Sir Keir Starmer revealed in June that he intends to step down as British prime minister but he also announced that his government still has plans for a major shake up of the UK’s home buying and selling sector.
A roadmap for that shake up was published on June 19th, with the overriding aim being to radically streamline and speed up the home buying process. The government has also outlined plans to change how it provides financial support to aspiring first-time buyers.
Elsewhere, interest rates were held at 3.75% by the Bank of England, with headline inflation holding steady at 2.8% and thereby easing some of the pressure on the Bank to raise its base rate and the UK’s underlying cost of borrowing.
House prices generally fell across the country in recent weeks, according to both Rightmove and Halifax, while Manchester has reportedly overtaken London as the country’s unofficial capital for ‘buy-to-let’ landlords.
Home Buying and Selling Reform Roadmap
As summer hit in earnest, the UK government took aim squarely at some of the fundamental underpinnings of how residential properties are bought and sold across the country, insisting that the process too often takes much longer than it needs to.
With roughly 1 in 3 deals falling through before they conclude and transactions taking 120 days to complete, on average, the government has said it intends to make the associated processes “faster, fairer and more secure,” in the interests of buyers, sellers, and the wider economy.
To that end, estate agents will soon be asked to sign up to a new ‘code of conduct,’ while solicitors and conveyancing experts will be encouraged to digitalise much more of their work and to use AI technology to speed up their processes where relevant.
It is hoped as well that legally binding sales agreements will be introduced much earlier in a typical transaction’s lifespan so that “gazumping” becomes a far less common feature of the England and Wales housing market.
The reforms also mean that sellers and estate agents will soon be obliged to provide ‘sales packs’ that detail all and any potentially pertinent information about a property before it goes on sale. The hope is that this extra transparency will result in far fewer people backing out of property deals they’d previously agreed to at the last minute.
Ultimately, the aim of the government’s roadmap is to cut homebuying timeframes by as much as four weeks and to save first-time buyers in the region of £650 per transaction.
“Getting the keys to a home you can call your own is one of the biggest events in anyone’s life,” said outgoing prime minister Sir Keir Starmer. “But right now, the system that should provide support instead turns it into a battle. Our reforms will bring this outdated process into the modern age, saving people time and money, and giving them the certainty they deserve.”
Base Rate Held at 3.75%
The Bank of England announced on June 18th that it would keep its base rate of interest at 3.75% despite the headline rate of inflation still being at 2.8% (above the Bank’s 2% target) and despite the Bank saying that it expects to see that figure go up again later this year.
Had the Bank seen fit to raise its base rate of interest, mortgage lenders would have most likely hiked the interest rates on most of their products, all of which would have been bad news for anyone with a tracker mortgage and anyone planning to remortgage in the coming months.
As it is, with the base rate held, mortgage lenders are generally keeping their deals unchanged, for now at least, which is welcome news for homeowners and would-be homeowners across the country.
Rightmove Reports ‘House Price Slump’
Despite inflation having stabilised recently, the fallout from the Iran War and upward energy price pressures, in particular, continues to provide an uncertain backdrop for the UK economy and its housing markets.
Unsurprisingly then, perhaps, Rightmove has reported that asking prices on homes for sale across the country fell by 0.6% in June. That fall is “larger than usual” for the time of year, the online property portal has said, with sellers apparently aiming to “entice summer buyers” with prices on average 0.5% below where they were a year ago.
Rightmove spokesperson Colleen Babcock cited macroeconomic uncertainty and heatwaves as factors contributing to the asking price falls shown in the latest data. “In this kind of market, sellers need to work harder to attract attention. Setting a competitive asking price from the outset is key,” she said.
New ISAs Planned for First-time Buyers
In June, the UK government also announced the launch of a fresh consultation looking at how savings tools might better support aspiring first-time buyers.
Plans are being developed to create new Individual Savings Accounts (ISAs) that specifically support the money saving efforts of would-be homeowners. The intention is for new ‘First Time Buyer ISA’ products to replace ‘Lifetime ISAs’ (LISAs), which were launched as an option back in 2017 but are described by the current government as “not working well” for too many people.
LISAs allow under-40s to benefit from a 25% tax free bonus on annual savings worth up to £4,000 as they save for a housing deposit. The replacement products are expected to offer much the same incentives but the aim is to make them more flexible and easier to use from the saver’s perspective.
Manchester On the Move
Manchester was the focus of much media attention in the month of June with the northern England city’s now former mayor Andy Burnham winning a parliamentary by-election and looking set to become the UK’s next prime minister.
But Manchester was also in the news for other reasons as data from the Property Buying Company revealed that the city is now the most in-demand location in the country for buy-to-let landlords. And figures from Rightmove also put Manchester firmly at the top of table when it comes to fastest house price growth over the past 10 years.
Remarkably, average house prices in Manchester are believed to have increased by as much as 63% over the past decade, which represents a much faster pace of growth than London, where prices increased by just 7% over the same period.
Home Legal Direct’s Perspective
Despite there being so much uncertainty in Westminster this summer, it’s good news that the government has been able to bring forward and back plans for a radical streamlining of the UK’s home buying and selling sector.
Regardless of how much time your property deal takes to conclude, however, having access to suitably well qualified and highly experienced conveyancing professionals will always be crucially important.
With Home Legal Direct you can find your ideal conveyancing partner in a matter of seconds. Or you can contact our in-house experts to ask for their advice on any associated issues or uncertainties.