June has been a busy month for property news! Here’s a quick round-up of the latest on Help to Buy ISAs, tenancy admin fees and leasehold reforms…
Lifetime ISA replaces Help to Buy ISA in November
The Lifetime ISA will replace the current Help to Buy ISA from this November, so first-time buyers are being encouraged to open a Help to Buy ISA to benefit from the 25% government top-up.
New applicants will be accepted until the 30th November this year, though they will be able to use it until the 30th November 2029.
Laura Suter, personal finance analyst at AJ Bell, commented: “If you already have a help to buy ISA you can keep paying into it for another decade, and you have until the 1st December 2030 to claim your Government bonus. Alternatively you can transfer to a Lifetime ISA and benefit from a higher limit of £450,000 on the value of the property you can buy, a bigger potential Government bonus each year and the ability to save lump sums rather than just monthly.”
For more information please visit The government’s official Help to Buy website.
Help to Buy equity loan cap comes into force April 2021
From April 2021 Help to Buy equity loans will only be available to first-time buyers and the maximum amount people can borrow will be capped according to which area of the country they live in.
The highest amount will be London where the price cap is set to be £600,000 and the lowest will be in the North East where it’ll be set at £186,100.
The Help to Buy equity loan cap is as follows:
|Yorkshire & The Humber||£228,100|
|East of England||£407,400|
Leasehold reforms proposed
Leasehold reforms proposed by the Ministry for Housing, Communities & Local Government (MHCLG) include recommendations that Commonhold becomes the preferred tenure of property ownership.
Some of the key leasehold reforms proposed include cap on ground rent in new leases at a peppercorn and removal of onerous ground rents in existing leases so they are capped at 0.1% of the value up to a max of £250.00 per annum.
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Tenancy fees banned in England
From the 1st June landlords and letting agents can no longer charge admin fees for tenancy renewals, credit checks and referencing. There is also a cap on tenancy deposits where landlords can only take up to 5 weeks worth of rent if the annual rent is under £50,000 and six weeks rent if it’s over £50,000.
Citizens Advice reported that the average amount paid for such admin fees before the new rules was around £400 and almost a quarter of tenants pay a deposit of 6 weeks or more, regardless of the annual rent.
Landlords can charge tenants for rent, utilities and council tax (if included in the tenancy), a refundable holding deposit of one week’s rent, early contract termination at the tenant’s discretion, late rent payment charges, lost key charges and changes to the tenancy agreement made by the tenant (capped at £50). Landlords or letting agents who don’t abide by the new rules will be fined £5,000.
Speaking on behalf of the House of Lords, Lord Nick Bourne of Aberystwyth, commented: “It has been clear throughout that this is a bill that we all support, and one that will deliver important changes to the private rented sector, improving lives for millions of tenants.”
Wales are set to follow suit in September, banning landlords and letting agents from charging for viewings, tenancy changes or signing a contract.
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