Buying, selling and letting - April, 2008

For many people every day begins with a commute to work, either by public transport or battling the traffic on the motorways. In fact, almost 1 million people commute into London alone every day.

Commuting has been in the spotlight in recent years because of the impact it has on the environment, with people encouraged to carpool and bike to keep carbon emissions down.

Now there is a new guilt-free way to commute. A commute that takes one minute, incurs no fares, petrol costs or congestion charge and has no impact on the environment. This is the daily reality for the growing number of 'green commuters' who are opting to work from home, without the distractions that working from home often comes with. They are working from their garden.  

Garden room specialist, Rooms Outdoor, says it has seen a steady increase in enquiries for its range of contemporary garden office rooms initially since the extension of the congestion charging zone and now with jitters in the housing market. Staying put and working from a bespoke office has become an even more attractive option. Added to this is also the environmental feel good factor - avoiding an average 10,000 annual travel-to-work car mileage, the green commuter is reducing his or her carbon footprint by 3.5 tonnes of CO2

Garden offices created by Rooms Outdoor buildings use a number of sustainable materials, as well as exceeding the required British housing standards of insulation. A carbon offsetting scheme is an optional extra for those wishing to avoid any environmental impact due to the construction of their new garden office.

Among those to have already made the switch is Annie Stevens, one of the UK's leading designers and chairperson of the British Interior Designers Association.  Annie recently installed a Rooms Outdoor Moderno and moved her highly successful interior design business from a London office back to her garden. The studio is large enough for two employees to work with her and also provides room for a meeting space. At the end of the day, thanks to clever storage, the area is transformed into a chill zone for her teenage children.

"While work-life balance has always been a factor for people choosing to work from home," says John Keenan, Managing Director of Rooms Outdoor, "We are seeing more people making the decision based on a range of problems associated with the housing market and commuting to work. This can simply be concern about the uncertainty of house prices, the frustration of travelling as well as an increasing number of people taking their impact on the environment very seriously."

He continues: "The choice of Rooms Outdoor designs means that garden offices can fit into even the smallest garden, are suitable for year round use and are extremely energy efficient and environmentally friendly."

Construction time on the Rooms Outdoor range is typically eight weeks from the first survey with planning permission only required in a minority of cases There is also minimal disruption to the home with all the work contained in the garden, meaning that the garden office can be prepared with almost no impact on the household or existing working arrangements.

John Keenan adds: "Adding a garden office is almost an instant solution to a better quality of working life and certainly compares very favourably when weighed against the average length of time it takes to buy and sell. In such uncertain times having this additional time to focus on your work could be vital to the success of your business."

For more information visit >www.roomsoutdoor.co.uk

Government figures show that 1.7 million of British households live in leasehold houses, flats and maisonettes. Leasehold is the term given to properties which confer only a right of occupation for a specified period of time. The right derives from a document called the Lease. Historically, upon expiry of the Lease, the asset would revert to the person who held the full title, called the Freeholder.

Historical Foreplay

It is not surprising that this two-tiered ownership structure has often resulted in serious disagreements regarding property management and maintenance charges. Especially given that until recently leaseholders had no control over how their property was managed and the costs involved.

Rachel, 42 of Norbury says “I lived in a leasehold flat about ten years ago. As soon as I discovered how pitiful my rights were when faced with a dispute over service charges, I voted with my feet and moved out”.

Legislative changes to leaseholder rights started to take place as early as 1954 although it was not until 2002 that the leaseholder’s ‘right to manage’ was introduced.

Updated Rights - Right to Manage (RTM)

Subject to certain conditions, Leaseholders can join forces to take over management of their property, irrespective of the wishes of the Freehold owner or current Managing Agents. Importantly, in many cases, this can be achieved without recourse to the Leasehold Valuation Tribunal (the court with jurisdiction over leasehold matters) and without accusations of fault or blame.

In order to qualify for this right, the general guidelines are as follows:-

• Two-thirds of the leaseholders in the building must have bought leases of 21 years or more.
• At least half of those who satisfy the above condition must be willing to exercise Right to Manage.
• No more than 25% of the total floor space in the building must be used for non-residential purposes (i.e. shop floor).
• The Freeholder must not be a local authority.
• The property must not be within the precincts of a church or chapel.
• If the Freeholder lives in the building containing four flats or less, and he or she lives there as his ‘only or principal home,’ Right to Manage cannot be exercised.

Maria (above) qualified for the right and persuaded the other leaseholders to join her in establishing a right to manage company and taking control.

“It seemed like a lot of work to start with”, she said “but I got legal assistance which helped a great deal. It went through like a dream”.

Some people are not quite as lucky as Maria. There are instances where the Freeholder refuses to accept Right to Manage and if he or she does not withdraw their opposition, an application to the Leasehold Valuation Tribunal may be the only alternative. Fortunately, however, the Tribunal can only prevent Right to Manage on the grounds of (1) ineligibility (2) outstanding service charges or (3) inaccurate procedure followed.

To conclude, Leaseholders should be encouraged to assume control as the grass is undoubtedly greener on the other side even though it might take a brisk walk to get there.

Written by Corinne Tuplin, Solicitor, of Pro-Leagle (http://www.proleagle.com/). 

Pro-Leagle is a specialist Leasehold and Property law firm.

(1) You’re kidding yourself if you think you are going to secure the home of your dreams purely by signing up with Rightmove.

(2) Make an effort to get to know your local estate agents and ensure they see you are a serious buyer by keeping in regular contact. Make the time to get in touch at least every couple of days to see if there is anything new on the market.

(3) Be realistic about what you can buy on your budget. Many home hunters waste months searching for the sort of property that will simply never come up in their price bracket.

(4) The more flexible you can be, the more chance you have of securing a great property. Think outside the box. Are you restricting the area too much? Does it really have to be Georgian? Could you consider converting a former commercial property?

(5) Don’t overlook a property purely because of its outside appearance. If a property is on a good road and has everything else going for it, it could still be a good buy. Consider employing the services of an exterior design company or architect to give an ugly property a facelift.

(6) Don't waste money on an expensive survey if the house is not that old. Tradespeople will often come and check electrics, plumbing, roof etc for free and at the same time, provide a quote for any repairs or maintenance, which can be a great lever for asking price negotiations.

(7) Get a great solicitor in place, who can use email, and is a pragmatic problem-solver.

(8) Get your broker sorted early so you know exactly what your budget is and make sure they can move fast when it comes to the time to get a mortgage in place.

(9) Be really nice to the vendors and estate agents - people sell to people they like.

(10) If you know you are going to be stretched for time, consider appointing a professional home finder.

Tips for SELLERS

(1) Make sure your house has kerb appeal by tending to your front garden and giving your front door a fresh coat of paint. If your property is not looking reasonably lovely on the outside, many potential buyers won’t even bother to walk up the driveway.

(2) Home hunters have wised-up to house doctoring in recent years. If you must do it, avoid the most obvious tricks, which include laying the table as if for a dinner party, burning scented candles in the bathroom and ‘artistic’ arrangements of fruit on the kitchen worksurface.

(3) Do however thoroughly declutter your house before allowing potential purchasers to view. If you haven’t used it in the last few weeks, chances are won’t need it. Make full use of your loft space and put anything that won’t fit in storage.

(4) Buyers hate vendor-led viewings, so let your estate agent do the job you are paying them for and make yourself scarce.

(5) If you must be around for a viewing, then get someone to take the kids and dogs out for a long walk.

(6) If your house is not selling, 90 percent of the time it will be because the price is wrong.

(7) Be prepared to move into rented accommodation if necessary. It could save you a lot of stress and stop you from impulse-buying the wrong house.

(8) If you have dogs, a good dousing of 'Oust' is highly recommended. Dog owners are often immune to the smells of their pets and bad odours really turn people off. Consider hiring a professional cleaning company if you have several pets in the house.

(9) If you don’t have to sell immediately, consider the effect that time of year has on property sales. If you put your house on the market at the wrong time of year, it could take much longer to sell – and buyers are suspicious of properties that don’t move quickly. If you can avoid it, don’t market your property until the spring and avoid Christmas and summer holiday periods.

(10) Visibility is everything when it comes to selling. Always ask your estate agent for a sales board, even if you live on a cul de sac or no-through road. And don’t forget to tell your friends, colleagues and neighbours that your house is for sale. People talk and word of mouth can really help with a sale.

Tracy Kellett, founder of BDI Home Finders is a gamekeeper turned poacher. Before setting up her property search consultancy, Tracy worked as an estate agent. Her mission is make professional home finding services accessible to everyone. In her personal life, Tracy has moved house 26 times. You can contact Tracy on 0845 603 6110 or via http://www.bdihomefinders.co.uk/

Getting a mortgage is something that all of us are likely to do once in our lifetime and some of us will do more than once. However, the process is complicated and can be a real cause of stress for home-hunters, who have to rely on third party advice as to what deal is best for them.

Before you go out there and ask around for what deals might suit you it is advisable to have at least a rudimentary understanding of what deals are available and how each one will affect your personal situation.

Repayment vs. Interest Only

Before we look at interest rates, it is important to decide which type of payment scheme you want to sign up to.

There are two types of mortgage payment schemes – repayment or interest only.

Under a repayment schemes the borrower makes regular repayments that go towards paying off the loan as well as the interest accrued. The payments are high enough that when the term of the mortgage is up you will have repaid the mortgage completely, as well as the interest accrued. This a safe option because you can be sure that at the end of the term you will be debt-free.

With an interest only payment scheme, there is a lot more risk but also the opportunity to spend your money more wisely, depending on your personal circumstances and financial restraint! The borrower only pays off the interest on the loan, with the agreement that at the end of the term the entire loan will have to be paid off in its entirety. If you are a savvy saver and can commit to making the necessary payments into a private savings account this is a good option. At the end of the term you will have saved the loan amount, and accrued interest on it while doing so.

Interest rates

Mortgages are influenced by the Bank of England’s base rate. The base rate is decided by the Monetary Policy Committee in response to the market conditions, and to a certain extent this then impacts on mortgage rates.

However, the amount mortgage rates reflect the base rate is dependent on other factors as well, such as the policy of the independent supplier and the type of mortgage deal you have signed up to. There are three main interest rate deals – fixed rate, variable and capped.

A Fixed Rate mortgage is just that – a fixed interest rate during the set term that will not change regardless of market fluctuations or base rate changes. It is a sensible option if you have financial limitations, and need to know exactly what your repayments will be and how much interest you will accrue in order to budget.

Variable Rate means that the rate of interest you pay varies over time, changing to reflect the market conditions and in response to the base rate. A variable rate mortgage is based on the mortgage supplier’s own rate policy, so the interest rate only changes at the discretion of the supplier. A tracker rate means that the interest rate automatically follows the base rate decisions. This can be a good option if you are willing to take a risk and you have an understanding of what is happening in the market.

A capped interest rate is a good compromise. It is a variable interest rate but has a capped top value, meaning you get the benefits of any major falls in the base rate but if the market swings the other way there is a limit to how high it can rise.

Making a decision

There is a lot to take into account when looking for a mortgage deal. The most important thing to factor into your decision is how stable your financial situation is now and how it might change in the future.

For someone with a bit more flexibility it could be worth looking at an interest-only or variable rate mortgage but if you are a first-time buyer with a tight budget there is security in knowing exactly what your debt and repayments will be.

The bottom line is that finding a mortgage is a complicated process and in the current environment it is advisable to get professional help.

To help you on your way HotProperty has built a new mortgage advisor finding service to put you in touch with a professional that will be able to advise you on your particular circumstances.

To use the HotProperty Mortgage adviser service, click on this link.
http://www.hotproperty.co.uk/money/mortgages