Reasons to choose Wilson Browne
As the Coronavirus / COVID-19 strengthens its hold on the UK, it’s important to take stock of the situation at regular intervals. The pace of developments means that there are regulatory, financial, and commercial challenges which need addressing.
Advice issued today may well be out of date tomorrow, but it remains important for to have a robust contingency plan in place.
23 June 2020 - Changes to the Stamp Duty 2nd home surcharge
Changes in 2016 to residential purchases meant that existing home owners had to pay a 3% additional SDLT surcharge when they purchased a new residential property. However this surcharge didn’t apply, in the main, where the purchaser was selling their existing home on the same day.
If the home owner planned to sell their existing home at some point in the near future then the surcharge could be re-claimed upon the sale of that previous home – but only if the sale took place within 3 years of the purchase of the additional property.
However the lockdown means the property market has not been running as smoothly as usual and there have been concerns that home owners will run out of time owing to the lockdown. As a result, HMRC issued an announcement on 3rd June that it would allow the 3 year period to be extended because of “exceptional circumstances”.
Legislation concerning this has not yet been published so we do not know exactly how claims will work. HMRC has issued some guidance giving examples of what the exceptional circumstances may be but it will likely be decided on a case by case basis. There is no certainty at present but home owners approaching the 3 year time limit should think about putting their former homes on the market now in order to preserve the possibility of a claim even if the sale doesn’t complete within the normal 3 year period.
22 May 2020 - FCA guidance consultation on mortgages and payment holidays
On 22 May 2020, the FCA published a guidance consultation on mortgages and COVID-19.
The guidance will apply to mortgage lenders, mortgage administrators, home purchase providers and home purchase administrators. It expires on 31 October 2020 and covers:
- Where a customer is experiencing or reasonably expects to experience payment difficulties as a result of circumstances relating to COVID-19, and wishes to receive a full payment deferral, a firm should grant a customer a full payment deferral for three monthly payments, unless it can demonstrate it is obviously not in a customer’s best interests.
- Customers who had a payment shortfall before 20 March 2020 who have not yet had a payment deferral, may request one in line with the guidance. Customers in payment shortfall should not receive less favourable treatment than other customers.
- Customers who can afford to return to full repayment should do so in their best interests. Firms should contact their customers to find out if they can resume payments and if so, agree a plan on how the missed payments will be repaid.
- Lenders should continue to support customers who have already had a payment holiday where they need further help. Firms are expected to engage with their customers and find out what they can repay and, for those who remain in temporary financial difficulty, offer further support.
- Firms should not commence or continue repossession proceedings against customers before 31 October 2020. This applies irrespective of the stage that repossession proceedings have reached and to any step taken in pursuit of repossession.
The guidance builds on Principles 6 and 7 of the FCA’s Principles for Businesses and MCOB 2.5A.1R, which relate to treating customers fairly and acting in the best interests of customers respectively. It is potentially relevant to enforcement cases and the FCA may take it into account when considering whether it could reasonably have been understood or predicted at the time that the conduct in question fell below the standards required.
The guidance consultation closes to comments on 26 May 2020. The FCA will aim to publish the final guidance quickly, and it will come into force shortly after. See the full guidance consultation here – https://www.fca.org.uk/publications/guidance-consultations/mortgages-coronavirus-updated-draft-guidance-firms
19 May 2020 - Preparing for Pandemic Possession Proceedings
There are over 17.4 million homes in the private rented sector in the UK and at present possession proceedings are on hold. Does this mean there is nothing you can do?
The Government announcement on 26 March 2020 that possession proceedings would be suspended has resulted in landlords being forced to sit on their hands for the time being.
That does not mean that housing law has stood still or that it is not possible to take action now to ensure landlords can move forward when the Courts re-open for business after 25 June 2020.
It is wrong to think that you can’t serve Notice on your tenants at the moment – you can.
At the moment all Notices served before 30 September 2020 must run for a period of 3 months.
Government guidance is to avoid serving a Notice unless you really have to. In some cases Notice will be served for rent arrears – in which case a landlord should take all reasonable steps to agree a payment plan with their tenant – but in other cases a landlord may serve Notice because they wish to sell or to move back into a property (as in the case of some ex-pats returning from jobs abroad due to Covid-19).
If Notice needs to be served, serve it now so that time is running.
Annual gas safety checks are still essential and landlords are advised to
- start early in trying to gain access to a property for gas inspections
- keep records – not just of gas safety checks that are successfully undertaken but also of steps taken to try to secure access for the checks to be undertaken
Gas Safety Certificates must now all be produced if Section 21 proceedings are being issued so now is the time to make sure those are all collated and copies obtained if there are any gaps.
Remember also that failing to deal with gas safety requirements and annual checks may void buy-to-let insurance.
Additional information is available here
Injunctions to gain access
Although possession proceedings themselves are currently stayed by the Coronavirus Act 2020, there is still an ability to apply to the Court for injunctions.
One injunction granted during lockdown related to a health authority’s need to move a patient on and into accommodation that had been identified for them.
Gas access injunctions have also been secured to force a tenant to comply with the requirement to permit access for a Gas Safety Certificate to be obtained.
The Energy Efficiency (Private Rented Property)(England and Wales) Regulations 2015 provide that from 1 April 2020 property cannot now be let if it has an energy efficiency rating of less than E.
Exemptions to this requirement do apply, such as if the property is still below EPC E after improvements have been made up to the cost cap (£3,500 inclusive of VAT), or there are none that can be made. A “high cost” exemption also applies.
Changes to forms
The Government have changed the application form for Accelerated Possession proceedings to be issued so it is vital to ensure that there is an up to date version of the court proceedings being used.
It remains to be seen how the Courts will deal with any influx of applications for possession in the coming months which arise as a direct result of Covid-19 issues but at present the advice for landlords is to get themselves organised to ensure that once claims can move forward they are ready.
Our specialist Private Landlord Team represent landlords from across the country in possession proceedings and injunctions. If you have a query or need to take action please do not hesitate to contact us on 0800 088 6004 or on email@example.com and we’ll be delighted to talk things over with you.
18 May 2020 - Immediate positive impact on mortgage activity
As reported in Today’s Conveyancer, the Government announcements on the reopening of the property market have had an immediate positive impact on mortgage activity according to recent data.
Today’s Conveyancer reported that “Whilst Twenty7Tec’s mortgage statistics for the week ending May 13 suggested that both search and document volume was falling on a weekly and fortnightly comparison, the figures for Tuesday, the day it was announced that the market was released, were showing considerable increases. For Tuesday May 13 alone, the volume of searches was up on a weekly, fortnightly and four week basis with rises of 7.98%, 12.54% and 17.31% respectively.”
Tom Warrender, Partner & Board Member at Wilson Browne Solicitors, commented “It will be interesting to see whether this proves to be an initial short term reaction or a more positive sign of a longer term bounce back. Many involved in the property market are getting to grips with the announcements and guidance and it is imperative that it is approached on a safety first basis, but overall this announcement has been received very positively. We have an excellent nationally recognised Residential Conveyancing Team here at Wilson Browne Solicitors, headed by Partner Jenny Woodruff, who are here for clients, old and new. We are here for you, we are open for business, and we are All the Help You Need”.
13 May 2020 - Government confirms regulations for moving house
The Government has amended the coronavirus (COVID-19) regulations to make clear that people who wish to move home can do so but will need to adapt to new practices and procedures to do so.
- Estate agents can open for business, following the relevant Government guidance.
- Developers can continue with new build sales whilst following the Government guidance.
- Viewings are allowed whilst following the relevant Government guidance and should be carried out virtually where possible.
- Everyone involved in the moving process must following social distancing to minimise the spread of the virus.
- You can put your property on the market and look for properties you want to move to – virtually where possible.
- Offers and reservations can be made – bear in mind there is a greater risk that parties may need to delay their move because someone is showing symptoms of coronavirus or self-isolating. Your conveyancer will help you and help make sure that any contracts or agreements are as flexible as possible to accommodate this risk.
- You are allowed to revisit a property after a sale has been agreed to for example “measure up” again following the Government’s specific guidance.
- Purchasers may also want to send in tradespeople to carry out inspections or works. Where possible these should be scheduled with one person visiting the property at any time and Government guidance should be followed.
- Searches can be carried out by your conveyancer online.
- Surveyors, EPC assessors and other inspectors are allowed to visit the property, again following the Government guidance.
- If a member of the household being viewed is showing symptoms or is self-isolating then no one should physically visit the property.
- Try to be as flexible as possible regarding moving dates – once you have exchanged contracts you will be contractually bound to proceed so consider any flexibility that can be built into the contract in case a party needs to self isolate.
- Removal firms can operate following the Government guidance. Given extra precautions will need to be taken, contact removal firms as early as possible.
For full details of the Government’s guidance here
13 May 2020 - Government intends to kick start the economy by including moving house as a reasonable excuse to leave the house
Under amendments to the Health Protection (Coronavirus, Restrictions) regulations in England, a reasonable excuse for being away from home will be expanded to include visiting estate or letting agents, viewing residential properties, preparing a residential property to move in or sell, or moving home, subject to safety precautions and social distancing being adhered to.
1 May 2020 - HMLR & Mercury Signing
HM Land Registry (HMLR) has announced that it’ll accept the ‘Mercury’ signing approach for deeds from Monday 4 May.
It’s also introducing some changes to their requirements to make it easier to verify identity for land transactions.
These are all temporary measures to address the current highly unusual coronavirus (COVID-19) situation.
HMLR has made it clear that these changes are temporary and may be modified or withdrawn at short notice if, for example, they’re considered to increase the risk to the register.
The ‘Mercury’ signing approach – electronic signatures
HMLR has made some temporary changes to make it easier for customers to verify a person’s identity for land.
Full details on these changes, including the conditions that must be satisfied, will be available from 4 May in the new Practice Guide 67A.
HMLR will accept deeds that have been signed using the ‘Mercury’ signing method.
The aim is to reduce problems with post, paper and scanning.
You’ll be able to email the transfer and other deeds to your client, who then only needs to print, sign and witness the signature page and take a photo of that or scan it before returning it to you by email for completion.
Read HMLR’s announcement in full here
9 April 2020 - Equity Release requirements modified to allow progress during lockdown
Given the current situation with regard to the outbreak of COVID-19, parties involved in property transactions face a number of restrictions, in some cases meaning transactions are placed on hold.
However with extremely low interest rates, many may be looking to re-mortgage or look into equity release.
Equity release essentially turns the equity in your home into money which can be used for a wide range of purposes, you can read all about equity release here: https://www.wilsonbrowne.co.uk/personal/residential-conveyancing/equity-release/
COVID-19 appeared to initially restrict equity release transactions from proceeding due to the need to comply with social distancing requirements, as a face to face meeting with your legal advisor is necessary.
However, the Equity Release Council have published a temporary modification to those requirements so that these transactions can continue, allowing legal advisors to carry out certain tasks via video conference. Full details can be found here
We are still here to help and offer fixed fees for Equity Release schemes undertaken by a highly experienced conveyancer.
We can also assist you with your re-mortgage and offer competitive rates – re-mortgages of course should not cause any issues with social distancing!
Update 29 March 2020 - Government Advice to Conveyancers on House Moves
This guidance should be read with the government advice on home moving.
This includes specific advice to conveyancers. You should note that, ‘prioritising the health of individuals and the public must be the priority.’
Nothing in this guidance should be read as contradicting that advice.
26 March 2020 - Government Advice on Moving Home during the Coronavirus (COVID-19) Outbreak
The underlying message from the Government, parties involved in home moving need to adapt and be flexible to alter their usual processes but have also made it clear there is no need to pull out of transactions.
That said everyone needs to ensure that they stay at home where possible and away from others especially observing the specific measures for those who are presenting symptoms, self-isolating or shielding. Health must of course always be a priority.
We are continuing to support our clients with moving home. There is rarely a one size fits all solution and advice will be given dependant upon the specific circumstances. For example the Government have made it clear a sale of an unoccupied property can still continue.
Be aware that due to the various restrictions in place the process may take slightly longer than usual. However the isolation period will not last for ever and we can continue working on matters in the meantime to ensure that, once this is lifted, we can get back to business as usual and get you moved as quickly as possible.
We are working with CSQ and have provided data for them to liaise with Secretary of State and we continue to monitor and work with all parties. For more information see here.
25 March 2020 - Private Landlord Advice
(Published 25th March )
The Coronavirus Bill has now confirmed that landlords will be required to give tenants three months’ notice rather than two in the wake of the pandemic. This appears to water down the original “three month ban on possession proceedings”.
It appears that it does not prevent action being taken on existing Notices either.
Our Team have issued proceedings for clients who had already served Notices on their tenants and these have been issued and allocated Court dates though it remains unclear whether those hearings in late April will take place.
Hearings that were listed are being adjourned to after 20 June on the grounds of a “public health emergency” and a desire not to risk people finding themselves homeless at this time.
There is no block on landlords serving Notice but the period of time that must run for has been extended.
Buy to Let Mortgages
Those landlords with a buy-to-let mortgage have been offered the same opportunity to ask for a 3 month payment holiday as other mortgage holders. This may ease financial pressure in the event that your tenant is unable to pay.
It does not help those landlords who own their property outright and rely on the rental income. Those landlords should consider the package of measures put in place by the Government (and still being announced) to meet drops in income.
Gas Safety Checks
Work is still going on to review the position with the requirement to have an annual Gas Safety check.
Landlords are advised that they can seek a new certificate 2 months prior to the expiry of the previous check and may wish to make a start on gaining access early given the risk that tenants may be self-isolating for up to 14 days.
We advise keeping a clear log of efforts made to renew your Gas Safety Certificate just in case there is a problem.
The Government has made it clear that landlords will not be prevented – in time – from evicting tenants and has asked that landlords and tenants work together to find solutions wherever possible to avoid that outcome.
Mortgage Providers offering Payment Holidays
Following the announcement made by chancellor Rishi Sunak of a promise of (at least) £330bn in funds available to combat the economic impact of Covid-19, it is apparent that this will include a proposed 3-month Mortgage Holiday – specific details of which are to follow.
Whilst a number of lenders had already begun to implement such measures, following the announcement, all lenders must now follow this guidance.
- “There will be a fast-track system for approval, but not everyone will be granted a payment holiday. The unpaid interest will still be recovered later, but individual credit ratings will not be affected.”
- Whilst the banks have stipulated that any arrears will have to be repaid in full, they have noted that these payment holidays are designed to minimise the risk of repossession. Banks have also commented that this will not adversely affect homeowners’ credit ratings – potentially offering some comfort to homeowners in this unsettling climate.
- Whilst it is clear that this is a move welcomed by homeowners, borrowers must ensure that they are fully aware of the effects that making this decision will have on the details of their mortgage, such as repayments and the term, in future.
Implications on those trying to move
- Whilst it is clear that we are trying to navigate through unprecedented territory, experts have provided positive commentary on the repercussions of the virus in relation to those looking to sell and buy property – the recent cut to interest rates made by the Bank of England will no doubt affect already low mortgage rate levels – giving many buyers the ability to purchase.
North London estate agent and former RICS residential chairman and Jeremy Leaf suggests that whilst viewing numbers have reduced over the past week: “It doesn’t necessarily mean that buyers and sellers are not getting on with moving…all parties asked the ‘what if’ question about completion, but all decided to proceed, nonetheless… we are not seeing sales or listings being cancelled widely yet.” Source
- For those currently in the process of moving, the effects of the virus may cause delays – but these are delays that will be being experienced by both, or all parties to the transaction – conveyancers will have to approach transactions with a pragmatic approach, and this may need to be done on a case-by-case basis, as a solution suitable for one transaction may not be suitable for the next.
- Given the current climate, it may be necessary for transactions to exchange and complete simultaneously – this would avoid the ‘what if’s’ being asked where an exchange and completion are days apart.
- Alternatively, for clients who are able to do so, it may be necessary to agree a completion date long after exchange – combatting any sudden need to self isolate/ decontaminate property, etc.
Private Landlord Advice
Private Landlords Face Ban on Evicting Tenants
The Housing Secretary The Rt Hon Robert Jenrick MP has announced (18 March 2020) a radical package of measures to protect renters and landlords affected by coronavirus. As a result, no renter in either social or private accommodation will be forced out of their home during this difficult time.
Emergency legislation will be taken forward as an urgent priority so that landlords will not be able to start proceedings to evict tenants for at least a three month period. As a result of these measures no renters in private or social accommodation needs to be concerned about the threat of eviction.
Recognising the additional pressures the virus may put on landlords we have confirmed that the three month mortgage payment holiday announced yesterday will be extended to landlords whose tenants are experiencing financial difficulties due to coronavirus. This will alleviate the pressure on landlords, who will be concerned about meeting mortgage payments themselves, and will mean no unnecessary pressure is put on their tenants as a result.
At the end of this period, landlords and tenants will be expected to work together to establish an affordable repayment plan, taking into account tenants’ individual circumstances.
To support his announcement the government has worked with the Master of the Rolls to widen the ‘pre-action protocol’ on possession proceedings, to include private renters and to strengthen it’s remit. This will support the necessary engagement between landlords and tenants to resolve disputes and landlords will have to reach out to tenants to understand the financial position they are in.
The government will also issue guidance which asks landlords to show compassion and to allow tenants who are affected by this to remain in their homes wherever possible. The National Housing Federation and Local Government Association have welcomed the new support for social renters and made clear that no one should be evicted because of the coronavirus.
This important step on buy to let mortgages ensures parity of support, further to the announcement yesterday the government made for private mortgage holders. We are also announcing that those who have benefited from a government backed help to buy equity loan will be offered interest payment holidays if they are struggling to pay due to coronavirus.