Wet wet wet…

Phillips George
29 May 2024
Estate Agency | Landlords | Renting | Selling

Rishi Sunak outside Number 10

 Rishi Sunak in drier times. 

In a week when the average house price in the UK hit an all-time high and has gone largely unnoticed, a more seismic and unexpected turn of events occurred as the PM gave a never-to-be-forgotten speech on the steps of Number 10.

True, no one will remember the content of his long, drawn-out soliloquy, but the visual impact of the news of the election date, beautifully accompanied by an ironic theme tune and the increasingly sodden state of Rishi Sunak’s extremely expensive Saville Row suit had us all thinking the same thing; can someone please rescue him with a nice, big umbrella?

This would never have happened to Hugh Grant when he played the PM in Love Actually.

The average UK house price hit £375,000 as demand from buyers delaying their plans from last year has led to price rises, despite high mortgage rates. In some positive signs for the mortgage market, HSBC UK, Barclays and TSB cut their mortgage rates last week.

How the election may affect the housing market

The UK’s housing market could be set for a strong summer despite the upcoming general election, as the market appears to be undeterred by the political upheaval. According to figures from the property portal Rightmove, 95 per cent of buyers said the upcoming election will not affect their moving plans.

There is some precedent to this, as in the two months leading up to the May 2015 election, buyer demand increased by five per cent year-on-year in March, and by six per cent in April.

I feel it in my fingers…

Clare Phillips, Partner at Phillips George said; “Although there is a fair amount of political uncertainty going on around the election, there seems to be a cautious optimism in the industry that the housing market will remain stable in the coming months.”

Leasehold and freehold reforms as well as the Renters Reform Bill have also been affected with the announcement of the election.

Leasehold reforms

The Leasehold and Freehold Reform Act 2024 has been pushed through before the election. The Act intends to make it easier for leaseholders to extend their lease, buy their freehold and take over management of their building. However, the proposal to abolish or cap ground rents for existing leaseholders, a key flagship aspect of the proposals, has been withdrawn.

However, Labour’s shadow housing minister Matthew Pennycook said his party would “finish the job of finally bringing the archaic and iniquitous leasehold system to an end”, which is good news for homeowners.

Key highlights:

  • The standard lease extension term has been increased from 50 years for houses and 90 for flats to 990 years.
  • The sale of new leasehold houses is now banned, other than in exceptional circumstances. Every new house in England and Wales will be freehold.
  • Owners on private and mixed-use estates will be entitled to standardised information on the service charges they pay to make it easier to challenge.
  • Leaseholders will be entitled to extend their lease or buy their freehold immediately upon acquiring property.
  • There has been an increase in the limit of “non-residential” floor space from 25% to 50% which applies before leaseholders can participate in collective enfranchisement or the Right to Manage.

Renters Reform Bill shelved

The Renters Reform Bill acted on a manifesto pledge to ban no-fault evictions. But the legislation has been dropped ahead of parliament dissolving for the election last Friday, perhaps an easy out for an unpopular piece of legislation as far as many landlords are concerned.

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Paul McCullough Phillips George Estate Agents
Paul McCullough, Partner
Paul has been in the UK property industry since 2008 and was previously involved in the sale of overseas property. Paul helped to set up a city centre sales and lettings agent and has been fully immersed in all aspects of the industry from day one. Paul has since taken his professional qualifications with ARLA (Association of Residential Letting Agents) and has an active approach to selling and letting properties. Paul is a problem solver and enjoys helping clients to achieve their goals, whether it is buying their dream home or finding the ideal tenant for their investment property.