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Happily, very little - as far as one can tell. Of course, this was not a normal budget in any sense of the word. However, as with any budget - emergency or not - no news is almost invariably good news!
As far as specifics are concerned, the increase in VAT to 20% from January next year admittedly does mean that fees and other costs associated with buying and selling property will rise slightly. Nevertheless, the really big worry - that Capital Gains Tax would be hiked to 40%, with the dramatic effect that might have had on the market - thankfully turned out to be groundless. Yes, higher-rate taxpayers will now have to pay CGT at 28%, but that isn't so high as to trigger a wholesale stampede away from property as an investment. Meanwhile, of course, there will be no effect whatsoever on standard rate taxpayers, who will continue to pay CGT at 18%, as before.
Indeed - insofar as there was any good news for anyone - the Chancellor seemed positively determined to lavish most of it on the property sector, by reinstating the tax breaks on holiday lets scrapped by the previous Government. This means that one of the main tax reasons for owning a furnished holiday let remains the fact that owners can offset any losses against other income.
So, all in all, I believe the property sector got off pretty lightly indeed in the budget.
Moreover...when you bear in mind that these measures come hard on the heels of the Conservative's pre-election commitment to raising the Stamp Duty threshold permanently to £250,000 for first time buyers - and, of course, the scrapping of Home Information Packs immediately they came into power - I actually think it's been a pretty good couple of months for the property market. Add to that the fact that all the uncertainty surrounding both the election and the much-trumpeted emergency budget itself is now finally behind us, and I wouldn't be at all surprised to see the market really start to take off.
While you personally may feel perfectly at home with technology, that doesn't mean that everyone else does. For a lot of people, it's actually quite an alien environment - or at least, not one in which they feel sufficiently comfortable to contemplate selling their most valuable asset without expert help. Besides, let's not forget that none of the top national property websites accept listings from private sellers - which rather defeats the whole object.
Of course, it's not impossible to sell your own home without recourse to a conventional estate agent. Despite this, however, only a tiny fraction of people actually do so. Nor have sellers exactly rushed to patronise those so-called internet agents who offer a basic, fixed-fee package.
Why is this? Well, for the simple reason that that there is a whole lot more to selling your home than sticking a homemade board in your front garden and an ad in your local paper - or online, come to that. Even assuming that you actually succeed in generating some enquiries, how do you sort the wheat from the chaff, the serious applicants from the complete timewasters? Leaving aside the security implications of letting complete strangers into your home, do you really have the time or the knowledge to handle all the viewings yourself, answer any queries and present your home in the best possible light? How do you qualify would-be buyers, to ascertain their financial circumstances and their ability to proceed with the purchase? Where do you turn for the expert advice and support you need to deal with all the stressful situations that can arise - for example, when your buyers come back demanding a price reduction on the basis of a problem unearthed by their survey? How do you go about monitoring the progress of the sale, and how do you deal with delays with other transactions up and down the chain?
In fact, the more you think about it, the more amazing it is that anyone should want to try and handle all this on their own. But then again, minimising stress and maximising peace of mind have never been exactly high on the agenda for your committed DIY-er...
Indeed you can!
According to the announcement made jointly last week by Eric Pickles, the new Secretary of State for Communities and Local Government, and Housing Minister Grant Shapps, compulsory HIPs are now a thing of the past. Or, to be more exact, they have been suspended with immediate effect, pending the introduction in due course of new legislation to abolish them altogether.
So, no more having to fork out hundreds of pounds upfront for a HIP. No more having to wait for anything up to 5 working days for the thing to be compiled before your agent could start marketing your home (on pain of a fine). Admittedly, you will still have to have an Energy Performance Certificate, or EPC, since these are a requirement of EU law (and of course, we all want to save the planet, don't we?) However, all that'll be needed is proof that one has been commissioned.
So ends arguably one of the most ill-conceived and poorly-executed episodes in the history of the housing market. And yet things might have been very different. After all, most people both inside and outside the property industry agree that some reform of the buying and selling process is badly needed in order to make the whole thing quicker, more transparent and more certain. Next time, however, let's hope that the Government thinks things through rather better, and takes a little more notice of the opinions of those who actually know what they're talking about!
Meanwhile... it is, of course, impossible to tell for sure how much of a dampening effect HIPs had on the property market during their brief existence - over and above the wider effects of the credit crunch. Nevertheless, by doing away with all the extra cost and hassle at a stroke, this Government's prompt action should definitely help put the current recovery on a sounder footing. And that has got to be good news for everyone.
In a word, no. Why? Well for one thing - although of course the situation may have changed by the time you actually read this - a Conservative win is by no means the foregone conclusion that it might once have seemed, even just a few short months ago. Indeed, there currently appears to be every chance that we may end up with a hung parliament, in which no single party has an overall majority.
But even if the Conservatives do win a clear victory next month, they are promising a period of consultation before bringing forward the secondary legislation needed to effectively scrap HIPs. This could easily take until the end of the year. After all, we're not simply talking about repealing an unpopular law. Rightly or wrongly, the HIPs legislation brought into being a whole new industry, employing a substantial number of people - many of whom invested a sizeable chunk of their own hard-earned money in specialist training. No Government of any persuasion will just destroy all of that at a stroke.
Meanwhile, Grant Schapps, the Shadow Housing Minister, is on record as saying that he will not in any circumstances condone law-breaking over this issue. This means that until such time as the legislation has been officially rescinded, you will still need to have a HIP in place before putting your home on the market. Beware any estate agent who tries to tell you that "now the Conservatives are in power, you don't need to have a HIP." You will still be breaking the law - and you can be sure that in these highly competitive times, some other law-abiding agent will be only too happy to shop both you and the agent concerned!
So, unless you are prepared to risk prosecution - or alternatively don't mind waiting until the end of the year (at least) before putting your home on the market - I would strongly suggest that you simply bite the bullet and forget about the possible demise of HIPs.
Very much so. In fact, even in the internet age, agents boards are still generally acknowledged to be one of the most effective marketing tools in the estate agent's locker. People really do notice them. What's more, enquiries that result from someone seeing a board outside your home are often likely to be more valuable that those received via the internet, or from newspaper advertising, since they imply that the would-be buyers have already seen the property and like what they saw. By definition, it also means that they like the location. So, if the price is right, such enquiries will normally turn into viewings.
In the case of vacant properties, boards can also act as a useful deterrent to sneak thieves, squatters and the like, since they will never know when an agent might turn up for a viewing.
Ironically, the most common objection to having an agent's board outside a property is that the homeowner doesn't want his or her neighbours to know they are selling. Bizarre, when you think about it. For one thing, the neighbours would have to be pretty slow on the uptake not to notice agents turning up to value the place or walking around taking measurements and photographs. Then there's the succession of complete strangers wandering about, very obviously checking the property out - as often as not while clutching copies of the particulars. Not forgetting, of course, the agent's press ads and window cards...
All in all, trying to keep the sale a secret is something of a tall order. But in any case, why on earth would you want to? After all, you're trying to sell the place, aren't you? And particularly in this kind of market, you need all the exposure you can get. Indeed, your neighbours may well know someone who would love to move into the area!
So, in short, I would strongly advise you to have a board!
Although a central register of the ownership of all property has been in preparation for well over a century, it was left up to individual counties and other responsible local authorities to decide when they joined the scheme. So, it was only in 1990 that registration finally became compulsory in all parts of England and Wales - and then only when properties were sold or acquired new owners. As a result, around 30% of property is still unregistered - mainly because it hasn't been sold or transferred for years and years.
If you currently own such a property, is it worth voluntarily registering it - particularly if a system already exists to ensure that this eventually happens in any case?
Broadly speaking, the answer is yes - for two main reasons:
Firstly, formal registration gives you far greater certainty and security regarding ownership of what is probably your single most valuable asset. Over the years, title deeds and other traditional proofs of ownership can all too easily go missing - and then you could be seriously stuck, particularly if there were to be any dispute over title, fraudulent or otherwise. Far safer and more reliable for your ownership to be a matter of official, central record.
Secondly, the simple fact is that it is considerably more complicated, time-consuming and expensive to sell a property that is unregistered, since the solicitors or conveyancers concerned first have to wade through mountains of old documents to establish legal title, rather than simply contacting the Land Registry for the relevant reference number. What's more, the vast majority of buyers now expect a property to be registered. However irrational, they may be put off altogether by the prospect of buying something that somehow seems to have slipped through the official net!
On balance then, I would certainly recommend voluntary registration. You can handle the whole thing yourself - the Land Registry provides a useful pack including all the relevant forms, which you can get by ringing 0800 432 0432 or emailing registerland@landregistry.gsi.gov.uk. However, most people prefer to seek legal advice on what can be quite a complex process. Either way, there is a sliding scale of charges involved, depending on the value of the property.
This is one of those HIP-related issues which, thanks to the rather ambiguous wording of the regulations, continue to cause a certain amount of confusion - and not just amongst the general public, either. In fact, a quick trawl through some of the literature and websites dealing with the subject reveals a worrying degree of inconsistency - not to mention downright mis-information. So, in order to be doubly sure, I've checked with the relevant Government department.
According to the housing section of Communities and Local Government, the situation is as follows. For a period of 12 months after putting your home up for sale for the first time, you can take it off the market and put it back on again as often as you like, for any reason you care to mention, and still use the original HIP. Moreover, if at the end of that year you still haven't found a buyer, you can continue to market your property for as long as it takes to sell, without the need for a new HIP, but only if you do so without a break - except where an agreed sale subsequently falls through. In this case, you can still return to the market with the original HIP - but only if you do so within a period of 28 days.
Finally, while we're on the subject of confusion, there is also a widespread belief that local authority searches and evidence of title are only valid for 3 months. In reality, the rules simply stipulate that both these sets of documents must be no more than 3 months old when the HIP is first compiled. Thereafter, they can be used for as long as the original HIP remains valid, as described above. Whether a buyer's solicitor, or more importantly, their lender, will accept searches that could be at least 15 months old is another matter - but under the HIPs regulations, you as the seller are not actually obliged to pay for anything more up to date.
Not surprisingly, this is the question everyone wants an answer to. And the truth is that things certainly do seem to be looking up.
Now, I know you would probably expect me to say that anyway, but the fact is that whereas last year the picture painted in the media was one of unrelieved gloom, these days the news is a lot better.
Look at just the last few weeks. We've had the Halifax reporting that prices in the three months to July rose by 0.8% compared to the previous quarter - the first quarterly increase since October 2007. We've had the Council of Mortgage Lenders announcing that loans for house purchase in April-June were 50% up on the preceding 3 months. Rightmove, the UK's largest property website, revealed that August 6th was the busiest day in traffic terms that it has ever had, with more than 22½ million pages viewed - and this in the heart of the holiday season! And in the very same week, the Royal Institution of Chartered Surveyors revised its prediction on prices from negative to positive, predicting a rise for the year as a whole of between 1 and 2%. Finally, we've had another major property website, propertyfinder, reporting that estate agents around the country are seeing prices picking up, the volume of transactions starting to rise, and properties taking less time to sell.
Record levels of buyer interest; increased sales volumes; prices that are starting to edge upward again; more money being lent; homes selling quicker. Put all that together, and I think it's fair to say that the worst may, just possibly, be over.
Of course, that's not to say that we're completely out of the woods yet. It's going to be a while before we see a return to anything like the slightly crazy market that existed in the first half of the Noughties - if ever. And in the end, perhaps that's no bad thing. After all, what is really needed is a good, stable market, with price rises that are sensible and sustainable.
And without wanting to be accused of sounding too bullish, I think we're on our way!
The market value of a property, and the value that is put on it for insurance purposes, are two very different things. Market value obviously reflects the price someone is prepared to pay for your home, while insured value is based on a calculation of what it would actually cost to rebuild it to the same specification in the event of something like a major fire. Even in the current market, the former is almost always higher - primarily because the insured value doesn't take into account the value of the land on which a property sits. Consequently, this discrepancy shouldn't really be a concern.
Whether or not the insured value is actually correct is another matter altogether, however. Generally speaking, insurance companies increase their valuations annually in line with inflation - but that won't necessarily reflect the true cost of labour and materials at any given time. Besides, they may have got their sums wrong in the first place. Then again, you may have significantly extended or improved your home over the years, and unless you make a point of telling your insurers, they won't have taken that into account.
As a general rule, I would advise you to check the insured value yourself every 2-3 years. Do this by multiplying the total area of your home in square feet or metres (frontage x depth if it's a flat or bungalow, or frontage x depth x the number of floors if it's a house) by the appropriate rebuilding cost per square foot or square metre. These costs are published by the Royal Institute of Chartered Surveyors, and should be available from any qualified surveyor. They will tend to vary, depending on things like the age of the property or whether it is detached, semi or terraced.
Once you've done your calculations, compare the result with the insurer's valuation, and if you're not happy, ask them to make the necessary adjustment. It might mean you pay a slightly higher premium, but it's a small price to pay for peace of mind.
Strictly speaking, it is not necessary to make a will, just because you have bought a home together. That said, however, I would strongly advise you to do so. For a couple in their 20s, this might seem a touch morbid, but actually it's just common sense - and particularly so since you are neither married nor, I assume, in a civil partnership. After all, you have just made probably the biggest single investment in your lives, so you want to be sure that it is protected.
Ultimately, everything hinges on the basis on which you actually bought your home. For example, many people talk about "buying a home together," when in fact only one of them actually owns it, and from a legal standpoint they are simply co-habiting. In such cases, a will is an absolute necessity - otherwise the surviving partner has no rights of ownership or inheritance whatsoever, in the event that the legal owner dies.
You may, on the other hand, have bought your home in joint names. But even here, there are actually two different ways in which property can be jointly owned, with significant differences between them.
So, if you own the property as "Beneficial Joint Tenants," then basically you are both equal legal owners, and each of you will automatically become the sole owner of the whole property if the other dies.
If however you own the property as "Beneficial Tenants in Common," then the surviving partner has no automatic right of inheritance, and the dead person's share simply becomes part of his or her estate, to be distributed either according to the terms of any will they may have, or according to the rules of intestacy (which in practice means that it goes to any living relatives in a strictly laid-down order of precedence, or even reverts to the Crown). In such cases, the only recourse open to the surviving co-owner would be to buy out the deceased's share.
So, the first thing you need to do is to clarify precisely on what basis the two of you own the property. And the second is - make a will!
The short answer is no - in fact, it's downright illegal. The law is absolutely clear on this: no property may be put on the market without a HIP already in place. So, if this agent is suggesting that you somehow don't actually need a HIP at all, or that it's OK to put your home on the market first and worry about the HIP later - or even that he's already got a likely buyer in mind, and the delay in getting the HIP might jeopardise the sale - then he is talking about breaking the law.
Of course, you might then ask, so what? After all, it's the agent who is legally liable - so if he is prepared to take the chance, why should you worry? Well, first of all, at some stage or other the buyer's solicitor is going to want to see a HIP - and if one doesn't exist, then that sale's not going anywhere. Besides, if this agent is trying to steal a march on the competition by suggesting you let him market your property straight away, instead of waiting for the HIP to be produced, then the chances are that some other law-abiding agent will get to hear of it and inform Trading Standards.
But in any case, ask yourself this simple question. What sort of service do you think you're likely to get from an agent who is so desperate for your business that he is prepared to break the law in order to get it? What other corners is he going to cut?
No, all in all, it makes no sense whatsoever to take a chance on using an agent who by his very actions is showing himself to be thoroughly dishonest. Much better to choose a well-established, reputable firm - if possible, on the basis of personal recommendation from someone who has recently moved house themselves. Using a decent supplier, a good agent can normally get a HIP produced in just 5 days, often even less. A leasehold property, or one with unregistered title, might take a little longer. But much, much better to be safe than sorry.
This is really a matter for a solicitor. The law governing this sort of thing underwent some major revisions a few years ago. Up until then, all you needed to prove was that you had occupied the land for a period of 12 years without any challenge from the legal owners. After that, you could claim possessory rights over it (not quite as good as full title, but the next best thing - particularly if you took out suitable indemnity insurance).
Now, things are rather more complicated, and the simple 12-year threshold no longer applies. You can understand why. Squatters' rights - which is effectively what we are talking about here - were always something of an anomaly in modern-day society, and it was only a matter of time before some Government or other reined them in.
So, what is the current situation? Well, that depends. When you say you have been "looking after" the land, what exactly do you mean? If it is simply a piece of unfenced ground that you have kept a horse on, for example, then you have no rights over it at all. To claim any such rights, you must have fenced it in or formally delineated the boundaries of the plot in some other way - and preferably done something else to improve it as well, such as landscaped it.
However, the real crucial point is whether the legal owners of the land are aware of your occupying it, or not. If they are, and they have agreed to it - or even if they have simply condoned it - then they will be deemed to have exercised their right of ownership, and you yourself will therefore have no legal rights whatsoever.
On the other hand, if despite your very best efforts you have failed to locate the legal owners; if you have subsequently fenced the land in and landscaped it; and if in all that time no-one else has claimed ownership - then you may well have a case.
That's a lot of "ifs" - which is why, as I said at the beginning, the only real advice I can give you is - consult a solicitor.
Legal Indemnity Insurance is not something that many people will have come across. Unless, that is, they have been involved in a previous property transaction which has been delayed or even prevented from going through altogether, due to some legal complication.
This type of insurance doesn't actually resolve such matters. Instead, it neatly circumvents them by providing protection for the purchaser against the possibility of any future financial loss or 3rd-party claims.
One of the commoner areas where this can come into play is in the case of properties which may have been improved or extended, but where the owner has neglected for whatever reason to gain Building Regulations approval for the work. Without the appropriate piece of paper, this is precisely the sort of glitch that can set all the legal alarm bells ringing. But with indemnity insurance in place to protect the purchaser against the costs of any future legal challenge, the sale can proceed in the normal way.
Other problems that indemnity insurance can help solve include those relating to lost documents, issues of access, poorly-worded legal documents, restrictive covenants, or even properties built on unmade roads. In this last case, for example, the purchaser's solicitor might well propose that indemnity cover be arranged against any future demands from the local authority for contributions to the cost of having the road made up, or to meet any future claim over rights of way.
Since it benefits both seller and buyer, legal indemnity cover may be arranged by either party. A single premium payment, normally of between £150 and £300, provides protection in perpetuity - so, once cover has been arranged, it is transferable from owner to owner.
So, to use a DIY analogy, legal indemnity insurance doesn't just paper over the legal cracks. It's more like a high-quality filler, giving a permanent, smooth finish!
From 6th April, all Home Information Packs must contain a Property Information Questionnaire, or PIQ, completed by the seller, and covering a whole range of issues which the Government believes buyers are interested in, or should be concerned about. These include everything from parking arrangements and rights of access to the condition of the electrical wiring and details of any structural changes. For leasehold properties, there are a whole raft of extra questions concerning the details and conditions of the lease.
Most of the questions are simple tick-box exercises. However, depending on which box you tick, you may be asked to explain your answer. So, if you have had some structural work done, you will be asked whether you obtained planning and/or building regulation permission - and if not, you will be asked to explain why. In certain case, you will also be expected to provide supporting information, such as guarantees for things like electrical work or double glazing.
So, all in all, filling in a PIQ is far from being a 5-minute job.
This may well be worth it if, as the Government believes, better informed buyers mean fewer sales falling through. However, PIQs are unlikely to help fulfil another aim of HIPs - which is to speed up the whole house-buying process. Since the questionnaires have been designed with the general public in mind, they are far too basic and general to be of any real value in the actual conveyancing process. Indeed, the Government itself, in the preamble to the PIQ, states that the questionnaire "does not replace official documents or legal information," and advises sellers to confirm any information with their solicitor or conveyancer.
What this means in practice is that the old Property Information and Fixtures and Fittings forms, beloved by generations of solicitors, will still have to be filled in as well!
Some of the more professional estate agents recognise this, and already provide an enhanced service that includes help with these forms. And it can get real results. For example, agents belonging to team, who go one step further in offering a "Homefile Prepared" service, have reported fewer fall-throughs and an average time saving on transactions of 10 days.
Now that is something worth bearing in mind!
You may well ask. Back in the olden days, when a first time buyer, or indeed anyone without much of a deposit, wanted to take out a high loan-to-value mortgage - that is, anything over about 85% - the lender usually insisted that the borrower take out mortgage indemnity guarantee (MIG) cover. This was typically based on a single premium paid upfront, the amount being added to the mortgage loan itself.
Not to be confused with mortgage protection insurance, which pays your mortgage if you are temporarily unable to do so through redundancy or long-term illness, MIGs protected the lender. So, if a borrower defaulted, and the property had to be "force-sold" for less than the outstanding mortgage debt, the lender could claim on this insurance for the shortfall.
For a long time, MIGs were standard - if slightly controversial - practice, but they fell out of favour during the last property recession. Having had an easy time of it for most of the 70's and 80's, insurers quickly got cold feet when repossessions reached their height in the late 80s and early 90s, and claims suddenly went through the roof.
As a result, MIGs disappeared - but with prices booming again, no-one cared.
Now, however - with prices falling once more, and with no safety net in place - lenders are hugely risk-averse, and the high loan-to-value mortgages on which most first-time buyers rely are as rare as Bush supporters at Obama's inauguration!
The paradox is that if lenders could only be persuaded to be a little more adventurous in their lending policies (without a return to the cavalier attitudes that helped get us into this mess in the first place), then this would actually help stabilise the property market.
An updated version of the MIG scheme could definitely play a part in this. Obviously, with the state of the wider economy at the moment, premiums would undoubtedly need to be fairly hefty. But then, perhaps the Government - with its new-found fondness for providing lending guarantees - could be persuaded to become the insurer of last resort. Stranger things are already happening...
In short, it can only mean good news. In percentage terms, this was the largest one-off rate cut there has ever been (there have been bigger cuts, but only when the rate was a lot higher than it is now). It represented a staggering 30% cut in the cost of borrowing - so it's not surprising that it took just about everybody by surprise!
Why would the Bank of England's Monetary Policy Committee - a body hitherto renowned for its excessively cautious approach to domestic interest rates - suddenly have such a collective rush of blood to the head? Well, from a technical point of view, they clearly realised that the inflationary pressures they have been so worried about for most of the year are now receding and being replaced by a very real risk of world-wide deflation. They also appear to have concluded that the best way of limiting the effects of the coming recession, (and I'm afraid most commentators now agree that one is definitely just around the corner), is not only to re-capitalise the money markets but also to reduce the overall cost of borrowing.
But what does this mean for the housing market? Well, now that most of the big lenders have finally given in to public and media pressure - not to mention Government arm-twisting - and agreed to pass on the full 1.5% cut, it basically means substantially cheaper mortgages. Many borrowers on tracker or variable-rate mortgages could now be in line for savings of several hundred pounds a month. That could mean the difference between losing their homes through forced sale or repossession and keeping them. For others, it will translate into higher disposable income - just in time for Christmas. Finally, for existing homeowners looking to trade up to a larger property, this cut - combined with falling house prices - could mean that that long-delayed move is finally affordable.
Of course, things may not pan out quite so smoothly. In any case, this is certainly not the end of all the problems facing the housing market. It may not even be the beginning of the end. But, as Churchill himself might have said, if he'd been a housing market expert, it certainly looks like the end of the beginning...
That rather depends on your situation. For instance, if you are not actually planning to move right now, then it really doesn't matter at all. Just sit tight, enjoy life, and wait for prices to bounce back. Which they will, of course.
I know this might sound glaringly obvious, but the plain fact is that thanks to all the doom and gloom in the press, a lot of people who find they are technically in a negative equity situation are worrying themselves completely unnecessarily.
If on the other hand you are in the position of wanting to move into a larger property - and of course, always assuming that you have the necessary finances - then it's more than likely that your lender will be happy to transfer any negative equity from your current home to the new property. Why? Because it actually reduces their exposure. In other words, a £10,000 shortfall on a £200,000 mortgage is effectively only half as serious as the same amount of negative equity on a £100,000 mortgage!
Of course, it may be that your situation is indeed a cause for genuine concern. And again, much depends on your particular circumstance. If, for example, you are in negative equity and you are really under pressure to sell - either because you can no longer afford the mortgage or because, say, you need to relocate, then you could always consider renting out your current property until prices turn round, and renting somewhere smaller elsewhere in the meantime. The differential between the two rents should provide you with some welcome extra monthly income.
Alternatively, if you have to sell now, then it might well be possible to come to an arrangement with your lender to convert the negative equity into a personal loan, which at the very least would give you a greater degree of flexibility as far as any future plans are concerned.
All in all then, and without of course knowing your exact circumstances, I would say don't panic. Speak to your lender. They may well have a solution for you. Negative equity really isn't the end of the world - whatever the press might say.
You're right. There has been a great deal of talk recently in the press and broadcast media about the credit crunch - most of it highly technical in nature. Basically, what is happening is this:
In essence, the term "credit crunch" describes the growing unwillingness of banks and other financial institutions like building societies to lend money quite as freely as they had previously been doing. The reason for this is that they simply can't afford it.
How can this be? Well, the days when banks only lent their own (or rather, their depositors') money are long gone. These days, they supplement their lending by raising vast additional sums in the international market. In other words, they borrow from other banks.
Now, this all works very well as long as everyone's got plenty of cash, but it quickly begins to unravel as soon as banks start going broke - which is where the spectacular collapse of the so-called sub-prime market in the USA comes in. So closely intertwined and interdependent are the modern international capital markets that banks all over the world have some degree of direct or indirect exposure to the sub-prime meltdown - witness Northern Rock. The trouble is, no-one really knows who is most badly affected - and so banks are playing safe by refusing to lend to each other, in case they don't get their money back.
But what does all this mean to you, and your moving plans? Surprisingly little, as it happens. Conditions in the housing market aren't actually as bad as the media would have us believe. There is an enormous amount of regional variation, of course, but broadly speaking there are still mortgages available, and sales are still happening. Yes, you may need to be more realistic about the asking price of your own property. But remember, this softening in prices is happening right across the board - so if you are looking to trade up to a larger property, then it actually works in your favour, since you will save more on your purchase than you "lose" on your sale!
In a written submission a couple of weeks ago, Housing Minister Caroline Flint announced the extension of the temporary provisions on first-day marketing and leasehold documentation - which have applied since HIPs first came into force last year - from June 1st to December 31st.
What does this actually mean? Well, first of all, one of the biggest bones of contention over the introduction of HIPs was the issue of first day marketing - in other words, the right of homeowners to instruct an estate agent to commence marketing their home immediately, without any delay. The Government remains committed to removing this right, and instead insisting that no property can be put on the market until a HIP has actually been produced. However, such was the outcry against this from estate agents and others that the Government was forced to concede that - for a strictly limited period, while the new system was bedding itself in - properties could be put on the market as long as a HIP had been commissioned.
So, what has now happened is that the Government has recognised that its original deadline for removing this concession is far too optimistic. This effectively means that until the end of the year, your agent can still start marketing your home once a HIP has been ordered, and they have had confirmation that it is HIP-compliant - thereby enabling them, for example, to contact so-called "hot" buyers straight away on your behalf.
Will this "temporary" concession be extended yet again, come the end of the year? Who knows. But, with the Government's track record, I suspect that no-one will be taking bets against it happening.
As for the issue relating to leasehold documentation, this particular concession was originally wrung from the Government because of the difficulties and delays involved in collecting together all the required information. Again, whether or not these problems will have resolved themselves by December 31st remains to be seen.
Aside from certain specific exceptions (for example, seasonal and holiday homes, properties that are scheduled for demolition, or those which have a sitting tenant), no-one can now put a residential property on the market without first commissioning a HIP - although the ultimate intention is that the HIP should actually be in place first.
What are HIPs intended to do? Well, by bringing together much of the necessary documentation right at the start of proceedings, instead of waiting for the buyer's solicitor to request it, the aim at the outset was to make the entire sales process quicker and more certain - on the entirely logical basis that the faster the transaction, the less opportunity there would be for anything to go wrong. While this remains part of their purpose, the Government's principal focus is now more on trying to encourage people to make their homes more energy efficient. Hence the inclusion in the HIP of an Energy Performance Certificate, or EPC, which not only rates a property from A-G on the basis of its energy efficiency, but also suggests ways in which that rating can be improved.
Aside from the EPC, a HIP must also contain the following: an index, a sales statement ((basically saying that the property is to be sold freehold, leasehold or commonhold by private treaty or tender), standard local authority searches, and evidence of title or ownership. In the case of leasehold properties, a number of other documents also need to be included, such as a copy of the lease.
What does a HIP cost? Well, at Helmores we offer the following options: Either you can pay up front for the HIP at a cost price, or we can include the cost of the HIP within our commission on a no sale - no fee basis, meaning you can put your property on the market without having to pay up front, and you won't have to pay for the HIP if you decide not to sell either.
If you are a buyer as well as a seller (as most of us are), you will actually save much of the cost of your HIP on your next purchase. And by the same token, if you're a first time buyer, then HIPs will actually save you money!
If you have any further queries regarding HIPs please don't hesitate to call us on 01363 777999.
The notion that there is a one-size-fits-all approach to marketing property is a fallacy. The fact is, different market conditions demand different approaches. Right now, for example, a good estate agent may well suggest adopting the "offers in excess of" ("oieo") approach, since it is designed to help generate higher levels of interest - particularly useful in a buyers' market.
One of the key advantages of the oieo approach is that it tends to attract genuinely committed buyers - people who may already have found a buyer for their own property, for instance, and who are now looking at the market very seriously. In this, it differs somewhat from the "normal" method of selling by private treaty, which will often attract a proportion of interest from buyers who are not in such a favourable position. One spin-off benefit of attracting serious buyers, of course, is that it tends to generate offers relatively quickly - so you soon get a pretty accurate picture of how much your home is really worth in the current market.
Also, with oieo, you are providing buyers with a realistic base price, rather than an asking price. This might seem like a small difference, but the fact is, asking prices are normally assumed to be on the optimistic side, and therefore they tend to attract lower offers. The whole object of the oieo approach, on the other hand, is to do the exact opposite.
If there is a downside to oieo, it lies in the fact that you are effectively telling the market in advance what you are prepared to sell for in a "worst case" scenario. However, remember you are not actually obliged to accept any offer at all. Besides, if you pitch the base price correctly, there is every chance of attracting two or three competing buyers - in which case, you could find yourself the beneficiary of a bidding battle, even in today's market!
On balance, therefore, I would have to say that if you are really keen to sell - and it happens to be a buyers' market - then oieo is a very good way to go about it.
The short answer - without seeing your home, of course - is almost certainly Stamp Duty. Despite repeated calls from right across the property industry for wholesale changes to the stamp duty regime, the Government in its recent Budget once again left it unchanged. And you can understand why, from their point of view. Stamp duty is a fantastic earner. Without having to lift a finger, the Government has seen its total take from this source soar by 40% to a staggering £6.4 billion in 2006/07, thanks to rising property prices.
There are two major problems with Stamp Duty. The first is the fact that the thresholds at which the varying rates of duty becomes payable simply have not kept pace with the rise in property prices. Currently, those rates are as follows:
· Up to £125,000 - 0%
· £125,001-£250,000 - 1%
· £250,001-£500,000 - 3%
· Over £500,000 - 4%
At a time when average national house prices, according to the Government's own figures, are over £222,000, there are now vast swathes of the country where you can't buy anything much bigger than a garden shed without incurring duty.
In your case, meanwhile, your home falls just the wrong side of the 3% threshold. Which brings me to the second problem with stamp duty. Incredibly, it is levied on the full purchase price - not just on the extra amount over and above the tipping-point between rates. In other words, anyone buying your home for, say, £255,000 will have to find a whopping £7,650 for stamp duty - compared to "just" £2,500 if they buy it for £250,000!
So what, you may say. After all, it's the buyer that pays stamp duty, not the seller. That is true, of course. But...the reality is that we are currently experiencing a buyers' market. That means buyers are spoilt for choice. If you are seriously considering selling - and if you need to do so within a particularly tight time frame - then it may well be that an offer of £250,000 is the best you can expect to get.
That depends on what needs doing and of course how much time and money you've got. However, you're certainly right in thinking that the way your home is presented can make a real difference to its saleability - particularly in the current market. With quite a lot of property for sale, buyers are relatively spoilt for choice - so you need to make sure your home stands out from the crowd.
As a general rule, even in slower markets, it's not worth tackling anything too big and expensive to improve the appeal of your property - for the simple reason that you are unlikely to recoup the full cost when you sell. Small things, on the other hand, can make a big net difference - things like clean, fresh paintwork inside and out; clean carpets and windows; tidy, neatly-trimmed gardens, and so on.
One of the key points to remember when it comes to presenting your home to prospective buyers in the best possible light is that the whole property should be of a consistent standard. So, for example, if everything else is being let down by the one room that you never got around to decorating, then it's probably worth doing that room up now (as long as it doesn't then make the rest of the property look dowdy, of course).
Overall, I suggest you start by taking a step back and try to look at your home as objectively as possible, as though you were seeing it for the first time. Make a list of any little things you notice that need sorting out. But try to keep a sense of proportion. After all, this is your home, not a show-house. People expect it to look lived-in.
Meanwhile, if you are in any doubt, then the thing to do is ask us at Helmores. After all, we are in and out of properties all the time - so no-one is better qualified to advise you on what needs doing to bring out the best in your home.
When it comes to making offers, there are few hard and fast rules - whatever the state of the market. Right now, for example, the press and broadcast media are busy telling everyone that we are in a buyers' market, and that hard-pressed sellers may therefore be amenable to accepting lower offers. However, it's worth bearing in mind that if a seller's agent has done his or her job properly in the first place, then the asking price should already be pretty much spot on. After all, no agent wants to waste time and money trying to sell a wildly overpriced home - particularly in the current climate.
That said, there's absolutely nothing wrong with making an offer, although it's advisable to do some research first, to see what similar properties in the area may recently have sold for. These days, there are a number of websites like www.myhouseprice.com and www.ourproperty.co.uk which can provide this kind of information. However, it's important to remember that they get their data from HM Land Registry, so it's basically 3 months out of date.
As a first-time buyer, you obviously won't suffer from the disadvantage of having to sell something else first, so there's less chance of losing out to someone who can move more quickly than you - other than a cash buyer, of course. Nevertheless, in making your offer, you should be prepared to be outbid. In this context, it's worth remembering that the agent is legally bound to continue passing on any new offers to his client (the seller) right up until exchange of contracts - unless specifically instructed otherwise. So, even if and when your offer is accepted, that's by no means the end of it.
One final word of advice. Resist the temptation to make offers on several different properties at the same time. Admittedly, this is a practice more commonly seen in a sellers' market, but still, it's not really cricket. You won't want someone doing it to you when you come to sell in the future!
With all the doom and gloom in the press, you might be forgiven for thinking that the property market was on its uppers. It isn't. In fact, there are still good purchasers out there, mortgages are still available, and property is still selling.
However, the point about prices is that they are a function of supply and demand - and the fact is that currently, there is quite a lot of property on the market, with more coming on all the time. As a result, buyers are relatively spoilt for choice, and can enjoy the pick of the crop. So, if you are keen to sell quickly, then it's all the more important to ensure that your asking price accurately reflects what similar properties are actually selling for.
Of course, even in the current market, there is always the possibility that there is someone out there willing to pay over the odds for your home because it particularly suits their needs - for example, if it happens to be close to a relative of theirs. Finding these very special buyers can be time-consuming, but if you aren't in a tearing hurry to sell, then by all means give it a go. Remember, however, that it's a good idea to have a strategy in place to review the situation on a regular basis with your agent.
Any other advice? Well, in the current market - just like any other - I would urge you to put your home up for sale before you go looking for something else, for two reasons. Firstly, if your property is already sold, then as a buyer you will be in a very strong position. Secondly, if you find the home of your dreams before putting your present property on the market, then you might feel pressured into accepting a lower offer, simply in order to hang onto your proposed purchase.
Finally, of course, one of the best ways of ensuring you get the best possible price for your home, in any kind of market, is by keeping it in tip-top condition, inside and out.
Most good estate agents these days will gladly handle viewings for you, at no extra cost. Indeed, I'd go so far as to suggest that if an agent doesn't offer accompanied viewings, as they are called, as a more or less standard part of their service, then you should look elsewhere.
Whether you're buying or selling, accompanied viewings offer a number of very real advantages - which is why they have long been considered the norm in other parts of the world. Indeed, in places like the USA, the idea of leaving the viewing of a property - in some ways the single most important stage in the entire marketing campaign - in the hands of a rank amateur (i.e. the owner) would be laughed out of court altogether. And when you think about it, that makes a lot of sense. Although the agent doesn't have your detailed knowledge of the property, he or she does have the skills, training and experience to identify and focus on those features that are particularly relevant to the wants and needs of the prospective buyer. In other words, they are better qualified to sell your home than you are!
As a vendor, accompanied viewings obviously relieve you of the chore of showing prospective purchasers round your home yourself. You can simply go out for an hour or so and come back when it's all over. If you've got dogs or young children, this is especially valuable, since it enables you to get them safely out of the house for the duration of the viewing - which is always a good idea!
Furthermore, if you are elderly, or living alone - or just understandably nervous about letting strangers into your home - accompanied viewings are the ideal solution.
Finally, it's worth remembering that buyers also tend to prefer accompanied viewings, since they are often too embarrassed to put questions about a property directly to its owner.
Strictly speaking, this is really one for a solicitor. That said, my understanding is that technically, you own half the thickness of any party wall, so as far as minor, everyday things are concerned - like drilling into it to install fixings for kitchen cabinets or shelves, or even cutting into it to install electrical wiring and sockets - you are basically free to do what you like, as long as you don't do it in the middle of the night. Nevertheless, it is basic politeness to let your neighbours know before you start.
Major structural work, meanwhile, is a rather different kettle of fish. This is governed by the Party Wall Act, 1996, which gives you the right to do things like cutting into the wall to take one end of an RSJ, or slicing all the way through it in order to install a new damp course. If necessary, you can even demolish the whole thing and completely rebuild it! However, you must inform the owners of the adjoining property, in writing, not less than two months ahead of the planned start date.
As well as requiring you to give the proper notice, the Act also stipulates that any work done should not cause undue inconvenience for your neighbours. In addition, you are responsible for providing suitable protection for buildings and property during the course of the work, and for compensating your neighbours in the event of any incidental damage. In return, your neighbours are legally bound to allow free access to their property as necessary for the proper completion of the work.
While my understanding is that your neighbours cannot ultimately stop you from exercising your rights under this Act, failure to do things like providing proper notice - quite apart from being an appalling breach of common courtesy - could trigger a lengthy and potentially costly dispute. That's why I would strongly urge you to seek proper legal advice before doing anything too drastic.
Variations on this question are put to agents all the time - whatever the state of the market. But if the question is essentially the same, so too is the answer. Basically, you should sell when you want to, or need to. I'm afraid there is little point trying to exploit the property market in the way you suggest - for the simple reason that it doesn't work like that.
Look at it this way. If it were really possible to choose a time to sell that would maximise your return, then everyone would be doing it. Then what? There would simply be a glut of property on the market, and prices would have to come down!
That said, it is true that the majority of sellers tend to wait until Easter before putting their homes on the market, because there tends to be an influx of fresh buyers looking to move in time for summer. However in practice, this means that there is often quite a shortage of property on the market at the start of the year! Yes, there may be fewer buyers out there looking in January. But there will be fewer properties for them to choose from too. Conversely, while there may well be more buyers on the lookout come Spring, there will probably be a lot more property on the market as well, all competing for their attention. That's how supply and demand works. And the current state of the market doesn't alter that one iota.
So, if you want or need to sell early in 2008, I would advise you to bite the bullet and put your home on the market in the New Year. If you need any more persuading, just think: the sooner you do so, the sooner your home will sell - which means you will be perfectly placed to get first pick of all those Easter properties!
As far as traditional pets like dogs and cats are concerned, there are of course no restrictions. However, things are rather different in the case of other animals.
For horses, ponies and donkeys, the rules are not too onerous. Nevertheless, since 2002, each animal must have its own passport - and when one dies, you can't simply bury it somewhere on your land. Instead, it must be collected for proper disposal by an approved carrier.
As for chickens, geese or ducks, flocks of anything less than 50 birds are exempt from registration - although you are encouraged to do so voluntarily.
Things get a lot more complicated, however, with traditional farm animals - what would broadly be termed livestock. Whether you have a single cow, pig, goat or sheep and treat it as a pet, or whether you keep several and exploit them for their milk/wool/meat etc, the same rules apply. Basically, all livestock must be registered with Defra (the Department for Environment, Food and Rural Affairs). You must also apply for the relevant ear-tag or passport for each animal, keep detailed records of their health, etc, and obey all rules on animal movements.
How do you go about this? The first step is to contact the Rural Payments Agency (www.rpa.gov.uk), and apply for something called a County Parish Holding (CPH) number for the property where the animal or animals are to be kept. Once you have a CPH number, you can register each one with Defra via your local animal health divisional office. Strict rules apply to the movement of all such animals. With cows, for example, you must notify the British Cattle Movement Service, and keep records of all such movements for up to 10 years.
This might all seem rather excessive if you're just planning to keep a handful of animals around your property - but as the recent scares over foot and mouth, bird flu and so on have highlighted, when it comes to keeping animals, you can't be too careful.
The first thing worth emphasising here is that you needn't have any worries over safety and security. As part and parcel of their duty of care to their clients, all agents who undertake to hold keys on behalf of clients are required to have clear procedures in place to eliminate any possible security risk. For example, all keys will normally be stored in a secure location - for example, an office safe. In addition, individual keys will normally only be identified by a reference number. The list of which number goes with which property will always be kept separately, either elsewhere in the office or in a different location altogether. So, even if by some chance your key were to fall into the wrong hands, it would be next to impossible to link it with your property. Finally, of course, all reputable agents are insured against any breach in these procedures.
As to whether leaving your key with your agent is actually a good idea, the short answer is, Yes! In fact, it has a number of real advantages. For example, it obviously allows your agent to conduct accompanied viewings on your behalf - which could be particularly useful if a really hot buyer turns up out of the blue, and you're not at home.
Then again, if you go away for any length of time, leaving a key with your agent means that he or she can pop round occasionally and keep an eye on the place. We're not talking about housework or garden maintenance here, but simply a question of giving the place a bit of an airing. And of course, if the worst were to happen, like a burst pipe or even a break-in, it means that your agent would be able to alert you in good time and make suitable arrangements for the necessary repairs.
Above all, leaving a key with your agent enables you to continue leading your normal life - despite the fact that your home is on the market. And anything that does that has got to be a good idea!
This is really a matter for a solicitor. The law governing this sort of thing underwent some major revisions a few years ago. Up until then, all you needed to prove was that you had occupied the land for a period of 12 years without any challenge from the legal owners. After that, you could claim possessory rights over it (not quite as good as full title, but the next best thing - particularly if you took out suitable indemnity insurance).
Now, things are rather more complicated, and the simple 12-year threshold no longer applies. You can understand why. Squatters' rights - which is effectively what we are talking about here - were always something of an anomaly in modern-day society, and it was only a matter of time before some Government or other reined them in.
So, what is the current situation? Well, that depends. When you say you have been "looking after" the land, what exactly do you mean? If it is simply a piece of unfenced ground that you have kept a horse on, for example, then you have no rights over it at all. To claim any such rights, you must have fenced it in or formally delineated the boundaries of the plot in some other way - and preferably done something else to improve it as well, such as landscaped it.
However, the real crucial point is whether the legal owners of the land are aware of your occupying it, or not. If they are, and they have agreed to it - or even if they have simply condoned it - then they will be deemed to have exercised their right of ownership, and you yourself will therefore have no legal rights whatsoever.
On the other hand, if despite your very best efforts you have failed to locate the legal owners; if you have subsequently fenced the land in and landscaped it; and if in all that time no-one else has claimed ownership - then you may well have a case.
That's a lot of "ifs" - which is why, as I said at the beginning, you best bet is to consult a solicitor.
Legal Indemnity Insurance is not something that most people will have come across. Unless, that is, they have been involved in a previous property transaction which has been delayed or even prevented from going through altogether, due to some legal complication.
This type of insurance doesn't actually resolve such matters. Instead, it neatly circumvents them by providing protection for the purchaser against the possibility of any future financial loss or 3rd-party claims.
One of the main areas where this comes into its own is over issues of title or ownership - particularly in cases where so-called possessory title is involved. This sometimes crops up with older properties which haven't changed hands for a long time. It means that although the current owners may have had use of a piece of land for many years, there is no official record of them having full legal title - otherwise known as absolute title. This is precisely the sort of glitch that would normally set all the legal alarm bells ringing. But with indemnity insurance in place to protect the purchaser against the costs of any future legal challenge, the sale can proceed in the normal way.
Other problems that indemnity insurance can help solve include those relating to lost documents, issues of access, poorly-worded legal documents, restrictive covenants, or even properties built on unmade roads. In this last case, for example, the purchaser's solicitor might well propose that indemnity cover be arranged against any future demands from the local authority for contributions to the cost of having the road made up, or to meet any future claim over rights of way.
Since it benefits both seller and buyer, legal indemnity cover may be arranged by either party. A single premium payment, normally of between £150 and £300, provides protection in perpetuity - so, once cover has been arranged, it is transferrable from owner to owner.
So, to use a DIY analogy, legal indemnity insurance doesn't just paper over the legal cracks. It's more like a high-quality filler, giving a permanent, smooth finish!
As you're probably aware, Home Information Packs (better known as HIPs) have not been without their fair share of controversy. The Government has consistently claimed that they will work wonders for the housing market and save the planet to boot. Others - namely estate agents, solicitors, surveyors and mortgage companies - have tended to be rather less enthusiastic.
So, being as objective as possible - and working on the basis that nothing in life is either all good or all bad - what, if any, are the real benefits of HIPs to you as a buyer?
Well, if this is your first foray into the housing market, then you stand to save money on the cost of your purchase, since the searches and so forth that you would previously have had to pay for will now be available for nothing in the HIP, courtesy of the seller. (If, however, you are selling one property in order to buy another, then you naturally lose that benefit.)
Secondly, the Energy Performance Certificate which forms a central part of the HIP will give you a clear idea of the energy efficiency of the property you are contemplating buying, together with some advice on how that might be improved. How important the energy rating may be in influencing your purchasing decision - and how valuable the advice that comes with it - remain, shall we say, open to question.
Thirdly, the Land Registry Plan, which forms part of the evidence of title in the HIP, will give you an indication of the boundaries of the property.
As for the rest of the contents, this is basically all technical material which will be of use to your solicitor, but of little interest to you personally. Ironically, however, this - if anywhere - is where the real benefit of HIPs may come, in cutting the time it takes for the transaction to go through. The quicker sales happen, the less chance there is for anything to go wrong - and that would be good for everyone.
Actually, of all the criticisms levelled at HIPs, this one is probably the least valid. In the vast majority of cases, moving home means selling one property in order to buy another. From the cost perspective, all that HIPs have done is to take certain items from the buying side of the equation - things like searches and so forth - and load them onto the selling side.
HIPs are therefore broadly cost-neutral. The only entirely new element is the Energy Performance Certificate, or EPC, and that probably costs less than £100. With average property prices now over £200,000, that's a mere drop in the ocean compared to the £2,500 that the Government will take off you in Stamp Duty!
Granted, if you are just selling, then your HIP is effectively a bit more expensive, since you aren't able to recoup the cost of things like searches on your next purchase. But even here, other than in exceptional circumstances, we are only talking about £200-£250 in total.
So, the answer to your question is: no, HIPs haven't made moving home a lot more expensive - so you certainly shouldn't let the thought of them put you off moving!
While I'm on the subject, it's important to clarify something about the EPC, which all HIPs must include (at the present time, of course, we're only talking about properties with 3 or more bedrooms). The EPC not only rates the energy efficiency of your property, but also suggests ways in which this rating can be improved. Now, some concern has been expressed that these suggestions are mandatory - in other words, that you are required by law to undertake the work. This is absolutely NOT the case. The Climate Change Thought Police might not like me saying this, but you are perfectly free to completely ignore everything that the EPC suggests! Hopefully, it will be many a long year before you can be thrown in the Tower for having single glazed windows.
If you have the space to do it (not to mention the money), then extending is certainly an option. However, there are a number of important points you need to bear in mind.
Firstly, an extension is quite likely to require planning permission, and major work of this kind will in any case need to conform to current Building Regulations. This is expensive. Of course, you can always have things done on the cheap (and there are plenty of builders around who will be only too happy to oblige), but this will only store up problems for the future. For example, you won't be able to sell your property as having 3 bedrooms, when in terms of Building Regs it only actually has 2 proper bedrooms, plus a loft room.
Secondly, no matter how happy you may be in your current property, extending always involves an element of compromise - not to mention an enormous amount of dirt and disruption. Trying to carry on anything remotely resembling a normal life in the midst of a building site, perhaps for months on end, can be very stressful indeed.
Finally, if you do decide to sell in the near future, you may well not recoup the full cost of the work. Yes, a 3-bedroomed house is worth more than a 2-bedroom - but not necessarily by as much as you might think. Extensions may provide more accommodation, but often they do so at the expense of the look of the property. We've all seen nice, neat Victorian semis that have been completely ruined by the addition of huge, top-heavy dormers.
At the end of the day, if you'd rather stay put, then by all means go ahead and extend. But if you would really prefer to move house, then do it - and do it now. Remember that as a buyer as well as a seller, it's all a question of swings and roundabouts - whatever the state of the market!
In practice, HIPs haven't fundamentally altered the conveyancing process at all. The two parties' respective solicitors still have to go through all the documentation with a fine tooth comb, to ensure that all the Is are dotted and all the Ts crossed. The big difference is in the way much of this documentation is delivered - and who pays for it. Local authority searches, for example, used to be commissioned by the buyer's solicitor on behalf of his or her client. Now, those searches are contained in the HIP, which is paid for by the seller.
Right from the start, of course, it was one of the principal aims of HIPs to speed up property transactions - thereby helping to reduce the number of sales that fall through. Despite all the controversy they have stirred up, it remains difficult to argue with the underlying logic: by bringing together most if not all of the legal documentation right at the start of proceedings - instead of waiting for the buyer's solicitor to set the ball rolling - significant time savings should be achievable.
Right now, it's far too early to determine whether HIPs have really delivered those savings. Major changes of this kind always have teething troubles, and take time to bed in. However, I suspect that the real key to the long-term success of HIPs will lie in the amount of information that is included in the packs. As things currently stand, for example, a HIP must include standard local authority searches, but specialist searches covering things like mining - pretty important if the property concerned is in a former coal-mining area - are only optional. Similarly, neither Home Use nor Home Contents forms are currently on the mandatory list, even though together they contain a great deal of important information that the buyer's solicitor will certainly require. The former, for example, deals with a whole range of topics, including boundaries, services and agreements with neighbours, while the latter details precisely which fixtures and fittings are included in (or excluded from) the sale.
My advice is therefore simple - the more information you include in your HIP, the faster your sale should be!
That depends on what sort of property you are looking to sell. Here in the UK, auction tends to be reserved for those properties where the normal method of sale by private treaty is less likely to produce the best possible price - for example, land (with or without planning permission), properties requiring substantial renovation or remedial work, short leasehold properties, and houses suitable for conversion.
One of the great advantages of auction is that contracts are exchanged at the fall of the auctioneer's gavel, with completion normally following in 28 days. This means 1) that sales rarely fall through, and 2) they happen far more quickly. As a result, auction may be particularly suitable for sellers requiring an immediate sale. However, the seller will need to instruct the agent several weeks in advance of the actual auction date, to allow time for details to be included in the auction catalogue and for various other administrative processes to be completed - like, for example, the compiling of a Home Information Pack, if one is required.
Talking of HIPs, it's worth noting that properties sold at auction have always needed a legal pack, containing items such as proof of ownership, searches and so on. In other words, just about everything a HIP contains, except the new Energy Performance Certificate. Properties that don't require a HIP - for example, land, or 1 and 2-bedroomed properties, or those that have a sitting tenant - will continue to require such a pack.
The agent conducting the auction will of course explain everything else you need to know, and advise you on setting a guide price and a reserve. Why two prices? Well, the guide price is just that - a general, ball-park figure published in advance and designed to help stimulate interest from prospective buyers. By contrast, the reserve price is strictly confidential. This is basically the minimum price you will actually accept. Although you agree it in advance with your agent, it can be changed at any time.
Once everything is in place, you're free to attend the auction if you wish, and drink in the unique air of excitement and anticipation. Who knows, you might even get hooked, and start attending them regularly!
If you have a property question that you don't see featured, please contact us and we will endeavour to answer your question as soon as possible.
