this might make you think twice about a leasehold property.....

ProDave

New Building Safety legislation on the way.  Talks of additional costs for leaseholders.

https://www.insidehousing.co.uk/insight/insight/what-is-in-the-governments-building-safety-bill-seven-key-takeaways-67235

dimbo61

More costs to leaseholders and a new job for someone which all the owners will have to pay for !

rabialiones

Does this apply to houses as well 

dimbo61

Think they are talking about high rise apartments as fire safety and cladding ☹️

NameUnavailable

dimbo61 said:

Think they are talking about high rise apartments as fire safety and cladding ☹️

The probably are, but the EWS1 process was intended for high rise apartments with cladding and yet it seems to be requested for any type of flat with or without cladding! Lots of people have 'worthless' flats because of it.

The good news though is that the government are also looking to bring in legislation to limit the amount that each leaseholder can be liable to pay per year to only £70K so I doubt it will be an issue for most leaseholders........

NameUnavailable

Also, I wonder what all these additional costs will do for the BTL market? I can see a lot of BTL flats becoming simply not profitable for the ownders, and what that in turn will mean for the private rental market. They don't think these things through do they.

Young_Turk

NameUnavailable said:

Also, I wonder what all these additional costs will do for the BTL market? I can see a lot of BTL flats becoming simply not profitable for the ownders, and what that in turn will mean for the private rental market. They don't think these things through do they.

What happens to the private rental market? More BTL sell, more renters buy. Why is that a bad thing?

NameUnavailable

Young_Turk said:

NameUnavailable said:

Also, I wonder what all these additional costs will do for the BTL market? I can see a lot of BTL flats becoming simply not profitable for the ownders, and what that in turn will mean for the private rental market. They don't think these things through do they.

What happens to the private rental market? More BTL sell, more renters buy. Why is that a bad thing?

If lots of additional charges are going to apply to flats, on top of existing service charges, then the profit on a rental property may not be enough. It might drive rents up or make more LL's give up and sell up. Probably in reality a bit of both.

Not all renters want to buy. Many rent because they don't have the money to buy a property or they don't want to be committed to a mortgage and the additioinal charges but prefer the flexibility of renting.

Young_Turk

NameUnavailable said:

Young_Turk said:

NameUnavailable said:

Also, I wonder what all these additional costs will do for the BTL market? I can see a lot of BTL flats becoming simply not profitable for the ownders, and what that in turn will mean for the private rental market. They don't think these things through do they.

What happens to the private rental market? More BTL sell, more renters buy. Why is that a bad thing?

If lots of additional charges are going to apply to flats, on top of existing service charges, then the profit on a rental property may not be enough. It might drive rents up or make more LL's give up and sell up. Probably in reality a bit of both.

Not all renters want to buy. Many rent because they don't have the money to buy a property or they don't want to be committed to a mortgage and the additioinal charges but prefer the flexibility of renting.

I can see that rents might be higher in the short term if a lot of landlords leave their properties empty whilst they sell. But the trend seems more likely to be for rents to fall. As landlords sell, the pool of renters shrinks, but importantly it tends to be those with a higher income who now own instead of rent. Rents are constrained by incomes, so rents are likely to fall. 
Incomes have fallen a lot, as some have become unemployed, millions are furloughed, and many others have taken a pay cut. 

J Paul Getty said: "If you owe the bank $100, that's your problem. If you owe the bank $100m, that's the bank's problem."
Similarly if a tenant can't afford rent during normal times that's the tenant's problem, as the landlord can let to someone else at roughly the same rent. If millions can't afford rent, that's a problem for landlord. They will have to cut rent to compete for tenants, otherwise their properties will remain empty.

Whether people choose to rent or not, they will be inconvenienced initially, but they will benefit from the lower rents.

thearchitect

Firstly, the relevant provisions of draft Building Safety Act only apply to England (there are UK-wide sections but they amend the Architects Act in respect of ongoing training, provide for a new housing ombudsman, and deal with product testing/certification). 

Secondly, the main part of the English provisions focusses on a new building regulator for high risk buildings, currently defined as tall multi-occupancy buildings.   In a return to how the building standards system works in almost every other Western European country, there is a requirement to get regulatory approval prior to commencing construction work ("Gateway 2").  In my view it is very clumsily done in comparison to other regimes.   There is also to be an enhanced compliance regime ("Gateway 3").  Much of the detail of this will follow in secondary legislation.

Now, the section which will concern occupants of such buildings will be that concerning new a new safety manager role.  In addition there are requirements around designer and contractor competence.  The duties are onerous and will carry a cost premium for all concerned. 

Stepping back, however, this all arises from the systemic failure we see within the English regualtory regime generally and at Grenfell in particular.   EWS1 will never be more than a stop-gap, and is fraught with problems.  In short, you are unfortunately paying for the the "light touch" approach adopted since the early 1990s.  It is not unreasonable to expect the definition of high risk buildings to extend in time to include other classes, for example hospitals and care homes (for obvious reasons).

NameUnavailable

Mickey666 said:

NameUnavailable said:

Young_Turk said:

NameUnavailable said:

Also, I wonder what all these additional costs will do for the BTL market? I can see a lot of BTL flats becoming simply not profitable for the ownders, and what that in turn will mean for the private rental market. They don't think these things through do they.

What happens to the private rental market? More BTL sell, more renters buy. Why is that a bad thing?

If lots of additional charges are going to apply to flats, on top of existing service charges, then the profit on a rental property may not be enough. It might drive rents up or make more LL's give up and sell up. Probably in reality a bit of both.

Not all renters want to buy. Many rent because they don't have the money to buy a property or they don't want to be committed to a mortgage and the additioinal charges but prefer the flexibility of renting. 

I’m sure that’s true, though it seems strange not to want to commit to a 25 year mortgage in favour of committing to a lifetime of paying rent.  Seems a very high price to pay for ‘flexibility’.  Still, each to their own.  At least it creates a market for landlords to sit back and watch their wealth roll in.

I don't disagree with you but then why are there so many rental properties? Why does anyone rent, why don't all those people just buy a place?