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New EPC Rules In Force From 9th January 2013

New EPC Rules In Force From 9th January 2013

The Energy Performance Certificate (EPC) shows the energy efficiency of a property, including any recommendations for improving the energy standards of the property, and it is a legal requirement in the UK that all properties for sale or to let have this certification. 

When letting or selling a property the EPC must be commissioned before any marketing can begin and a physical copy should be obtained within 7 days of the property first being advertised. That gives landlords just a week to instruct an agent, arrange an EPC and begin marketing the property for sale or to let. 

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Online property portal, Rightmove states that it has recorded a drop in the average asking price for residential property this month, the first significant fall since January 2012.

Average UK residential property prices have fallen by 1.7%, a drop of around £4,138 (GBP),

The demand for residential property has been low due to a number of factors:

  • Euro 2012
  • The weather, deterring potential buyers from viewing properties,
  • The Olympics, for distracting people’s focus away from moving.

Righmove said that there were twice as many people trying to sell a property than those trying to buy one, with each branch of the agency having an average of 75 residential properties that they were unable to sell.

The company warned property vendors that further asking price cuts could be necessary to secure a sale.

Director of Rightmove Miles Shipside, said: “The fact that we have not seen major price falls in the UK and that many areas are not awash with ‘For Sale’ boards may lead some sellers to be over-optimistic with their pricing. New seller numbers may be down some 30% on the period prior to credit-crunch, but the numbers achieving a successful sale are down by half and average unsold stock levels are creeping up.”

The West Midlands was the only region in England and Wales where prices increased in July compared with the previous month – with asking prices up 2% to £191,121.

In contrast, residential property prices dropped most in London, compared with the previous month, with a fall of 3.6% to £460,304.

Families who are looking to move into larger properties are finding themselves stuck in first-time buyer flats because they cannot sell their homes or get a mortgage.

A survey by LloydsTSB found that “second steppers”, those who have a first home to sell and who want to move up the ladder, are increasingly stuck in unsuitable accommodation.

The report reveals that home affordability for Second Steppers has become much less favourable and declining house prices have led to many homeowners being in negative equity.

Second Steppers are homeowners looking to sell their first home and move up the property ladder.

Many potential Second Steppers in today’s market would have bought close to the peak of the UK property market and are now finding it increasingly difficult to get off the “first rung”.

Many bought at the peak of the market in 2007, and may have negative equity to cope with as well as a lack of buyers and difficulty meeting moving costs.

The figures show the majority of property vendors in this situation have been stuck on the property ladder for over 12 months.
Some will have had children in the intervening time and feel that they are stuck in unsuitable accommodation.

22% now believe that it is harder to move up the housing ladder than to get on it in the first place.

According to Lloyds TSB’s report,
• 61% of second steppers have wanted to climb up the ladder in the past 12 months but have been unable to do so as they face an increasing number of challenges.
• 22% believe it is now harder to move up the ladder than get on it in the first place.
• 43% also feel it will be as equally difficult.

Stephen Noakes, mortgage director of Lloyds TSB said: “First-time sellers are now faced with some very tough challenges when trying to make their next move on the property ladder and many are finding it more difficult than getting on the ladder in the first place. It is vital that this group of home movers receive more support and attention as they play an intrinsic role in getting the housing market moving again.”

A recent study by HSBC also found that as many as 360,000 home owners are unable to move up the property ladder thanks to a combination of sliding house prices and more restrictive lending rules.

Those who bought properties in 2007 before the housing crash do not now have sufficient equity in their homes to trade up to larger properties, according to new research by HSBC.

Although most are not yet in negative equity, they do not hold enough of their home’s value to cover the required 10% deposit on a new property and pay associated moving costs, such as stamp duty, agent fees and legal expenses.

The problem has been exacerbated because the price of many first time properties has fallen faster than the rest of the housing market.

Demand from first time buyers has waned since lenders pulled out of the 100% mortgage market.

Mortgage lenders now require buyers to put down at least a 10% deposit, and even then these borrowers will be charged a higher mortgage interest rate than those borrowing 75% of a property’s value.

Peter Dockar, the head of mortgages at HSBC, said: “Those who have bought their first home can no longer rely on rising house prices to provide them with the deposit they need for their second.”

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A new study by UK mortgage lender Halifax reckons that optimism is picking up among property investors, with more investors predicting a boost in the fortunes of UK residential property market than those predicting a dramatic fall in UK property values.

Just under 30% of those surveyed by the Halifax feel that UK property prices will increase in the next 12 months, up from nearly 28% from October 2011.

22% say UK property prices will decline, a fall of 8% on October 2011’s figures.

However, most people are predicting a year of stability in the UK housing market rather than any major changes, with 66% not expecting to see a rise or fall in property prices of more than 5%.

With the real possibility of an influx of overseas investors as the Olympics draw closer, optimism is high with many hoping that the hosting of the games in the nation’s capital will give the UK property market a much needed boost. Meanwhile, people in the North East are the least hopeful of price rises.

Halifax Chief Housing Economist, Martin Ellis, said: “The modest improvement in consumer confidence in the outlook for house prices reflects the resilience of the UK housing market over recent months in the face of a weak economic recovery and the deterioration in the outlook for both the UK and global economies.”

The UK residential property market currently puts house buyers firmly in the driving seat, according to almost 60% of those moving home.

Figures from property website Rightmove, show that 6 in 10 of those planning to move home feel that property buyers are in a far more commanding position over property vendors.

Rightmove’s survey suggests that 30% of the country feels that UK property prices will decline in the coming 12 months and just 25% believe property prices will be higher by February 2013.

With the Olympic Games set to be hosted in London this summer, UK capital residents appear to be less negative about the housing market’s future prospects, with 1 in 3 London residents predicting that property prices in the nation’s capital will be higher than they currently are this time next year.

Director of Rightmove Miles Shipside, said: “Our survey shows that sellers in the South should have more reason to be confident than those in the North, though even within regions there is evidence of variations in confidence in local micro-markets.”

According to UK property transaction figures, the number of private residential property sales fell by 11,000 during 2011, continuing the property slump that has now lasted for 3 years,.

Statistics released by HM Revenue and Customs show UK residential property sales dropped to one of the lowest totals recorded, with just 869,000 residential properties sold last year compared to the 880,000 homes sold in 2010.

The slowdown in the housing market in recent years was most evident in 2009, when only 848,000 houses were sold, (about half the number of transactions recorded in a year before the financial crisis began).

The Bank of England (BoE)  said recently that it believes even more lenders will tighten their credit criteria in 2012 and it will be even harder for would be purchasers and property investors to get a mortgage, heightening concerns UK residential property sales could hit another record low this year.

The first-time buyer sector of the industry made an ever so slight slight recovery in recent months after dropping to a three-year low last autumn.

However, the recovery may prove temporary with the stamp duty holiday for first-time buyers closing in spring 2012.

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