Buying, selling and letting - December, 2004

Stamp duty to remain high for UK home buyers

UK home buyers will be disappointed that the Chancellor did not take the opportunity in his 2004/5 Pre-budget report to reduce the increasing burden of housing tax policy – stamp duty and inheritance tax.

The UK housing market has remained strong in 2004, with house prices rising by 16.8 per cent during the year. Halifax estimates that the Government currently takes around £4 billion each year from residential stamp duty alone.

Halifax, the UK's largest mortgage lender, will lobby all three main political parties for changes in property taxation, especially inheritance tax and stamp duty, in the run up to the next general election.
Research by the Organisation for Economic Co-operation and Development (OECD) shows that UK property taxes, as a percentage of Gross Domestic Product (GDP), are the highest for any major developed country. According to the OECD, UK property taxes have risen from 3.7 per cent of GDP in 1995 to 4.3 per cent in 2002 (using the most current data available). In contrast, the average for Euro-zone countries is just 1.9 per cent.
The UK is one of only four OECD countries where property taxes make up more than ten per cent of Government revenues. The Euro-zone average is 4.9 per cent. In the UK, property taxes as a percentage of total Government revenue have increased from 10.5 per cent in 1995 to 12 per cent in 2002.

Shane O'Riordain, general manager for Government relations at Halifax, said: ‘It is disappointing that the Chancellor has not taken steps to ensure housing tax revenue is fairer where it counts, particularly for first-time buyers. As a very minimum we would like to see property tax thresholds automatically aligned with house price inflation.’
Ray Boulger of Charcol, says, ‘With income tax, the higher percentage rates of tax are only payable on the amount of income over certain thresholds. However, with stamp duty land tax, once you reach a certain level borrowers are forced to pay the higher percentage on the total amount. A sensible starting point for the one per cent tax band would be the average property price, based on Land Registry figures (currently £188,000), and the annual inflation adjustment (up or down) should also be based on Land Registry figures.’

Halifax estimates that the stamp duty threshold (currently £60,000) would currently be £146,750 if it had been increased in line with the rise in house prices since March 1993 – the last time that the threshold was increased. In 1993 almost two-thirds of dwellings sales were beneath the stamp duty threshold, compared with around a quarter now. According to Halifax figures the average first-time buyer now pays more than £1,000 in stamp duty, equivalent to around six per cent of their deposit or around two weeks of their annual income.

Hotproperty gives you some hints on what to think about when it comes to front door security.
A secure front door is vital for keeping your home safe and protected. Fitting the right locks and taking a few precautions will deter burglars and provide you and your family with peace of mind, whether you're at home or away. And this is especially important during these summer months, when the majority of people spend all day out of their homes, either enjoying the outdoors or actually out of the country, and burglary rates are at their highest.

Locks

Firstly, remember that a lock is only as strong as your front door. If your front door or frame is weak, replace this first before spending time and money on locks. In general, several locks will be far more effective than a single lock, however strong. This is because a heavy blow to the door may cause the frame to split or a single lock to fail, and two or more locks will strengthen the door's resistance.
It is also an advantage to have different types of lock. You should ideally have at least a cylinder lock (the most common type of front door lock, with three parts – the cylinder, the body and the staple), which locks automatically each time the door is closed, together with a 'dead bolt' mortice lock. Hinge locks or rack bolts – similar to those used for window frames – are also very effective as additional locks.

Insurance companies will often ask what types of lock you have on your front door before giving an estimate. Fitting certain locks may make you eligible for lower premiums.
Other ways to improve the security near your front door:
Install a door viewer or security chain. Each provides a simple way of monitoring who is at your door before you open it fully
Set up a routine for answering the door to callers. Always ask for identification from service engineers – many will now set up a password when arranging to visit as a way of confirming their identity
Keep the area around your front door tidy and maintained. Repair any damage to the door or frame promptly. This will help you highlight any weaknesses in your security before they become problems. Psychologically, a home which looks well kept is perceived to be well protected
Make sure there is adequate lighting, both outside your front door and in your hallway

A government-backed tribunal service provides quick and easy housing dispute resolution – but thousands are still missing out, finds Johnny Turner.

Thousands of people throughout the country could be missing out on the opportunity to resolve costly and traumatic disputes over their property leases, rents, service charges and other housing problems, because they are unaware of the quick and affordable solutions offered by tribunals.
The government-backed Residential Property Tribunal Service (RPTS) runs tribunals that are able to resolve a range of housing related disputes. These tribunals are quicker and cheaper than the County Court system and are available locally to landlords, leaseholders and tenants alike. Applications cost between £50 and £500 depending on the nature of the dispute. Certain disputes can be resolved free of charge.

While use of the RPTS’s services is growing, senior president Siobhan McGrath believes that a great many people who encounter problems with leases, rents and other housing issues simply do not know what solutions are on offer through the tribunal system. McGrath and her colleagues have embarked on a nationwide awareness campaign to highlight that help is at hand.
‘Whether you’re a leaseholder, tenant or landlord, housing disputes can be stressful, time-consuming and expensive,’ says McGrath. ‘Our tribunals, which are available locally throughout the country, can resolve many types of dispute, breaking the deadlock with the potential to save both sides time and money.’  

The RPTS is one of 70 tribunals in England and Wales. It is able to settle a wide range of disputes, including disputes over rents under regulated and some assured tenancies, as well as issues regarding leasehold enfranchisement and service charges.
The RPTS is strictly impartial and every case it handles is decided on its merits. Hearings take place locally or at one of RPTS’s five regional offices. If applicants have mobility problems, panel hearings can even be held in their own homes.
Hearing panels are typically made up of a valuer, a lawyer and a lay person. Seventy percent of disputes are heard within 20 weeks or, in urgent cases, even sooner. Panel members usually undertake property inspections.
As well as being efficient the service is also extremely cost-effective. You don’t have to hire a lawyer or valuer to represent you as the hearings are semi-formal and user-friendly, although you can appoint a lawyer at your own expense if you wish.
The RPTS’s powers were extended last year as a result of the Commonhold & Leasehold Reform Act 2002. Leasehold Valuation Tribunals, which form part of the Residential Property Tribunal Service, now have the ability to settle disputes on:
Service charges The LVT has much wider powers to decide whether service charges are payable including decisions on whether the costs are reasonable, the standards of work are reasonable and whether the lessees have been properly consulted.
The right to manage A new right for lessees of flats to manage their own properties has been introduced. The LVT can decide disputes between the landlord and the right-to-manage company.
Administration charges The LVT can decide whether other charges under a lease (e.g. a landlord’s costs associated with giving consent to sell the flat) are payable and/or reasonable.
Variation of leases The power to correct defective leases, which was previously exercised by the County Courts, has been transferred to the LVT.

Under the Government’s Housing Bill, The Residential Property Tribunal Service will also become the appeals body for local council decisions on housing fitness standards, the licensing of landlords in selected areas and the licensing of houses in multiple occupation.

Siobhan McGrath says: ‘We are urging anyone who is having problems resolving disputes over any of these issues to contact one of our regional offices or phone the national helpline.’
RPTS National Helpline 0845 600 3178
Regional office 020 7446 7700
rpts.gov.uk

Colder weather brings with it a whole new set of home safety concerns. However, by following these simple guidelines from the experts at gas-elec you can have a safe winter.

Winter requires heat and light that just aren’t necessary at other times of the year. This means dealing with open flames, boilers and heaters that you do without in summer. With the cold with us once again it’s a good time to remind ourselves of the basic rules of keeping you and your family safe during the freezing season.

Love your boiler

By servicing your boiler on an annual basis – before the deep winter sets in – you will not only reduce the likelihood of a breakdown but may actually increase the working life of your boiler by up to five years. A pre-winter service carried out by a CORGI-registered engineer may also make your boiler run more efficiently, helping you reduce those dreaded January bills.
If the worst happens and your boiler breaks down during the festive period, there are a copule of quick checks you can do before you incur the cost of an engineer call-out charge. Central heating systems often switch off for other reasons besides a problem with the system itself – for example, a blown fuse or a lack of water in the system. These are the first two things an engineer will check and are simple things to fix. So try checking your water gauge and topping up the system, as well as replacing the fuse.
If the boiler is still not working, you should not attempt to repair the boiler in any way. Having made sure it’s neither the fuse nor the water level, call a CORGI-registered service engineer.

Protect yourself from CO

You can’t see it or smell it but carbon monoxide (CO) is a poisonous substance which is responsible for the deaths of 50 people every year, and which makes many more ill from exposure to it. A good way to minimise the risk of CO poisoning is to have chimneys swept and gas appliances and flues checked.

Draughty dangers

Living rooms with solid fuel heaters should be ventilated, as hazardous situations can arise when windows and doors have been draought-proofed and the permaent ventilation is blocked by the home owner. When keeping out uncomfortable draughts, make sure that you’re not keeping in something much more dangerous: deadly CO fumes!

Lights and electricity

Electric heaters and kitchen appliances are in constant use during the winter and should also be checked by a registered electrician to ensure they meet safety standards.
If a piece of electrical equipment cuts out continually or gives off a strange smell, or if the plug feels warm, switch off immediately and get it checked.
Never overload power points. If there are not enough sockets, consider having more installed as this is a much safer option than extension leads.
For appliances that use a lot of power, such as heaters, hair dryers and kettles, use only one plug per socket.
Never double up your Christmas tree lights with the plug of another appliance as this could result in overheating, electric shocks and short circuiting – and could possibly cause a fire.

Candles and flames

Candle safety is all about common sense but during the festive season our sensible selves can seem to be absent. There are, however, some simple rules you should follow about candle use:

Don’t surround candles with foliage or Christmas decorations
Always use a stable holder – don’t stick a candle to a saucer with hot wax
Don’t place candles on carpets, tablecloths or other flammable surfaces
Keep lit candles away from pets, children, hair and clothes
Never leave burning candles unattended while you are out of the room – and never forget to extinguish them before going to bed.

Bedtime checks

By carrying out the following checks before you go to bed, you can greatly reduce the chance of a fire starting while you are asleep – and increase your peace of mind:

Make sure all the burners or rings of your cooker are off

Check all heaters are off and place guards in front of open fires
Switch off all unused electrical appliances at the socket
Close all internal doors, particularly in unoccupied rooms such as the kitchen, living room and dining room

This information is provided by gas-elec, a company that provides the next generation of gas and electrical safety inspection services to letting agencies, private landlords, home owners, buyers and sellers. For more information visit gas-elec.co.uk or call 0800 587 9999 for your regional offices.