Britain’s usually manic property market all but ground to a halt in the days before Chancellor Kwasi Kwarteng’s mini-Budget.
Transactions were put on hold, estate agents’ phones stopped ringing and desperate sellers held off cutting prices to attract buyers.
Rumours that the Government was about to launch a stamp duty holiday had been swirling for days. And no one wanted to risk missing out by making the wrong move.
Tax cut: The Government has doubled the threshold at which you start paying stamp duty from £125,000 to £250,000. It will save a typical household £2,500
But when the Chancellor finally did unveil plans to permanently slash the levy, industry insiders say there was a sense of anti-climax.
‘It isn’t going to have that much of an impact — a lot of people were hoping for something more,’ says London estate agent Christian Warman, of Tedworth Property.
Jo Ashby, of Cornwall agency John Bray, adds: ‘It was certainly not a phone-ringing-off-the-hook situation.’
Historically, stamp duty cuts have poured petrol on the housing market and encouraged families to move home in droves.
When former Chancellor Rishi Sunak axed the tax on all properties worth up to £500,000 at the pandemic’s height in 2020, house prices shot up almost overnight — and many have continued to creep even higher.
But now, despite initial signs of increased activity — with traffic to the property website Rightmove jumping by 10 per cent in the hour after the announcement — agents and brokers say the reaction has been lukewarm.
And within days it was overshadowed by news of soaring mortgage rates, which prompted some panicked analysts to predict a house price crash of up to 40 per cent.
So has the Chancellor done just enough to prop up the market?
Who is in line to benefit?
Last week’s tax cut is less generous than that of Mr Kwarteng’s predecessor, Rishi Sunak.
The Government has doubled the threshold at which you start paying stamp duty, from £125,000 to £250,000, while Mr Sunak increased it to £500,000. Mr Kwarteng’s plan will save a typical household £2,500.
First-time buyers will benefit the most as they no longer have to pay the levy on homes worth up to £425,000 — an increase from the previous £300,000.
This could save them as much as £6,250. However, it will disproportionately benefit those buying in areas where property prices are higher, such as London — in the North, for example, first-time buyers are less likely to be purchasing homes worth more than £300,000.
Joel Edgerton, from Wigan estate agency Regan & Hallworth, says: ‘Buyers were saving as much as £12,500 during the last stamp duty holiday.
‘This time around, the incentive isn’t anywhere near as big for anybody who isn’t a first-time buyer.’
Second homeowners pay the standard rate plus a 3 per cent surcharge on each band.
The cut does not apply in Scotland, which has a slightly different levy called the Land and Buildings Transaction Tax (LBTT). This amounts to between 2 per cent and 12 per cent, depending on the value of the property.
First-time buyers in Scotland do not pay LBTT on properties worth up to £175,000.
Buying a home right now ‘feels more like a gamble’
Mum-of-two Charlotte Dale stands to save £2,500 in stamp duty on the home she has recently bought in Richmond, South-West London.
However, this is not enough to off-set the higher mortgage she will be locked into.
Property deal fell through: Charlotte Dale, with her young family
Charlotte, 34, a journalist who is buying with her partner, says: ‘We were set to buy a property six months ago but the negotiations fell through.
‘Everybody kept saying there was going to be a house price crash so we thought it was best to hold off. But now we’re kicking ourselves a little.
‘My broker said our mortgage is going to be a lot worse than it would have been six months ago but the best it’s going to get for at least two years.
‘So while we’re saving slightly in stamp duty, in the long run we’ll be paying more.
‘Buying a house at the minute feels like a gamble.’
More Tales of Gazumping?
Critics claim that the previous stamp duty holiday fuelled greed and poor practices in the housing market.
Tales of ‘gazumping’ — whereby buyers are outbid on a property at the last minute — sealed bids and homes selling for far more than the asking price were rife at this time.
And there are fears this could be repeated. Within hours of last Friday’s announcement, mortgage broker Andrew Montlake, of Coreco, wrote on Twitter: ‘Just heard that a buyer who had their price agreed yesterday has now had word from the vendor that they want more money because of the stamp duty change! And so it begins . . .’
However, experts point out that the permanence of the latest announcement might in part explain the far calmer reaction.
Broker Emma Jones, who runs When The Bank Says No, adds: ‘The last stamp duty cut was massive, but that was a temporary holiday. There won’t be such a rush this time.’
Rising bills: Analysts predict that the base rate could hit 6% by next spring, meaning borrowers face the sharpest increase in their mortgage repayments since the financial crisis
How will the market react?
Soaring mortgage rates have led to fears of a house price crash.
Analysts predict that the Bank of England’s base rate could hit 6 per cent by next spring, meaning borrowers face the sharpest increase in their mortgage repayments since the financial crisis.
Research by estate agency Hamptons found most buyers today would see any stamp duty saving wiped out within six months of repaying higher mortgage rates.
Estate agent Allan Fuller says: ‘The Chancellor has given with one hand and taken away with the other by reducing stamp duty while introducing policies that lead to a large rise in interest rates.’
Yesterday, Graham Cox, of Self Employed Mortgage Hub, claimed soaring rates could lead to house price falls of between 20 per cent and 40 per cent over the next few years.
Most experts have dismissed these figures as scaremongering and insist the stamp duty cut is enough to stave off any drastic crash. They agree the market will naturally correct itself after nearly two years of record price rises.
Researchers at Capital Economics currently predict house prices will fall by 7 per cent.
Aneisha Beveridge, head of research at Hamptons, says: ‘Prices will start to fall in the areas they rose fastest over the past few years — such as in the North and South-East.
‘The higher end of the market, in places such as prime central London, for example, will probably weather the storm a little better.’
Jo Ashby, from John Bray, says: ‘The stamp duty cut will inject a bit of momentum into the market. House prices are likely to taper off in the next year, but that was always bound to happen.’
And Joel Edgerton, from Regan & Hallworth, adds: ‘During the last stamp duty holiday, homes were going off the market as quickly as they were put on it. That’s not normal and things cannot stay at that level.
‘The Chancellor has done enough to stabilise the market until the end of the year, so we will have a decent Christmas.’
h.kelly@dailymail.co.uk
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To keep things simple he bought properties with tenants already in situ and picked up properties at auction, where in the early days he said he could buy at 20pc or more below market level. He put down his initial deposit with savings and then began remortgaging to release equity to fund more purchases. Mr Jones did not agonise too much about location, buying properties everywhere from Scotland to Kent, as long as there were decent transport links. But now he does look at the bottom line. “My rule is to buy property only with a yield of at least 9pc,” he said.
In 2006 Mr Jones, who is married with two grown-up children and lives in Bedford, was made redundant from his job as a chartered engineer. At the time he had around 10 properties and decided to exchange the nine-to-five for running his burgeoning empire full time.
He now owns around 50 properties and has outsourced some of the day-to-day work by using a maintenance company that his tenants can contact directly. He uses Caridon Landlord Solutions to help him find new tenants.
Much has changed since Mr Jones bought his first buy-to-let property. Bargains are much tougher to find at auction, stamp duty surcharges must be paid and licensing has been introduced in many areas. Crucially, mortgage interest payments on rental properties are no longer tax deductible.
To get around this Mr Jones has incorporated his property holdings within a company, which allows him to continue to deduct mortgage costs. The number of such incorporations has more than doubled in the year to August compared with the previous year, according to buy-to-let firm GetGround. But there is a sting in the tail, warned Mr Jones, in the form of expensive overheads such as accountants to draw up annual reports.
“It is a lot harder for people starting out now to make money than it was when I started,” he said.
In the future he will have to deal with planned new energy efficiency regulations, which will make it an offence to rent out homes with an Energy Performance Certificate rating of less than C from 2025. “It is something a bit troublesome on the horizon,” said Mr Jones. He will wait and see if this change actually comes into force and then renovate below‑C properties where cost effective and sell the rest.
Mr Jones has no plan to retire yet and on that basis has not bothered to calculate how much his portfolio is worth. “All I know is that I make a comfortable income now and can continue doing so,” he said.
When he does decide to retire his plan is either to revert to plan A – sell off some properties to pay off the mortgages on the rest and live on the income they produce – or hand over to the younger generation if one of his children is willing to make buy-to-let their career.
Britain’s richest homebuyers are ditching their traditional London stomping grounds and are decamping to the Home Counties en masse, new research shows.
The capital’s glitziest postcodes have suddenly lost favour with England and Wales’ super-prime buyers, who are increasingly shopping for more rural homes in the likes of Surrey, Buckinghamshire and Hampshire.
So far this year, more than a third (34pc) of the top 1,000 most expensive home purchases in the country were made outside London, according to exclusive research by Search Acumen, a prop tech company.
This was a 45pc jump since 2021, when the share was less than a quarter.
A desire for access to green space in the wake of the coronavirus lockdowns has been key. Back in 2019, before the pandemic, the share of big ticket sales happening outside the capital was just 15pc.
St George’s Hill in Elmbridge, Surrey, was the number one location for the highest value home sales outside the capital in the year to date.
It was followed by Highclere Park in Newbury, Hampshire; North Fambridge in Chelmsford, Essex; and Ridgemont Road in Ascot, Berkshire.
Surrey accounted for the largest share of big ticket buyers after London, with 81 of the most expensive purchases in the country in the year to date.
Buckinghamshire was the second most popular county, with 32 sales, up from 20 a year earlier. In Hertfordshire and Hampshire, the number of top end sales more than tripled, to 28 and 26 respectively.
By contrast, the number of big ticket sales in Kensington and Chelsea – the longstanding favourite amongst the wealthiest buyers – fell by 45pc year-on-year to 154.
Similarly, in Westminster, sales halved to 92, while Camden saw a 36pc drop to 53 – little more than half the number recorded in Surrey.
The trend reflects the fact that international buyers – who are more likely to spend in prime central London than in the suburbs – largely disappeared during the pandemic, Search Acumen said.
In the first six months of this year, international buyers accounted for just 21pc of home sales in Greater London, according to Hampton estate agents, down from a peak of 35pc in 2018.
Overseas buyers are now returning to prime central London – accounting for 48pc of transactions this year, up from 35pc in 2021 – but it seems a lasting legacy of the pandemic that the top end of the English property market has become more dominated by British spenders.
Buying outside the capital also means that the top 0.1pc of purchasers are now spending drastically less.
The average price paid across the top 1,000 sales so far this year was £3.4 million – roughly half the £6.3 million spend in 2021.
Andy Somerville, of Search Acumen, said: “The days of London being the default location of choice for high-value house purchases are increasingly behind us as big-spending homebuyers look to invest their time and money in locations beyond the capital.”
Dawn Carritt, of Jackson-Stops estate agents, said: “Key to this rebalance has been the void of international buyers during lockdown.”
The shift to remote working drove fierce demand for country property during the pandemic period, but the frenetic pace of the market is now cooling, Ms Carritt said.
“Offers that are being made now feel much more grounded in reality than they did this time last year. Buyers do not want to enter the bidding wars we sometimes saw six months ago.”
Andrew Wishart, of the analysis firm Capital Economics, says: “The market reaction to the announcement suggests that mortgage rates of over 6pc are now a distinct possibility, which would leave house prices more overvalued than in 2007.”
The stamp duty saving will help to boost buyers’ deposits because it must be paid upfront, Wishart says. “But it will be nowhere near enough to offset the hit to demand from further rises in mortgage rates. While the consensus is for house prices to flat line, we are increasingly convinced a significant correction is coming.”
In August, new buyer inquiries fell at the fastest rate recorded since April 2020, according to the Royal Institution of Chartered Surveyors, a professional body. Excluding the Covid housing market shut down, this was the biggest drop since the global financial crisis.
In September, GfK’s consumer confidence index hit -49 – the lowest rating on record since the metric began in 1974.
Forecasts of a global housing downturn
The forecasts for house price falls are part of wider expectations of a global housing market downturn, as central banks scramble to tackle soaring inflation.
Earlier this week, Jerome Powell, chair of America’s Federal Reserve, warned that America’s housing market boom would reverse, as the central bank raised interest rates by a further 0.75 percentage points.
Mortgage rates in the United States have already exceeded 6pc. Prices have not fallen yet, but sales have fallen for seven consecutive months. Capital Economics has forecast a 5pc price drop.
The super-hot pandemic-era housing markets are now feeling the crunch across the world. House prices in New Zealand fell by 11pc between their peak in November and July, according to the Real Estate Institute of New Zealand. Capital Economics has forecast a 20pc drop in Canada, a 15pc drop in Australia, and a 10pc to 15pc fall in Sweden – to name a few.
Should the tax cuts have gone further?
Kwarteng’s move roughly brought the nil-rate bands in line with house price growth since they were last changed (the £125,000 nil-rate was set in 2006 and the first-time buyer nil-rate was introduced in 2017).
But the Chancellor did not adjust the higher bands accordingly. Instead, the lowest stamp duty band has been wiped out. This means that the lowest rate is now 5pc, when previously it was 2pc.
Many are underwhelmed by the tax cuts. Matt Henderson, of Strutt & Parker estate agents, is calling for a much larger overhaul.
“A full restructuring of the system is needed in order to further reduce the barriers for first-time buyers entering the market and to create liquidity around downsizers releasing underutilised stock back into the market.”
Richard Donnell, of property website Zoopla, says: “If we are to significantly mobilise the housing market, greater changes are needed to offset the impact of higher mortgage rates.”
Kwarteng should have gone much further, says Hudson.
“We are rapidly moving beyond a point where £2,500 or even £5,000 makes much difference,” says Hudson.
“Stamp duty is a stupid tax, but these changes are slightly underwhelming. A lot of people were expecting something much bigger. The Government estimates these changes will encourage 29,000 more people to move house. That’s almost nothing.”
Over the duration of a two-year fix, they would spend an extra £21,432 compared to if they had locked in a mortgage deal a year earlier – and traders expect rates will continue to rise even higher. The consensus from economists, however, is for a less extreme peak in the Bank Rate of around 3.5pc in 2023.
Pantheon Macroeconomics, an analyst, has forecast only a 0.5 percentage point increase on Thursday. But analysts have warned that transactions will still drop sharply. Soaring mortgage rates are already taking a heavy toll on buyer demand, as purchasers have less money to spend.
In August, new buyer inquiries plunged at the fastest rate recorded since April 2020, when the housing market was shut down during the first lockdown, according to the Royal Institution of Chartered Surveyors, a professional body.
Excluding the 2020 data, August saw the biggest drop in buyer inquiries since the global financial crisis – and that was before Thursday’s rate rise.
Ross Boyd, of Dashly, a mortgage comparison website, said: “A rate increase of 0.75 percentage points will send shockwaves through the property market. Factor in the impact of skyrocketing inflation and an economy that’s teetering on the edge, and you have all the ingredients for a serious slowdown in transaction levels.”
First-time buyers, who have been unable to benefit from high house price growth, will be hardest hit. A 0.75 point increase in the Bank Rate would push up the monthly mortgage bill on a typical £243,700 first-time buyer home from £1,148 in August to £1,240 – an extra £92, or £2,208 over two years, according to Hamptons.
This would mean first-time buyer mortgage costs would have increased by 34pc since December. If the Bank Rate hits 3.75pc, the average first-time buyer’s monthly mortgage bill will be £1,402 – an extra £478 per month compared to if they had got a mortgage offer in December. Hamptons’ calculations were for a buyer with a 25pc deposit, purchasing with a two-year fixed-rate mortgage.
DANVILLE — It’s been 17 years since the annual Walk for Life started in Danville.
The walks have changed location through the years, just as the Women’s Care Clinic also moved locations to now being on Bowman Avenue.
This year’s Walk for Life is at 10 a.m. Saturday at Lincoln Park. Check-in is at 9:30 a.m.
“It’s just a really good time for the community. I think the heart behind it is to gather the community and do some peer-to-peer fundraising,” said Mariah Hanson, director of the Women’s Care Clinic of Danville.
The event is where people sponsor participants to walk. It’s rain or shine.
The walk has been at different locations through the years including along Vermilion Street and from Lincoln Park to the former Women’s Care Clinic on Williams Street.
They previously had to get a parade license for those walks. Participants would have signs too.
Due to the clinic now being farther away from Lincoln Park, they won’t walk to the new building, Hanson said.
They will do a one-mile route throughout the park.
She said it’s more now to get out and exercise and raise money.
There also are additional activities. There is a vendor fair, petting zoo, face-painting station, balloons and other activities. The vendor fair will have items such as honey, jewelry, candles and even meat.
Hanson said the underlying message is pro-life of what they do as a clinic.
But they also don’t want to exclude people.
“We’re not here to condemn. We’re here to show the community that we’re here, and have fun,” she said.
Usually about 100 to 150 people have attended the annual event in the past.
The public is invited to the event. They don’t have to walk.
Everything is free, but there will be a hot dog lunch for a $5 meal fee at 11 a.m.
Money raised goes back to serving clients and what the clinic does day-to-day.
The non-profit, faith-based clinic offers free services to families, including pregnancy tests, parenting classes, education, community referrals, limited obstetrical ultrasound and support groups.
The clinic started in a garage by Linda Odle, moved to Vermilion Street, then Williams Street and is now in its largest location yet, 1509 N. Bowman Ave. in Danville.
One parenting class just started last week.
Raising Highly Capable Kids is a place to learn how to raise healthy, caring and responsible children. This class will run through Nov. 16. Childcare will be provided for children birth to fourth grade. A meal along with weekly giveaways also will be provided at the Women’s Care Clinic class.
Hanson said through some other hosts and sponsors, the walk was already about 90 percent paid for. That’s why they can offer most of the activities free to the public.
She said they have walk participants who do it every year that they count on.
One family raises funds and does it in memorial of a granddaughter who passed away.
“That’s really special; very cool,” Hanson said.
MEMPHIS, Tenn. (WMC) – Archie Robinson was sick and bedridden last year when he received an eviction notice saying he had to move out of the house he owned immediately.
“Some young lady served me some papers stating that someone had bought the home, and why was I here? And who was I?” said Robinson. “I was like – I’ve been here basically all my life.”
Robinson inherited his childhood home in Memphis’ Glenview neighborhood from his mother who was behind on the property taxes when she passed.
It was sold in a tax sale last February by the Shelby County Trustee’s Office to collect the money he owed in back taxes — about $5,000.
Robinson said he had no idea he’d lost his home until that eviction notice, so he called the Trustee’s Office and spoke with an employee to find out what happened.
“I asked, ‘How could you sell my property without me knowing?’ He said ‘Well, we sent out notices,’” said Robinson. “I said, ‘Well, I haven’t received any notices.’”
State law requires that trustees notify homeowners facing tax sales. Shelby County uses certified mail, which means the homeowner – or another authorized person – signs the notice when they receive it.
In late March 2020, at the start of the COVID-19 pandemic, the U.S. Postal Service began allowing their carriers to sign the notices instead, marking the documents with “COVID” or “C-19.”
While the Shelby County Trustee Regina Morrison Newman disputed Robinson’s claim via email saying he signed three certified mail notices, which Robinson denies, what she doesn’t dispute is that thousands of homeowners may not have received proper notice that their houses were going into a tax sale.
Newman told this to the County Commission in October 2020.
“Our return receipts for 30,000 pieces of certified mail came back marked COVID, so we could not prove to the courts that anybody received that mail or that due process was provided,” Newman said at the time.
Despite the lack of proof, the Trustee’s Office moved forward with the tax sales and put nearly 1,700 properties on the auction block between August 2020 and February 2021, while federal eviction and mortgage foreclosure bans were in place.
An analysis done in partnership with the University of Memphis Institute for Public Service Reporting shows most of those properties were vacant, but more than 400 appear to have been occupied by their owners.
In such cases, residents often face eviction or are forced to scramble for money to repurchase their own homes. Many other tax-foreclosed homes house vulnerable renters.
Newman denied Action News 5′s request for an on-camera interview, but previously defended her decision to move forward with the tax sales by saying her office published the addresses in the Memphis Daily News, fulfilling a state requirement to publish addresses in a newspaper of general circulation.
The notices are also published on Public Notice Tennessee, a website listing all public notices in Tennessee.
Housing advocates and neighborhood groups, as well as potential buyers, use the Memphis Daily News and its site to monitor foreclosure notices.
Multiple homeowners The Investigators spoke with said they never saw nor heard of the Memphis Daily News, which is where those notices are published.
Newman pushed one tax sale from April 2020 to August 2022, and said over the phone that her office reaches out to some homeowners facing tax sales depending on how much they owe.
Meanwhile, Jack Turner, a former attorney from Newman’s office, sat down with Action News 5 and said it’s possible homeowners may come forward and say they didn’t receive proper notice.
Before he left the Trustee’s office in the spring, they were still getting certified mail signatures from postal workers, not homeowners, while tax sales continued.
“Somebody may challenge a tax sale after the fact and say they were never given notice and the courts will have to decide whether the notice was sufficient or not,” said Turner. “If that happens, they’re still going to have back taxes due, but it might set aside a tax sale.”
But a homeowner must have the money to challenge the sale in court.
Homeowners Denise Thomas and Jack Mitchell say they didn’t receive notice before they lost their home in a November 2020 tax sale, so challenging that sale was not an option.
“I do not know of the resources that we could’ve used in order to do anything about it, so we kind of just let it slide,” said Thomas.
Thomas and Mitchell are now living in a rental and barely making ends meet, while Robinson borrowed money to redeem his property and keep his house.
But with his financial resources drained, he is once again behind on his property taxes.
“I can’t imagine not having any place to live or having to depend on someone else for my wellbeing, especially after working so hard and now being disabled,” said Robinson.
Part Three of Homeowners Left Homeless, in partnership with The Institute for Public Service Reporting, will air Tuesday at 6 p.m.
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MEMPHIS, Tenn. (WMC) – Denise Thomas and Jack Mitchell purchased their first home together more than fifteen years ago on Harris Avenue, a stone’s throw away from the historic Orange Mound neighborhood, which was one of the first subdivisions planned specifically for African Americans who, in part, saw home ownership as a platform to build wealth.
“What did home ownership mean to you?” Asked The Investigators.
“It meant stability in old age,” said Thomas. “Being able to be somewhere where I can say ‘this is mine’. Where I wouldn’t have to stay with any of the children or stay with other family members or friends. This is mine.”
What was hers now belongs to someone else after health struggles and job losses caused the 60-year-old housekeeper and 71-year-old Vietnam veteran to fall behind on their property taxes.
“I just didn’t have the money. Point blank period. I did not have the money.”
Thomas lost her home in a tax sale in November 2020. It was auctioned off by the Shelby County government and sold to the highest bidder to recoup her unpaid property taxes.
“I’m not the only one. This is all over the nation, I believe.”
Thomas is right. Tax sales didn’t stop during the pandemic including in New Orleans, St. Louis and Shelby County to name a few.
Court documents and property records show nearly 1,700 properties were sold in Shelby County tax sales between August 2020 and February 2021 while the federal eviction and foreclosure moratoriums were in place.
“I think it’s unfair and unfortunate,” said Archie Robinson who lost his house in a pandemic tax sale.
Robinson inherited his childhood home from his mother who was behind on the property taxes when he moved in. As a stroke survivor on disability he says he paid what he could but it wasn’t enough.
Last year, while Robinson was sick and bedridden, his fiancé says a sheriff’s deputy came to their door with an eviction notice.
“The door bell rung, I went to the door and she gave me the paperwork saying we had to leave because the house was sold,” said Donna Pruitt. “Archie wasn’t able to come because he was in the bed, he was already sick, and it was very surprising.”
Robinson asked family and friends for the nearly $9,000 he needed to redeem his property and buy it back.
“I was talking to him saying how many people actually lost they houses are out here on the streets?” Asked Pruitt. “And it happened during this time. Where they going to get their help at?”
That’s the problem with tax sales, according to Andrew Kahrl, a professor of History and African American studies at the University of Virginia. He said most homeowners who live in their homes and lose them in tax sales can’t afford the taxes and says tax sales disproportionately affect the elderly, low-income and African American homeowners.
“The way that local governments conduct tax sales is being done in a discriminatory manner that often targets certain homeowners and certain neighborhoods over others,” said Kahrl.
In an analysis done by Action News 5 and the Institute for Public Service Reporting, we created a map that shows the neighborhoods in Memphis with the largest concentrations of tax sale properties. These neighborhoods are majority African American and nearly 40% live below the federal poverty line.
Kahrl believes Shelby County should have paused tax sales in 2020 like D.C., Detroit, Chicago and New York.
Shelby County Trustee Regina Newman, who is responsible for scheduling tax sales, moved from April 2020 to August. She said over the phone she didn’t want to add to peoples’ burdens at the time and there would be a “bad perception” of putting people out of their houses while they’re supposed to stay in them.
“Postponing a tax sale for a couple of months doesn’t really do anything to address the underlying problems,” said Kahrl.
Kahrl wants cities and counties to treat owner-occupied properties differently than vacant ones.
Washington and Baltimore have taken steps to protect owner-occupied homes from tax sales and did not include those properties when they resumed their tax sales in 2021 and 2022.
How did they do it? Baltimore identified owner-occupied homes by checking the index of Maryland’s Homestead Tax Credit, which offers tax breaks to people living in their principal residences. Similarly, officials in Washington consult a database for that city’s Homestead Deduction, which also offers tax breaks to owner-occupied households. The method doesn’t identify all owner-occupied homes, officials said, but it can help save many from tax foreclosure.
We wanted to speak with Trustee Newman about this option but she denied our requests for an on-camera interview. She did say over the phone that her office does not “go look at houses.”
Jack Turner, a former attorney from her office isn’t sure that the law would let the Trustee differentiate vacant and occupied homes.
“They have an obligation to sell property for which the taxes have not been paid and I think the reason why the law was written the way it is is because you didn’t want a tax assessor playing favorites,” he said. “Forgiving some debts or going easy on someone who was a political contributor or a crony or a friend.”
Owners like Thomas and Mitchell want to see Shelby County explore any type of solution that can better help people like them keep their homes. With the couple’s house sold, they now live in a rental that gobbles up nearly their entire monthly income.
“I’m worried about making sure that I have somewhere to live. A roof over my head. That’s what’s important – keeping a roof over my head. At 61 years old and not having to sleep out there in the park or in the shelter.”
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First-time buyers have just six weeks left to use the Help to Buy equity loan before the government-backed scheme disappears.
At least 25,000 first-time purchasers will be locked out of the housing market after the scheme closes to new applicants on October 31, leaving a “void” of support for entry-level purchasers just as the brunt of the cost-of-living crisis hits, analysts warned.
Under the scheme, first-time buyers can purchase a new-build property with a 5pc deposit and a 20pc equity loan that is backed by the government and is interest-free for the first five years. In London, where house prices are higher, the equity loan is 40pc.
Help to Buy officially ends on March 31 2023 – however, this is the deadline for all sales to complete. The deadline for first-time buyers to register is five months earlier, at 6pm on October 31.
This means first-time buyers have six weeks to house hunt, reserve a home that is supported by the scheme and submit a Property Information Form.
After the deadline, first-time buyers will have few options to get on the housing ladder without financial support from their parents.
Nick Whitten, of JLL property consultants, said: “Our research suggests that after the cut-off, there will be a 50pc fall in first-time buyers purchasing new-build homes straight away. That means there will be at least 25,000 fewer sales per year.”
He added: “This is an absolutely crucial six weeks, if you are a first-time buyer without significant support from the Bank of Mum and Dad.”
The Help to Buy equity loan scheme supports around 50,000 sales a year – equivalent to 36pc of all new-build sales in the three years to March 2021, according to Savills estate agents.
The scheme has been criticised for inflating prices of new homes and for trapping homeowners in high interest rate deals after their five-year period ends. But regardless of Help to Buy’s flaws, the scheme’s withdrawal will be a hammer blow to first-time buyer transactions.
Lucien Cook, of Savills, said: “It is difficult to see what will fill the gap. If first-time buyers can’t rely on the Bank of Mum and Dad and they are struggling to get a deposit, it will be very hard for them – particularly because high rent prices will make it harder to save.”
First-time buyers will be stuck in the rental sector for longer. Others may stay living at home with their parents, Mr Cook said.
The government support will disappear just as mortgage rates are soaring, making the housing market even more inaccessible. High house price growth since the pandemic also means that getting a deposit to buy a property is now even harder, Mr Cook said.
My tenants can’t afford heating, let alone the rent – it's time to sell
Of course, in the end, the sad truth is, not paying the rent will result in tenants losing the properties they were seeking to heat, but what I was looking to avoid was the interim period – the bit where a tenant doesn’t pay me, but I still have to pay the mortgage and the repair bills. It was this line of thinking that pushed me into selling multiple properties.
Landlord friends of mine were surprised given the high yields on offer, but it’s only a decent return if someone is actually paying the rent. What’s more, the ever-spiralling costs of labour and materials means maintenance, which has always been a big chunk of my costs, has increased to ridiculous levels.
Couple that with the delays in the court system, and any arrears, even if caught early, could grow to unsustainable proportions.
Thorough tenant referencing, guarantors and rental protection insurance will continue to grow in importance. But, more than ever, the most important thing will be having the right property to begin with.
In a day and age where for some tenants their utility bills will be higher than their rents, the equation needs rethinking. Any property owned now will need to have more money invested into it over the next few years to make it compatible with the new utility-driven-rental-market economy.
EPCs will be studied meticulously by future tenants wanting to know precisely what the running costs are. Those which don’t make the grade will likely fall in price and see reduced tenant demand. That’s no bad thing. But what it does mean is landlords need to be prepared to invest in their properties. Without that investment, you will not be a successful investor.
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