As part of The Sherrards Training Academy, we have asked our Legal Assistants and Trainee Solicitors to write articles to support their learning, and also to ensure they start to build on their own personal brand. This article has been fact-checked and proofread by Head of the Residential Real Estate department, Asha Ngai.

What is Stamp Duty Land Tax?

Stamp Duty Land Tax (“SDLT”) is payable if you purchase a property over a certain price. The current SDLT threshold is over £250,000 for residential properties, meaning that if you purchase a property for less than £250,000 there is no SDLT to pay.

The amount of tax payable is dependent on the purchase price of the property, whether it is a residential or non-residential purchase, whether you are purchasing the property as an individual or as a company, whether you are non-UK resident and whether you own any additional property. The exact figure for SDLT payable on a purchase can be calculated on the government website, and can be found here.

What is Multiple Dwellings Relief?

You could be eligible for SDLT reliefs if you are buying your first home for example, or in a number of other specific scenarios. Such reliefs, if applicable, could reduce the amount of SDLT payable by you.

At the time of publication of this article, one of these SDLT reliefs is called Multiple Dwellings Relief (“MDR”). This relief can be claimed if you purchase more than one residential property in a single transaction. For instance, if you purchase a home based on large grounds, and there is an additional property on the grounds that you are also purchasing, you might be able to claim MDR. Therefore, a reduced SDLT rate will apply.

Changes to Multiple Dwellings Relief

The Government’s spring budget, published on 6 March 2024, informed that from 1 June 2024, MDR will no longer continue to apply. This means that those who purchase a property after 1 June 2024 (which results in them owning more than one dwelling in a single transaction) will not be able to claim MDR.

However, for contracts exchanged on or before 6 March 2024, MDR will continue to apply, even where completion of the purchase takes place on or after 1 June 2024 provided there is no variation of the contract after 6 March 2024.

However, for contracts exchanged on or before 6 March 2024, MDR will continue to apply, even where completion of the purchase takes place on or after 1 June 2024 provided there is no variation of the contract after 6 March 2024.

If contracts are entered into after 6 March 2024, you can only benefit from MDR if actual completion takes place or the contract is ‘substantially performed’ (where the buyer has paid substantially all of the consideration specified in the contract), before 1 June 2024.

For more information regarding the changes to MDR, please follow this link to go to the Government’s website.

If you seek further information and advice in respect of any area of residential real estate, then please do not hesitate to contact us at law@sherrards.com and we will be happy to assist you.

All of this may prompt a pick-me-up for deal activity in both the commercial and residential sectors. There will also be a number of regulatory changes to keep up with in 2024, but with a general election on the cards, making accurate predictions of what will happen in the sector and what the legislation will end up looking like is probably best avoided.  What we can safely do is provide a rundown of some of the more significant developments in property law expected in 2024, with the finer details to be fought over in Parliament.

Leasehold and freehold reform

The Leasehold and Freehold Reform Bill will enable leaseholders to extend leases to up to 990 years, abolish marriage value and also limit ground rent. These changes will make it cheaper and easier for leaseholders to extend leases or buy the freehold or share of the freehold.

Renters reform

The Renters Reform Bill is likely to come into law this year, and it will make significant changes to the way in which landlords let properties to tenants.  This is the one promising the abolition of so called “no fault” evictions, but the reforms have been delayed due to the lack of a framework for the courts to deal with the proposed new eviction process.

Ending of lower residential stamp duty

The increase of the residential nil-rate tax threshold from £125,000 to £250,000 will end on 31 March 2025.  This means that buyers will go back to paying the full amount of stamp duty next year.  This may result in an increase in transactions towards the end of 2024 and the beginning of 2025, before the lower rate ends.

Building safety

The Building Safety Act 2022 brought in several measures intended to make buildings and residents safer, in light of the Grenfell tragedy.  In October, a number of measures were brought into law, which now relate to all projects, not just high-risk buildings.  The regime is complex and specialist advice should be sought when building or re-developing property.

Biodiversity net gain

Intended to ensure that development has a measurably positive impact, or “net gain” on biodiversity, developers must deliver a BNG of 10%. This means a development will result in a better quality natural habitat than there was before development. New BNG rules came into force for most new developments from January 2024. Draft regulations and government guidance were published at the beginning of December.          

To find out more, contact Chris Piggott or get in touch with law@sherrards.com. 

Have you lived in your home for a number of years and are now thinking of downsizing to a smaller or more manageable property? Although the process has not changed, it is always sensible to be one step ahead of a buyer’s lawyer, particularly if you’d like a quick and stress-free move.

Instructing a lawyer is the first port of call and it is always good to do so in advance of the property being marketed with an estate agent.  This will allow time to iron out any issues and pre-empt all those questions that a prudent buyer’s lawyer will raise.

Potential issues that may arise include:

• If the land has not already been compulsory registered, then it may continue to be unregistered at the Land Registry. You will need to dig out your original title deeds for an application to be made. As most land is now registered, it may be worth asking your lawyer to register it at the Land Registry for ease of dealing with it moving forward.
• Where the property is registered, you should check with your lawyer for any entries on the title. If there are satisfied mortgages which have long since been redeemed, then you will need to contact the lender to ask them to notify the Land Registry or provide a form of discharge for your lawyer to send to the Land Registry on your behalf.
• Where you have carried out works to the property, you will need to produce various warranties and guarantees if they are still in date, along with building control completion certificates for new windows and planning permissions obtained at the time. Often duplicate information can be obtained from the council and duplicate FENSA certificates for new windows. However, you may want to draw your lawyer’s attention to these items so appropriate investigation can be made.
• Where the property is leasehold, you should pull together your ground rent and service charge payments, minutes of previous meetings with the management companies and contact details as to where the management pack can be obtained.
• Where there are rent charges demanded or where the property lies upon a freehold management estate, then enquiries will need to be raised and evidence of payments obtained in the form of receipts.
• There may be requirements for statutory declarations to be made as to use of the property or indeed parcels of land which are not in your ownership. It is sensible to draft these in advance or obtain indemnity insurance quotes for a prospective buyer.

Armed with the above, a full disclosure can be made to the buyer’s lawyer at the outset with no hidden difficulties arising at a later date to cause a buyer to withdraw. We are facing a particularly difficult market at present so anything you can do to improve your chances of a successful sale are well worth the effort.

To find out more, please contact Caroline Vernon. 

The High Court in, Kettel and others v Bloomfold Ltd [2012] EWHC 1422 (Ch) granted an injunction to a group of tenants in a block of flats preventing the landlord from developing land where the tenants’ car parking spaces were located.  The Court ruled that the car parking spaces granted to the tenants as part of their long leases were easements and the tenants were entitled to an injunction preventing the landlord from carrying on the proposed development because the landlord was not entitled to unilaterally terminate the easements.

An easement is a right to use or pass over land, and not a right to possession or joint use of the land with the party that has granted the easement.  In addition, an easement cannot be claimed if its effect would be to deprive the party that has granted the easement the benefits of owning the land.  In other words, the right will not be an easement if it prevents the owner of the land in question having any reasonable use of the land.

The Tenants had been granted long leases of flats in the landlord’s existing development, which included a right to use a specific parking space.  In the leases, the landlord had reserved the right to develop its neighbouring property, even if this affected certain rights enjoyed by the tenants.  The landlord wanted to commence a new development on land which included the car parking spaces allotted to the tenants and required the tenants to accept different parking spaces elsewhere.

The Tenants sought an injunction to prevent the development, arguing that they had been granted rights to use the car parking spaces which amounted to exclusive possession, and which in turn deprived the landlord of all reasonable use of the land on which the car parking spaces were situated.  The landlord argued in return that the tenants did not have exclusive possession of the car parking spaces, and so the rights to use the car parking spaces were easements.  Therefore, the landlord further argued, if the proposed development deprived the tenants of their right to use the car parking spaces, the tenants should be awarded damages.

The High Court granted the injunction to the tenants.  The Court held that the tenants had not been granted exclusive possession of the car parking spaces and that the rights granted merely prevented the landlord from parking a car in the car parking spaces.  It did not prevent the landlord from doing anything else with the land, such as passing over it or laying pipes or service media beneath it for the existing block of flats.  Therefore, the landlord was left with reasonable use of the land.  However, there was no right set out in the tenants’ leases for the landlord to unilaterally vary the position of the car parking spaces.  In other words, the landlord could not on its own extinguish the easements that had been granted by granting equivalent easements to the tenants on a separate piece of land.  The landlord was entitled to temporarily obstruct the car parking spaces to carry out its maintenance obligations at the existing block of flats, but it could not extinguish the easement by requiring the tenants to park their cars elsewhere.  The Court therefore granted the injunction as an appropriate means of preventing the landlord from unilaterally terminating the easements, and the landlord was prevented from carrying out its proposed development.

This case confirms that where tenants are granted specific parking spaces within their lease, do have a legal entitlement to use the parking space.  Therefore, developers in granting new leases will need to consider and include a right to alter and indeed terminate the tenants parking rights, where there is a potential for development of that land further in the future.

To find out more, please contact Caroline Vernon.