What's your financial position



Q. The estate agent I am buying through wants to see proof of my financial position, but I don’t want to disclose that until my offer is accepted. Do I need to give this information in advance?

A. The agent you are dealing with is absolutely right in asking to see proof of your financial position. The relevant section of The Property Ombudsman’s Code of Conduct states that the agent must take all reasonable steps to establish the source and availability of a prospective buyer’s funds - and pass this information to the seller - so if he didn’t, he would actually be in breach of the Code and if the sale subsequently fell through over money matters, his client would have legitimate grounds for complaint. 

You are under no obligation to disclose this information if you don’t want to. However, the agent would then have no choice but to tell his client that as a result of your unwillingness to co-operate, your financial position couldn’t be confirmed. Ultimately, it is the seller’s decision whether or not to accept any offers but the agent would be doing less than his duty if he didn’t recommend an appropriate course of action. If the seller wanted to accept your offer, the agent might well suggest for example, that he continues to actively market the property until appropriate reassurance was established.   

Of course, your reluctance to reveal such details at such an early stage of negotiations is perfectly understandable. However, the sale is unlikely to go anywhere until you do – except on the kind of conditional basis above.

building their own property is the ultimate dream

The best piece of advice where land is concerned is - think very carefully about it!


For many people, building their own property is the ultimate dream and it can be extremely satisfying. It can even be relatively cost effective; however there are a number of potential pitfalls.


Employing an architect and project manager to handle the whole thing on your behalf can be pretty expensive. Alternatively, you could tackle things all on your own but do bear in mind that dealing with planning and building control departments and coordinating builders, suppliers and public utilities has the potential to turn into a real-life nightmare.


If you are one who thrives on this sort of challenge, your first step is to track down a suitable piece of land. That in itself is no easy task - after all, we live on a fairly small, crowded island.


Some estate agents – although by no means all – do deal in land. Alternatively, there are a number of websites these days that specialise in this area. Nevertheless, you need to bear in mind that buying land without planning permission can be a huge gamble – while conversely, land which already has planning permission is obviously going to come with a higher price tag.

Generation Rent is a popular term used to describe young adults, normally between the ages of 18 – 35, who live in rented accommodation because of high house prices. They are generally regarded as having little chance of becoming homeowners. However, how do the UK’s Generation Rent compare to others around Europe?

In November 2017, Countrywide data showed that an average of 7.6% of homes listed to let had previously been listed for sale, which in turn has led to an increase in people renting in the United Kingdom. However, in Europe, Germany leads the way when it comes to the percentage of the population living in a rented dwelling, with a huge 54.3%.

We’ve recently seen dynamic changes on the residential property market across Europe, with the average square metre cost of a property varying significantly. The United Kingdom still has the highest per square metre average transaction price in Europe of €4,628, despite a decrease of 9.0% due to the pound’s depreciation. This in turn has made it hard for new buyers to get onto the property ladder.

Comparing the average cost of 4,628 EUR/m2 in the UK to other nations in Europe, you can get more space for the equivalent value elsewhere. This leads to higher rental costs, once the properties find there way onto the rental market.

Back in the UK, we saw the average rental cost increase by 2.55% between August 2016 and 2017, with the South East being the only region to become more affordable with a percentage decrease of -0.2% in rental costs.

In the previous 10 years, the increase in house prices has outpaced the rise in average salaries. This has led to first time buyers not being able to raise a deposit to purchase a property, which has led them to rent.

However, research from the Yorkshire Building Society has shown that buying a home in Britain has become more affordable across 54% of the country over the past decade (07-17).

Proposed increase on amount of tax paid on limited company BTL dividends

If you have a buy-to-let property business in a limited company, the Office for Tax Simplification (OTS) is proposing some big changes that could increase the amount of tax paid on dividends.

On 25th May, the independent office of HM Treasury, recommended the changes as currently the tax paid on dividend income is less than other income sources.

The OTS gives the government advice on how to simplify the tax system and as currently they described dividend tax calculations as “complex” so they are proposing dividends should be taxed at the same rate as income.

Its report stated: “A more radical option would be to end the differential tax rates for dividend income. If all taxable income was taxed at the same rates, it would not matter how the personal allowance was used.

“Making this change would have the effect of increasing the amount of tax due from those who receive amounts of dividend income above the allowance. It would also impact on the taxation of profit extracted as a salary or as a dividend, from family owned companies.”

Currently, basic rate tax payers pay 7.5% tax on any dividends received, if they exceed the £2,000 allowance. Higher rate tax payers it is 32.5% tax and additional rate tax payers pay 38.1%. If the change is implemented, these amounts would increase by 20%, 7.5% and 6.9% respectively. For the basic rate tax payers, that is an increase in tax payments on limited company properties dividends by 125%.

Agricultural Occupancy Condition


Effectively, it means that the property can only be occupied by someone who currently works in - or is retired from - agriculture (or related rural industries such as horticulture and forestry). So, while there would be nothing stopping you buying the property, you couldn’t actually live in it!


AOCs are in fact very common - they originate when a planning application is submitted by someone like a farmer, who wants to build a house on what is otherwise agricultural land, either for his own use or for one of his workers. Ordinarily of course, such applications would be turned down, since there is a general presumption against allowing residential development in open countryside. However, they may be granted - with an AOC - if it can be proved that there is a special need. Since this is a local rather than a national planning matter, the precise nature of the AOC will vary from place to place. So, someone who works for a fencing contractor, for example, may be acceptable in one area but not in another. 


Unsurprisingly, with strict limits on who can occupy such a property, the impact on selling prices can be significant – hence why the property you’ve seen looks like such a bargain! 


Most Local Authorities are very reluctant to revoke AOC’s – if only to stop speculators buying up rural properties on the cheap with the aim of making a killing by selling them on later at the full market price. Even where councils are prepared to consider it, they certainly don’t make it easy - the current owner might first have to go through a full marketing exercise, perhaps for a year or more, in order to prove that there is no market for the property encumbered.


So, all in all, even if it sounds like a bargain, a property with an AOC is still not likely to be all that cheap and as a buyer without any agricultural links, you should tread carefully.  

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