Stephen Murray, Business Development Director at PSG, talks us through the news and events that have impacted on our sector throughout the year.
Well what a year 2013 has been for our sector. The housing market showing positive signs of recovery and growth, whilst most welcome, has only been one chapter in the story. A stream of government announcements and changes in wider industry has continued to keep us all on our toes throughout the year.
I feel the need, the need for speed
In January, just as we all took the tinsel down and commenced breaking our New Year’s resolutions, the Government announced the go ahead of High Speed 2 (HS2). The HS2 debate has gathered pace and intensity throughout the year, with concerns over Return on Investment, the true economic benefit to the north, and real concerns over blight and property values along the proposed route. So far all efforts to de-rail the project look likely to fail.
How green is your house?
The Government’s home energy improvement scheme, The Green Deal, was launched at the end of January. This has transpired to be a bit of a damp squib and is set for a re-launch in 2014.
In March, Greg Barker, the Minister for Energy and Climate Change predicted, somewhat optimistically, that 10,000 homes would have signed up to the Green Deal by the end of the year. The latest figures released in August showed that out of 58,000 assessments undertaken, there had been only 132 Green Deals taken up.
In a speech at the end of October, Mr Barker continued in optimistic form as he outlined Government plans to further develop the Green Deal and the Renewable Heat Incentive schemes in 2014. He claimed that over 80 per cent of those who have had the Green Deal assessment have reported they have either installed or intend to act on the Green Deal approved measures.
Whilst the Green Deal is showing itself to be a very slow burn, purchasers do need to understand the obligations and implications of buying a property which is subject to a Green Deal.
Keeping your head above water
In May the Law Society issued updated TA6 (Property Information) and TA10 (Fittings and Content) forms. The TA6 form now takes account of problem issues including flooding, Japanese knotweed and the ‘Green Deal’.
This was closely followed by publication of the long awaited Practice Note on Flood Risk. The Practice Note highlights the issues, which clients should be made aware of, in relation to flood risk and what steps they might take to assess and reduce the risk if necessary. The practice note also highlighted the availability of commercially available flood risk searches. These highly affordable desktop reports are fast becoming a pre-requisite for both residential and commercial transactions.
The end of the Statement of Principles between Insurers and Government (set for June 2013) looked likely to leave a complete void in insuring potentially high risk properties. However, last minute negotiations provided a reprieve with an extension until July whilst an agreement was sought between the parties. Thankfully in July, the Government announced that agreement had been reached and that “Flood RE” would be delivered in 2015. This would guarantee affordable flood insurance for hundreds of thousands of homes. Until then the Statement of Principles would continue to be honoured. This is not however the end of the story as many homes will be excluded from Flood RE and we may still see large excesses applied to some policies. As with all things the devil will be in the detail.
To frack or not to frack – That is the question…
The UKs’ looming Energy crisis has been another hot topic throughout 2013. Last December’s announcement to lift the moratorium on Hydraulic Fracturing (fracking) has seen protests reminiscent of the anti-nuclear demonstrations of the 1980’s. October saw the announcement of the intention to build Britain’s first nuclear power station for two decades at Hinkley Point C plant in Somerset and wind farms are popping up all over the place much to the concern of many local residents in the greenbelt. Blight and pollution remain the biggest concerns for purchasers and residents.
In opposition to the stance taken by the UK government, the 2011 French ban on fracking has been upheld in a recent court case. A decision which has seen the French energy company GDF Suez, who lost the French court case, team up with Dart Energy acquiring a 25 per cent share in 13 UK onshore petroleum exploration and development licenses.
Day light Robbery
Following items on the BBC radio 4’s Money Box programme earlier in the year highlighting the risk posed by Vendor Conveyancer Fraud, The Sunday Times featured a story showing the very real risk faced by not carrying out sufficient due diligence prior to sending mortgage/purchase funds. The case involved Action Conveyancing also known as ARC or Abode Solicitors, who have since been intervened and closed down by the SRA. Action Conveyancing sent funds to a bogus firm M A Manning and Sons Solicitors. The £175,000 of client monies was cleared out of the bank account the following day. The client’s solicitors cited failure to use the “Lawyer Checker” product as evidence of negligence.
At the LFS Conveyancing Conference in September, Nick Larkins, Mortgage Fraud Controls Manager at Lloyds Banking Group made specific reference to the continued concerns of lenders in the area of vendor conveyancer fraud.
This is an issue which is not going away anytime soon.
The bank of (Mum) Cameron n’ (Dad) Osborne – Help to Buy 2
October 8th saw the Government bring forward the second phase of the Help to Buy Scheme, which effectively sees the tax payer underwriting mortgage deposits enabling buyers struggling to find a deposit to obtain high Loan to Value mortgages.
The launch has been trumpeted by many, but has been criticised by others as it does not address the fundamental issue of insufficient numbers of homes available. Fears of creating another bubble as demand far outstrips supply are of greatest concern.
Confused… you will be…
Why choose black or white, when grey is such an appealing colour
Confusion rained on down as the 12th of October approached. Thismarked the end of the 10 year Transitional Provisions Order for the registration of certain Overriding Interests at Land Registry as laid down in the Land Registration Act 2002.
The confusion surrounded miss-information around whether that date meant that Overriding Interests, that were not registered on a title by this date could no longer be enforced and therefore where no longer of concern to a purchaser or their conveyancer.
This is not quite the case. If we take Chancel Repair Liability as an example:
The end of the Transitional Period on the 12th October did NOT extinguish the potential liability. The liability will only be extinguished following the first Transaction For Valuable Consideration of land after October 12th, although it should be noted that a notice can be registered at any time after 12 October 2013, until the first transaction, which could be decades from now and as such there is no deadline.
A CML Christmas card?
As the end of the year approaches the CML, in a letter to the Law Society, confirmed Lender Exchange, a single panel management data and application process owned and operated by Decision First (part of the recent acquisition of DIIG Europe by DMG Information part of the Daily Mail and General Trust) is likely to launch in early 2014. The technical platform will collect and validate all data from conveyancing firms and make this information accessible by all participating lenders.
It will be interesting to see how this impacts on the market in 2014.
A Happy and prosperous New Year to you all
So as 2014 pops its head over the horizon, the general feeling is that the tide is turning for the UK housing market like sunlight through the storm clouds, shafts of cautious optimism are spreading from south to north across the country.
As an industry we must constantly adapt and evolve not only to react to, but also steer the market, keeping standards of customer service and client protection core to our values.
Here’s to an interesting 2014!