Published December 2021
Anyone involved in the residential property market is looking for a well-earned rest over the Christmas and New Year period. The last 18 months have seen record levels of transactions brought on by the Stamp Duty Land Tax (SDLT) holiday and pent-up demand in the market.
Predictions for 2022 indicate that buyer demand will remain high and that prices will continue to rise. However, transactions should remain more consistent throughout the year as we will not face the pinch points we did in 2021 as the SDLT holiday has now been phased out.
Key aspects to look out for in 2022 include:
Land Registry fee increases
From 31 January 2022 the Land Registry are increasing their registration fees for the first time since 2009. This will affect the majority of transactions including first registrations of unregistered land, transfers, leases and mortgages. Details of the new fees can be found here: https://www.gov.uk/government/publications/increase-to-hm-land-registry-fees/fees-review-2021-to-2022
As we use the Land Registry portal for our registrations, our clients will see fees increase by 11%. As the Land Registry has experienced considerable delays in processing applications over the last two years, we hope that the increased fee income will result in quicker response times.
Interest rate rises
As inflation continues to rise, many consider it only a matter of time before the Bank of England increase interest rates. It is not yet known how Omicron will affect the economy, so a decision on interest rates may be delayed until early 2022. A number of lenders have already pulled their lowest mortgage rate offers. If rates rise, we are likely to see more of that. Clients with existing mortgage offers should make sure that they are able to complete before their offers expire and consult with their financial advisor or broker, as there will be no guarantee that any mortgage extension will be offered on the same terms. For those looking to buy in 2022 it remains important to seek quality financial advice on the best products on offer.
Improved energy efficiency
COP26 highlighted that we could all do more to improve emission levels. Currently, non-exempt residential properties require an EPC rating of ‘E’ or above if they are to be let. The government is considering a policy that would require the rating is improved to ‘C’ or above by April 2025 on new lettings and April 2028 for existing lettings.
Irrespective of whether the government adopts that policy or not, we are likely to see greater emphasis on energy efficiency moving forward.