New rules will increase number of rural barn conversions

The government is planning to introduce new permitted development rights for agricultural buildings in England.

Farmers and estate owners will be able to convert buildings under 150 sq metres into a residential dwelling without the need to gain full planning consent.

A maximum of three additional dwellings, including flats, will be allowed on an agricultural unit.

Buildings up to 500 sq metres can be used for a state-funded school or nursery providing childcare.

The move proposed follows earlier changes that came into effect in May allowing farm buildings to be converted to a range of commercial uses without the need to gain planning permission.

A  consultation on the proposals closes on 15 October 2013.

Prior approval will be needed from local authorities before any residential conversions can take place and the new rules only apply to agricultural buildings constructed before 20 March 2013.

The areas that will require approval include:

• Siting and design to ensure physical development complies with local plan policies on design, materials and outlook

• Transport and noise impact, contamination and flooding risks to ensure that change of use takes place only in sustainable locations

James Del Mar, Head of Knight Frank’s Rural Consultancy Team, says the proposals could be positive for rural landowners.

“Anything that allows the more flexible use of farm buildings that no longer fit into modern farming systems is to be welcomed.”

However, he says those planning any conversions will still need to work closely with their local authorities.

“Although they will not have to make a full planning application, there are still a number of considerations that will have to be satisfied before conversions can take place.”

The value of 'sentiment' in house buying

Jason Tebb, managing director and founder of estate agency Ivy Gate talks about 'sentiment' in housing market.

In spite of rising house prices in London and the South East, with improved liquidity in finance and more mortgage products available, it’s easier for buyers to make a move than it has been for some time. A lot of that is down to positive sentiment, which has increased banks’ willingness to lend and lowered their perception of risk. This same sentiment is what makes people buy property.

I first heard about ‘sentiment’ 10 years ago when I was a junior negotiator. My manager at the time told me that people like to feel it’s the right time to buy, not be told it is. He told me that people always take advice from friends and colleagues over an estate agent.

The UK’s feel good factor, which started with the Olympics last year and continued this summer with the fantastic weather and triumphs in tennis and cricket, has had a positive effect on the sentiment of the whole country. Combine this with sustained good news on the economy and the mood in the country is at its most optimistic for years. All of this makes people think less about losing money and more about trying to improve their life by making the bold decisions that they previously put off. Affordability then becomes a small factor in the decision-making process.

Buyers are overly fixated on the short-term outlook when they should be thinking long-term. Although it's natural to worry about an investment that is hundreds of thousands of pounds, you need to remember that it's a home too. Most mortgage products have minimum terms of a number of years, so why worry about how the market is in six months. You wouldn't be able to sell it anyway without paying a mortgage redemption penalty. The single most important question to ask yourself when you are thinking about buying a home is “can I see myself living there?” You can’t be thinking about what the market will look like in a year or two. When the housing market was more affordable back in 2009, people were put off buying because of poor sentiment, whereas, now property is less affordable but the reverse is true. The best time to buy is always when the market is at its lowest in the cycle, but the irony is that most people only realise this when it's too late.

In the current market buyers should be prepared to compromise. You’ll never get a 10 out of10. The best properties will always be just out of your price range. Aim for a seven out of 10 and if you find a property that matches most of your requirements, be brave and go for it. Also, be aware that we're not in the same market as a year ago; properties are agreeing at closer to the asking price than you think and in some cases are exceeding the asking price.

Meanwhile, sellers need to think seriously about their next move and have a plan. The best buyers who pay the best prices will want to move quickly and without delays and you will slow the process down by trying to find a property to move to. Think about breaking a chain to make you more attractive to interested parties, it will make it easier for you to secure the most willing and able purchaser.

Price of UK woodland on the rise

For a long time woodland in the UK was either viewed as a specialist investment or the least valuable part of a farm sale.

However, times have changed and woodland is becoming more popular as an asset class and is starting to achieve prices similar to decent arable land.

One example of this is the sale of the 840-acre Finglw Woodlands on Dartmoor, pictured below.

Last-minute bidding pushed the eventual sale price to over £1m above the property’s £3m guide price.

The buyer was a consortium of conservation charities including the National Trust and Woodland Trust.

Tom Raynham, from Knight Frank, says: “Although the purchase in this case was for conservation reasons, there were a number of strong under-bidders interested in buying the woods from an investment and taxation angle.”

Scottish house sale prices £14,500 below asking prices

Scots selling their homes have been accepting prices about 9% below their asking prices, according to an analysis of market figures from this spring.

Website S1 Homes compared average asking prices with the officially-registered settlement prices.

It found that the "reality gap" was widest in more expensive properties.

According to this analysis, the average house sale in Scotland, at £153,102, was £14,500 below the average asking price.

The second quarter of the year saw a 3% rise in selling prices and nearly 2% higher asking prices, since the first quarter.

The statistics showed that those people selling flats and terraced houses were, on average, getting slightly more than they asked for.

Detached houses

Covering more than 10,000 flats on the market, the average asking price with S1 Homes was just below £112,000, and the average settlement price, according to Registers of Scotland, was £117,500.

The average terraced house, selling for £123,000, was £2,000 more than the average asking price.

But those selling semi-detached houses were having to accept less than they asked, and those in detached houses were typically having to accept 18% less than they asked.

That was a reality gap, on average, of nearly £50,000, on an average sale price of £225,000.

There were more than 7,000 detached houses advertised and included in the survey.

Is time right to buy in Spain?

There’s no doubt that Spain’s property market has endured a difficult few years and residential prices in the country tumbled in the wake of the economic downturn. 

But now Knight Frank’s representative office in Spain, says buyer confidence in the market is starting to return

Barcelona based agent Lucas Fox notes that the fall in prime residental prices in Spain is begining to slow and as a result investors are sensing a potential turnaround in the market.

Data released by the agent suggests that prices in some of Spain’s most desirable areas have fallen up to 50% since the property crash of 2006/7. However, sales have begun to rise more recently as British and Scandinavian buyers return to the market.

• In Barcelona, the Costa Brava and Marbella, prices have fallen between 20% and 50%. In some areas, they may have reached the bottom.

• Property sales in Barcelona are up 13.5% from January to May 2013 compared to the same period last year

• Lucas Fox has seen the strongest two quarters of trading since the start of the property crash of 2006/7

• The luxury property market is doing particularly well, primarily in Barcelona, the Costa Brava, Ibiza and Mallorca where the average sales price of properties sold by Lucas Fox in the first six months was over a million Euros. In these key areas the property markets are still being driven by international clients

• Mallorca was the most popular tourist destination in Spain in the first half of 2013, with many British and Scandinavians returning to the market

• On Ibiza, prices remain buoyant and the demographics of buyers is changing with more young European buyers in the 30 to 40 year age group

Alexander Vaughan, co-founder of Lucas Fox, said: “The first six months of 2013 saw further encouraging developments in the property market in prime areas of Spain. In all regions we cover, the numbers of offers and sales completed were significantly up on the same period in 2012.

“It remains a buyer’s market with even the best properties transacting at 20% to 30% below their peak prices and sellers increasingly open to negotiation on asking prices. Our advice to potential buyers is to focus on location and quality.

“There are some great deals to be had and we think that in most areas, particularly Barcelona, the Costa Brava and Marbella, prices are at, or very close to, the bottom. We expect the trend of sellers lowering asking prices in line with buyer expectations to continue for at least the rest of 2013 and quite possibly the next couple of years.”