Homeowners in flood areas to get relief

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A new report, published shortly by the Chartered Insurance Institute’s New Generation Claims Group, will call for the creation of an agreed standard for validating the flood resilience of a property.

This would essentially create a certificate allowing homeowners to prove their property had undergone adaptations to improve its flood resilience, operating in a similar way to the energy performance certificate.

The theory is that a flood risk certificate would allow insurers to differentiate between risks more easily than under the current framework – fondly referred to as the postcode lottery by some! According to the CII group’s research, customers do not see any benefit in employing flood resilience measures as they don’t feel that insurers recognise these steps when it comes to calculating premiums.

The proposal has gained the support of many in the industry including the Chartered Institute of Loss Adjusters which views it as a positive step to help reducing a customer’s potential risk, lessening the potential impact of flooding and – potentially – meaning that they don’t pay more than they need for cover.

Given the uncertainty that still remains with the upcoming introduction of the new Flood Re scheme, such a certificate could act as a powerful incentive for homeowners in flood risk areas to take proactive steps to protect and adapt their property.
As a reminder, the Statement of Principles that existed between Government and insurers with regards to insurance for existing properties in flood areas expired in June 2013 and was replaced by a Memorandum of Understanding to continue pending implementation of Flood Re. This is essentially a reinsurance programme open to all home insurers for high risk domestic properties.

At the moment it is still unclear as to which risks insurers will cede to Flood Re and each insurer is free to decide which risks they do cede. Insurers will also be able to choose what premium they charge but will be expected to pass on the benefit of Flood Re to customers through lower premiums in high risk areas. Only properties built before 1st January 2009 can be ceded and while some limited business activity is acceptable for home insurance contracts where the owner is resident, properties in commercial ownership and/or paying business rates cannot be ceded.

Insurers will always consider anything that prevents loss to a customer’s property as a good thing, but don’t necessarily translate it into a reduced premium. There has been something of a precedent in the car insurance market whereby installing a security device or a tracker can be taken into account in the premium. Such devices have to be registered with the Association of British Insurers and have gone through an approval process – and therein lies the issue when it comes to flood resilience products. There is a whole range available and they usually only mitigate against certain types of flooding.

Clearly the introduction of a flood resilience certificate and its acceptance by insurers is not going to happen overnight, nor is it certain to deliver reduced premiums however the very fact that it is the insurers’ chartered body recommending its development is a positive step and could result in some relief for homeowners in high risk flood areas in the future.

 

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Over 40s most likely to become first-time landlords

According to a new survey by Rentguard Insurance, between 40 and 49 years old is the most common age for those becoming a landlord for the first time.

Some 40% of those purchasing a buy-to-let investment for the first time were in this age bracket.

They were followed in second place by those in the 50+ age bracket (24%) and those aged between 30 -39 (19%). The landlord insurance specialists asked customers the question ‘How old were you when you first became a landlord?’ on the Property Eye section of their website.

Perhaps surprisingly, 17% of those surveyed were aged just 20-29 when they became a landlord for the first time.

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The Battle of the Property Portals- Zoopla Verses OnTheMarket

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The verbal battle between Zoopla and its new competitor and estate agent-owned Onthemarket, is hotting up. Zoopla previously announced that it has lost 11% of its estate agent branch members over the past year as its younger rival has sought to lure them away. In a recent blog I stated how many agents were moving all their properties to OnTheMarket from other popular websites to advertise. Zoopla is now saying that they have already re-signed “a number of agents who had previously cancelled to join Agents’ Mutual” although, they failed to reveal their names.

The spokesman for Zoopla Lawrence Hall says: “These agents have already realised that the Agents’ Mutual experiment is hurting them and they are no longer prepared to be guinea pigs in this process and lose out on valuable exposure and enquiries”.

OnTheMarket have a ‘one other platform’ rule, meaning estate agent members can only list their properties on that portal and one other, but this is restrictive as they are not visible to the major audience offered by all the key portals.

The latest data obtained by independent web monitoring firm Hitwise, reveals that over the first two weeks since the launch of OnTheMarket in January 2015, it has attracted a total of 194,000 visits (an average of 14,000 per day) compared to 18.8 million visits for Zoopla over the same period.

The Hitwise data indicates that Zoopla’s daily audience has averaged 97 times that of Onthemarket over the two week launch period and that Onthemarkets share of all UK property website visits during this period stands at just 0.22%, in comparison to Zoopla’s market share at 22%. This data is implying that at current levels an Onthemarket agent would get equal levels of exposure and enquiries in 3 months that an agent on Zoopla would get in a just one day.

Onthemarkets representative Ian Springett said: “As we have stated previously, the Hitwise figures which continue to be reported by Zoopla are inaccurate and demonstrate Zoopla’s increasing desperation to reduce the number of agents who are removing their properties and advertising expenditure from them to list with OnTheMarket.com”. Onthemarket believe they have already overtaken Zoopla in certain spots of the country with their property listings and are confident of becoming the number two portal within a year.

Zoopla feel compelled to respond to OnTheMarket’s claim of one million unique visits to its new portal by saying that it lacks any authoritative source to back up that figure. They insist that they will continue to do what they do best, which is to provide innovative and market-leading tools for both consumers and agents. They believe that their members are enjoying record levels of exposure, enquiries, instructions and value from them and that the figures speak for themselves.

Recent Planning Laws..Be warned!!!!!!!

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On 25 March, in one of his last ministerial acts of this Parliament, Eric Pickles, Secretary of State for Communities and Local Government, announced a series of changes including new permitted development rights and rules on standards.

New permitted development rights

The following permitted development (PD) rights apply from 15 April 2015 such that, as a general rule, planning permission will not be required for:

  • the conversion of casinos or amusement arcades to dwelling-houses (C3);
  • the conversion of storage premises or distribution centres (B8) to dwelling-houses (C3);
  • the conversion of retail units (A1/A2), betting offices, pay day loan shops and casinos to restaurants/cafes (A3);
  • the conversion of retail premises (A1/A2) to assembly and leisure (D2); and
  • the installation of rooftop solar arrays of up to 1MW (representing a 20-fold increase from than that previously permitted).

Betting offices and pay day loan shops will be removed from the A2 use class and become sui generis but will continue to benefit from the permitted development rights to change to A1 and A2 uses and certain temporary changes of use for a period of up to two years.

PD rights for extensions to non-domestic premises including shops, offices and industrial buildings are made permanent. The temporary right for larger rear extensions to dwelling-houses is to be extended for a further three years to May 2019.

Other PD amendments include rights for shops to modify existing loading bays and erect ‘click and collect’ facilities, rights for temporary filming on commercial premises, new rights to replace plant and machinery on existing waste management sites and new rights for sewerage undertakers.

The controversial office to residential conversion right, currently set to expire on 30 May 2016, was not mentioned in these changes and is subject to further consideration.

Deemed discharge of conditions

A new procedure for the deemed discharge of conditions also took effect on 15 April 2015. Applicants may assume that certain planning conditions are deemed to be discharged if the local planning authority (LPA) fails to determine the application for detailed approval within the 8 week determination period or longer agreed period. Many types of conditions are excluded, including where development is subject to EIA.

The applicant must, however, serve the LPA with a “deemed discharge notice” specifying certain information including the date on which deemed approval will take effect, which must not be before the determination period expires and must be at least two weeks after receipt of the deemed discharge notice by the LPA (whichever is later). If the LPA has not given notice of its determination (whether approval or refusal) by the specified date then the condition is deemed to be discharged.

New guidance on s106 negotiations

National planning practice guidance has been updated to make it clear that negotiations on s106 agreements should be concluded within the statutory timescales for determining planning applications. It promotes the use of standardised clauses to minimise the need to draft agreements from scratch and proposes that parties should start discussions at the beginning of the application process. Few changes are anticipated in practice as a result of this guidance.

New standards

New streamlining measures for technical standards apply from 1 October 2015 including additional optional Building Regulations on water and access and a new national space standard. Emerging local plans, neighbourhood plans and supplementary planning documents should not impose additional local technical requirements for the construction and internal layout of new dwellings, including requirements to adhere to the Code for Sustainable Homes. Existing plan policies are expected to be updated accordingly.

Until 30 September 2015, planning permissions should not be granted requiring compliance with any technical housing standards save where LPAs have existing policies on access, internal space or water efficiency. Thereafter, compliance with the new optional national technical standards should only be required where there is a relevant current adopted Local Plan policy.

Other changes

Other changes to practice guidance now in place include restrictions as to when local parking limits should be imposed and confirmation that LPA assessments of housing need should not normally require updating for a full 12 months.

Labour puts its stamp on housing

The Labour Party Hold Their Annual Party Conference

 

 

 

 

 

With only days to go until the election, housing seems to be at the top of the agenda for the political parties as they battle it out for Downing Street. Just this weekend Labour have announced two major proposals focused both on the lettings and sales market in the hope to tempt younger voters onto their side.

Firstly, Ed Miliband announced they would impose rent controls should they come into power, which would mean that landlords will only be able to increase rent for tenants by less than inflation for the duration of a contract. The party have already stated in their manifesto that it wants three-year tenancies as standard. They say that they are proposing these policies to help provide security for renters and help to keep the rentals affordable, which, on the face of it, is likely to appeal to millions of tenants around the country and particularly in London.

But how likely is that rent controls will provide this? Winkworth’s Chairman, Simon Agace, says that the reality of rent controls is far from the picture of security and control that Labour paints. “I started my career in the property world as a chartered surveyor in the late 1960s when I witnessed the ending of rental controls, which healed the damage done on the provision of homes and improved the quality of property in London. I therefore note the current climate with a certain degree of anxiety for the home-buying public,” he comments.

“The rental market has changed for the better as a result of some excellent regulation, but there is a delicate balance between regulation and altering the relationship between tenant and landlord. Intervention on rents and security of tenure has in the past damaged both market liquidity and good business values.”

Conservatives agree with this view, arguing that the policy would drive up rents and extinguish investment in the sector leading to poorer quality housing and fewer properties to rent.

For the sales market, however, Labour has proposed to abolish stamp duty for first time buyers of properties up to the value of £300,000, which at its maximum could save them £5000 in fees. “It is simply too expensive for so many young people to buy a home today, saving up for the deposit, paying the fees and having enough left over for the stamp duty,” stated Ed Miliband, “So we are going to act so we can transform the opportunities for young working people.”

With stamp duty already receiving a huge overhaul at the end of last year under the Conservatives, which helped a large section of the market, this latest reform would only serve to help this end of the market further.

Labour isn’t the only party looking to appeal to this end of the housing market though. The Conservatives have already announced their Help to Buy ISAs following the introduction of their Help to Buy policy in 2013. Help to Buy ISAs will allow first time buyers to save for a deposit and will be granted 25p by the government for every £1 saved.

So, housing is a hot topic on the agenda this election and seems to be the issue that is distinguishing the different parties as we move towards polling day.