Buying, selling and letting - April, 2004

Whether looking to buy a new family home or a buy-to-let investment property, buyers can still make great returns by predicting the next ‘up-and-coming’ area, reports The County Homesearch Company. There is a cliché that the arrival of a premium coffee chain heralds gentrification, but by the time the first cappuccinos are being sipped the canny investors will have already moved in.
The County Homesearch Company has identified ten reliable signs that a district is on the up:

·   Look for skips in front gardens and on the roadsides.

·  Check if the council has plans to impose parking restrictions – residents-only parking is very desirable and can attract buyers to an area

·  Estate agents are often the first to sniff out an opportunity, so look for new upmarket estate agencies opening on the high street

·   Investigate the stock at the local garden centre. Patio furniture and high-style, low-maintenance garden accessories show the presence of time-poor affluent professionals

·    See if the local sandwich bars are re-styling as delis; when Parma ham and Sicilian olives take over from egg and cress, it could be time to call the estate agents

·    Working parents are desperate for good childcare provision. Private daycare nurseries are often very quick to spot new areas of opportunity, so look out for any new openings

·    If the local pub has developed its exterior and installed outdoor gas heating, it is a sign that the ‘al fresco’ crowd is moving in

·   The large supermarket chains have to spot trends well in advance, so keep an eye on any new upmarket stores such as Waitrose

·   When an area acquires a new name, such as Brackenbury Village or Between the Commons, it is a sign that the estate agents are gearing up for a push

·  Curtain, sofa and other interior design shops will start to spring up very rapidly as new owners overhaul their properties

Jonathan Haward, founder and managing director of The County Homesearch Company, comments: ‘As the housing market is still growing year on year, the trend for affluent buyers to move into traditionally down-at-heel areas continues. If buyers want to take advantage of this, they have to spot the signs as early as possible to make the maximum gains.’

Planning permission ensures that buildings go up in the right place and with minimum disruption to the community. Anna Bowden explains

The planning system helps to balance the developments the country needs (for example new homes, factories, offices and schools) with our duty to protect and improve the environment. This balance is essential to ensure that development and growth are environmentally sustainable; that is meeting the needs of the present without affecting the ability of future generations to meet their own needs. It does not control how a building is constructed – that is the function of Building Regulations – and there are also separate systems governing, for example, developments affecting listed buildings or the demolition of unlisted buildings in conservation areas.

Each council must prepare and adopt policies for development in its area, and when you apply to your council for planning permission the application will be decided in line with these policies, unless there are very good reasons not to do so.

Do you need to apply for planning permission?

You do not always need planning permission. It is not required, generally speaking, for changes to the inside of buildings or for small alterations to the outside, such as the installation of telephone connections or alarm boxes. Other small changes, for example putting up walls and fences below a certain height, have a general planning permission for which a specific application is not required. If you are unsure whether you need it or not, check informally with the council. For a fee, you can also apply for a formal decision. This is known as a lawful development certificate. If your council refuses a certificate, you can either apply for planning permission or appeal to the Secretary of State.

Things that you might need planning permission for include working from home, extending existing premises, building flats over shops or building new premises. Working from home is an interesting issue - the key test here is whether or not the overall character of the property will change as a result of the business i.e. is it still a home or is it now business premises? For example, will your business result in a marked rise in traffic or people calling; will it involve activities unusual in a residential area; will it disturb your neighbours at unreasonable hours or create other forms of nuisance such as noise or smells?
The construction of new premises nearly always needs an application for planning permission. The development plan in force in your area will give you some indication of whether or not your proposal is likely to be acceptable, so it is worth talking to your council before submitting an application. If there are difficulties, officers may be able to suggest ways to make your proposal more acceptable.

How to make an application?

It is not necessary to make the application yourself – if you wish you can appoint an agent (for example an architect, a solicitor, or a builder) to make it for you. In most cases a decision will be made within eight weeks, although large or complex applications may take longer. Your council should be able to give you an idea about the likely timetable. There will also almost certainly be a fee involved, the amount of which will vary according to the type of development proposed. The revenue from fees contributes towards the cost to the council of handling applications and the fee is not refundable unless the application is invalid.
Once your application has been accepted, a copy will be placed in the planning register to be available to anyone who wants to see it. The council will also notify neighbours by letter or will fix a notice on or near the site, and may also advertise your application in a local newspaper to give the public the opportunity to express views. Anyone can comment on your proposals. Your local council will assess the relevance of comments and, in the light of them, may suggest minor changes to the application to overcome any difficulties. A report will then be sent to the planning committee or the planning officer making the decision.

The council grants planning permission by sending you a letter notifying you of its decision. Generally, unless your permission says otherwise, you can begin the development at any time within five years of the granting of planning permission.
If you have not started work by then, you will probably need to reapply. If the permission is subject to conditions, for example, requiring you to submit for approval details of a specified aspect of the development which was not fully described in the application, these must be dealt with before the development can begin.
As an alternative to outright refusal, the council may grant permission subject to conditions – for example, restricting what you can do on the premises or requiring you to get specific approval for aspects of the development, such as the materials to be used, before you can proceed. Again, the council has to give reasons for the conditions. If you are not prepared to accept the conditions, you can discuss the position with the planning officer, who may be able to suggest ways of overcoming the council’s objections.

Timeshare meets buy-to-let

The buy-to-let boom has mutated into a new strain – an investment scheme offering people the chance to make money by buying a hotel room and letting it out to guests. Currently being run by company GuestInvest, under the deal investors buy a hotel room for up to 52 nights a year and can earn an annual return of up to seven per cent by letting members of the public pay to stay in it.
GuestInvest estimates that an investor should see returns of between five and seven per cent a year on the room, depending on how often they use it themselves. Revenue from letting the room is shared equally between the hotel and the room owner, and investors have to pay £500 a year towards maintenance and room renovation costs.
The venture is aimed at the type of person who might otherwise have to choose between paying for expensive hotels on a regular basis or buying a city-based home that they wouldn’t use that often.

Ministers step up home loan scheme

The government is to expand its scheme for housing aid for key public sector workers in the south-east. Deputy prime minister John Prescott and health secretary John Reid will extend the £230 million starter homes initiative fund launched three years ago. Loans from the scheme help key public sector workers get on to the housing ladder but will no longer be limited to first-time buyers. The loans only have to be repaid if the workers leave their job or sell their house.
The four schemes on offer are:
·    Homebuy, providing an equity loan of at least 25 per cent of the property value up to a limit of £50,000
·    London Challenge Key Teacher Homebuy, providing a higher loan value limit for which only a small targeted group of teachers will be eligible
·    Intermediate renting, offering a rent somewhere between social and open market rates
·    Shared ownership on new-build schemes, where the purchaser buys at least 25 per cent of the equity and pays rent on the balance
The recent Barker review on housing supply, published alongside the budget, confirmed that the number of newly-built social houses for rent has fallen from 42,700 in 1994–95 to about 21,000 in 2002–03. The current scheme gives priority assistance for teachers, police, nurses and other essential health workers, but these groups are likely to be extended.