Fracking, flooding and interest rates
There’s mixed news for the property market in our latest round-up of recent property news
Interest rates proving to be good news for property purchasers despite the Brexit effect
While the low value of the pound might encourage foreign investors to buy UK property, the Brexit effect continues to cause uncertainty in the property market. Expect that to continue until we know when the government will serve Article 50 notice on the EU (*) and more information is released about the UK’s trading arrangements with Europe and other trading partners post Brexit.
The interest rate change back in August was the Bank of England’s response to worsening economic conditions arising from the Brexit vote. The rate was cut to 0.25% and was not good news for savers.
The lower rate was intended to encourage households and businesses to borrow more in the hope that this would encourage the banks to loan more and keep cash flowing.
If our experience is anything to go by, the property market appears to be thriving in our region. Certainly, here at Pearsons, we are busy with property transaction work.
In our conveyancing team, Victoria Marshall reports that our recent instructions have been coming from what she refers to as the 'middle movers' - those buying bigger properties. The number of instructions for conveyancing work suggests market confidence has not really been knocked by the Brexit effect – in our region at least.
(* See our recent article: Brexit Wrangle Continues with New Court Decision)
Flooding – reform might be problematic for developers
A House of Commons environment and rural affairs committee report has called for a major reform of the system for managing floods. Some of the issues raised by the MPs will, if they gain traction, cause problems for developers who build on land at risk from floods. For example, they have suggested that new homes should be landscaped in such a way that they deal with their own surface run-off and the discontinuance of the right of any home to connect surface water run-off to a mains sewer to be discontinued.
EAC report: Flooding: cooperation across government.
Flood insurance for homeowners
While on the topic of flooding, we wrote an article on the introduction of the FloodRe insurance earlier this year (*). FloodRe is flood insurance scheme for private homeowners. Although there are some restrictions, if you live in a flood zone, it is worth speaking to your insurance broker about the scheme.
(*See our article: Flood Re – a new flood insurance scheme for private homeowners)
Flooding is often referred to as an “act of God” by insurance companies and it’s something that you can’t predict or prevent, but there are things you can do as a homeowner to prepare and protect yourself. Compare the Market have released an essential guide to flood safety and resiliency for homeowners affected by flooding.
Protests at approvals to start fracking
There have been more protests about the government’s recent approval of fracking applications.
Fracking is the process by which shale gas is extracted from underground rocks. It has been used successfully in the USA and now companies in the UK are ready to start the process at certain sites in the North West. Cuadrilla is one of those companies who had made a planning application to Lancashire County Council for approval to frack at Cuadrilla's Preston New Road site at Little Plumpton in Lancashire. The application was rejected and Cuadrilla appealed, successfully: at the beginning of October, the Communities Secretary, Sajid Javid, approved Cuadrilla’s plans.
Fracking applications – and the government’s support for a shale gas industry in the UK - have given rise to many protests and have been contested furiously by environmentalists and local campaigners alike. There are concerns about the effect of the fracking process on the environment, the visual impacts, noise pollution and the risk of earthquakes. For now at least, Cuadrilla seem to have satisfied the Environment Agency with their environmental impact assessment. However, protesters continue to argue that the government should look at renewable energy sources rather than support the shale gas industry.
Mr Javid’s decision sets a precedent for other applications such as those relating to Roseacre Wood. Others making fracking applications will no doubt be relying on the guidance given in the appeal.
You can read more about the decision on BBC news.
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Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.
This blog was posted some time ago and its contents may now be out of date. For the latest legal position relating to these issues, get in touch with the author - or make an enquiry now.