By Hamish Bruce
Anytime the political arena takes centre stage, there is usually a stagnation of progress in the property market and people waiting for the outcome of the general election. One of the main topics of debate throughout the campaign trail was regarding the proposed reformation of taxation on Non-Dom’s.
In Prime Central London in particular where there is significant non-domicile presence there has understandably been a slowdown in activity whilst more information is filtered through and people look for more clarity on the framework or Labours proposal prior to making any decisions on their property purchase. With an overwhelming consensus from the general public that change was necessary, we are now looking for the new Labour government to impose their policies and whilst buyers might have clarity on the longer-term future of the government, this is unlikely to see an immediate upsurge going into Q3.
According to Lonres, year on year there has been an increase in properties for sale by 10%, and a 25% decrease in properties sold and interestingly there has been a 25% decrease in properties withdrawn from the market. These statistics marry with what has been happening in the market this quarter, a plethora of property fall throughs and longer conveyancing periods.
Non-prime areas of London have seen a flurry of activity, with agents run off their feet, in particular in the price range of £500k-£1.5m, due to the relief in stamp duty at this level and the properties value for money. A recent client search for INHOUS in the areas of Hackney, Walthamstow and Leyton in East London, saw 30 property viewings at a house in one day, with the house going to sealed beds. It is a competitive market and our clients really benefitted from our INHOUS buying service expertise, as property was coming to the market on one day and selling the next! It would be great to see this result in London’s prime areas in the near future.
The Leasehold and Freehold Reform Act 2024 received Royal assent on May 24th which for many was welcome news. That being said, although the Act has been passed it has not yet come into force. This means that for the time being tenants will need to continue operating under the existing regimes of the Leasehold Reform Act 1967 in relation to houses and the Leasehold Reform Act 1993 in relation to flats. It will be for the new Government to set the commencement date for the Act and also to table secondary legislation that is required to provide detail on the more controversial elements of the Act, such as the setting of the valuation methodology. (Farrer & Co)
On the mortgage front, many buyers have been holding off to see what the Bank of England does with interest rates, with many predicting a rate cut at the August meeting. At the time of writing however, this is now hanging in the balance as inflation held firm at the banks 2% target in June with many industry experts saying it is 50/50 as to whether it will happen. Whilst many lenders have factored in a future cut into many of their products, a reduction in interest rates will give buyers a level of comfort and the confidence to start making decisions on their future purchases.
“Greater demand will likely be unlocked by a drop in mortgage rates, with all eyes on the Bank of England and an anticipated base rate cut which Oxford Economics expect in August. Inflation fell to its target of 2% in May – a key step on the path to the rate cut. These key economic indicators are expected to have a more substantive effect on the mainstream market than the Election and its outcome.” (Savills Research)
As we enter into holiday season, with many looking to get away from the drab and dreary English Summer and the disappointment of Football not coming home AGAIN, Q3 is perhaps going to be a period of adjustment for the market. As the new Labour Government settles in, their policies are revealed and we get a clearer understanding of what will be happening with interest rates, buyers may be looking to this period to consolidate. Whilst there may be a slight downturn in activity over the next few months which is natural during July-September, especially in Prime Central London, it could very well lead to an interesting and very busy end to the year.
The current Stamp Duty Land Tax thresholds are:
Source: Lonres.com & www.gov.uk/stamp-duty-land-tax, Savills research
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Tenancy charges may vary, depending on the agreement we have with you, so it’s best to ask the INHOUS lettings department.
The following payments may apply when entering an Assured Shorthold Tenancy:
| First month’s rent | In advance |
| Tenancy Deposit | 5 weeks, or 6 weeks if annual rent is over £50,000 |
| Holding Deposit | One week’s rent, put towards your first rent due |
| Early termination when requested by the tenant | A charge not exceeding the financial loss experienced by the landlord |
| Default charge for late payment of rent | A maximum of 3% above Bank of England base rate, charged when rent is more than 14 days late |
| Default charge for replacement of lost key or security device | Equivalent to cost incurred |
| Changing the tenancy documents after the commencement of the tenancy, including change of sharer | £50 incl. VAT |
The following payments may apply when entering a Non-Housing Act Tenancy:
A Non-Housing Act Tenancy is formed when the annual rent exceeds £100,000 or the property is occupied by a Company rather that an individual.
| Inclusive of VAT | |
| Tenancy Setup Fee drafting and execution of tenancy agreement if supplied by us, collecting and holding the Security Deposit as Stakeholder, issuing protection certificates, if applicable, Open Banking type referencing of tenant and initial Right to Rent Checks | £360 |
| Check-in Fee checking into the property and reviewing inventory | minimum of £130 |
| Tenancy Continuation negotiating and drafting an extension | £150 |
| Change of Sharer – Deed of Assignment | £120 |
| Early Termination – Deed of Surrender | £120 |
| Guarantor Referencing Fee (each): | £30 |
| Deed of Guarantee Fee: | £50 |
| Late payment of rent | 3% above the Bank of England base rate |
This guide is for tenants and landlords in the private rented sector to help them understand their rights and responsibilities. This guide includes a checklist and further detail on each stage of the rental process.
Tenancy charges may vary, depending on the agreement we have with you, so it’s best to ask the INHOUS lettings department for a full breakdown of costs. Here’s a list of what you can typically expect to pay:
| Lettings Service Only: | 10%+VAT (12% inc. VAT) – Including rent collection |
| Letting and Management Service: | 16%+VAT (19.2% inc. VAT) |
| Short Let (less than 6 months): | 24%+VAT (28.8% inc. VAT) |
| Lettings Renewals Service: | 8%+VAT (9.6% inc. VAT) |
| Lettings and Management Renewal: | 14%+VAT (16.8% inc. VAT) |
| Short Let Renewal (less than 6 months): | 24%+VAT (28.8% inc. VAT) |
Additional non-optional fees and charges
We will not be charging clients fees for referencing, tenancy agreements or deposit registration.
The costs of a clean, EPC, gas safety, EICR, PAT and inventory are set by third party suppliers and prices may vary. The below schedule is to give you an idea of what you would typically pay.
All fees stated are inclusive of VAT (calculated at 20%):
During the tenancy (if required
INHOUS is a member of and covered by the ARLA/Propertymark Client Money Protection (CMP) Scheme.
We are also a member of a redress scheme provided by The Property Ombudsman www.tpos.co.uk.