31/10/2014
Headlines
31/10/2014
Scotland: Devolved taxes: Land and Buildings Transaction Tax This tax, which is Scotland’s first ‘devolved’ tax since the Act of Union in 1707, replaces stamp duty. The Scottish Government estimates that no tax will be payable on 45% of transactions, that 90% of residential transactions will incur a lower charge or no greater charge, and that the change will be revenue neutral. LBTT applies on the portion of the total value which falls within each band (so different to SDLT, under which the higher tax rate is payable on the whole purchase price when a threshold is crossed); the Government claims this is fairer and will reduce market distortions around thresholds.
Various The market has already responded with more expensive sales being pushed to happen before the new taxes are introduced from 1 April 2015. A Daily Telegraph editorial has called it counterproductive and a tragedy. The Scottish Property Federation has warned that commercial property values may be hit. There will also be a Scottish landfill tax of a standard rate of £82.60 per tonne, with a lower rate of £2.60 per tonne for specifically identified qualifying materials, also from 1 April 2015. We await further details on the Scottish rate of income tax, which will take effect from April 2016, when Scottish Ministers will be able to replace 10p in each UK income tax rate with a different (or equal) Scottish rate.
Scotland: consultation on a new private sector residential tenancy The Government’s aims for the proposals are to improve security of tenure for tenants, while giving suitable safeguards for landlords, lenders and investors. The private rented sector has more than doubled in size in the past 15 years to over 333,0000 homes, which is more than an eighth of all homes in Scotland.
Farming Scotland: dairy herd increased by 3.2% or 8,400 cows in year to June 2014 This suggests that Scottish milk production is likely to have increased year-on-year and will have contributed to the 8% increase in UK milk production seen in the first six months of the current milk year.
Morrisons tries to reduce impact of wholesale milk price fluctuations The supermarket wants to add a new mechanism in its milk supply contract to reduce fluctuations in the price paid to its processors (and so possibly farmers), as it re-tenders for liquid milk supplies.
Tractor weight and speed limits increased from Spring 2015 (UK) Higher tractor speeds and heavier tractor and trailer combinations will be allowed, and a roadworthiness test for tractors and trailers will be developed during 2015 / 16.
Property Issues Planning: protection for Green Belt reinforced The Government has revised and restated its protection of the Green Belt. Unmet housing need is unlikely to outweigh the harm to the Green Belt and other harm to constitute the “very special circumstances” justifying inappropriate development on a site within the Green Belt.
English Heritage restructured into two bodies 1.
English Heritage: properties currently run by English Heritage will remain in public ownership, but will be managed by a charitable trust, using the same name, and be given £80m of capital funding by the Government. 1
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Historic England: English Heritage’s planning and heritage protection duties and powers are unchanged and will be carried out by a non-departmental public body, to be called Historic England.
Renewable energy: Government reduces support for solar farms Fields used for solar panels will not be eligible for any farm subsidy payments available through the Common Agricultural Policy. This is one of a series of policy changes the Government has made to reduce land take by solar farms and ‘blight’ of the countryside. The Government has also announced that it is unaffordable to keep the Renewables Obligation Scheme open for solar projects greater than 5MW and so it would be closed to new projects from 1 April 2015; there is a grace period for projects where significant financial commitments have been made prior to 13 May 2014. The Government has refused to rule out cuts to smaller solar farm payments ahead of next year's election. These changes are likely to reduce the number of solar farms in the UK from an expected 1,000 by 2020; there are currently 250. The solar industry has hit back at the Government, claiming that its decisions are based on bad science and ‘chasing headlines’. Defra has admitted that it has no idea of how much farmland has been taken by the technology.
Housing: Right to Build Following its Budget 2014 commitment, the Government is consulting on creating a new ‘Right to Build’ and giving custom builders a right to a plot from councils, which it hopes will reduce the difficulty custom builders often have finding suitable land. 11 local authorities will become Right to Build ‘vanguards’ and operate the Right to Build model on a voluntary basis to test how it works.
Planning: £100,000 available for 40-60 workshops to encourage neighbourhood planning The funding is available in areas where take up of neighbourhood planning has been low. Grants cover venue, promotional and speaker costs and have to take place by March 2015. Around 1,200 communities across England have already embarked upon neighbourhood planning since they were introduced by the Localism Act 2011.
Renewable energy: summary of consultation responses on underground access for gas, oil and geothermal below 300 metres Despite considerable opposition in the 40,647 consultation responses, the Government is proposing to change the law to allow energy firms to drill under private land without the owner’s permission. DECC claims that the opposition did ‘not identify any issues that persuaded us to change the basic form of the proposals’. It says that land at such depths has little real value and so its use will not affect the owner. This is a change from the current position where permission is needed from all surface owners as their ownership is considered to go down to the centre of the earth. At present, permission can be unreasonably refused for geothermal energy; there is an appeal process for oil and gas developments. The changes, which will require primary legislation, will bring rights in line with those already available to the coal industry. Without the new legislation, operators could otherwise potentially have to negotiate with hundreds of landowners. The changes are obviously positive for the renewable energy industry. The proposals seem to interfere with the concept of ‘an Englishman’s home is his castle’.
Residential Markets • •
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A rate rise now looks unlikely before the General Election next May as inflation dropped to a five-year low of 1.2%. To avoid housing bubbles and strengthen the banking sector, loan-to-value and debt-to-income ceilings will be applied to all new mortgages including buy-to-let, and banks and building societies will have to strengthen their capital reserves, under new Bank of England rules set to be published. UK house prices are forecast to fall by 0.8% in 2015, due to new mortgage lending rules, according to the Centre for Economic and Business Research. Demand for houses fell sharply in Scotland in September – an effect of The Referendum (RICS) The amount of equity released by households between July and September was the largest in any quarter since records began in 2002. House building activity is rising in all areas, other than London, and is now at its highest since 2007. 107,000 houses were registered in January to September, up 6% increase on last year. Growth was strong in the North East, Yorkshire and Humberside and the West Midlands.
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Gross mortgage lending in September was 10% higher than a year ago, showing how much the market has improved in the past 12 months. (Council of Mortgage Lenders). CML says there is growing evidence that mortgage lending activity, and the housing market, are sitting on a plateau.
Affordable housing • Publicly-listed housebuilders cannot solve the housing shortage, according to Bellway, which needs more government spending on affordable housing. Rented sector • Scottish rents slipped 0.2% in September, according to Your Move, the first monthly fall in three months, as the market's growth cools. However, average residential rents are still 2% (£11) higher than a year ago, but this represents a slowdown of annual growth from this time in 2013 (3.1%). • From 1 October 2014 it is a legal requirement for lettings agents and property managers in England to join 1 of 3 government approved redress schemes.
Environment The RSPB’s State of the UK’s Birds report highlights continuing challenges for many species This is an impressive and detailed report. The headline message for farmland is that the farmland bird indicator remains at less than half its 1970 starting value, and has continued to fall in the 2000s, although at a slower rate.
And finally… The Google cat
Google is investigating after a Google Maps user drew a cat at Hobson Bay, Auckland, New Zealand by adding cycle and footpaths to the map. A friend of the ‘artist’ said he started with a cat, and then added a collar, whiskers etc. Whilst every effort has been made to ensure the accuracy of this briefing, its information may not be comprehensive and recipients should not act upon it without seeking full professional advice. If you have queries regarding any of the articles, please contact jason.beedell@smithsgore.co.uk (01733 866562) or andrew.teanby@smithsgore.co.uk (01522 507310)
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