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JUL
28

The Property Update; July Newsletter

london skylineWhether you voted to leave or remain, it's true to say that both the residential and commercial property markets have felt the effect of the ‘leave’ vote.

It's still too early to identify the underlying effects, but our specialist property lawyers noted that almost immediately some purchasers indulged in 'gazundering'. One purchaser, a banker, decided to reduce his offer on the date of exchange (which fell on the day after the referendum) by 25 percent, an offer which was abruptly rebuffed by our client, the vendor, and the sale fell through. However, the majority of all our property transactions completed normally during this period because our clients kept cool heads.

Our multi-lingual lawyers have stated that thanks to the pound being at its lowest level for over 30 years and record low mortgage deals on offer, that there has been renewed interest from foreign investors from the USA, Italy, France, China, South East Asia, Qatar and UAE, and they have dealt with a large number of such enquiries.

 

First Time Buyers

There has been a surge in First Time Buyers during the first two quarters of 2016, i.e. pre-Brexit. According to the Halifax, an estimated 154,200 stepped onto the property ladder for the first time.

The average age of such a buyer has now increased to 33 years old and is very likely to have been assisted by the Bank of Mum, Dad and Grandparents, who will lend/give an estimated £5billion to their offspring this year.

It seems that there is also a marked increase in the numbers of couples buying for the first time. Most of these types of buyers are buying well under the stamp duty limit, especially those buying outside London and the South East. There has also been a growing trend for young purchasers to purchase a 'buy to let’ property initially, with the intention of selling on in order to buy their first residential property. These individuals should take immediate advice, because they may find themselves facing a 3% Stamp Duty surcharge when selling that original property.

Additionally, those parents who own the properties that they live in but have added their names to their off springs mortgage may also find themselves in the same predicament - take advice now should you be in that situation.

 

Is this a good time to buy?

There are some stunning mortgage deals on the market at the moment; in fact, mortgages are at their lowest level to date. With the prospect of a Bank of England cut in August, lenders are looking to increase the volume of their mortgage sales.

So for a buy or re-mortgage from this prospective, it seems the answer is yes.

Additionally Santander, working with Legal & General (and equity release specialist Key Retirement) has just launched a lifetime mortgage, an acknowledgement that the days when a buyer could expect to pay off his or her mortgage within 25 years have now gone.

Certainly there has been a correction in price levels at the very top end of the London market, (this has been happening since 2014), RightMove in its July report state that post Brexit there has been a reduction of .9% (a UK average of £2,647) in prices of those properties coming onto the market in July. With the enormous uncertainty following Brexit that trend is likely to continue.

It has also been reported to our property lawyers that developers selling on 'off plan’ properties are reducing their prices markedly and this has attracted a great deal of interest from foreign investors. One word of advice; don't buy in the larger of developments of smaller flats where there are likely to be any number coming onto the market. There has been a definite slow down in the London new build market so there could be some great bargains there.

 

Downsizing?

Senior and mature property owners have recently been warned by Government not to look to their home as an additional source of income to fund their retirement, in fact it was described as a 'very risky strategy'. Once would be 'downsizers' have done their figures, it's likely that it will not be such a lucrative move.

There is also a huge demand for bungalows, which now command an average 16% premium. These properties are now rarely built by developers, older bungalows have traditionally been built in large plots with big gardens and there is often the potential to build on top of the original property, so they are an attractive proposition for older buyers and developers alike.

A third of equity release customers over 55 years of age still have mortgages and a large number of these have interest only mortgages.

 

Commercial Property

British Land have stated that post Brexit they expect that both tenants and investors will be very cautious.

This is against a background in which investment in commercial property has slumped over the last two years in any event. It is accurate to say that there has been a decline in commercial property prices, and of course there was enormous publicity following several property funds stopping withdrawals by their investors when facing the prospect of an avalanche of redemptions. However, there is evidence that SME’s (small medium enterprises) are bucking that trend.

The technological, media and creative industries in London have been the fastest growing sectors over the last 5 years. These (often young companies) want flexible working space - in admittedly cheaper areas -following the latest trends in 'agile’ working (hot design / working remotely etc.) The business life cycles of these SME are much shorter than traditional companies, so business owners are unwilling to commit to long leases any more. These tenants are more demanding and it pays commercial landlords to engage regularly with these tenants, rather than wait to for lease renewal dates.

 

If you require assistance with any prospective purchase or sale of any type of property in England and Wales, please contact our experienced specialist property (Real Estate) lawyers on 0207 387 2032 or use our online enquiry facilities at www.lewisnedas.co.uk

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JUL
06

London Property Market - A Real Opportunity for European Buyers

housing squareThe majority decision of the British electorate on 23 June 2016 to leave the European Union heralds a new dawn in the property market.

The uncertainty created by ‘Brexit’ has created new pricing opportunities for buyers who may otherwise have been unable to afford their first property purchase and encouraged overseas buyers, attracted by the cheaper pound, to purchase an array of properties at the higher end of the market.

Moreover, those clients who are selling their main residence and buying a new one, are now exercising greater flexibility in their pricing strategy. By accepting in some cases a lower price on their sale and successfully negotiating a larger discount on their related purchase.

The British Government as well as the Bank of England have also issued important and decisive policy announcements to embolden the country’s economy in today’s new era. Macro-economic policy changes include the Chancellor’s recent statement that he intends to lower the rate of Corporation Tax to under 15%. Mark Carney, the Governor of the Bank of England, has also stated that the Bank will step up its monetary measures to increase overall levels of confidence in the nation’s economy. Parts of the British press also believe that Mr Carney has already signalled his intention to lower in the near future, perhaps by this August, the benchmark rate of interest from 0.5% to 0.25%.

At Lewis Nedas Law, we as a team of property professionals are geared up for this new frontier in transactions- as we offer a Partner led group of conveyancers who can act quickly to achieve your objectives.

We also act for overseas clients from a range of countries including France, Spain, Italy and beyond- who require a more hands-on approach and greater level of advice during the course of their transactions.

To our prospective French speaking clients, we say: Nous vous invitons à considérer notre cabinet d'avocats. Nous offrons un service amical et un prix compétitif.

To our prospective Italian clients, we say: Vi invitiamo a prendere in considerazione il nostro studio legale. Offriamo un servizio amichevole e prezzi competitivi.

To our prospective Spanish clients, we say: Damos la bienvenida a considerar nuestro bufete de abogados. Ofrecemos un servicio amable y un precio competitivo.

And to one and all, we say: Welcome to Lewis Nedas, where we offer a friendly and competetively priced service on a range of property transactions.

 

If you are about to embark on a property transaction, please call Richard Greenby, Senior Associate  in our Property Dept on 0207 691 4560 for a free quote, or complete our online enquiry form here.

 

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JUN
17

More Warnings for those who buy former Local Authority Properties on Estates or High Rise Buildings

housesAfter decades of underinvestment, many local authorities are having to find huge amounts of money to fund major works, and purchasers have found themselves presented with huge contribution bills.

The Guardian reports that in Oxford, 50 local authority property purchasers have been presented with bills of £50,000 each) towards these major works - there are no 'right to manage ' provisions which are available to leaseholders in the open property market, and those who cannot afford to pay are finding themselves having to surrender amounts of their equity to the local authority in lieu of payment.

It's an expensive lesson, but before buying such a property, do your research and make sure that your solicitor asks the right searching questions of the local authority and their plans for the future.

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JUN
16

A Buoyant Year End for HMRC

HMRC logoHMRC had a buoyant year end in March 2016, as a result of the Stamp Duty increase deadline; a record high in stamp duty receipts was recorded.

A YouGov survey concluded that the majority of public opinion gave overwhelming support to the increase in stamp duty, because they believed that the benefit will be passed to First Time buyers. The outcome remains to be seen.

Things became more difficult for HMRC when in an embarrassing (for them) judgement handed down by the Court of Appeal, it was pointed out to HMRC that they had pursued the wrong party when seeking the payment of £50 million stamp duty due as a result of the sale of the Chelsea Barracks in 2007. It seems that the true owner of the property is the Qatar based bank Masraf al Rayan, though the purchaser was an investment company ultimately owned by the Qatar Investment -Authority. HMRC will appeal, apparently, but we can't help thinking that there wouldn't be many UK based purchasers that could get away without paying Stamp Duty!

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JUN
16

Property Market Awaits the June Brexit Referendum

brexit 1After having successfully survived the frenzied madness of March 2016, during which our property lawyers were overseeing up to 16 completions a day because of a rush to beat the March 31st Stamp Duty Land Tax increase deadline, the property market is now quieter.

Most potential buyers and sellers anxiously await the outcome of the Brexit referendum on June 23rd 2016. Other factors suggest that perhaps we have reached the top of the 12 year increase in property prices and the market, especially in London and the South East, is heading for a correction.

Statistics published in April 2016 show that mortgage lending for the month fell by under 1/3; residential transactions in the country fell below 100,000 as did Stamp Duty receipts, as one would expect.

The National Association of Estate Agents in April saw a marked reduction of new buyers (the lowest since March 2014) together with a sharp drop of properties coming to market .

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