Fri 25 Mar 2022
Paul Bennett, Director
While it’s easy to get side lined by more salacious property headlines, such as rampant house price growth that now outstrips wages in 90% of England and Wales, there have been a number of other announcements in the last few weeks that shouldn’t be overlooked. Behr & Butchoff examines three recent developments that are affecting buyers, sellers, tenants and landlords in London.
Energy saving materials will be VAT-free from April
Anyone planning to make significant eco-improvements to their properties will find it has become cheaper thanks to the Chancellor. Contained in March 2022’s Spring Statement was a reduction of VAT applied to energy saving materials. As of April this year, there will be no VAT to pay on items including heat pumps, solar panels and insulation.
Mr Sunak was at pains to point out that the savings would be twofold – a VAT saving at the time of purchase and reduced fuel bills as a result of improved energy efficiency after installation. The new zero-VAT initiative will run for the next five years.
Interest rates rise by 0.25%
On 16th March 2022, the Bank of England’s Monetary Policy Committee voted by a majority of 8-1 to raise the interest rate. A hike of 0.25% points sees the current interest rate rise to 0.75%. The majority of homeowners with a mortgage will not notice any difference to their monthly repayments as data from UK Finance indicate that 74% of all current mortgages are on a fixed-rate product. This type of home loan means the repayment stays the same until the end of the fixed-rate period, regardless of the Bank of England’s actions.
Those with tracker, variable, standard and base rate mortgages may see a small increase to their repayment. To illustrate, a borrower with a tracker mortgage of £150,000 arranged over 20 years and with a 2.25% interest rate would pay £18 more per month as a result of March’s rate rise.
A shift to more upfront information
In late February this year, the National Trading Standards Estate and Letting Agency Team (NTSELAT) announced its three-phase plan designed to give buyers and tenants more information about a property before they make an offer.
Material information, comprising council tax band or rate, the property price and tenure information, should appear on all property listings by the end of May. If it doesn’t, advice explaining why the missing data is important in the decision making process and how movers can obtain the absent information will be displayed.
Once phase one is in place, phases two and three will be rolled out. Agents will be asked to disclose additional material information pertaining to any utilities and non-standard features that may affect someone’s decision to make an offer (phase II) and additional material information that affects a particular property, such as a flood risk or restrictive covenants (phase III).
The ultimate aim of NTSELAT is to make all material information a compulsory requirement among agents. It wants failure to disclose full material information to prevent the property from being listed on property portals.
If you have any questions about the three recent items of news and how they may affect your next property move, the Behr & Butchoff team would be pleased to help.