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The recent debate in the House of Commons saw the rarely used ‘financial privilege’ rule used to overturn all the Lords amendments to the Welfare Reform Bill. 

This mechanism prevents Peers from overruling MPs on matters of spending.

Responding to the vote National Housing Federation Chief Executive David Orr said:

'The decision by MPs to reject the Lords' Bedroom Tax compromise is a blow to thousands of families in social housing across the country, many of whom are already struggling to make ends meet.

'That over 70 organisations, from disabled charities to mortgage lenders, came together in support of this change to the Welfare Reform Bill shows just how important this issue is. It is unjust to penalise people for under-occupying their homes when they have nowhere else to move to.

'Given the level of opposition in the Lords to these proposals and their potential impact, it is totally wrong for the Government to shut down discussion by claiming financial privilege.

'We will continue to campaign against these unfair proposals.

'While we welcome the Government's commitment to introduce a nine-month grace period for claimants hit by the overall benefit cap after losing their job, we remain concerned that this crude measure will lead to a rise in rent arrears, homelessness and child poverty'.

Graeme Brown, Director of Shelter Scotland said:

“This decision is grossly unfair and shows the UK Government is simply failing to listen to the voice of reason being put forward by housing professionals, social landlords, MSPs and individuals.

“Penalising low-income people for having an extra room assumes that there is a ready supply of smaller properties for them to move to.  This is simply not the case.  So the only consequence will be people stuck in homes with mounting rent arrears and a further descent into debt.

“Even at this late stage, we urge the UK Government to modify its proposals.” 

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Freezing weather continues to sweep across the country and is set to bring with it snow and ice this weekend.

Here, the Landlord Syndicate, offers advice to landlords on preparing both their properties and tenants for freezing conditions...

According to Total Landlord Insurance, an approved member of The Landlord Syndicate, landlord claims as a result of burst pipes and flooding rise by an average of 100% in winter months versus summer.

Eddie Hooker, CEO of Total Landlord Insurance, said: "During the cold snap just over a year ago, escape of water claims rose by a staggering 900%. While the weather cannot be prevented, precautionary measures can be taken by landlords and tenants to minimise the risk and, should the worst happen, limit the resultant damage."

The Landlord Syndicate advises landlords to arrange a convenient time with tenants to visit their properties to make checks both internally and externally.

Hooker said: "It is worth checking that all pipes and tanks in the loft are adequately insulated and that overflow pipes are connected and not blocked, especially if you have taken on new tenants in the last year that may have used the loft space and unwittingly moved or dislodged something."

Externally, pipe work should be lagged, including outside taps which should either be turned off internally if possible and drained down, or fitted with an insulated jacket.

"Gutters and downpipes should be clean, free from cracks and have supporting brackets that are secure as snow and ice can add excessive weight resulting in damage. This is also the time to ensure drain gratings are clear of leaves and debris and that there are no cracked or missing roof tiles,"  Hooker said.

On visiting the property, landlords should also advise tenants to leave the heating on low if they are planning to be away over the next month, and whether at home or not, doors between heated and unheated parts of the property should be left open to allow warm air to move around the property.

Hooker said: "In really cold spells this could include leaving the loft hatch open to allow warm air to circulate reducing the risk of frozen pipes in the loft.

"Most importantly, we advise landlords to ensure tenants know where the stopcock or isolation valves are located in case they have to turn off the water to any part of the property and check now that the valve moves easily without the need for any special tools."

Finally, The Landlord Syndicate recommends that landlords provide tenants with the number of their preferred and reputable contractor in case the tenant is unable to contact the landlord in an emergency. This will ensure the issue is responded to and repairs undertaken quickly to prevent further damage.

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Here Lucy Morton and Richard Barber of estate agency, W A Ellis, give their thoughts on the Prime Central London property market for January 2012.

Lucy Morton, senior partner and head of lettings comments:

“We are now receiving enquiries in their droves about lettings over the Olympic period (27th July to 12th August or realistically from 20th July to 19th August).  The Para-Olympic games start on 29th August and run until 9th September, so at the very best, the requirement will run from 20th July to 16th September.  Interestingly, 90% of these enquiries are coming from landlords, which tells a story in itself.  At the moment, there is very limited demand from tenants. 

“In my opinion, it is the hoteliers who will benefit from increased occupancy and rates and not the majority of landlords – in fact, I offer a word of caution to investor landlords who are considering losing their long term, blue chip tenants for this short term gain. Looking at the pros first, the clear advantage is that the average increase is 400% of the long term rental value but this may vary depending on the property and location.  Rents will be paid in full and in advance for the entire let but will include all utility bills including gas, water, electricity, water rates, television licence and Council Tax (with the exception of telephone, internet and satellite/cable television).

“However, the major drawback is the void period running up to the let and more importantly, following the let.  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.  We are already noticing a reduction in demand levels - I believe that the lettings market plateaued in October 2011 and in some areas, is now marginally dropping.  The reason for this change in market conditions is that the City is not employing its normal influx of expats and it is these tenants who underpin the lettings market. With the economic outlook looking bleak, this situation is not going to improve and therefore, the market will not be able to cope with this extra supply which could drive rents down. 

“In addition, anyone wanting to let during the Olympics will also need to apply for planning permission to let their property for less than 90 days.  Without it, they are breaking the law and could be fined up to £20,000.  The future sale of the property could also be affected as any enforcement notice will be registered as a legal charge and this may deter future buyers.  A short let may also invalidate some insurance policies.  If the rent is under £1923 per week, it will become an AST (Assured Shorthold Tenancy) and therefore, a Section 21 Notice must be served.  If the tenant refuses to leave, they may be able to stay for six months until Court proceedings can be initiated.

“The final major risk is wear and tear.  Landlords can’t be sure that the tenant will treat their property as their home during this short period. No deposit will cover the replacement value of furniture and fixtures and fittings, let alone any replacement of carpets or redecorations.
 
“My advice to long term investors is to ignore the hype and temptation, unless the current tenancy is actually coming to an end in July, or unless you are a homeowner who wants to avoid the Olympic gridlock in London and flee to calmer and possibly warmer climates.”

Richard Barber, partner in residential sales, comments:  “Without wishing to sound like a ‘stuck record’, stock levels are at an all time low and invitations to value potential new instructions are at considerable lower levels than at the same time last year.  That said, enquiry levels are still robust and the demand for high quality stock is most encouraging – the ability to satisfy this demand, however, will test the ingenuity and lateral thinking ability of our sales team.  I believe it will be an interesting year and the current indicators would seem to point towards continued increases in capital values. 

“Much has been made of George Osborne’s intended attack on the ‘super-rich’ and various stamp duty land tax mitigation schemes.  It has been common practice over the last 20 years for high value London properties to be owned in off shore companies, often registered in Jersey or Guernsey where the sole asset is a property.  As a consequence, when the ‘company’ is sold, stamp duty is charged on the shares of the company and treated as a share transaction as opposed to a property transaction with stamp duty charged at 0.5%, instead of the more punitive rate of 5%.  The 4.5% saving is usually shared between seller and purchaser. 

“The Treasury estimate that approximately £1 billion of revenue is being lost annually via the sale of property-based ‘companies’, and, as a consequence, it is widely rumoured that they will legislate to prevent this.  I believe that the Inland Revenue will adopt a similar approach to France, where, if a company’s assets are more than 50% land or property, any share transfer is liable to stamp duty at the rate of 5%.  Consequently, the stamp duty mitigation advantage of holding a property in a company name will be removed.  Naturally, many overseas investors will still choose to own properties in company names as a ‘hedge’ against their own country’s tax regimes. 

“I don’t believe that a clamp down – anticipated to be announced in the 21st March budget – poses a threat to the upper end of the London property market, simply because, in our experience, whilst many properties are purchased in off-shore companies or trusts, very few of these companies are subsequently sold, as the inherent problems of purchasing such companies usually deters cautious purchasers and their solicitors.  Indeed, as anecdotal evidence, only three sales over the last two years have involved the purchase of the shares in a company within our sales office. 

“Whilst I do not believe that the Chancellor’s attempts to increase his revenue are misguided, I hope that his estimates are correct!  I do not think that it will negate the current upward movement at the upper end of the London property market.”

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The value of prime property in the world’s key cities rose by only 0.2% in the final quarter of 2011, according to the latest Knight Frank Prime Global Cities Index.

Although the Index, which tracks the performance of the world’s leading luxury residential markets, rose by 3% during 2011, the second half of the year saw the pace of growth slow considerably.

The luxury housing market is now seeing the pace of price growth slip for the second time since the 2008/09 global financial crisis. In this latest cycle annual price growth peaked at 11.5% in Q2 2010 but has since slowed each quarter.
 
Post the Lehman collapse European and North American cities were largely responsible for the index’s slump. Since late 2010 it has been the Asian cities which have dampened price inflation. In Q2 2010 prices in Asia Pacific were rising at an average rate of 23.6% each year, the comparable figure now stands at -1%.
 
Anti-inflationary price cooling measures implemented by Asian governments, combined with worries that the euro zone sovereign debt crisis will affect the global economy, have created a more cautionary climate.
 
The slowdown in the luxury Asian markets has highlighted the extent to which the "old-world" cities of London, New York and Moscow are outperforming the overall index.  London and Moscow have ranked highly for several quarters but Manhattan’s recovery is gathering momentum. Foreign demand for New York’s luxury homes is not only strengthening, but is also starting to diversify with Chinese nationals increasingly evident, particularly in the US $1-$3million sector.
 
Paddy Dring, head of Knight Frank’s International team said: "Despite cooling price growth in the second half of 2011, the world’s prime markets continue to outperform their mainstream housing markets, providing some justification for their safe-haven reputations. The flight of capital towards the world’s luxury neighbourhoods increased in 2011 as geo-political events in the Middle East and North Africa took hold and the tumultuous global economy weakened the viability of a number of alternative asset classes."
 
Price growth in 2012 will continue to be underpinned by this flight of capital from troubled world regions. This, combined with a desire among wealthy investors to target property and other real assets over financial products, will reaffirm prime property’s safe-haven qualities in 2012. 

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