First time buyer mortgages rise, but buy to let slows
Borrowing for house purchases in August were up 14% month on month and 11% year on year, according to the latest data.
Figures from the Council of Mortgage Lenders show particular resilience from first time buyers but buy to let loans are down
"House purchase activity bounced back from a dip in July, reflecting resilience in first time buyer activity. Mortgage rates remain at or close to historic lows, and the re-pricing of mortgages following August’s base rate cut should help to underpin a continuing, strong appetite for home-ownership over the coming months" said Paul Smee, CML director general.
"Buy to let by contrast continues to operate at lower levels five months after the stamp duty change on second properties. This appears to be a long term trend, and with lenders potentially tightening affordability checks ahead of the tax changes in April 2017, activity on the buy to let house purchase side may well remain at current levels."
Woman rejected by mother in will wins £164k inheritance
A woman cut out of her mother's will has been awarded a £164,000 inheritance in what could prove to be a landmark ruling. For the full story, see the BBC
We asked Senior Partner, Patrick Donaldson, for his initial thoughts on this decision.
"The Court has taken a robust attitude about the mother’s conduct. Although there is freedom of testamentary disposition, that principle is restricted by virtue of the Inheritance (Provision for Family & Dependants) Act. Testators must make reasonable provision for dependent children but it is a question of interpretation in defining who is deemed to be a dependant. In this case the daughter was estranged for 37 years but the court concluded that the mother was difficult and unreasonable and placed great weight on the financial situation of the daughter and her 5 children.
"This may not be new law but the case provides a new interpretation of how far freedom of testamentary disposition is restricted. There is now a suggestion that the testator should prove some connection with the charities (or other beneficiaries) they benefit when excluding children from their wills - even long estranged children. This makes for less certainty despite the fundamental legal principle that a testator is free to dispose of their estates as they see fit.
"The implication is that regardless of the absence of any contact between a parent and adult child there is an implied duty to make provision for an impecunious adult child. It would be surprising if this case does not lead to more litigation in probate matters."
Model agreement to set out rights of tenants and landlords
The government is introducing new measures to encourage longer term tenancies and improve standards in the private rented sector.
A model tenancy agreement will set out the rights and responsibilities of both landlords and tenants, and provide an industry benchmark for written tenancy agreements.
The government is also introducing a tenants’ charter which will give advice on what to do if something goes wrong with a tenancy. The charter will ensure greater transparency about letting agents’ fees to prevent unreasonable practices and unfair charges. This will enable tenants to know the full costs before they sign up to any contract.
Help to Buy guarantee now available for homebuyers
The mortgage guarantee scheme has been introduced three months early to boost the housing market and enable more people to own their own home.
The scheme applies to both new build and older properties and is available to both existing homeowners and first-time buyers. It was due to be introduced in January but the Government brought the date forward so that it came into effect in October.
Help to Buy: mortgage guarantee is targeted mainly at people who can afford to pay a mortgage but are struggling to provide the large deposits required by some lenders. The scheme can be used for properties up to the value of £600,000.
Potential buyers will have to provide a minimum deposit of 5%. The government will then provide a guarantee for up to 15% of the purchase price. This is designed to encourage lenders to provide 95% mortgages, secure in the knowledge that the government guarantee minimises any risk.
Advertising watchdog sets deadline for agents and landlords
The Advertising Standards Agency (ASA) has set a deadline of 1 November for letting agents and landlords to ensure they clearly display information about non-optional fees in their ads for rental properties.
ASA says non-optional fees such as admin fees, charges for inventories and reference checks can create significant costs for tenants. The changes mean that agents and landlords must now ensure that non-optional fees are made clear on their websites and in other promotional material.
An ASA statement says: “In practice this means that non-optional fees that can be calculated in advance will be included with the quoted asking rent. So, when an agent charges a non-optional fee that does not change according to individual circumstances, e.g. a fixed admin fee of £150 per tenant, ads should state “£1500pcm + £150 admin fee per tenant” or similar.
TUPE regulations to be ‘simpler and less confusing’
The government has announced changes to TUPE regulations which are designed to cut red tape and make the process simpler and less confusing.
TUPE – the Transfer of Undertakings (Protection of Employment) Regulations – protects the rights of employees when a business is transferred from one owner to another.
The proposed changes mean that one year after the transfer, businesses will be able to renegotiate terms and conditions in collective agreements as long as the overall changes are no less favourable.
Overtime payments ‘should count towards holiday pay’
An employment tribunal has held that overtime payments should count when calculating holiday pay as long as the extra hours are “intrinsically linked” to the employee’s overall work and duties.
The judgment brings the UK closer to EU law in relation to the Working Time Regulations.
The judgment means that overtime which is an integral part of an employee’s role should be taken into account when calculating holiday pay.
One other point to bear in mind; this ruling only applies to the four weeks’ holiday entitlement available under EU law. It doesn’t apply to the Bank Holidays available under UK law. This could lead to further confusion so it is likely that there will be further legal developments to clarify the situation.