Housing Market - 2013 Review and 2014 Predictions and Fears

2013 Summary

In January 2013 the Nationwide Building Society measuring price changes from December 2011 to December 2012 showed a national fall of 1% leaving the average price of a property at just over £162,000.

Moving to the end of the year this picture has changed dramatically with the latest data disclosing the average price at £174,500 and national increase of between 5 ( Nationwide) and 7.7 %(Halifax).  This has been fuelled by increased transactions and a dramatic increase in mortgage lending. The Land Registry has a more modest estimate of value growth if 3.1%.

Whichever of these statistics  you rely on it is clear that that there has been a significant increase in prices within the last 12 months. 

The Nationwide reported in November a 34% increase in mortgage lending. 

As for total transaction numbers, the Council of Mortgage Lenders estimate this will exceed one million, which compares favourably with the 1.6million figure for the boom years 2006 and 2007.

The rental market has also faired extremely well this year with the monthly lettings index from Countrywide disclosing average national rents up 4.2pc over the year to November. The increase in property value has however had a negative impact on the rental income relative to property price yield, with the yield, according to the specialist buy to let lender Paragon, falling from 6.7% to 6% on the year ( November 2013 to November 2014)

2014

House prices are predicted to continue to rise with the Government predicting a 27% price increase by 2018.  

It is also predicted by one leading buy to let broker that buy to let transactions are likely to increase in 2014 by at least 25%. 

All good news but what are the possible barriers to these predictions becoming reality?

Interest rates remain at a record low but what is likely to happen if these suddenly increase.  Looking at the varying views on this most commentators believe we will not be seeing an increase until the early part of 2015. 

Another fear relates to the global economy and how this still remains in a very unstable state.  Central banks remain unclear about how and when to remove the colossal stimulus they have provided for their economies over the past five years and of how this will impact on growth.  On top of this is the fact that many of the problems which led to the near collapse of the banking system has still to be addressed.  All of this has led some commentators to predict that we may be on course in 2014 for yet another economic crisis. 

in conclusion with everything else being equal 2014 should be a good year for those working in the property industry though given the unexpected collapse in 2007 who am I to say this can be guaranteed!  Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

Confusion around liability for church repairs continues

October of this year saw the introduction of new rules on Chancel repair liability.

This is the liability of an owner of land to pay for repairs to the chancel of a parish church. Owners affected include individual homeowners as well as ecclesiastical organisations, universities, colleges and others. Land does not have to be near a church building in order to be liable.

The amount of this liability can often be significant and  therefore this is an issue which you must ensure your legal advisor addresses when purchasing or remortgaging your home. 

Prior to the change of law introduced in October this liability if it existed in an area including the property you were purchasing or remortgaging  you would be exposed to a demand whether or not you were ware of its existence.   For this reason a competent property lawyer would carry out a search to see if the  liability existed and if it did to take out insurance to protect you if a claim was brought. 

Since the 13th October the liability will, in general terms, only be binding on you if the person or body who has the right to make the claim has registered the liability with the Land Registry.  In other words, you would only be exposed to the liability if notice of the existence  is shown in the title document of the property to be purchased or remortgaged.  

I say this is the general rule but there are situations when even if the liability was not registered  prior to the 13th October at the Land Registry it may still be binding on you. 

Registered land

For registered land, where a notice has not been entered, liability for chancel repair will continue until the first transaction for value is registered at the Land Registry (not a dealing at nominal value or a gift or transfer on inheritance) after 13 October 2013.

This means if the right to claim for the cost of church repairs was not registered with the Land Registry by the 13th October, it could still be binding on you when purchasing a property after that date. If you are purchasing a property after the 13th October and there have been no change of ownership in the interim it is important to check the Land Registry register for any notice of chancel liability which may have been registered before you exchange contracts and to also ensure your solicitor takes steps with the Land Registry to provide you with a protection period between exchange of contracts and registration of your ownership with the Land Registry. 

You should also consider taking out protection against the liability if you are remortgaging or gifting property 

Unregistered land

In the case of unregistered land, chancel repair liability will continue to exist in the same way; If any chancel repair liability is not protected by a notice or caution before your ownership is registered, you will take the property free from this liability.

In short when purchasing or remortgaging or gifting a property please ask you solicitor for reassurance that steps to protect you from this liability will be taken. 

MJP Conveyancing are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk