The UK government has recently announced a shift in property ownership, marking the beginning of the end for the out-dated leasehold system. Under these proposed reforms, commonhold will be reinvigorated and made the default tenure for flats, ensuring homeowners have full control over their properties.

What’s Changing?

• Ban on new leasehold flats – The government will prohibit new leasehold flats, ensuring future homeowners are not burdened by ground rent.
• Empowering homeowners – Commonhold will give homeowners a stake in the ownership of their building, removing the power imbalance that currently exists under leasehold.
• Greater control and security – Homeowners will no longer be subject to the whims of freeholders and managing agents.

A Fairer System for Homeowners

Unlike leasehold, where homeowners effectively rent their property from a freeholder for a fixed term, commonhold grants full ownership. This means:

• No ground rent – Homeowners will not have to pay escalating fees just to live in their own property.
• Self-management – Residents will have control over how their buildings are run, including maintenance and service charges.
• No expiry date – Commonhold properties do not revert back to a landlord after a set period.

What This Means for Existing Leaseholders

While the ban on new leasehold flats is a major step forward, millions of existing leaseholders are still affected by unfair terms. The government is pushing ahead with reforms to:

• Make it easier and cheaper to buy a freehold or extend a lease.
• Strengthen protections against unfair service charges.
• Improve regulation of managing agents.
• Reform forfeiture laws to prevent homeowners from losing their property unfairly.

Next Steps

Later this year, the government will publish a Bill setting out the full legal framework for reformed commonhold. A consultation on banning new leasehold flats will also take place to determine the best approach.

If you are looking to buy or sell a leasehold property in England and Wales, then please call us on 01267 237441 or email us at mail@utk.co.uk to speak to one of our experienced property solicitors.

The Bank of England has lowered its base interest rate from 5% to 4.75%, marking the second rate cut in 2024. The previous reduction in August ended more than four years of steady or rising rates. Despite these adjustments, borrowing costs remain challenging for many households as the UK navigates an environment of high interest rates compared to the last decade.

Impact on Mortgages

Interest rates directly influence mortgage repayments, credit card costs, and savings rates for millions across the UK. Here’s what the latest rate cut means for different mortgage types:

• Tracker Mortgages:
  Around 600,000 homeowners have tracker mortgages that are linked to the Bank of England’s base rate. These homeowners will benefit immediately from the reduction, with monthly repayments decreasing.
• Fixed-Rate Mortgages:
  Over 80% of mortgage holders are on fixed-rate deals. While their payments remain unaffected for now, the rate cut could influence pricing for future deals. However, fixed mortgage rates remain high:
  • Average two-year fixed rate: 5.42%
  • Average five-year fixed rate: 5.13%

Challenges for Borrowers

Many fixed-rate mortgage holders who locked in at historically low interest rates are nearing the end of their deals. About 800,000 fixed-rate mortgages with interest rates of 3% or lower are set to expire annually through 2027. These borrowers face significantly higher costs when remortgaging, reflecting the increased rates in today’s market.

Broader Considerations

Although the base rate cut is a positive signal, its impact on fixed-rate mortgage pricing may be limited in the short term. Factors such as market reactions to the Budget and global economic events continue to play a significant role in determining lending rates.

Looking Ahead

Borrowers should closely monitor the market and seek financial advice to navigate this evolving landscape. While rate cuts provide some relief, the era of ultra-low mortgage rates appears to be over, at least for now. Planning ahead is essential, especially for those approaching the end of their fixed-rate terms.

The inflation rate rose by more than expected to 2.3% last month, and this raises the question as to whether the Bank of England will put future interest rate cuts on hold until the inflation rate drops back under 2%, or whether it will continue to cut rates to stimulate a faltering economy still reeling from the Labour government’s recent tax increases.

Whether you are purchasing a new home or navigating a remortgage, please contact our expert team of property lawyers by telephoning 01267 237441 or emailing us at mail@utk.co.uk.

Recently, the UK Government unveiled the Renters’ Rights Bill, a transformative piece of legislation aimed at reshaping England’s private rental sector. This landmark bill, expected to come into effect in 2025, promises to offer tenants greater protection. But what does this mean for Wales? Could we see the Welsh Government adapt its laws to match England’s evolving rental landscape?

Let’s delve into the key differences this proposed legislation would create between England and Wales.

Tenant Protection: A Key Difference

If the English bill is passed in its current form, landlords will be restricted from regaining possession unless specific grounds apply. This change essentially creates unlimited tenancies if tenants wish to remain and none of the stipulated grounds for eviction exist.

In contrast, landlords in Wales enjoy greater flexibility. Although they must wait six months before reclaiming possession, they don’t need a specific reason, providing more control over their properties. However, the process is not without challenges—one small mistake in issuing notices can result in costly delays.

Fixed-Term Tenancies: A Safety Net for Landlords

Another significant difference between the two nations lies in the concept of fixed-term tenancies. In Wales, landlords can still offer these contracts, allowing them to plan ahead with a guaranteed income. In England, however, their abolition could create uncertainty, as tenants may choose to leave on short notice, disrupting rental income streams and potentially making buy-to-let mortgage lenders nervous about future risks.

Rent Bidding Wars: A Rising Concern?

While bidding wars aren’t common practice in most of Wales, some areas might be experiencing this trend, particularly in high-demand markets. The proposed English legislation seeks to curb this practice, though it could be argued that more government action is needed to increase housing supply and ease pressure on the rental market. In Wales, rent levels are currently dictated by market forces, providing a more balanced approach.

Final Thoughts: Wales vs. England

If the Renters’ Rights Bill becomes law in England, the differences between English and Welsh housing regulations will be more pronounced than ever. While England will see stricter rules on tenant evictions, fixed-term tenancies, and rent arrears, Wales maintains more landlord-friendly policies, offering flexibility and control.

For now, landlords in Wales can breathe a sigh of relief, but it’s anyone’s guess whether the Welsh Government will follow suit with similar changes in the future.

When selling a property, most sellers will wait until they have an accepted offer before they obtain a conveyancing quote from a solicitor. You may not realise that much of the legal and administrative work can begin before you find a buyer.

Here are some of the early considerations that merit instructing a solicitor early:

1. Proving your identity

Your solicitor is required by law to carry out identification checks on you as a seller to satisfy the money laundering regulations. For example, is your passport or driving licence up to date and can you readily produce a recent utility bill or bank statement?

2. Property Information

Your solicitor will need to send you numerous forms asking questions about the property. These are quite lengthy and need to be completed as fully as possible. The information you provide will help your solicitor identify questions and issues that will be raised by your buyer’s solicitor throughout the process. Early instruction allows your solicitor to identify potential problems which can hopefully be dealt with in advance.

3. Dealing with missing documents

Missing documents is a frequent cause of delay which will hinder the progress of your sale. There are many certificates and documents relating to the property that you may need to produce to the buyers. Typical examples of these are window/door installation certificates, solar panel documents, electrical, central heating and a host of different guarantees and warranties. Do you know where these are and have you still got them? If one or more of these documents are missing, your solicitor will advise you how to rectify the situation and save time later in the process.

Our team of experienced property solicitors would be pleased to assist you with any queries you may have about the conveyancing process. Please call us today on 01267 237441 or email us at mail@utk.co.uk.

The uncertainty of the outcome of the upcoming general election can influence decisions relating to all aspects of life, and many people will understandably wonder how this may affect property transactions.

When considering previous general elections, it comes as no surprise that there is generally a slow down in the number of property transactions due to buyers and sellers being hesitant to proceed with making such an important decision against an uncertain future.

However, despite the fact that mortgage rates are still generally high, the housing market remains buoyant, with steady increases of properties being sold. It is also pleasing to note that mortgage lenders’ fixed rates appear to be stable, for the time being.

What we know so far is that the Labour party has not yet announced their stance on stamp duty land tax, whereas the Conservative party are expected to keep the current thresholds for first time buyers. Furthermore, both of these parties currently remain silent on any potential changes to inheritance tax. It will therefore be a case of seeing what unfolds with the next government.

The reality is that the general election will not have an immediate impact on the housing market as neither the Conservatives nor the Labour party have a huge divide in any property-related policies which may throw the property market into turmoil or cause greater uncertainty.

Nevertheless, whilst there may inevitably be short terms fluctuations in prices and the number of properties on the market, the natural supply and demand of the property market will continue to be a driving factor in the property sector.

Our team of experienced property solicitors will be more than happy to discuss your purchase or sale. Please call us on 01267 237441 to speak to one of our property solicitors.