for a reasonable return on their money resulting in purchasers being available in the market place but unwilling to offer the prices currently being asked, leading sadly to the inevitable fall in house prices which has now been forecast for the coming 12 months.
On the other hand, the news is not all bad as the cost of mortgages will fall for the time being.

Whilst a number of first time buyers have fixed rate products and therefore will not benefit from a further reduction in interest rates, those who have tracker mortgages will gain as the interest rate on their product follow the movements in the Bank Base Rate. Those borrowers looking for new mortgages may find that the fixed rate products offered by the financial institutions will also become more competitive as lower fixed rates may be offered, but again this will depend entirely on the confidence that the banks and building societies may have with regard to future interest rates.

The uncertainty following the ‘Brexit’ vote may well result in the banks and building societies electing to err on the cautious as ever and not pass on the reduction in the Bank Base Rate to new borrowers as they fear that such a short-term incentive on the part of the Bank of England may not prove successful in the long term with interest rates having to rise should the country face greater financial hardship as a result of the vote.

Have a question? Contact the Cardiff conveyancing team >

Aug 10

What effect will the Brexit Vote have on the Housing Market?

Property Conveyancing Cardiff

With the announcement that the supply of homes in the UK market fell at its sharpest rate to date with buyer demand hitting an eight year low following the ‘Brexit’ vote, it appears that a fall in house prices is being anticipated. The RICS expect prices to fall in the next few months.

While this may be attractive to potential first time buyers, it will most certainly be bad news for property investors and existing home owners.

The fall in supply to the market is down to potential sellers uncertain if now is the right time to sell following the recent referendum result. The dramatic ‘Brexit’ result, combined simultaneous with political uncertainty and instability with leadership changes in both leading political parties, has left the housing market in somewhat of a turmoil.

The Government has moved quickly to try and stabilise matters with a prompt election of a replacement Prime Minister, but the rocky road ahead is an unknown one for both politicians and investors alike.

The housing market has always found its own “norm” within a matter of months, but the fear is that an inevitable fall in house prices will in turn reduce the supply of properties for sale as potential sellers elect to stay put and wait to see what happens.

This is often the case when there are dramatic changes in either economic policy, Stamp Duty or other taxes, or changes in interest rates, but this current position is a little unusual as we have a drop in interest rates combined with uncertainty in the financial market place and predictions of an inevitable fall in house prices.

Have a question? Speak to the team >

Jul 22

Can I claim against survey oversight?

I have just discovered that the house I bought three years ago has subsidence. We had a full survey carried out before we bought and this was not spotted. I am insured but will have to pay a hefty excess for the repairs. Can I make a claim against anyone for this oversight?

YOU need to obtain an independent report from a Building Surveyor or Structural Engineer to establish whether or not the problem existed at the time you bought. A building surveyor will advise as to whether or not your surveyor should have identified any tell-tale signs that should have been picked up in an ordinary homebuyers or structural survey. If the Report is favourable, then you may have a claim against your surveyor for professional negligence. You should seek the advice of a solicitor specialising in professional negligence. You should also investigate the possibility of the problem being covered by your building’s insurance policy as this may be an easier and more direct way of recovering the cost of the remedial works. In the event of a successful insurance claim, you may still have the right to claim any uninsured losses direct from your surveyor, such as any excess, should you be able to prove negligence. As with all such litigation the cost of pursuing it must be weighed up against the overall cost of the works.

Jul 18

Can I be forced to paint the outside of my house?

Forced to paint your house?

MY neighbour is having the outside of his house painted to put on the market and mine is looking very tatty next to it. He says the state of my property is now affecting the value of his and has asked me to get mine repainted. He is threatening me with his solicitors. Can he do this?

NO he cannot. If your property is very dilapidated due to lack of maintenance then the only remedies available to your neighbour would be a local authority enforcement notice declaring the property to be in a dangerous state which would require you to carry out urgent repair works for health and safety reasons, or action by an estate owner who may have the benefit of a restrictive covenant for repair should you live on a development where all properties are subject to various covenants including an obligation to keep the property in a good state of repair, and to decorate the exterior of the property, say, every five years.

Jul 14

Do I need Planning Permission for my boat?

I am considering buying a boat, but the only place I can keep it during the winter months is in the front garden in full view of the neighbours. Will I need Planning Permission for this?

The first thing you need to establish is whether your property is subject to any restrictive covenant preventing you from placing or storing a boat on your property. Many properties are subject to covenants or restrictions preventing the storing of anything other than domestic vehicles on their properties.

Planning Permission is not mandatory in such circumstances, but you will be well advised to check with the local authority planning department first in order to ensure there is no objection. If you can fence around the area where the boat will be stored then this very often helps in appeasing the neighbours, who can see that you are making efforts to consider them by screening what many may regard as an eyesore.

As with all potential planning related issues it would be courteous to discuss this with your neighbours to establish that they have no objection to your storing the boat on your property. Even if there was a restriction on the title preventing you from doing so, it is less likely to be enforced if you have the support and backing of your neighbours. After all, breaches of covenant are often raised directly as a result of objections received from neighbours who are often subject to similar restrictions.

Jul 10

Do I still have to pay my rent after I’ve moved out?

In my Tenancy Agreement there is a clause stating that if I wish to terminate the agreement and move out, I will still have to pay my landlord until a new tenant is found. Is this lawful?

All residential short-term Tenancy Agreements granted for a fixed term of at least six months, but not exceeding 12 months, are deemed to be Assured Shorthold Tenancies. These fixed term tenancies ensure that both the landlord and tenant are committing to a fixed period of a minimum of six months and a maximum of 12 months.

Should you wish to terminate this agreement before the end of the fixed term you may well have to pay your landlord rent for the balance of the agreed contractual term of the Tenancy Agreement unless your landlord can find an alternative tenant to take the premises within that period, in which case the landlord may, but is not obliged to, release you from the terms of your Tenancy Agreement before the end of the fixed term.

If you continue to occupy beyond the fixed term period specified in the Agreement then the Agreement can be terminated by either party giving the other notice to terminate as specified in the Agreement. Provided these notice periods are adhered to then you will be free to leave. Any Tenancy Agreement containing such a term stating that you are obliged to continue to pay rent until an alternative tenant is found for the property is not only unusual, but would probably be unenforceable and considered to be an Unfair Contract Term in so far as it relate to a period beyond the fixed term of the tenancy. The position should be easily clarified by talking to your solicitor.

Jul 6

Can we withdraw our offer?

My partner and I have made an offer on a house which has been accepted and we would due to exchange contracts next week. She has now said it is too soon for us to live together but I can’t afford to buy on my own. Can we walk away from this, or is it too late?

Fortunately, it is not too late as you may withdraw from any transaction prior to contracts being unconditionally exchanged. Despite your being virtually on the point of exchanging contracts, it is possible for either party to withdraw from the transaction. You are, therefore, free to withdraw without any obligation to indemnify the seller for any of his abortive costs or for any inconvenience caused.

A late withdrawal like this often infuriates the innocent party as they have no recourse to make any claim for the recovery of their abortive costs. All you can do is apologise to the seller for your late withdrawal, which is due to a change in your personal circumstances which are clearly beyond your control.

Jul 2

How do I find the owner of the wasteland that I want to buy?

There is a small plot of wasteland at the side of my house which I would like to buy to extend my plot. I have asked around but no-one seems to know who owns it. How do I find out who the owner is?

This is a very common problem. While the majority of land throughout England and Wales continues to become registered land with details registered at HM Land Registry, numerous pieces and parcels of land (many where ownership simply is not known) remain unregistered.

With unknown parcels of waste land it is often difficult to identify the actual owner. You can make enquiries either direct through your solicitor or direct to the Land Registry to establish whether the land is registered. If it is, then identifying the owner is a relatively simple process as you simply obtain a copy of the title which will identify the name and address of the proprietor. If the search shows the land is unregistered, then it is very difficult to establish who the true owner is, particularly if enquiries in the immediate locality prove unsuccessful.

You are, therefore, left with the prospect of having to take steps to claim the land as yours. This will involve initially ensuring that the land is enclosed within your own property in order that you may show that you have enjoyed uninterrupted occupation of the land. You will need to swear a Statutory Declaration evidencing the period during which the land has been occupied solely by you without any interruption or claim from the rightful owner. You can apply to the Land Registry for Possessory Title to the land based on appropriate evidence in support.

If, however, at some time in the future the true owner lays claim to the land then the Land Registration Act 2003 makes it easier for the lawful owner to do so upon production of proof of title – despite the fact that you may have occupied the land for the previous 10 years or so.