MP takes on property developers
Emma Lunn rounds up the property stories from the week that you might have missed.
A round-up of property stories that you might have missed.
A few recent changes in the property sector aim to make it easier for people to buy a home, while an MP fights back against unscrupulous developers. Here's an overview of the latest stories of interest.
Homeowners on private estates face unregulated and uncapped maintenance fees according to an MP, who has raised a bill on the subject in parliament. These fees, otherwise known as service charges, management charges or estate fees, are ostensibly to cover the cost of maintaining communal sites such as grass verges or children's play areas spaces retained by the developer rather than being adopted by the local authority.
Companies then either charge residents directly, or sell the contracts on to property-management firms. Yet the fees are being used as "the latest cash cow by unscrupulous property companies", says Helen Goodman, MP for Bishop Auckland.
One of Goodman's constituents saw their maintenance fee rise from £60 to £134 in four years, while another faced a 50% rise in one year. Despite this, the public spaces are often not kept up to a proper standard. The MP presented her private member's bill in parliament on 15 November, so there is a long way to go before legislation could be enacted, but the reading draws attention to the scale of the problem.
From 1 December, all regulated law firms will be required to publish the prices they charge for various services, including residential conveyancing, and spell out what these prices cover. Firms' websites will also need to outline their complaints procedure, and explain how and when complaints may be made to the Legal Ombudsman or Solicitors Regulation Authority (SRA).
Consumers should easily be able to compare the services of different providers and choose the one that best meets their needs, says the SRA. Having this information in advance should help consumers avoid being taken by surprise by larger-than-expected bills when work has already been completed. As well as clearly setting out prices, firms will also have to provide a typical timescale for quoted services.
Specialist mortgages known as "joint-borrower sole-proprietor" (JBSP) mortgages are becoming an increasingly popular way for parents to help their children buy property. Where a parent buys a property with their children, this can boost the amount the child can borrow, as the lender will take into account the parent's income as well.
Yet because the parent's name will be on the property deed as well as the mortgage agreement the transaction attracts the 3% surcharge on the purchase of a second home, and the child will also not be able to benefit from the stamp-duty exemption for first-time buyers.
JBSP products offer a way around this by allowing for a family member to provide financial support without being named on the property deed. Barclays has offered a loan of this type for some time, but the market is growing.
Other providers include Metro Bank, while Tipton & Coseley Building Society launched a range of products last week. Note that although only one party is the legal owner of the house, both parties remain on the hook for payments, and both would see their credit rating affected if payments are missed. Parents may also be turned down by the lender if they are close to retirement.