House Prices Near Top 30 State Schools are '12% Higher'

This article by Harriet Meyer of theguardian on October 27th, 2013 reveals that third of properties close to the top state schools command a premium of more than £80,000 according to the survey by Lloyds.

House prices near the best state schools, such as King Edward VI School Handsworth, attract a premium of more than £30,000, says Lloyds. Photograph: Andrew Fox/Alamy

 

Parents are paying "premiums" of on average £31,500 for a home in an area with one of the UK's leading state schools, according to resarch from Lloyds.

The findings are are likely to reignite the controversy surrounding schools selecting by parents' ability to afford to live somewhere.

Property prices within postcodes with the top 30 sought-after secondary state schools are 12% higher than the average price in the rest of the county, at an average of £295,972, or almost nine times average annual earnings for a full-time male employee at £33,740.

Properties close to the top state schools command a housing premium of more than £80,000 in almost a third of cases.

The north-west has the largest premium, with average house prices in the postcode of the top 10 state schools in the region trading 28% – or £43,142 – above the average house price in their county.

This is followed by Yorkshire and the Humber, with a premium of 18%, and London at 15%. In contrast, house prices in the East Midlands that are close to the best performing state schools are on average 6% lower than in neighbouring locations.

The most expensive catchment area of a state school in Britain is that of the Henrietta Barnett all-girls grammar school in Barnet, north-west London, where the average house price trades at a premium of 87% or an average of £402,600.

Homes within the postal district of Tiffin girls' school and Tiffin school in Kingston-upon-Thames commanded the second highest premium, with house prices in the KT2 postcode trading at more than double the average for the borough at £207,591.

However, more than a third of England's top 30 state schools are in locations where the average property price is less than the average of those in neighbouring areas. With an average price of £94,843, properties in the catchment of King Edward VI Handsworth school in Birmingham, B21, for instance, are 42% or £67,738 below the county average.

Meanwhile, prices in the surrounding area to Kendrick school and Reading school were £108,033 lower than the county average.

The research is based on average asking prices in June 2013 and GCSE results taken from 2012.

Nitesh Patel, housing economist for Lloyds Bank, said: "All parents want to ensure their children have access to the best schools, so it is not surprising that homes in areas close to the top performing state schools typically command a significant premium over neighbouring areas.

"However, with the availability of suitable homes in short supply, high demand has led to average prices in many of these areas being out of reach for many buyers on average earnings."

Article Source: http://www.theguardian.com/money/2013/oct/27/house-prices-state-schools-higher

The Hidden Dangers of Shared Ownership

Shared ownership is said to be the easier way to get onto the housing ladder, but is currently presents some legal flaws for the buyer as revealed on this recent article by Giles Peaker of TheGuardian on September 3rd, 2013.

It's touted as an easier way onto the housing ladder, but shared ownership is mired in worrying legal flaws for buyers.

Shared ownership is being positioned by housing charity Shelter and others as the future of home ownership for low- and middle-income households, and as a means to encourage investment in home building. However, shared ownership currently presents some significant legal flaws for the purchaser – not the least being that there is actually no 'shared ownership' at all.

As a solicitor who works in leasehold litigation, I am concerned that the significance of a case called Richardson v Midland Heart, from 2007, is not more widely known. Rebecca Richardson had purchased a 50% share of a property with housing association Midland Heart for £29,950 in 1995. The arrangement, a typical one, was that she paid rent on the other 50%. There was the usual staircasing option, by which Richardson could opt to pay more for a greater share, up to owning outright with 100%, but, again not uncommonly, she had not exercised this.

Unfortunately, Richardson got into arrears on the rent. Despite agreeing to allow the property to be sold, Midland Heart quickly brought possession proceedings under Housing Act 1988. Midland Heart used a ground where if there are eight weeks of rent arrears when a notice is served and also at the date of the court hearing, the court must order possession, with no discretion to do otherwise.

The court found, reluctantly, that what Richardson had was an assured tenancy for 99 years (the length of the lease). She did not have a lease that could be protected, as it was not for the whole of the property. What is more, she had no right to the return of the £29,950 she had paid. The court made a possession order and Richardson lost the property.

In practice, this means that shared ownership is just a tenancy, with an expensive downpayment for an option to buy the whole property at a later date. The landlord or housing association remains the owner of the property up to the point of the 100% buyout and the tenant can be evicted for rent arrears regardless of how much of the property they supposedly own – and without being recompensed for that payment. A case this year suggested there may be a human rights claim for the return of that money, but this is untested.

Richardson paid for her 50% share up front, but if it were a mortgage the lender would almost certainly step in to pay off the rent arrears, adding the arrears and additional charges to the mortgage loan, to preserve its security and avoid the shared-ownership tenant being evicted. But the legal position remains the same.

There are other problems that, though not unique to shared ownership properties, occur more often with them. For example, frequently the housing association will itself only lease a number of flats in a block built by a developer, which it then sub-leases to people on a shared ownership basis. In this situation, the shared ownership leaseholder will often find that they have no way to enforce repairs to the building, as the housing association will have no responsibility for its condition. The shared ownership leaseholder may well face leaks, heating problems, or defective windows but be unable to make the landlord or freeholder carry out repairs, or be compensated, where a social tenant would at least be able to get compensation from their landlord.

These are major problems for the shared ownership model. The Richardson v Midland Heart problem will almost certainly need legislation to change. While shared ownership may well be the most promising route into home ownership for many, there are substantial risks for those taking that route.

Article Source: http://www.theguardian.com/housing-network/2013/sep/03/hidden-dangers-shared-ownership