Buying, selling and letting - Selling

There has been much speculation about the health of the property market following the recent ‘credit crunch’ which seriously exposed failings of elements of the banking system. Northern Rock has not recovered from the queues of customers who picketed branches to withdraw their savings and threw the financial stability of the bank into question in the process.
Homeowners and investors are understandably concerned about the broader impact this will have on the UK finance and housing market.

What is the credit crunch?

The credit crunch was caused by a liquidity crisis in the financial market. In short because of high repossessions in the US the value of the mortgage portfolios that the banks were selling lost their worth, which reduced their profitability and the banks’ liquidity.
Investment banks usually sell interests in a pool of mortgages. The value of the package is worked out from the expected future cash flow from the mortgages that make up the pool. When these pools were packaged together a certain percentage of the mortgages were expected to default and end up being repossessed. However, what happened was that the defaults and repossession rates were higher than expected.

The main problem with this scenario is that some of the mortgages should never have been made in the first place. Lenders who were desperate for new borrowers were willing to make risky loans in the sub-prime market for greater returns and this backfired.

What caused the problem?

The credit crunch was caused by huge losses made by banks that provided mortgages to sub-prime candidates with less than perfect credit records or low incomes. They defaulted on their mortgages and their homes were repossessed. The banks had to write off their loans and as a result made huge losses in the process which drastically reduced their profitability and liquidity.

Why has this affected the UK?

My understanding is that this has affected the UK banks because some of them are backed by US lenders and others have bought these sub-prime loans, often packaged up in pools of debt called collateralised debt obligations which lost their value.

How will this affect my mortgage?

These problems are unique to a handful of lenders and particular those who specialise in sub-prime lending. It may mean it is more difficult to obtain credit if you are considered a sub-prime applicant as some lenders are introducing tougher criteria to reduce their exposure. For traditional borrowers the effects should be limited – and in any case the situation should gradually return to normal.

Lawrence Garry is a property investor and a director of mortgage adviser Milestone Financial Services. Submit your property market questions to lawrence.garry@milestonefs, call 020 7719 0170 or visit milestonefs.com

Good lighting really does transform a home, but it can be a difficult task to master. Leading electrical regulatory body NICEIC offers some practical advice on how to get to right.

Well positioned lights will really help to enhance the mood of a room, but just how much light is needed to create the right effect? One way to determine the correct light levels for a home environment is to measure the room size in square metres and multiply this by 25 for incandescent lamps, 15 for halogen lamps or 19 for compact fluorescent lamps. This will give you the total watts required to light the room.  It’s best to place lights at a height where the bulb can’t be seen directly to avoid and reduce any glare. Don’t hang pendants so high that the bulb is clearly visible underneath from below and if lights are to be positioned over or near reflective surfaces make sure they have a diffuser.

The lighting for each room in the house will depend on its function, and the following tips will help you decide which light sources are best.
The living room Used for relaxing, entertaining, socialising, reading and watching TV, the living room is a multi-functional space. Work out where your furniture will be positioned and where you need lighting. That way you can advise your electrician if new sockets need to installed and so avoid long cables and flexes running across the floor.

Aim to use plenty of different light sources so you can create different levels of lighting.
One central pendant light with up lighters and table lamps placed around the perimeter of the room will create a feeling of more space as the light radiates inwards. Floor lamps are effective at brightening up dark areas where it’s tricky to fit wall lights. Just one chandelier situated in a living room can provide an element of glamour – they were traditionally lit by candles so use a low wattage bulb to give the same subtle affect.

The kitchen Lots of light is required in the kitchen. Under unit lighting is important to cast efficient light over work surfaces and a good ambient light is also useful. Downlighters in the ceiling creates a glare free effect while remaining functional, but it’s important that each spotlight is fitted properly with a fire hood. Pendants aren’t best suited to kitchens as they attract grease and dust.  
The dining room How you light this room depends on its style, but usually the main light source is hung over the dining room table, which can then be supplemented by wall lights and table lamps. You could also fit a rise and fall pendant, which can be adjusted to the desired height. If candles are used ensure they are far enough away from the light fitting. Long dining room tables look great with long lights suspended on wires.

The bathroom For make-up application and shaving it’s best to have a bright light, but if relaxing for a soak in the tub you’ll want to be sure you can dim the lights. Wall lights must be out of reach, or enclosed to keep water out, especially spotlights that are installed above a shower. Lighting can be controlled by a wall switch, which must be mounted outside the bathroom. Some mirrors have sections of the reflective surface removed and lights fitted behind. You can also use LED floor lights, which are set into the floor and come in different colours.

The bedroom Here you can really be creative with your lighting scheme, using bright neon colours or sparkling fairy lights. The right lighting will help you create a relaxing retreat to wind down and get a good nights sleep, but be sure to include more general lighting for getting dressed in the morning. Adjustable reading lamps are ideal if one of you is reading or watching TV while the other sleeps. They can be mounted on the wall, hotel style, or they can be fixed to the bed head or used as table lamps. To make the most of your dressing table make sure it is lit from both sides of the mirror, so it doesn’t cause shadows across your face.
To find a registered electrician in your area visit findanelectrician.info

General tips

Bright light is not always good light
Different effects are produced when light is reflected by surfaces, so consider this when you are deciding where to situate lights
Direct lights are best for reading or working
Lights can also be used to highlight features such as paintings or objects and help add atmosphere to a room
For multi functional rooms install a dimmer switch so you have the option of more light for reading or working and lower light levels for relaxing
Incandescent bulbs give off warmer colours and will help achieve a cosy atmosphere, while fluorescent light bulbs will offer a cooler but more efficient light for utility rooms
Dark coloured rooms absorb more light, so additional light will be needed
If you have a feature wall or coloured surface, illuminate it with lighting to add colour

The Exeter office of Savills has been instructed to sell Waterside House set in the sought after village of Stoke Gabriel in the famous South Hams region of South Devon.

As the name implies, Waterside House is perfectly located on the water’s edge, enjoying spectacular views from the many windows, balconies and terraces over the unique Mill Pool to the deciduous wooded banks beyond or down stream to the tower of the parish church of St Gabriel and St Mary with the River Dart beyond.  With steps leading down to the river via the terraces and balconies, the house is ideally placed to enjoy not only the water frontage, but also the south Devon countryside, Dartmouth and Totnes being about 4.5 and 5 miles away by boat and Torbay about 6 miles away.  The stylish accommodation includes a master bedroom suite with river balcony, a guest suite, 2 further bedrooms, open living space with dining area, sitting area, kitchen, laundry room, study, cloakroom, family bathroom, shower room, games room with kitchenette, studio and workshop and would provide the discerning owner with a property which is just perfect to entertain in.

Stoke Gabriel is picturesquely scattered on the east bank of the estuary of the Dart and is surrounded by beautiful and unspoilt undulating countryside.  This ancient and unspoilt village retains much of its period charm with records showing that a church has been in the village as far back as when William the Conqueror defeated King Harold in 1066.  Set within the church grounds is the famous yew tree reputed to be nearly 1300 years old and rumour states if you walk backwards round the tree three times your wish will come true!

Richard Addington of Savills says “Looking over the Mill Pool at sunset from the balconies is amazingly calming.  Whether you had this house for a permanent or holiday residence, the benefits are obvious”
Waterside House is being offered for sale at a guide price of £1.5 million.

Tax may well be playing on the mind of many property investors as they prepare to file their self assessment tax return. Although the final deadline is the end of January next year, for those who want the Inland Revenue to calculate their tax for them the deadline 30 September.
The problem for many investors is that the complexity surrounding tax issues means it can be very hard to know what is and isn’t deductable – the end result being that investors can end up paying too much or too little in income and capital gains tax.
Before you tackle your tax return this year it is worth ensuring you have considered everything you can to correctly minimise your tax bill.

GET ORGANISED

Property investors need to be organised. A separate bank account should be set up and investors should keep track of rental income and expenditure, holding on to all relevant receipts. Hiring professionals such as accountants and solicitors will help to make the process much easier. Any professional or legal fees can be offset against the rental income. However, fees incurred during the actual buying process cannot be claimed until the property is sold.

SINGLE OR JOINT OWNERSHIP

If the property is owned by more than one person then careful consideration needs to be given to the form the ownership takes, whether it is joint ownership, partnership or through a syndicate, each method will have its own tax implications. As the Inland Revenue assess income individually, each legal owner of the property is required to submit an annual return.

OFFSETTING EXPENSES AGAINST RENTAL INCOME

Income tax is payable on rental income after allowable deductions have been taken into account and the list is extensive when it comes to what is and isn’t deductable. Investors can offset costs including utility bills when properties are empty, management agents’ fees and interest paid on borrowing costs, including mortgages and loans.
In addition, costs relating to repairs of maintenance can be offset. However, improvements made to a property, such as adding a conservatory are not tax deductable, but they can be offset against the capital gains tax liability when the property is sold.

RUNNING YOUR PROPERTY AS A BUSINESS

A buy-to-let property should be treated as a business and as such certain costs associated with running the property are deductable. These include marketing and travel costs and office costs such as a proportion of the utility bills and office equipment.

EXIT STRATEGY

When it comes to selling the property there is likely to be capital gains tax on any profit accrued on the property, which could be up to 40 per cent. However, there are steps which you can take to reduce the bill. For example, you can claim exemption on the tax for the period you have permanently resided in the property and the final 36 months of ownership, irrespective of whether you have lived there. Other tax breaks include taper relief and personal capital gains allowance of up to £8,500.

PLAN FOR THE NEXT GENERATION

It is vital to plan for the next generation and to protect your assets from inheritance tax (IHT). The current threshold is £300,000, which means you are likely to be liable for inheritance tax, especially if you have a portfolio of properties. However, there are various methods for reducing IHT. It is worth consulting a professional to ensure you minimise your family’s bill. It is essential to make a will, to ensure your estate is passed on according to your wishes and if your property is overseas you should seek inheritance tax advice and write a local will, as your British will might not be accepted.
Whether you are buying in Britain or overseas you need to be fully aware of all the tax implications. Don’t be fooled into thinking you won’t be found out, the authorities now have the power to discover exactly what your income is whether it’s here in Britain or overseas. Be prepared, pleading ignorance will never count in your defence.

David Austin is managing director of Property for Life. Visit propertyforlife.com

mform.co.uk analysis reveals average first-time buyer could be borrowing £200,000 by 2012.

Analysis of industry data by online mortgage company mform.co.uk reveals that between 1996 and 2006, the average mortgage taken out by first time buyers has increased by 173.6% or around 10.7% a year.  If this continues, mform says that by 2012, the average mortgage taken out by a first-time buyer will top £200,000, up from around £120,500 today or £39,811 in 1996. 

Year    Estimated median first-time buyer mortgage    
2008    £133,468.32   
2009    £147,746.94   
2010    £163,553.11   
2011    £181,050.25   
2012    £200,419.25   
2013    £221,860.37   

Francis Ghiloni, mform.co.uk marketing and business development director, said: “First- time buyers increasingly need to find huge sums of money in order to get on to the property ladder.  For a first-time buyer to take out a mortgage that is three times their salary today, we estimate that they would need to be earning £40,190, but by 2012, it would need to be a staggering £66,806.

mform.co.uk, which allows customers to compare mortgages based on the true cost including rate, fees and other features, says that many first-time buyers can dramatically cut the cost of their mortgage by making sure that they search the entire market for the best deal for them.

mform.co.uk offers consumers a free, unique and innovative online service enabling them to conduct the most comprehensive search of mortgages available. It allows people to identify all of the key features and benefits of every mortgage, and calculate its true cost in terms of rates and charges. This helps consumers develop a personalised list of best-buy mortgages that meet their specific needs.
The search process is free of confusing sponsored links and there are no distracting adverts from lenders during the mortgage search process. mform.co.uk is completely independent and it feels that adverts might unfairly influence a person’s choice of mortgage. Users of the service are able to link through directly to lenders’ mortgage application departments.
The service, which is free and easy to use, can be found at www.mform.co.uk.

De-cluttering expert Sue Kay found herself drawing on the advice she gives to clients as she traded her East Finchley home for a central London pad. Johnny Turner talks to her about the move, our shopaholic culture and the psychology of having too much stuff.

In this must-have, must-shop world it is worth stepping back occasionally and wondering why we have accumulated what we have. When I moved six months ago, I went through two culls of paperbacks and still had two copies of some novels; ridiculous as it sounds, I couldn’t decide which cover I liked better.
And a pile of VHSs when I no longer have a working VCR?
Which leads me to a catchphrase that, however inappropriate when considering the clutter of others, is very tempting to use when looking at my own: ‘How sad is that?’

Sadness, of course, cuts to the heart of why it is difficult to let go of things. For Sue Kay, de-cluttering expert and author of two books on the subjects, a degree in psychology is a useful tool when dealing with clients. ‘It is emotional,’ says Kay over the phone from her new Marylebone home. ‘You’re coming across things from your past – maybe you’ve lost someone or had a difficult breakup.’
As in the song ‘These Foolish Things’, mementos trigger longing for what was: ‘A cigarette that bears a lipstick's traces / An airline ticket to romantic places / And still my heart has wings …’
So why should we part with what makes us nostalgic? ‘You’re moving your life forward, and to do that you have to let go,’ she says. But this forward motion is not without a price, as we all know. ‘There’s a always a tweak – and a tweak for me may be a pain for someone else.’

Our homes have emotional power in our lives; the need to feel secure is, after all, one of our most basic driving forces. Sue is very aware of this and with her easygoing, friendly style she makes it easy to look honestly at your habits with regard to your possessions. ‘I’m not here to judge or bully you,’ she says. ‘I would never tell you to get rid of something that’s important to you.’ The key to the de-cluttering process, says Sue, is ‘standing back and looking at something and asking “why?”’
I wonder whether, in moving from quickly gentrifying north London to Marylebone, an area that boasts a peculiarly urban mixture of the cool and the chaotic, she found herself having difficulty living by her own teachings?

‘I could feel the piles of paper starting to build up for a while – that feeling of, where are things? It’s good to reconnect with that.’ Somehow I doubt those piles of paper got too high, for she is a true believer in letting go of things that don’t serve a purpose. Clutter, according to Sue Kay, is defined as ‘things you no longer use or love’. Many people have a mistaken idea of the process, she finds. ‘Sometimes they confuse it with being puritanical but it’s not that at all. Being organised doesn’t mean you’re not a free spirit.’
And just as hoarding ‘things’ is a habit, so is that reflexive feeling of being quite content to dispose of things that fit the above definition. And at the heart of this philosophy, says Kay, is the ability to take an honest look at ourselves and why we feel the need to ‘over-have’ if you will - not to mention investigate the modern mania for shopping, owning, collecting, three ways of validating ourselves in a way that rather misses the point of validity.
‘Were all struggling with the way we live,’ she says. ‘Fast, furious, constant consumption. It’s hard to stop, hard to say enough. I can’t do IKEA – I get muddled and buy the wrong sizes, then I have to go back, which is not what I want to do!’

She has found the property market has a bearing on her work. ‘We’re living in extraordinary times, when people have all this stuff and don’t have a bigger home.’ And it works the other way around as well – after all, clutter is a good way to drive away prospective buyers.
The green movement is a sibling of the Sue Kay philosophy – and surely the best way not to waste things is not to gather too many things to begin with. Surprisingly, however, in some ways she has found her work complicated, not eased, by the new green awareness. ‘I’m pro-green but it adds an extra level of stress to de-clutter ethically.’ She laughs, ‘I got an email about old pill bottles: “What do I do with these?”’

With her client visits she is very careful not to judge; rather, she acts on empathy and frames her work in terms of the good it can do. ‘It’s my job not to feel overwhelmed. You have to manage their expectations.’ The most difficult consultations are when people veer strongly to one extreme or the other. ‘Either they have to agonise over everything or they want to throw everything away.’
She treads lightly when helping a client with those possessions that trigger particularly personal or painful feelings and memories. ‘When you come across your dead husband’s bus pass – that can be agonising.’
It is natural to feel vulnerable when clearing away life’s detritus, she says – particularly in the presence of a stranger. ‘People get very defensive and worried. It’s like someone seeing your knicker drawer – your muddle and your mess. Things you hide from the outside world, like if you haven’t paid your bills for six months.’

Having written two books on de-cluttering, she would now like to dig deeper into the psychological basis of keeping things well past their use-by date, and how this ties in with the all-consuming consumer culture. ‘Everything’s so cheap, we’re living in this Primark culture. Is it making us happy? I’d like to look at that. If somebody gave you a great CD, you’d enjoy it. If they gave you three – that’s nice. But ten? You start thinking, God I can’t cope with this!’
For now, though, she has taken a month off and is getting to know her new neighbourhood. ‘It’s certainly lively. I’m down towards the Edgware Road part of it – it’s lively , it’s noisy. I’m between Marylebone High Street and Oxford Street.’ One of the most cluttered areas of the capital, I can’t help but think.

Sue Kay’s books, No More Clutter and Hoarder To Order, are available at bookshops and online. Visit nomoreclutter.co.uk

Mary Anne Bowring, creator of Leasehold Support, advises leaseholders how to deal with rogue freeholders

The freeholder has a responsibility to the lessees and should comply with his schedule of covenants such as keeping the building insured, carry out necessary repairs to the structure and ensure that communal service are maintained.

However, leaseholders can be at the mercy of the freeholder who can take advantage by charging inflated prices for insurance and requesting unjustified service charges. Due to lack of awareness of their legal rights, leaseholders are often in a state of limbo and continue to pay the service charge and building insurance even though little is being done. If that isn’t bad enough, some freeholders simply cannot be traced – which makes it impossible to sort out maintenance issues such as communal areas not being cleaned or a leaking roof.

Leaseholders can claim their right to manage to take charge and stop poor management of the block. However, this is only possible if 50 per cent of the leaseholders in the block support a right to manage movement. The same applies to buying the freehold which again could solve the problem of an absent rogue freeholder. Provided two-thirds of the flats have long leases and 51 per cent of the ‘qualifying lessees’ participate you can force the freeholder to sell you his title.

Unfortunately, for a lot of leaseholders gaining support from the rest of the block is an issue. The recent buy to let trend means many flats are owned by investors who remain nonchalant when it comes to the repair and maintenance of the block or have passed the buck to a letting agent. For example, Ringley’s legal services team has just dealt with an absentee freeholder case where only one of the flats in a block was actually occupied by the leaseholder, with the rest rented out. This created a nightmare for the resident leaseholder as she couldn’t drum up any support from the other leaseholders about the state of repairs as they didn’t live there.

If getting 50 per cent of the block to support the right to self manage or buy the freehold is out of the question, don’t worry – there is another option. If you are concerned that the block is falling into disrepair and the freeholder isn’t managing the block effectively then you can apply to the Leasehold Valuation Tribunal to request they appoint a managing agent of your choice.
Before you apply, you will need to select an agent that has sufficient expertise to satisfy a tribunal that they are fit to fulfill the role of court-appointed manager, able to take over the role of the freeholder and abide by the schedule of covenants set out in the lease.

Requesting a court-appointed manager is different to claiming your right to self mange, as there is a need to prove the freeholder is at fault. In order to persuade the tribunal to appoint a manager, it is necessary to justify your reasons why such a course of action is reasonable and would be in the best interests of the block as a whole.
It is possible to present your own case at tribunal if you have a good understanding of your lease and can find the relevant clauses of which the freeholder is in breach. However, you will need to provide supporting material such as visual evidence of disrepair, works for which you feel you have been overcharged or unauthorized alterations and a record of all unresolved disputes. It is also necessary to produce copies of service charge accounts which do not comply with the Landlord & Tenants Acts.  
If you are not confident in presenting your own case then its better to enlist the support of a managing agent, typically a firm of chartered surveyors who have the necessary experience. To lodge an application with the Leasehold Valuation Tribunal costs between £150 and £350 depending on the number of dwellings in a block. At the tribunal, each party bears their own costs but if the tribunal feels that one or both of the parties is wasting their time or not following directions on the information and evidence to be heard it does have the power to award costs of that part of the hearing.

Mary-Anne Bowring is founding director of Ringley Chartered Surveyors and a member of the RICS and the Association of Building Engineers. The Ringley Group subscribes to the RICS ten- minute free consultation service on this topic. To get the ball rolling, feel free to call 020 7267 2900 and ask to speak to Mary-Anne Bowring or Teresa Tuck

House prices continue to rise and one of the major difficulties facing first-time-buyers is the high cost of properties in relation to teachers' salaries. Here one newly qualified teacher tells us how she broke the parent trap and found the financing to buy her dream home.

After six years of teaching, Susanna Pinkus had packed up her life in the South East and moved to Cambridge to take a masters degree and then a doctorate in special education. But when her studies came to an end she found the move back home a bit of a shock.
‘I was in my thirties and returned home to find all my friends had houses of their own and yet I was back living with my parents with £10,000 of student debt. I needed to do something about the situation quickly,’ she says.

Pinkus's new job as an advanced skills teacher working in the London Borough of Harrow provided a comfortable salary; however the chance to have a house of her own was still a bit of a pipe dream.
With the average price of a home in England and Wales topping the £177,000 mark in 2007 and prices in the South East averaging £217,000, it is increasingly difficult for teachers to buy a home. ‘Most of my colleagues who are not married are either living with their parents or renting,’ says Pinkus.
Banks traditionally offer mortgages which total four times a person's salary. But in Bushey, where she wished to live, a mortgage of this type would only allow her to purchase a one-bedroom flat. With a big family who visit regularly, and the need for an office where Susanna could get on with finishing the book she was writing, a one-bedroom flat was simply not an option. ‘I had also been a little spoilt, living in the most beautiful setting in Cambridge and did not like the thought of moving to a basic flat with no garden.’

The chance to house-sit a friend's apartment while she was travelling helped Susanna to move out of her parents' home. It also provided a good opportunity to save for a deposit, but with house prices in the area increasing every month, the chance of finding something liveable in her price range seemed to get slimmer and slimmer.
‘It all came to a head one day when I went home and blurted out my frustrations to my parents. I felt that there were no options left for me to have a decent home of my own.’
Not the type of people to give up easily, her parents agreed to help in her search. Her mother is a teacher and knows the difficulties of buying a home on a teacher's salary. She and her husband were one of the first few couples to take a mortgage out with the Teachers Building Society when it was set up many years ago and they suggested Susanna should try talking to them.
Lenders occasionally allow a parent to guarantee their child's loan when their offspring's salary does not match up with current house prices. However, the parent is asked to guarantee the entire loan and this was not an option she wanted to consider. ‘I did not want to put that financial risk on my parents, no matter how small the chance of me defaulting on the loan.’
The Teachers Building Society offered a solution. Her parents could guarantee the part of the loan that crept above the total of four times her salary, rather than the whole amount –
an option that both Pinkus and her parents were happy with.
The mortgage repayments would be a tight squeeze so she did her sums and managed to reduce her outgoings in other areas to ensure she would be able to afford the repayments. By shopping around for a different gym membership, mobile phone and health insurance deal, she managed to reduce her outgoings by 30 per cent without having to give up any of her luxuries.

Much to her disappointment, the first house she put an offer on fell through. ‘It was a huge blow. After making all these adjustments to afford the right house, seeing the opportunity disappear was simply awful. Just afterwards, interest rates began to rise and with each hike I felt my chances of being a home owner disappear.’
However, the Teachers Building Society agreed to keep to the mortgage deal that she had secured before the interest rate rise and this enabled her to purchase her dream home which she found six months later.
Pinkus bought Lavender Cottage for £231,000. The property was in need of some serious renovation, so her newly-retired father, friends and relatives were all drafted in to transform the home in four weeks and within a £10,000 budget.
The two-bedroom cottage has the garden and study that she wanted, and with the added bonus of being only 15 minutes from work, she can get home in time to enjoy her evenings in her new surroundings.
Would she recommend the Teachers Building Society to other teachers looking for a mortgage? ‘Most definitely. What they did for me was beyond the call of duty. I was often on the phone to them two or three times a day and they were always happy to help. They understand teachers and they were very flexible in a way that other banks would struggle to compete with.’

Teachers Building Society provides mortgage and savings products to the education sector. Visit teachersbs.co.uk for more details

Mary Anne Bowring, creator of Leasehold Support, advises leaseholders how to deal with rogue freeholders.

The freeholder has a responsibility to the lessees and should comply with his schedule of covenants such as keeping the building insured, carry out necessary repairs to the structure and ensure that communal service are maintained.
However, leaseholders can be at the mercy of the freeholder who can take advantage by charging inflated prices for insurance and requesting unjustified service charges. Due to lack of awareness of their legal rights, leaseholders are often in a state of limbo and continue to pay the service charge and building insurance even though little is being done. If that isn’t bad enough, some freeholders simply cannot be traced – which makes it impossible to sort out maintenance issues such as communal areas not being cleaned or a leaking roof.

Leaseholders can claim their right to manage to take charge and stop poor management of the block. However, this is only possible if 50 per cent of the leaseholders in the block support a right to manage movement. The same applies to buying the freehold which again could solve the problem of an absent rogue freeholder. Provided two-thirds of the flats have long leases and 51 per cent of the ‘qualifying lessees’ participate you can force the freeholder to sell you his title.
Unfortunately, for a lot of leaseholders gaining support from the rest of the block is an issue. The recent buy to let trend means many flats are owned by investors who remain nonchalant when it comes to the repair and maintenance of the block or have passed the buck to a letting agent. For example, Ringley’s legal services team has just dealt with an absentee freeholder case where only one of the flats in a block was actually occupied by the leaseholder, with the rest rented out. This created a nightmare for the resident leaseholder as she couldn’t drum up any support from the other leaseholders about the state of repairs as they didn’t live there.

If getting 50 per cent of the block to support the right to self manage or buy the freehold is out of the question, don’t worry – there is another option. If you are concerned that the block is falling into disrepair and the freeholder isn’t managing the block effectively then you can apply to the Leasehold Valuation Tribunal to request they appoint a managing agent of your choice.
Before you apply, you will need to select an agent that has sufficient expertise to satisfy a tribunal that they are fit to fulfill the role of court-appointed manager, able to take over the role of the freeholder and abide by the schedule of covenants set out in the lease.
Requesting a court-appointed manager is different to claiming your right to self mange, as there is a need to prove the freeholder is at fault. In order to persuade the tribunal to appoint a manager, it is necessary to justify your reasons why such a course of action is reasonable and would be in the best interests of the block as a whole.

It is possible to present your own case at tribunal if you have a good understanding of your lease and can find the relevant clauses of which the freeholder is in breach. However, you will need to provide supporting material such as visual evidence of disrepair, works for which you feel you have been overcharged or unauthorized alterations and a record of all unresolved disputes. It is also necessary to produce copies of service charge accounts which do not comply with the Landlord & Tenants Acts.  
If you are not confident in presenting your own case then its better to enlist the support of a managing agent, typically a firm of chartered surveyors who have the necessary experience. To lodge an application with the Leasehold Valuation Tribunal costs between £150 and £350 depending on the number of dwellings in a block. At the tribunal, each party bears their own costs but if the tribunal feels that one or both of the parties is wasting their time or not following directions on the information and evidence to be heard it does have the power to award costs of that part of the hearing.
Mary-Anne Bowring is founding director of Ringley Chartered Surveyors and a member of the RICS and the Association of Building Engineers. The Ringley Group subscribes to the RICS ten- minute free consultation service on this topic. To get the ball rolling, feel free to call 020 7267 2900 and ask to speak to Mary-Anne Bowring or Teresa Tuck

De-cluttering expert Sue Kay found herself drawing on the advice she gives to clients as she traded her East Finchley home for a central London pad. Johnny Turner talks to her about the move, our shopaholic culture and the psychology of having too much stuff.

In this must-have, must-shop world it is worth stepping back occasionally and wondering why we have accumulated what we have. When I moved six months ago, I went through two culls of paperbacks and still had two copies of some novels; ridiculous as it sounds, I couldn’t decide which cover I liked better.
And a pile of VHSs when I no longer have a working VCR?
Which leads me to a catchphrase that, however inappropriate when considering the clutter of others, is very tempting to use when looking at my own: ‘How sad is that?’
Sadness, of course, cuts to the heart of why it is difficult to let go of things. For Sue Kay, de-cluttering expert and author of two books on the subjects, a degree in psychology is a useful tool when dealing with clients. ‘It is emotional,’ says Kay over the phone from her new Marylebone home. ‘You’re coming across things from your past – maybe you’ve lost someone or had a difficult breakup.’
As in the song ‘These Foolish Things’, mementos trigger longing for what was: ‘A cigarette that bears a lipstick's traces / An airline ticket to romantic places / And still my heart has wings …’
So why should we part with what makes us nostalgic? ‘You’re moving your life forward, and to do that you have to let go,’ she says. But this forward motion is not without a price, as we all know. ‘There’s a always a tweak – and a tweak for me may be a pain for someone else.’
Our homes have emotional power in our lives; the need to feel secure is, after all, one of our most basic driving forces. Sue is very aware of this and with her easygoing, friendly style she makes it easy to look honestly at your habits with regard to your possessions. ‘I’m not here to judge or bully you,’ she says. ‘I would never tell you to get rid of something that’s important to you.’ The key to the de-cluttering process, says Sue, is ‘standing back and looking at something and asking “why?”’
I wonder whether, in moving from quickly gentrifying north London to Marylebone, an area that boasts a peculiarly urban mixture of the cool and the chaotic, she found herself having difficulty living by her own teachings?

‘I could feel the piles of paper starting to build up for a while – that feeling of, where are things? It’s good to reconnect with that.’ Somehow I doubt those piles of paper got too high, for she is a true believer in letting go of things that don’t serve a purpose. Clutter, according to Sue Kay, is defined as ‘things you no longer use or love’. Many people have a mistaken idea of the process, she finds. ‘Sometimes they confuse it with being puritanical but it’s not that at all. Being organised doesn’t mean you’re not a free spirit.’
And just as hoarding ‘things’ is a habit, so is that reflexive feeling of being quite content to dispose of things that fit the above definition. And at the heart of this philosophy, says Kay, is the ability to take an honest look at ourselves and why we feel the need to ‘over-have’ if you will - not to mention investigate the modern mania for shopping, owning, collecting, three ways of validating ourselves in a way that rather misses the point of validity.
‘Were all struggling with the way we live,’ she says. ‘Fast, furious, constant consumption. It’s hard to stop, hard to say enough. I can’t do IKEA – I get muddled and buy the wrong sizes, then I have to go back, which is not what I want to do!’

She has found the property market has a bearing on her work. ‘We’re living in extraordinary times, when people have all this stuff and don’t have a bigger home.’ And it works the other way around as well – after all, clutter is a good way to drive away prospective buyers.
The green movement is a sibling of the Sue Kay philosophy – and surely the best way not to waste things is not to gather too many things to begin with. Surprisingly, however, in some ways she has found her work complicated, not eased, by the new green awareness. ‘I’m pro-green but it adds an extra level of stress to de-clutter ethically.’ She laughs, ‘I got an email about old pill bottles: “What do I do with these?”’

With her client visits she is very careful not to judge; rather, she acts on empathy and frames her work in terms of the good it can do. ‘It’s my job not to feel overwhelmed. You have to manage their expectations.’ The most difficult consultations are when people veer strongly to one extreme or the other. ‘Either they have to agonise over everything or they want to throw everything away.’
She treads lightly when helping a client with those possessions that trigger particularly personal or painful feelings and memories. ‘When you come across your dead husband’s bus pass – that can be agonising.’

It is natural to feel vulnerable when clearing away life’s detritus, she says – particularly in the presence of a stranger. ‘People get very defensive and worried. It’s like someone seeing your knicker drawer – your muddle and your mess. Things you hide from the outside world, like if you haven’t paid your bills for six months.’
Having written two books on de-cluttering, she would now like to dig deeper into the psychological basis of keeping things well past their use-by date, and how this ties in with the all-consuming consumer culture. ‘Everything’s so cheap, we’re living in this Primark culture. Is it making us happy? I’d like to look at that. If somebody gave you a great CD, you’d enjoy it. If they gave you three – that’s nice. But ten? You start thinking, God I can’t cope with this!’
For now, though, she has taken a month off and is getting to know her new neighbourhood. ‘It’s certainly lively. I’m down towards the Edgware Road part of it – it’s lively , it’s noisy. I’m between Marylebone High Street and Oxford Street.’ One of the most cluttered areas of the capital, I can’t help but think.

Sue Kay’s books, No More Clutter and Hoarder To Order, are available at bookshops and online. Visit nomoreclutter.co.uk

REITs show potential

Real Estate Investment Trusts (or REITs as they are known), have received a substantial amount of publicity since their introduction into the UK market in January 2007, according to Datamonitor. REITs represent an area of particular growth potential, given the fact that they give investors an opening in which to invest in physical land and buildings across all property sectors and all commercial, industrial and residential structures. Furthermore, investors can take-up a REIT proposition via their pension fund, which is now the only route at an investor’s disposal to invest in property and has been a booming area of the market in recent years.
However, the UK REIT market is a young and nascent one, so some prominent issues still need to be ironed out and this would explain why UK REITs have been affected by slightly adverse performance of late.

The fact that REITs are still in their formative years is a short-term hindrance but like the other investments mentioned, they continue to serve as widely known buzzwords in the savings and investment market.

New buy-to-let mortgage incentives

Standard Life Bank has introduced free legals and no valuation fees to its Freestyle buy-to-let remortgage range.
The latest changes, which became effective on last week, follow previous product developments from the Bank. These include: half-price arrangement/booking fees for any landlord purchasing more than one buy-to-let property with a Standard Life Bank mortgage (fees for the first mortgage at standard rate, all subsequent mortgages up to a maximum of nine additional properties in a 12-month-period following AIP of first application, reduced by 50 per cent, up to a total loan value of £1.5 million); a reduction of the rental yield requirement to 110 per cent from 120 per cent; verification of income not be required for loan-to-value of up to 85 per cent (increased from 75 per cent).

Jackie Moran, Head of Sales for Standard Life Bank, said: ‘This ongoing enhancement further strengthens our buy-to-let offering and makes it even easier for advisers to recommend Standard Life Bank for all their client's buy-to-let needs.

‘With the new enhanced range of buy-to-let products, clients will be able to save even more, especially when buying or remortgaging multiple properties,’ she said.

For further information, and to use Standard Life Bank's buy-to-let calculators, landlords should log onto www.freestylemortgages.com

Further information for advisers can be found at www.standardlifebank.com/adviser or by calling 0845 845 8451.

Property prices increased by 0.7 per cent in July, the fourth consecutive month that house prices have grown by less than 1.0 per cent. This confirms that house price inflation is slowing, according to the latest Halifax price report.

Housing market activity also continues to ease. Mortgage approvals to fund house purchase in the three months to June were four per cent lower than in the preceding quarter. This continues the downward trend since last autumn with approvals in the second quarter of 2007 being eight per cent lower than in the latter part of 2006.

The level of new buyer interest in purchasing a house fell for the seventh successive month, indicating that potential buyers have become more cautious. Completed property sales also fell in the second quarter of 2007 and were six per cent lower than a year ago.
The increase in the proportion of borrowers taking out a fixed-rate mortgage in recent years appears to have affected the timing of the housing market's response to interest rate changes. As a result, house price inflation and activity are likely to take longer to slow as interest rates rise because many borrowers are only affected when their fixed-rate deal matures. Over the past 18 months nearly 70 per cent of new mortgages have been taken out on fixed rate terms; this is substantially above the average of around 40 per cent since 1993.

Homeowners who took out a fixed-rate deal two years ago face higher payments when they remortgage, but most borrowers will be able to absorb the rise in payments. Most people's earnings will have risen since they took out the mortgage – average earnings have risen by seven per cent over the past two years in monetary terms – providing more income to finance the higher interest payments. In addition, most borrowers facing higher payments will have accumulated a significant cushion of housing equity as a result of house price inflation since they took out their mortgage.

A healthy economy and strong labour market continue to underpin housing demand. The annual rate of house price inflation has edged up in the past two months, from 10.6 per cent in May to 11.2 per cent in July, despite smaller monthly rises. This increase in the annual rate is due to the weakness in house prices in mid 2006 when prices fell by 0.3 per cent between April and July. The modest recent pick-up in the annual rate is likely to be short-lived. Halifax expects house price inflation to ease over the remainder of the year as the impact of higher interest rates is increasingly felt.

Martin Ellis, chief economist, said: ‘We expect the downward trend in house price growth to continue as the five interest rate rises since last summer have an increasing impact on household spending and housing demand. Sound economic fundamentals, high levels of employment and a shortage in the number of properties available for sale, particularly in London and the South East, will, however, continue to support house prices.’

In the wake of FSA criticism, some lenders are abandoning ‘excessive’ exit fees. But some are not

In the wake of the victory for people-power in the row over excessive bank charges, it was only a matter of time before attention turned towards mortgage lenders and the fees they extract from their home loan customers.

Mortgage lenders often charge what is known as mortgage exit administration fees (MEAFs) when borrowers pay off their mortgage or switch to another lender to cover the staff and other costs involved. But, just as the bank charges were deemed punitive, and therefore unfair, so are these exit fees, say experts. The typical exit fee is around £200.
The FSA has put pressure on lenders since January, when it highlighted that many mortgage customers were being charged higher exit fees than expected. Last week the authority announced that most lenders had either got rid of the fees or reduced them. And although the deadline the FSA set for lenders to declare their intentions with regard to the charges, some have not indicated what they plan to do.

Ray Boulger, senior technical manager at leading mortgage broker John Charcol, says lenders are choosing to either resist change (as Barclays/Woolwich has done, leaving its exit fee at £275) or modify these fees in one of three ways:

removing: abolishing the exit fee completely. Boulger says, ‘Cheltenham & Gloucester/Lloyds TSB led the pack in the first camp by being the first major lender to announce they were abolishing the fee and were followed by a number of other major lenders.’ The lender was joined by Royal Bank of Scotland, Northern Rock and HBOS.
reducing: owering the fees
replacing: abolishing it but replacing it with another fee of the same amount but with a different name. Boulger calls these lenders ‘perhaps the most cynical group’. which nevertheless are meeting the FSA’s requirements, are those lenders which have abolished the exit fee but replaced it with a new fee for an identical amount but called it something different. The new fee names either no longer refer to the costs of closing the mortgage, or are stated to cover something else difficult to measure. Lenders who have ‘reclassified’ the exit fees include Abbey and the Bank of Ireland Group.

One lender, Principality, has increased its exit fee – by £17 to £152.
Boulger says, ‘Even after the deadline, we are still waiting to hear final confirmation from several major lenders, including Alliance and Leicester, Scottish Widows and Mortgage Express, which indicates that some are going to tough it out with the FSA. A typical exit fee is around £200 which has risen a staggering 33 per cent in the last two years. There is however now no hiding place for lenders. They have to be open about what they are doing and will have to be up front in justifying these excessive fees.’

Boulger says those who have redeemed mortgages in the last four years are likely to have ‘a very strong case’ for seeking compensation from their lender. That figure would come to around ten million mortgages, he says. ‘I would estimate that the total compensation payable will be at least £50m and probably in the region of £100m.’

Garden expect Simon Sales gives his top tips on creating the ultimate outside space

Good terraces and roof gardens can be difficult to achieve and careful planning is paramount. But if you get it right, roof gardens are the most fantastic spaces – private, elegant and glamorous, and often with views to die for.

Whether you are looking for a private area for entertaining alfresco, a zen-like space for yoga and contemplation, somewhere for the family to socialise, or just somewhere you can relax, these tips will ensure you get just what you want.

1 May I? Check that there are no planning or other constraints preventing you from having your roof terrace.

2 Weigh it up Consider the overall weight of the surface material, e.g. the plants, soil, containers, and ensure the building is designed to support it. If in doubt contact a structural engineer.

3 Get help from an expert If possible, use a garden designer who has experience of roof terraces and gardens to help you make the best decisions.

4 Follow the money Have a budget in mind so that you can prioritise the costs accordingly between the essentials and the desirables.

5 What do I want? Think about the overall look that you are trying to achieve – are you going for classical or contemporary?

6 Manage the elements Create shelter from the sun and try to slow down the prevailing wind. This can be achieved by using trellis or other planting that will act as a natural screen.

7 Make containers blend in Use similar containers made of one or two materials for an elegant solution and allow the plants to make the big statements.

8 Just add water Watering is the highest priority on a roof terrace. Always install an irrigation system. Plants in sunny, windy conditions dry out very fast and will require regular (sometimes twice per day) watering every day during the summer months. Plants will look very poor very quickly if the watering is irregular and your investment in plants will be wasted.

9 Don’t overdo it Don't apply too much water at one time, as excess water running through the containers will leach out valuable nutrients in the soil and make sure the majority of the watering takes place at night, to minimise evaporation.

10 Which plants Select plants that enjoy hot sunny conditions. Choose ones with succulent leaves, e.g silver, narrow or hairy types – all of which are designed to minimise water loss.

Simon Sales is managing director of Waterwell Lighting and Irrigation. Visit waterwell.co.uk

White goods disposal

New Waste Electrical and Electronic Directive (WEEE) regulations come fully into force in August.  Here, we explain what it all means and how it benefits us and the environment.

1. What is WEEE anyway?

WEEE stands for Waste Electrical and Electronic Equipment – and that means more or less anything with a plug or a battery that you no longer need. It includes all sorts of everyday electrical and electronic items, from old washing machines, vacuum cleaners or coffee machines through to computers, table lamps and even some children’s toys.

2. What does WEEE mean to me?

The WEEE regulations come fully into force in August 2007. They’re rules designed to make all of us – consumers, manufacturers, distributors and retailers – take a more responsible attitude to the electrical and electronic goods we throw away.

3. How big is the problem?

It’s the fastest growing waste mountain in the European Union. Last year in the UK we dumped two million tonnes of the stuff in landfill. A lot of that was large household appliances, known as ‘white goods’. It’s taking up valuable land and it’s harming our environment.

4. I’ve noticed a new symbol on some products. What does it mean?

That’s the crossed out wheelie bin logo. Every new electrical or electronic product has to be labelled with it. Anything carrying the symbol cannot be thrown out with the rest of the household rubbish. It must be disposed of separately.

5. Who’s responsible for disposing of my old fridge?

If you’re buying a new fridge, the answer is the retailer. For anyone who sells or distributes electrical and electronic equipment, either in store or online, has to offer customers a free way of getting rid of their old equipment when they buy an equivalent new item.

6. How will that work?

Retailers can run their own takeback schemes or join in the national scheme. Both run on a ‘like for like’ basis. You take back an old kettle when you buy a new kettle, an old fridge when you buy a new one, and so on. If retailers are part of the national scheme, they will give you information about free local collection facilities. If they are running their own scheme, they will take back equivalent items in the store.

7. What about heavy items?

Don’t worry, you’re not expected to carry your old washing machine back to the shop! For bulky goods, retailers have to offer a ‘collection on delivery’ service, taking away an old item of equipment when they deliver a similar new one. They can choose whether or not to charge you for this.

8. So, what is free?

The takeback service – which includes the transport of the waste equipment from the retail premises to the treatment plant, its storage, treatment and recycling – is absolutely free to consumers.

9. Can I take my old electrical and electronic goods to the local tip?

Yes, if it’s a designated collection facility. There may be one of these special collection points at your local waste recycling centre. You can either take the items yourself, or arrange for them to be collected and taken there. You may be charged for a collection service.

10. What happens after my old stuff is taken away? Is it recycled?

Wherever possible, items are refurbished and reused, and recyclable materials recovered. What’s left is disposed of in an environmentally safe way. The whole aim of the new regulations is cut the amount we send to landfill.

11. Is it worth the bother?

If you care about our environment, it is. The new regulations are part of a move towards encouraging all of us to reduce the amount of waste we create, and reuse, recover and recycle more. That includes WEEE.

12. What else can I do?

Buy good quality, longer-lasting electrical and electronic goods. They may cost you more but they’ll last longer. In the long term they’re better for your pocket and better for the environment.

Courtesy of miele.co.uk.

Green living

The green message is getting around – and eco-friendliness is touching every part of our lives, from how we live to where we live. Johnny Turner looks at some great homes and laudable lifestyle initiatives.

The idea

With recent reports of soaring water bills – some by more than four times the rate of inflation – homeowners and businesses are throwing money down the drain. Harvesting rainwater can save over 50 per cent of mains supply water and dramatically reduce water bills.

Rainwater harvesting specialist Rainpiper.com believes the majority of consumers are unaware of the benefits of harvesting rainwater. By capitalising on the recent heavy rainfalls, consumers could be collecting valuable rainwater which can be used for general washing purposes and watering the garden.
Leigh Middel, co-founder of Rainpiper.com, says, ‘Rainwater also has many advantages over hard water. Its composition and softness reduces the need for harsh detergents and it doesn’t contain chalk and lime deposits. Rainwater is also rich in nutrients and minerals, which is very beneficial to the garden.’
Rainpiper.com has just launched a hydrostatic rainwater harvesting system which holds over a tonne of natural rainwater. This cost effective device means homeowners and businesses can have instant access to rainwater to water their garden, wash their cars and outside areas without the worry of increasing water costs.Rainpiper works independently of the main supply therefore can be used during a hosepipe ban.

For more information visit rainpiper.com

The gadget

Ever wondered how much energy that little red light on your TV overnight is costing you? A lot, is the simple answer. So do something about it and green up your home.
Bye Bye Standby is a brand new energy saving product from Harmony Systems. Part of the company’s Domia Lite product range, Bye Bye Standby saves the energy that the device would normally use by being ‘on standby’ – a substantial waste of energy. The system made up of two parts, the Green Switch and Smart Sockets.

Simply plug each device that you wish to control into a Smart Socket. The Smart Sockets have large mechanical switches inside that operate when the Green Switch is pressed. Press the Green Switch down as you leave the room and the Smart Sockets switch their respective appliance
off. Press the Green Switch up and they all come on again. The Green Switch and the Smart Sockets communicate using radio signals so to and one Green Switch can operate as many Smart Sockets as you want.

Installation is simple and there are no wires. The system can operate a whole host of equipment but is designed ideally for electronic equipment such as TVs, computers, printers, DVDs etc. DEFRA has said that by turning devices off of standby, the typical house would save £38 per year at 2006 prices.
For more information see byebyestandby.com

The green home is the home of the future. Everyone from civic leaders to actors to politicians has something to say about why it is important to conserve and re-use. Global warming’s last few non-believers have been shown the facts and we homeowners and prospective buyers must factor into our decisions an awareness of the effect our home has on the wellbeing of the wider world.
In this feature we’ll look at the latest tips, trends, gadgets and – of course – homes that further the cause of green awareness and action.

Newly built homes are at the forefront of the march towards green-ness. Building a home, after all, takes a lot of energy and is a major source of CO2; any savings we can make as we build the next generation of dwellings is worth pursuing.

ZEDHomes Ltd is a sustainable development company, founded in 2003 by Michael Shwartz, managing director of the Michael Shwartz Group. Shwartz was listed at number seven in Property Week’s October 2006 listing of the top twenty green heroes.
ZEDHomes is committed to building homes and workplaces that recognise the changes in how we live and work; and that are environmentally sustainable and energy saving, with a strong accent on accessibility and community.

The company believes in providing infrastructure that encourages a more sustainable lifestyle and instigates greater social responsibility. It believes it is the most socially and environmentally aware developer in the UK. The aims of the organisation are to build affordable low- and zero-emission developments (that’s the ZED of the company name), homes and workplaces that are spacious, stylish, comfortable and filled with natural light. These homes are stylish, finished with natural materials and easy to maintain and clean; they are warm in the winter and cool in the summer.
Where possible, ZEDHomes’ developments incorporate local shops, pubs, cafes, retail, commercial and workspaces. Car pools are encouraged to reduce car dependency and both internet ordering and storage facilities will be provided to encourage home deliveries. These measures help residents spend less time travelling and more time living.
The company won planning permission (on appeal) for its first site, Packetboat House, Hillingdon, in late 2005, and the first ZEDHomes apartments are expected to reach the market within two years. There is already a healthy waiting list for these properties.
Find out more about an organisation at the vanguard of the green homes revolution by visiting zedhomes.com.

A brand new development in trendy Islington is embracing the need to limit vehicle ownership and use – a major issue, particularly in the crowded capital – by offering a year’s free membership in the in-house car club scheme. Inspace Homes will be officially unveiling Blue, a new development with joint venture partner Your Lifespace, on Thursday 2 August.

Set within a four-storey building that blends wood, brick and glass on Sherbourne Street N1, Blue has been designed by Grafik Architecture and comprises a collection of 28 contemporary apartments offering open-plan living that will appeal to young professional first-time buyers.