Fri, 03 Feb 2012 23:01:01 GMT2012-02-04T00:09:18Z
Landlord Patrick Osborne profited from rising rents, generous tax breaks and easy capital gains ? so why did he get out?When Patrick Osborne became a landlord in 2001 he was taken aback by how many friends and acquaintances condemned him. "I'm not going to pretend I fell into it by accident. I made an active decision to do it for income and pension planning. But I was surprised by some of the reactions I got and the level of vitriol towards landlords. I'd only ever had good experiences as a tenant, so this shocked me."Osborne ? data manager at a retail bank's HQ ? moved to the UK from Australia in 1995 and thinks this may, in part, account for his surprise. "There isn't the same issue about it in Australia. It's a polarising issue in Britain, and I'm really glad I'm not part of it any more."At first, Osborne, who is 40, single and lives alone, was happy to be a landlord. "I took the responsibility seriously. If you don't have gas and electricity safety certificates and there's an explosion you're going straight to jail. And rightly so. But there could still be a fire and someone could die, even if it's not your fault. I was always aware of that."He became a landlord when he moved from his first house in New Cross, south-east London, which he bought for £95,000 in 1999. Rather than selling, he decided to rent to students."I liked the idea of offering it to young people who wouldn't normally want to buy at that stage of life. I didn't charge the most the market would bear, just enough to make me a steady income, as well as capital appreciation. It was mainly for my pension. I had other pensions but, as I'd changed jobs two or three times, there were lots of bitty ones; this was something solid."Like hundreds of thousands of other landlords who jumped on the buy-to-let bandwagon, Osborne could happily have held on to his property, or bought more, using the equity he has built up.But he had a major change of heart, prompted by the continuing rise in house prices, in London at least, and the lack of supply of homes for younger families."I wouldn't describe myself as left wing but, increasingly, I feel housing provision in Britain is deeply unfair. The only reason I could buy when I did, and become a landlord, was down to luck and timing. I couldn't afford the house I'm living in if I had to start now."I didn't really need the rental income as I already earn a good salary. And, basically, my views changed."I think housing provision should be more regulated and not a free-for-all. It's not nice to profit from someone else's need to sleep somewhere. I think it's wrong some landlords have strings of properties. It restricts supply, and tenants have very few rights, or aren't aware of rights they do have."You hear all kinds of horror stories, such as three months' rent in advance, or houses let out that aren't safe but if tenants say anything they're evicted. A landlord can always replace them. It's wrong. I don't want to be part of that, even in my small way, and I like to think I was a good landlord."We all make compromises with our principles but I was getting more and more uncomfortable defending mine."Osborne says he was also appalled at tax breaks he received. "I was quite surprised by how much I could set against tax and that was without hiring a flashy accountant, so I probably could've claimed more. The tax rules were, believe me, very generous."When Osborne decided to get out, he gave his tenants six months' notice ? the law only requires two ? and sold his house for £230,000. It was a handsome profit even after capital gains tax, which he used to pay off most of his current mortgage.Osborne bought his first house when he was 28 and became a landlord at 30. It's a very different picture for today's under 35s. A survey last week showed what most of us know anecdotally ? far fewer young people can afford to buy now. The 2012 HSBC Moving Home Survey revealed a growing number of young people don't want to own a home, which is a reverse in home ownership aspirations of this age group.Meanwhile, 61% of people aged 55 and over aren't planning to move. The generational divide in the UK property market is likely to cause housing stagnation in 2012, with young people unable to buy, and older homeowners unwilling to sell, the report concluded.This is further backed by HM Revenue and Customs, which this week reported house sales fell last year to one of the lowest ever recorded at 869,000. Further falls are expected this year as the economy remains weak.But others say 2012 could see the return of the first-time buyer. This week saw the launch of the government's NewBuy Guarantee scheme designed to help buyers over the obstacle of high deposits. Mainstream lenders are also making more 95% deals available, and offering better prices on longer-term fixed rate mortgages. This week Chelsea building society launched the lowest-ever interest rate for a five-year fixed rate mortgage, pegged at just 3.19%.But there is no sign Osborne is sparking a trend towards quitting among buy-to-let landlords. In 2001, according to the Council of Mortgage Lenders, 72,200 buy-to-let mortgages were granted, rising to 346,000 in 2007. The figure dropped to 94,600 in 2010 ? the last full year figures are available. But the trend is firmly back up, says Sue Anderson, CML spokesperson. "Demand for private rented housing is high and set to remain so. The rising demand for renting makes it likely the buy-to-let market will continue to grow."Buying to letRenting propertyPropertyInvestmentsConsumer affairsLaura Marcusguardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

Fri, 03 Feb 2012 23:00:00 GMT2012-02-04T00:10:46Z
Rural idyll and rural reality cheek by jowl: a strange but unique mixWhat's going for it? I once saw the Garland festival at Castleton, one of those slightly Wicker Man, splendidly batty British traditions where the king for the day is paraded around on a horse with a basket of flowers over his body. It's either deeply pagan, deeply touristy or co-opted to celebrate the restoration of Charles II, depending on your position on such things. And, round here, you have to have a position. The Hope and Edale valleys might be the honeypots to end all honeypots, inundated with tourists since the first mill spun in the industrial cities round about and garlanded, like the king, with gaudy trinkets to keep them occupied ? caves, wild, pretty valleys, teashops ? but underneath they keep it real. There's a sturdy, noisy community round here, rich and poor, dealing with real rural problems such as poverty, the grumpy weather and the parlous state of the hill farm. Sturdy enough, say, to give birth to the right to roam with the mass trespass on Kinder Scout in the 30s. Rural idyll and rural reality cheek by jowl make for a strange mix, but at least it's unique. Some days at Hathersage's open-air swimming pool you can be serenaded by a decidedly unironic brass band.The case against The hordes, the hordes! The inevitable restrictions of living in a national park. The problems of the rural economy. The roads. Serious weather in winter.Well connected? Windy, bottlenecked roads plus coach parties. Nuff said. Get up early to avoid. Despite its isolation, the Sheffield to Manchester railway passes through every one to two hours at Edale (33-35 minutes to Sheffield, 45 to Manchester), Hope, Bamford and Hathersage (21-24 mins to Sheffield, 60 to Manchester).Schools Primaries: Bradwell Junior, Castleton CofE, Edale CofE, Bamford and Hathersage St Michael's CofE all "satisfactory", says Ofsted. Hope Valley College secondary is "good".Hang out at? Some swear by the Cheshire Cheese in Castleton. Me? I'm more a George Inn kinda guy.Where to buy Hope and Castleton are more touristy and posh, Bradwell more "normal", Edale's villages more remote but beautiful. Hathersage is nearer Sheffield and more grounded. Expect limestone cottages, ex-barns, farmhouses, town houses, plus a smattering of Victorian redbricks.Market values Large detacheds, farmhouses, etc, £450,000-£750,000. Detacheds, £200,000-£450,000. Semis, £200,000-£400,000. Terraces, £160,000-£225,000.Bargain of the week Big, three-bed Victorian stone terrace in Hope, with rural views; £205,000, with Blundells (01433 609125).From the streetsLiam and Jane Clarke "Castleton has great walking, community life that can't be beaten, plus wonderful eating out, in particular at the 15th-century Rose Cottage."Lydia Keigwin "Hathersage has two iconic attractions: the heated open-air swimming pool ? open late March to early October and a fabulous experience whatever the weather ? and Stanage Edge, a stunning rock face an hour's walk from the village."Steve Briggs "It's a privilege to live in such a beautiful place as Castleton. For a very busy, honeypot village, it has a strong community spirit, but you do have to like people, given the number of visitors."Hazel and Andy Jamieson "Our favourite things about Hathersage: the wonderful annual gala, glorious countryside and delicious ice-cream made on a local farm."? Live in Hathersage, Castleton and Edale? Join the debate below Do you live in Sandwich, Kent? Do you have a favourite haunt or pet hate? If so, email lets.move@guardian.co.uk by Tuesday 7 FebruaryPropertyHomesTom Dyckhoffguardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

Fri, 03 Feb 2012 22:56:01 GMT2012-02-03T22:56:01Z
I'm at least £800 out of pocket, but landlords are threatening me with courtI own a one-bed flat on a lease. Hot water and central heating is included in the service charge of £3,000 per annum.The first year, the heating did not work. I was told by the landlords, Latymer Court Freehold (LCFC), that the problem was with the radiators and that I needed to buy wrought iron ones. This I did at a cost of more than £700. Still no heating. Despite my incessant demands, the landlords took no action, so I purchased two electric heaters and ran them for two years. Finally, in the third year, the landlords admitted it was a total blockage of the risers and replaced them. We had heating at last. I added up the cost of running the electric heaters and all the other costs I had incurred, and asked the landlords to reimburse me. They refused. I withheld roughly £800 from the next service charge and asked, again, for them to propose compensation. They responded with a letter from a debt collector and then solicitors, stating that, regardless of what services are, or are not, provided, the service charge must always be paid in full. Five years on, we have reached a stalemate, with them occasionally threatening legal action and me asking for compensation. JP, LondonRelationships between leaseholders, landlords and the managing agents that run the properties on their behalf are notoriously fraught, but it is important that you sort out this dispute or you will come up against problems if you sell.You told us that you were willing to forgo your additional costs if LCFC would stop chasing you for the £800. We approached LCFC. It initially told us to talk to the managing agents who run your block, Willmotts, but they told us they could not talk to us about your case because it was one that LCFC insisted on dealing with directly. The letters to you were coming from Willmotts on the instruction of LCFC, but that was as far as its involvement went, it said. So we went back to LCFC but it was "unable and unwilling" to talk to us, although it has since sent us an email disputing certain elements of your story.We enlisted the help of Chris Alexander, a property litigation lawyer at SA Law solicitors based in St Albans, with the aim of establishing your chances of success in court.He talked us through your contract and pointed to various elements within it that mean you have a reasonable case against LCFC. For example, he says that LCFC cannot rely on the "non-deduction from rent" clause ? this would apparently not stop you from making an equitable set-off in the way you did by withholding your £800.Your case has the additional complication that you do not have the receipts for your costs because the managing agent has changed since the heating debacle started. It was the former company that you sent the receipts to. If the case went to court this would make your claim trickier to win, but not impossible.Since Guardian Money became involved, LCFC has sent you another letter, again threatening to take you to court. We have suggested that you now take further action to resolve this, taking your case to the independent legal body, the Leasehold Valuation Tribunal, which is a low-cost option. You would also need to ensure that an application is made under section 20c of the Landlord and Tenant Act 1985 to prevent the landlord charging back its legal costs through the service charge.Chris Alexander has kindly offered to draft your claim and you have agreed. Please let us know how you get on.We welcome letters but cannot answer individually. Email us at consumer.champions@guardian.co.uk or write to Bachelor & Brignall, Money, the Guardian, 90 York Way, London N1 9GU. Please include a daytime phone numberLeaseholdPropertyHousehold billsConsumer affairsConsumer rightsLisa Bachelorguardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

Fri, 03 Feb 2012 17:00:01 GMT2012-02-03T17:00:01Z
Considering a move or just wondering how the other half lives? Take a look at our gallery of homes on the market to see what your money will buy

Fri, 03 Feb 2012 14:47:19 GMT2012-02-03T14:53:17Z
London agents and landlords look to cash in on Olympics, leaving tenants facing rent hikesTenants in London are being priced out of their homes because their landlords are hiking up their rent during the Olympics and Paralympics.Properties are being advertised for rent for as much as £100,000 a week over the Olympic period in some well-heeled parts of west London, while tenants closer to the Games sites are finding their rents increasing up to fourfold.One tenant living in east London said a clause had been added to his rental contract last year that said there would be "a minimum increase of 4.0x multiple of the current weekly rent during the Olympics and 2.0x multiple of current weekly rent during the Paralympics"."There was no mention of it [the increase] outside of the clause being added," he said. "I am going to have to move out."Another tenant, who also did not wish to be named, said that his landlord had just informed him that his rent would go up by almost £200 a month ? an increase that has forced him out of London, increasing his travel costs by 15%."My flat is in Bermondsey [south east London] and when it came to my renewal of contract last month, our landlord insisted on an increase in rent from £1,100 to £1,290 a month," he said. "As I'm only 24 and only left university two years ago an increase like this is impossible, and has resulted in me having find a new place outside of London increasing my commute by about an hour.""The only reason I could see for this steep increase was the Olympics and the fact that I'm close to the Jubilee [tube] line, and a few stops from Stratford. I'm pretty sure I'm not the only one in this boat as I have seen three or four other tenants in our building moving out in the last three months, most of whom are young professionals."Lettings agents, Draker, which is based in London's West End, is advertising Olympic lets prominently on Google. A search on its website shows 36 properties to rent during the Games, with rental prices ranging from £1,500 a week for a one-bedroom flat in Chelsea to £100,000 a week for a six-bedroom penthouse apartment in Knightsbridge.A number of other high profile estate agents have sections dedicated to Olympic properties on their websites. Foxtons is renting out 1,100 properties for the Olympics, with prices ranging from £525 a week to £100,000 a week.Dozens of other websites have been created especially for property owners wanting to cash in on the Games.One property owner on Rentduringthegames.com is advertising a two bedroom flat for up to six people in a tower block on "well known Ilford high road", east London, for £1,500 a week during the Olympics and £1,000 a week during the Paralympics. The average rent for all properties in the area at present is £1,195 a month, according to property website Zoopla.Housing charity Shelter said that it has become increasingly concerned that tenants are being priced out of their homes."We're beginning to see worrying signs of the pressure-cooker effect the Games could bring including some indications of landlords looking to evict their current tenants in order to let their homes to Olympic visitors this summer," said Kay Boycott, director of campaigns, policy and communications at Shelter. "It's absolutely vital that anyone who thinks they could have problems seeks advice immediately."Labour MP Chris Williamson also raised the issue in Parliament at the end of last year after attending a public meeting in Brent, north-west London, where a number of tenants had expressed their concern over their tenancy agreements during the Games."One of the concerns raised at that meeting was that longstanding private tenants were being told by their landlords that they will have to move out during the Olympics," said Williamson. "I raised this in Parliament, asking whether an assessment had been made as to the extent of the problem and whether the CLG minister planned to take steps to discourage this practice."Communities and Local Government minster Andrew Stunell replied saying that the government has received no evidence that this was happening.WA Ellis, an estate agent in central London that deals with high-end properties said that it was receiving inquiries "in their droves" about lettings over the Olympic period but that 90% of these were coming from landlords, with very limited demand from tenants."The major drawback [to increasing rents during the Olympics] is the void period running up to the let and more importantly, following the let," said Lucy Morton, senior partner and head of lettings at W A Ellis. "If long term investors jump on the Olympic bandwagon and launch their properties back on to the market in September, there is a strong risk that there will be a sudden surge in supply of properties available without the demand."However, other agents are looking to take advantage of the Games. Fulham based estate agency, Haus Properties, said that it will be hosting a series of informative Olympic rental seminars throughout March and April "to educate homeowners about what they need to consider." It said that this was due to an increasing volume of enquiries from homeowners looking to let their properties during the Olympics.The National Landlords Association said that while it recognised that the Olympics presents an opportune time for many businesses to increase their income, it does not make sound commercial sense for landlords to end a current tenancy to raise the rent for a few weeks during the games."Most landlords would recognise it is far more beneficial to have a good, long-term tenant in their property," said David Salusbury, chairman of the NLA. "It is important that homeowners considering letting their properties during the Olympics are aware of their responsibilities to tenants, and the regulations they must comply with."Renting propertyPropertyOlympic Games 2012Lisa Bachelorguardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

Fri, 03 Feb 2012 12:22:32 GMT2012-02-03T12:35:21Z
Companies purporting to help struggling homeowners found to be offering schemes that 'never should have been sold'The City regulator has shut down the market in schemes which purport to help struggling homeowners, by buying their properties and renting them back to them so they can continue living there.The Financial Services Authority (FSA) acted to stop the sale and rent back market after it found that most schemes were either "unaffordable or unsuitable and never should have been sold".Also called "sale and leaseback", the schemes allowed homeowners to sell their home to a company or individual but then lease it back and remain in the property as a tenant, usually on an assured shorthold tenancy lasting six to 12 months ? after which they could lose their right to live in the property.Sale and rent back companies typically targeted struggling homeowners who would stump up the cost of a valuation ? usually at least £500 ? only to find the price being offered for their home falls far short of the market value.The Council of Mortgage Lenders issued a warning about the sector in October 2007. However the FSA did not introduce full regulation until June 30 2010, which said companies were prohibited from using high-pressure sales techniques, had to introduce a 14-day cooling-off period, and had to ensure customers had security of tenure for a minimum of five years.The FSA said a recent review of all 22 regulated firms resulted in it referring one firm to its enforcement division, while others have either stopped taking on new business or cancelled their permissions. "Effectively, this means the entire SRB market is temporarily shut," it said.The FSA said it had been tipped off by a lender alleging that one firm was committing fraud by arranging transactions as buy-to-let mortgages, with the rogue firm purchasing properties at below market value before inflating the purchase price to defraud the lender.It also found that firms did not correctly assess appropriateness and affordability, and customers were not given enough time to consider their agreement, which often contained incorrect information and did not meet the FSA's requirements for tenancy agreements. It said sales processes were inadequate and did not allow firms to gather enough information to assess whether schemes were appropriate, and promotions also breached FSA rules.Nausicaa Delfas, the FSA's head of mortgage and general insurance supervision, said: "Sale and rent back is often the last resort for struggling homeowners, so we expected to see firms treating their customers much better than this report suggests."The resulting temporary closure of this market could have been avoided if sale and rent back firms had taken the time to fully understand their regulatory responsibilities and customers' needs. It seems most were more focussed on their own commercial success rather than the welfare of the customers, with one firm even resorting to fraud."Consumer rights group Which? conducted its own research into the market in February 2011 and found that advice to SRB customers was "woefully inadequate".Its chief executive, Peter Vicary-Smith, welcomed the FSA's announcement: "We now want to see redress for those consumers who have been given poor advice by SRB companies, and for this to happen quickly."The FSA will now focus on working with firms conducting past business reviews to ensure any affected customers are treated fairly. It said if customers with existing agreements had concerns about their agreement they should in the first instance contact their provider, or seek professional advice.The sale and rent back victimsThe Observer warned about the sector in 2006 and in 2009 highlighted the plight of victims such as Jean Turner and her husband, who sold their Norwich home to a sale and rent back company after falling three months into arrears on their mortgage. Although they only owed £1,500 they had been taken to court by their lender and faced repossession.A company called Home Assured agreed to buy their home and paid off the outstanding mortgage and arrears. The Turners then paid £500 a month in rent to stay in their home ? the same amount they had been paying for their mortgage, but had no tenancy agreement or rent book. The firm then sold her home to another owner but she received a court summons when the new owner failed to keep up with the mortgage payments ? then the new owner tried to raise the rent from £500 to £650.Sale-and-rent-back schemesPropertyFinancial Services Authority (FSA)RegulatorsFinancial sectorConsumer affairsMark Kingguardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

Fri, 03 Feb 2012 06:15:00 GMT2012-02-03T06:15:01Z
Analysis of claims data from MoneySupermarket shows 17 areas in which no previous burglaries were declared by applicants for home insuranceHouseholds in London's Stoke Newington and Apperley Bridge in Bradford are the most likely in Britain to make an insurance claim for burglary, according to analysis of information given by consumers on home policy applications.Analysing 3m quotes made during the year to 30 November 2011, MoneySupermarket.com has produced a list of areas where applicants declared a previous claim for burglary or theft from their home or garden. Households in the N16 and BD10 postcodes declared a respective 33.6 and 33.1 insurance claims per 1,000 quotes, putting them top of the list.London and Leeds postcodes made the most frequent appearances in the burglary claim chart, with six and five respectively. LS13, comprising Bramley, Rodley, and Swinnow, was the postcode district in Leeds with the most theft-related insurance claims.In contrast, 17 areas showed no previous burglaries were declared by applicants for home insurance, including Bodelwyddan in Denbighshire, Eastbourne in East Sussex, Peterlee in County Durham, and Ryde on the Isle of Wight.Julie Fisher, head of home insurance at MoneySupermarket.com, said: "Being in a higher risk area doesn't necessarily mean where you live is bad or rife with crime ? many thieves will target more affluent areas purely for the rewards on offer."Most insurers have a blanket approach when it comes to assessing postcode districts for home insurance premiums, but this really needs to change."The latest crime statistics issued by the Home Office for the 12 months to September 2011 mirror MoneySupermarket's data, showing that the areas with the highest rate of burglary per 1,000 households are West Yorkshire (including Leeds and Bradford) and the London region.But not everyone who has experienced a burglary will make an insurance claim, while many homes in a given postcode won't have bought any home insurance at all. Also, some people obtaining quotes for home insurance might (intentionally or not) omit the fact they have made a previous claim for burglary.Malcolm Tarling from the Association of British Insurers said: "It is true that not everyone claims after a burglary ? many homes are not insured and some people will omit a previous claim when applying for insurance, though they shouldn't. You could use claims data in 10 different ways and get 10 different outcomes."What is known is that more people in urban areas are less likely to have home insurance because of the cost ? premiums are higher in urban areas because that is statistically where there is more crime. So while this survey has highlighted a number of urban areas as burglary hotspots, it's also true that an urban home with effective security measures installed can be less of a risk than a poorly protected home in a rural area."Top 10 districts most likely to disclose a home insurance claim1. N16 ? Stoke Newington, London, 33.6 per 1,000 inquiries2. BD10 ? Apperley Bridge, Bradford, 31.73. B71 ? West Bromwich, West Midlands, 31.74. N22 ? Wood Green, London, 30.35. LS13 ? Bramley, Rodley, Swinnow, Leeds, 306. LS15 ? Austhorpe, Barwick-in-Elmet, Colton, Cross Gates, Halton, Halton Moor, Scholes, Whitkirk, Leeds, 28.7. BD18 ? Saltaire, Shipley, Windhill, Wrose, Bradford, 28.68. LS7 ? Chapel Allerton, Chapeltown, Little London, Meanwood, Potternewton, Sheepscar, Leeds, 27.49. DN2 ? Intake, Wheatley, Wheatley Hills, Doncaster, 27.310. SW16 ? Streatham, London, 27.2Home insurancePropertyInsuranceMark Kingguardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

Thu, 02 Feb 2012 13:13:55 GMT2012-02-02T14:24:15Z
The idea is to cut income and business taxes while introducing a land value tax to end our obsession with property and to encourage paid workAmid a flurry of microeconomic reform proposals, the Institute for Fiscal Studies has thrown its weight behind OECD proposals for a shift away from income taxes to consumption and wealth taxes.In particular, the IFS said: "Replacing business rates with a land value tax would remove a damaging bias against property-intensive production."The IFS's recognition of the property problem is welcome.Across the western world there is a mania for investing in unproductive property as a way to boost living standards. There is a case to be made that property speculation, seen as a bona fide job in some circles that deserves respect, is a way not to do any real work, but let's leave that to one side.The last property bubble, which precipitated the financial crash, has entirely failed to diminish the appetite for making gains on property speculation as a substitute for making gains from working.For 30 years wages have stood still. But no matter, we can speculate on property to increase our income.This is not the fault of homeowners. Faced with an employer who refuses to pay higher wages, workers have little option than to borrow and what better than a home as the main supporting asset?Housing equity allows all homebuyers to supplement their incomes either as collateral for a secured loan or, less directly, for an unsecured loan.There is no tax on the main home or its sale. There is only 100% gain. For higher rate taxpayers, the buy-to-let option is also lightly taxed compared to income tax (40% versus 28% for capital gains tax).The OECD has proposed cutting income taxes and business taxes across its developed world membership and introducing a land value tax (LVT) to end this obsession with property and encourage paid work.An LVT would take money out of the property market every year rather than just when transactions occur. Stamp duty could be abolished and inheritance tax as well, especially as the UK has already pushed the threshold so high that middle income groups don't pay and the rich can avoid it. Council tax would go, along with business rates.The left has traditionally objected to any reduction in the role played by income tax and corporation tax. A highly redistributive income tax and a big levy on corporates is the way to make the new phenomenon of super-high-salaried staff (relatively unknown 40 years ago) and their capital-owning cousins pay for welfare services, they believe.Except that a wealth tax is redistributive. As the IFS says, a tax reform can be revenue neutral, if that makes it more politically acceptable, with rich landowners paying the most.Obviously a radical tax change is probably more politically unacceptable in a downturn than it is in a boom, but then there is never a good time.While the holy grail of LVT supporters is to abolish all other taxes, the OECD merely recommends a shift in emphasis. The shift would allow some simplification, though simplification is not the point. It is to make work pay without sacrificing the welfare state.The bankruptcy of the Liberal Democrat plan to raise the personal allowance threshold to £10,000 is that it seeks to impose a higher burden on middle income earners within the same tax structure. If their mansion tax illustrates a desire to tax wealth, like the IFS, they should switch to an LVT. Almost anyone with a mansion can void the current charges on its sale: a higher tax makes no difference. An LVT is unavoidable.EconomicsReal estateTax and spendingTaxPropertyPhillip Inmanguardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

Wed, 01 Feb 2012 15:25:57 GMT2012-02-02T11:28:27Z
Mortgage indemnity scheme will guarantee 95% loans up to £500,000, with developers and taxpayers providing fundingA government scheme aimed at kick-starting the housing market by underwriting 95% mortgages will be available to people spending up to £500,000 on a new-build property, the housing minister has announced.The NewBuy Guarantee scheme, which will be launched in March, will allow lenders to offer large mortgages on new-build homes without taking on all of the risk: they will be guaranteed not to lose money if the property falls into negative equity and is repossessed, with the mortgage indemnity funded by developers and taxpayers.The scheme had been heralded as a way to get first-time buyers back into the market, with the prime minister suggesting it could help 100,000 buyers frozen out by a lack of finance.The first-time buyer market has become more competitive in recent weeks, but rates on low deposit mortgages are high, and there is much less choice than there was before the credit crunch. Would-be movers have also been struggling as falling house prices have left some with very little equity to put into buying their next property.Unveiling more details, housing minister Grant Shapps said he wanted to "go the extra mile" for those aspiring to get on the housing ladder. He said that while buyers typically needed to raise £40,000 to put down as a deposit, this could help those with just £10,000 to buy a home of their own.Details of the scheme confirm it will be open to all buyers, not just those looking for their first home, and reveal it can be used on new-build houses and flats costing up to £500,000 ? considerably more than the average first-time buyer price. The only criteria imposed by the government is that borrowers must be UK citizens and the property they are buying must be their main home.Although there are just weeks to go until the scheme launches, Nationwide building society, one of the lenders which will take part, said it is still working with the government to work out exactly how it will operate.The Council of Mortgage Lenders said discussions about the scheme were ongoing, and when the final details were announced the £500,000 cap could vary around the country.Spokeswoman Sue Anderson said lenders were drawing up plans for mortgages, but it was unclear whether they would be able to offer loans more cheaply under the scheme.She said: "While it is easy to ally this scheme with first-time buyers who are struggling to get on the housing ladder, our research shows there are a lot of people who cannot move house because their equity has been eroded. They make up a chunky part of the market."Shapps also announced he had identified enough government land to build 80,000 homes and was working with organisations including the BBC and Royal Mail to find more to increase that number to 100,000 homes by 2015."The pattern of the past has been to produce endless policies and initiatives that simply gather dust on Whitehall shelves and lead to inaction and inertia," he said. "But with the prime minister putting housing centre stage on the road to economic recovery, I am determined we shall not repeat these mistakes of the past."The announcement on NewBuy, which was previously referred to as the mortgage indemnity scheme, was welcomed by property firm Countrywide.Its chief executive, Grenville Turner, said: "As deposit affordability continues to be one of the most restrictive barriers to purchasing a property, we are seeing a greater level of competitiveness from lenders in the higher loan-to-value mortgage range, and opening up the restrictions on prospective buyers who can access the NewBuy guarantee scheme can only be a good thing for the market."MortgagesFirst-time buyersPropertyHousing marketHilary Osborneguardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

Wed, 01 Feb 2012 07:00:01 GMT2012-02-01T07:00:02Z
From a barn conversion on the Isle of Wight to a London apartmentJill Insley

Wed, 01 Feb 2012 06:30:03 GMT2012-02-01T06:30:03Z
Q I have unfortunately allowed myself to accrue a £3,000 overdraft, which is costing me about £40 a month in interest. My mortgage is fully flexible and the rate is tracked at no more than 0.99% above the Bank of England base rate for the lifetime of the loan. I have made a number of lump sum overpayments over the years, as well as a regular monthly overpayment of about £300. Is it a good idea to use some of the overpayment on my mortgage to pay this £3,000 off? My intention would be try to pay back the extra borrowing over the next 12 months or so. Does this make sense from a financial perspective? HFA Yes, it does make sense financially to increase your mortgage to repay your overdraft. Paying £40 a month in interest on an overdraft of £3,000 means the overdraft interest rate is 16%. If you added £3,000 to your mortgage at a rate of 1.49% your monthly interest bill on that amount would come down to £3.73 a month ? or to put it another way, the yearly increase in your mortgage interest would be barely more than what you are paying for your overdraft each month. However, it still makes sense ? as you plan to do ? to clear the additional borrowing over the next 12 months.MortgagesBorrowing & debtPropertyVirginia Wallisguardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

Wed, 01 Feb 2012 06:30:02 GMT2012-02-01T06:30:02Z
Q When my dad died a few years back my parents' house was transferred into my name for me and my mum to live in. I now want to buy my own home with my boyfriend, but obviously won't be selling my dad's house as my mum will continue to live there. The new house will be in my and my boyfriend's names and everything will operate as normal, with the mortgage and bills etc split and paid equally. I want to make sure I won't receive a tax bill or anything for my Dad's old house, what with me owning it but not living in it. The house will remain in my name but my mum will be living in it alone and paying all the bills herself. She won't, however, be paying me rent, so basically the house is hers except in name.Will I be subject to tax even though this house is making me no money? I really hope not, otherwise I am going to have to sign it over to my mum as I can't afford to pay a tax bill for nothing in return. ANA Assuming your dad's house was left to you in his will, any inheritance tax due would have been paid when probate was granted on your dad's estate. If there wasn't a bill then, you don't need to worry about a tax bill now.And you definitely won't receive a tax bill simply for owning your dad's old house. There could be a tax bill if you were to sell or give away the property, but as you're not planning to do either of those things there is nothing to worry about.Capital gains taxInheritance taxTaxPropertyVirginia Wallisguardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

Tue, 31 Jan 2012 13:35:16 GMT2012-01-31T13:35:16Z
200,000 homes in England and Wales could be left without cover as agreement between insurers and government endsUp to 200,000 homes in England and Wales have been warned they will struggle to obtain adequate flood insurance after June 2013, when the insurance industry's voluntary flood agreement with the government ends.In 92 constituencies there are 1,000 or more homes at high flood risk, the Association of British Insurers (ABI) said after analysing the latest Environment Agency flood data.Boston and Skegness in Lincolnshire is the constituency with the most homes at significant risk of flooding, with 7,550 properties under threat, followed by the Vale of Clwyd (7,339 homes), Folkestone and Hythe (7,196), and Windsor (7,125). A property is defined as being at risk if it has a one in 75 chance of flooding in any given year.The risk of households being unable to obtain cover is heightened by an ongoing row over who pays for the flood defences needed to maintain protection for the 5m homes at risk across the UK.Adrian Webb of esure said there had been a "gentlemen's agreement" between insurers and the government since 1961."The government of the time said government would be responsible for flood defences, and in turn the insurance industry would include flood cover as standard. At the end of the 1990s it was becoming clear that the government's side of the equation was not being met ? and will not be met in future," he said.The current flood insurance statement of principles agreement with the government, agreed in 2000 as a short-term measure, ends in June 2013. It states that insurers must include flood cover as standard for properties built before 1 January 2009, where the risk of flooding is low; and, crucially, insurers must allow at-risk households who already have flood cover to automatically renew cover with the same insurer, as long as flood defences are planned to be in place within five years.The ABI's director general, Otto Thoresen, said this "grossly distorts the market" because people in lower risk flood areas pay more to subsidise those at higher risk. "Customers in high risk areas are tied to their existing insurer, and those insurers covered by it have ended up with a disproportionate number of high flood risk properties."Webb said insurance in general "ensures a flow of money from the fortunate to the unfortunate. But the difficulty comes in areas where flooding isn't accidental or a peril anymore, but a certainty. Then it becomes a redistribution of wealth and not insurance."The public accounts committee said the government "needs to reach an agreement with the insurance industry urgently and work more closely with it to ensure insurance cover is both available and affordable" ? something echoed by Webb. He said the insurance industry needs to have "very strong words with government between now and June 2013."He added: "The government can't force insurers to compensate consumers for its own failure to invest in flood protection. If an agreement can't be reached one of two things will happen: either cover will become unaffordable in areas where there is a strong likelihood, of flooding or costs will rise for everyone. The areas identified by the ABI would probably be hit first."In a December 2011 article for the Town and Country Planning Association David Crichton, visiting professor at University College London and at Middlesex University Flood Hazard Research Centre, said an end to the current agreement on insurance would be a good move in the long run, "because flood insurance provides economic penalties to discourage building in flood hazard areas. [But] in the short term, withdrawal of insurance cover is likely to lead to blight and a fall in property values."Simon Douglas, director of AA Insurance, said some households could soon encounter problems: "Some insurers are telling us that flood-prone homeowners might not be able to renew their cover later this year, because their new policy will extend beyond 1 July 2013: with all the implications for property value and mortgage availability that this implies. That does not augur well for the 5.2 million families estimated to be at risk from flooding."Constituencies with most homes at significant flood risk? Boston and Skegness, 7,550 homes? Vale of Clwyd, 7,339? Folkestone and Hythe, 7,196? Windsor, 7,125? Runnymede and Weybridge, 6,541? Clwyd West, 6,160? Aberconwy, 5,500? Nottingham (south), 5,043? Great Yarmouth, 4,965? Sittingbourne and Sheppey, 4,295? Leeds (central), 4,209? Canterbury, 4,199Source: ABIHome insuranceInsurancePropertyInsurance industryFloodingNatural disasters and extreme weatherMark Kingguardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

Tue, 31 Jan 2012 12:46:22 GMT2012-01-31T12:49:46Z
For those with jobs, places like Hartlepool and Middlesbrough are great places to live, surrounded by ravishing countrysideIt is easy to be cowed by the twin gods Supply and Demand, which have a nasty way of rounding on those who try to meddle with their proceedings. This is especially the case when they are in league with the estate agents' holy trinity ? location, location, location ? as with the Land Registry's new figures on English regional averages for house prices.These show prices in the northeast of England falling below £100,000 (to £99,464) while most of London shows a rise to £345,298 (but not all; eight of the capital's boroughs including "Olympic" Newham have registered falls). It is easy and tempting to respond: well of course; demand outweighs supply in London, where the jobs are, and the opposite applies in Middlesbrough or Hartlepool, where they aren't.This is true (in a crude, broadbrush way) but not immutable. Like all markets, housing prices depend to an extent on confidence and consumers believing that as things are, they will remain. Time and again, innovators have been able to push at this. Older readers will remember how Charlie Ware, later famous for his Morris Minor centre in Bath, drew scorn for his belief in the 1960s that Islington could be "gentrified".Those of us of that generation will note an interesting thing about today's world. Whereas we sought and found properties to do up, a ritual involving tense negotiations over mortgages as well as endless floorboard sanding, today's young look largely in vain for unloved wrecks. Scope in London seems to be down to former council flats, which exacerbates the malign side of gentrification. But lift your eyes, ye metropolitans. The opportunities are there; you just need to slip the surly bonds of the M25.Hartlepool and Middlesbrough, for example, are excellent places to live for those with jobs, surrounded by ravishing countryside and coast and with strong communities whose welfare has always ? contrary to interminable cliches about "comers-in" ? been reinvigorated by outsiders. The arrival of ICI in Billingham in the 1920s is a textbook example of this. In modern times, you need only tramp over the North York Moors to Kirkbymoorside to study the "Slingsby effect".It is too late to look for a bargain round Kirkbymoorside, but the Slingsby company has been there for many years, making first aircraft and now submersibles, as used in the Gulf of Mexico oil well plugging, in a factory invisible to holidaymakers on the beautiful Helmsley-Pickering road.It has never had any difficulty in attracting the brightest and the best, any more than ICI had, with lovely villages within an easy commute. The same applies even more strikingly in West Cumbria, part of the north-west region where the average house price has also fallen, by 3.4% to £113,204.In the 1930s, the government encouraged three major companies, all run by refugee Jewish immigrants, to set up factories here: Seckers who made the Royal family's silk, Marchon the pioneers of detergents and Kangol , which made berets and later seat belts. They have now gone or shrunk to a morsel, as the coal and iron which preceded them did previously, but only after many successful years; and the attractions of the Cumbrian coastal strip are undiminished.In villages and towns such as Frizington or Workington you can buy property more cheaply than on the eastern fringes of the Lake District and yet within equal distance of the wonders of the national park.Nor is this just an opportunity for those who can afford to buy. London councils such as Croydon are negotiating over tenancies in excellent places including Hull, Manchester and Walsall which have spare capacity. And you won't be buried away. Moor Row, next to Cleator Moor, was among the UK's top 10 places to bring up children in a survey last year, partly because of the chance to meet people from all over the world doing the Coast to Coast walk.So where are the Charlie Wares today? I wouldn't dawdle too long if you are potentially one, because for all the UK's skewed way of seeing our country through London eyes, more influential voices than mine are making the point. Who's this talking to journalists about the fact that Bridlington is regularly seen as a "depressed area"? "Local people don't seem to see it that way." David Hockney, who's come back from California to rejoin us. Londoners, why not you?? Follow Comment is free on Twitter @commentisfreePropertyHouse pricesMartin Wainwrightguardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

Mon, 30 Jan 2012 15:25:58 GMT2012-01-30T15:25:58Z
Gap widens between London and elsewhere as prices fall in 2011, Land Registry figures showThe average house price in the north east of England has fallen below £100,000 according to official figures from the Land Registry which reveal a widening chasm between London and the rest of the country.In England and Wales, the average property fell in price by 1.3% across the whole of 2011 to £160,384, with prices in December flat compared to the same month a year ago.But in the north east, an area ravaged by public spending cuts and unemployment, prices plumetted by 7.1% in 2011 to an average of £99,464, the lowest level in eight years. It is now the only region in the country where prices are on average below £100,000.Hartlepool in County Durham recorded the biggest price falls seen anywhere in England and Wales last year. Prices fell by an average of 17.5% to £77,188, the same level as 2004 and not much above the £66,000 figure of 1995.Middlesbrough also saw steep declines, with prices down 9.9% during 2011 to hit £81,415 on average. Prices in Liverpool also fell sharply in 2011, dropping by 9.6% to hit £93,068 on average.Meanwhile in London property prices rose by 2.8% during 2011, or nearly £1,000 every month, to £345,298. This is just a shade below the all time peak of early 2008.One borough, Kensington and Chelsea, now has average prices of nearly £1m after a 7.2% rise to £967,951 during 2011. The increase in 2011 prices alone in the borough was nearly equal to the cost of buying a home in Hartlepool.Westminster saw the biggest rise in London, increasing by 8.9% to an average of £677,752. Across the whole of the capital, the average price for a detached home also rose above £600,000.But not everywhere in London saw a price surge. The figures reveal that the 'Olympic' borough of Newham, which might have expected to see a rise in buyers, was one of eight districts in the capital to see price falls in 2011.The Land Registry also published data on sales volumes, which indicate that nationally, the property market remains in the doldrums compared to the boom years up to 2007.Monthly sales to October 2011 (the last month where data is available) averaged 60,764 in England and Wales, compared to the 120,000 sales a month common in 2005 and 2006. Only two parts of the market showed sales volume increases over the year; houses in the £1.5m-£2m bracket, and houses sold below £50,000.Peter Rollings of estate agency Marsh & Parsons said: "Stagnant house prices in December and falling transactions capped a fairly dismal year for the national housing market. Economic uncertainty and fears over job losses have reined in home moves in many parts of the country, and undermined prices outside London ... [but] the appetite we've seen from buyers in January bodes well for vendors in the coming year."In Fulham, west London, for example, one property where a sale fell through before Christmas went back on the market to receive seven offers and sold for £20,000 above the asking price. "With such competition for homes in the capital, there's no reason why price rises will judder to a halt any time soon," said Rollings.But economist Howard Archer of IHS Global Insight said he expected prices to fall by 5% during 2012."We suspect that low wage growth, a markedly weakening labour market and major concerns over the economic outlook will limit potential buyers and weigh down on house prices."On top of this, a significant number of people are still finding it hard to get a mortgage. Indeed, there is a growing likelihood that banks' willingness to lend to prospective home buyers will diminish due to the weak economic environment while there is also the very serious risk that banks' future ability to lend could be increasingly constrained by difficult wholesale funding conditions. These factors are seen outweighing the support to house prices coming from extended very low interest rates."Annual average price change by regionNorth west down by 3.4% to £113,204Wales down by 3.0% to £117,447London up 2.8% to £345,298East down 0.2% to £172,899East Midlands down 1.5% to £123,697England & Wales down 1.3% to £160,384South east down 0.2% to £206,522Yorkshire & The Humber down 3.2% to £119,096South west down 1.5% to £170,504West Midlands down 3.2% to £129,082North east down 7.1% to £99,464House pricesPropertyPatrick Collinsonguardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds