Housing market update

Housing market update
New Homes Ombudsman to crack down on rogue builders

Rogue developers will no longer be able to get away with shoddy building work when a New Homes Ombudsman scheme is introduced. The service, which will be free for consumers to use, aims to help homeowners to resolve problems such as faulty wiring or poor workmanship. According to the Home Builders Federation’s latest satisfaction survey, 99% of those who bought a new build in 2018 reported a snag or defect to their builder after moving in. It will be compulsory for homebuilders to sign up to the Ombudsman register and they must offer compensation to those found to be living in poorly constructed new builds. The Government has yet to confirm when the service will be launched.

Help to Buy house purchases approach 250,000

Nearly quarter of a million properties have been purchased with the help of the Government’s Help to Buy equity loan scheme since it was introduced in 2013. The Ministry of Housing, Communities & Local Government said that 248,075 properties have been bought with an equity loan so far, with first time buyers accounting for 81% of total purchases. The average price of a property bought using the scheme is £264,785. The current Help to Buy equity loan scheme is due to end in March 2021. A new equity loan scheme will be introduced at this point, which is designed for first time buyers only, with regional caps on the maximum property value rather than the current £600,000 limit.

Leasehold property buyers ‘misled’ by housing developers

Leasehold homeowners have been unfairly treated and prospective buyers misled by housing developers, an investigation by the Competition and Markets Authority (CMA) has found. Concerns expressed by the CMA include some developers failing to explain the differences between leasehold and freehold properties properly, or misleading buyers about the cost of converting their leasehold to freehold ownership. Some homeowners are forced to pay escalating ground rents which can double every 10 years, making it difficult to sell properties on. The CMA has promised to look at the problems its found and to take enforcement action against companies it believes to have broken consumer protection law.

House prices rise at fastest rate for 18 months

Annual house price growth has risen to 2.3%, according to Nationwide’s February House Price Index, the strongest rate in 18 months. Buyer sentiment may have been boosted by the decisive election result, the building society said, combined with buoyant labour market conditions and low borrowing costs. Despite this positive news, Nationwide’s chief economist Robert Gardner admitted that the global economic backdrop remains “challenging” with the coronavirus outbreak expected to affect activity in months to come. The building society anticipates that house prices will remain broadly flat in 2020 as a whole.

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