Right-to-buy housing scheme faces abolition in Wales

A flagship policy of Margaret Thatcher, it faces abolition by ministers who say they want to protect the stock of social housing for those who need it.

In the meantime, the maximum discount under the right-to-buy scheme is set to be cut from £16,000 to £8,000.

The scheme will also be immediately suspended in Carmarthenshire due to local housing shortages.

The Welsh Conservatives' shadow housing minister Mark Isherwood described the move as "an anti-aspiration, nanny-state-knows-best decision which limits housing supply and denies people in council properties the choice and power to buy their council house".

Right-to-buy, one of the Thatcher government's most popular policies, was blamed by critics for reducing the stock of social housing.

More than 130,000 houses in Wales have been bought under right-to-buy, for council tenants, and right-to-acquire, for housing association tenants, since 1980.

In 2003, the maximum discount in Wales was cut from £24,000 to £16,000.

Most social housing tenants in Wales currently have the right to buy their home once they have been renting it for five years.

But, since 2008, annual sales in Wales have been in the low hundreds.

Housing Minister Lesley Griffiths said she wanted to "protect social housing stock for people who really need it".

"Some of those houses have been bought through right-to-buy and ended up in the private rented sector," she said.

"I want to ensure that people who require social housing don't have to languish on waiting lists for a long period of time."

In England, where the maximum discount has been increased to up to £75,000, sales have risen sharply over the past three years.

Is Wales next to have its own property ta

The Wales Act has been given Royal Assent - passing to the National Assembly for Wales some tax-raising powers including that of stamp duty. 

The act - which also renames the assembly government ‘The Welsh Government’, mirroring the Scottish example - gives some income tax and borrowing powers to Wales, too, although it appears that if the principality makes any significant change to stamp duty it would have to secure the approval of a referendum. 

Stephen Crabb, the Secretary of State for Wales, says: “I want a lasting and fair devolution settlement that works for the people of Wales.”

Last year Scotland - which already has powers over its own level of stamp duty - scrapped SDLT complete and replaced it with a progressively-stepped Land and Buildings Transaction Tax, which comes into effect in April. 

It includes 10 per cent and 12 per cent thresholds of tax to be paid by purchasers when transacting a property.

Deposit protection schemes

Tenants can expect a decision as to how much of their deposit is going to be returned to them within ten days from the end of the tenancy, while any part of the deposit kept back at this stage will remain protected in the scheme being used until such time as any dispute is resolved.
However, the exact arrangements depend on the type of scheme used.

The only custodial TDP scheme is provided by the DPS, and involves the DPS holding the deposit money in a bank account. When the tenancy ends, it releases the deposit to the person who is entitled to it.

Landlords based overseas must use the custodial DPS scheme unless they employ a British-registered letting agent to manage their tenancy.

If the DPS is used for tenants adopting a rent deposit scheme, such as when a council pays the deposit and the tenant leaves, landlords can agree with the council or a third party to keep the deposit in place for the next tenant.

Under insurance-based schemes, the landlord or the landlord's agent holds the tenant's deposit and pays a fee to insure it against the landlord illegally keeping the deposit.

If the landlord does not pay the tenant the amount they are owed at the end of the tenancy, then the insurer will pay the tenant and try to get the money back from the landlord.

If the tenants' deposits are paid in instalments as part of a rent deposit scheme, then landlords must use an insurance-based TDP scheme, the only two providers of which are MyDeposits and the TDS.

Within 14 days of receiving tenants' deposits, landlords must give the relevant information to their tenants, together with the address of the rented property and the amount of deposit paid, the landlord's or letting agency's name and contact details, and the name and contact details of any third party that has paid the deposit.

In addition, tenants must be provided with information about items or services covered by the deposit, the circumstances under which the landlord will be able to retain some or all of the deposit, and what to do if there is a dispute over how much deposit should be returned.

Landlords are responsible for making sure the deposit is kept safe with one of the schemes even if they use a letting agent to look after the deposit, which provides the tenant with peace of mind.

YOUR AGENT deposits all tenant deposits with the DPS.

Government scheme for first time buyers

A number of initiatives have been introduced to help first time buyers purchase a home. By far the most popular is Help to Buy.

As many as seven out of 10 under 40s who are looking to buy a property this year are expected to use the Help to Buy scheme.

The scheme - which is available to home movers as well as first time buyers - is aimed at helping those with a small deposit of as little as five per cent.

There are two parts to the scheme - the equity loan and the mortgage guarantee.
Under the equity loan scheme, the buyer must find a deposit of at least five per cent, while the government offers a loan of up to 20 per cent, interest free for five years. The remaining 75 per cent is covered by a standard mortgage.

It is only available on newly built properties up to the value of £600,000 in England, £400,000 in Scotland and £300,000 in Wales.

The deposit you need will depend on the total value of the property you buy. For example, a buyer looking to purchase a £200,000 property under the equity loan scheme will need a minimum deposit of £10,000 and a mortgage of £150,000. An equity loan of £40,000 is provided by government.

Under the mortgage guarantee scheme, lenders buy a guarantee on loans for borrowers with only a five per cent deposit. The scheme is available on newly built properties – depending on your lender – and existing homes, up to the value of £600,000

The property must be your own home and cannot be a buy-to-let investment.

A buyer looking to purchase a £200,000 property under the mortgage guarantee scheme will need a minimum deposit of £10,000 and a mortgage of £190,000.

While every effort has been taken to ensure the above information is up to date, some inaccuracies may occur. All information was correct at time of publication and is provided in good faith. 

Long-term fixed rate mortgages now available from 2.99 per cent

Competition is intensifying in the long-term fixed rate mortgage market as lenders turn their attention to 10-year deals.

Barclays today launched a record low 10-year fix with an interest rate of just 2.99 per cent – thought to be the first ever deal of this length for below 3 per cent.

The offer comes as the number of 10-year deals available continues to soar.

There are currently 77 different mortgages that offer a rate fixed for a decade, up from just 8 in January last year and only 22 as recently as October.

Not only is the level of choice increasing, but the cost of the deals has also come down.

The typical interest rate charged on a 10-year fixed rate loan is now 4.17 per cent, the lowest level ever recorded and down from 4.23 per cent 12 months ago, according to financial information group Moneyfacts.

The group said that while shorter term fixed rate mortgages, of two, three and five years, had previously been favoured by the majority of borrowers, locking into the current historically low interest rates for the longer term was boosting demand for the products.

Meanwhile, lenders who borrowed from the Government’s Funding for Lending Scheme are keen to put the funds to use so that they can demonstrate that their mortgage books have grown.

The Barclays 2.99 per cent deal is available to homeowners with a 40 per cent deposit who pay a £999 fee.

The group also has a rate of 3.99 per cent for those who have only 25 per cent of their property’s value to put down.

Competition among shorter-term fixed rate deals also remains intense, with HSBC launching a two-year deal at just 1.29 per cent.

The mortgage is available on loan-to-value ratios of up to 60 per cent and comes with a £1,499 fee.

Norwich & Peterborough Building Society and the Post Office are both also offering sub-2 per cent two-year fixed rate mortgages, with fees of £195 and no charge respectively.

Meanwhile, First Direct has slashed the rate of its five-year fixed rate loan to a market-leading 2.39 per cent on loan-to-values of up to 65 per cent. The deal comes with a £1,450 fee.

Read the full story here

Should I rent or buy a property?

The answer to this question is not straightforward. It comes down to personal circumstances and current market conditions and is always a hotly debated topic. The case for and against both options can easily be made. Fundamentally, it depends on an individual's personal circumstances.

Recent record low interest rates have played a significant role in keeping the cost of borrowing low and driving down monthly mortgage payments. But lending criteria have been strict and inflation has been consistently above the Bank of England's target. Speculation is now growing about when - and by how much - the Bank rate will be raised. So those on tracker mortgage could see their monthly payments start to rise soon.

While buying wins out over renting today according to our latest research, the impact of a rise in interest rates cannot be ignored. If interest rates were to increase by 1 per cent and rents to remain the same, renting would become more cost-effective in 80 per cent of the locations we recently studied.

If you are thinking buying in the current market you must keep in mind how rising interest rates would affect your monthly payments. Fixed rate deals remain the best way for borrowers to protect themselves against this uncertainty, but they don't suit everyone's financial situation.

So, because we don't know your personal circumstances it would be hard to say you should rent or buy. So instead, here are some reasons to consider when looking to rent or buy:

Buying

1. You're investing in your future

If you own your home and have a repayment mortgage, rather than interest-only mortgage, you are investing in your future and creating a valuable asset. Your monthly repayments aren't going to a landlord and creating 'dead money' for you. However, while the value of your property may go up as well as down, at the end of the term of the mortgage you will own the property outright.

2. Freedom

If you own your home you can do what you like to it (within the planning regulations). You can make it a home for your family or simply move in and carry on. You'll also be in direct control of any problems with the property and won't have to deal with agents or landlords.

3. Discipline and experience

The house buying process can be a daunting one, but when you have done it once, the process is very similar for future purchases. If you're a first time buyer, owning your first home can be a great way to kick-start financial planning for your future and help you to create a household budget to manage the costs of running a home.

4. Community

An often overlooked advantage of buying your property is that you're also becoming part of an existing community that makes up the local school, church or shops and create lifelong friends and support.

Renting

1. Flexibility

Renting allows you to choose pretty much where you like to live. In most cases you can break a rental contract after six months, allowing you to move to a new location or try a new location perhaps as a test before you decide to commit and buy in the area.

2. Free from financial responsibility

As a renter you are not going to fall foul of any housing market related conditions. You will of course have to pay rent but you're not tied into monthly repayments on a bigger loan and therefore cannot fall into negative equity.

3. No maintenance costs

As a tenant it is the responsibility of your landlord to maintain the property, pay for its upkeep.