3. EES&G Factors

Question 1

What does the housing act 1985 do?

Answer 1

Permits owners to fix the duration of a tenancy and the notice required by either party. It also protects tenants from eviction under certain circumstances and stops tenants from being able to create indefinite rights of occupation.

Question 2

Companies and institutions hold roughly what percentage of UK commercial property?

Answer 2

Almost 75%

Question 3

When interest rates rise, what tends to happen to commercial property?

Answer 3

The price falls

Question 4

Commercial property prices are more volatile and unpredictable, why is this?

Answer 4

The average investment value is higher, meaning there are fewer buyers and sellers.

Question 5

What is in place to prevent short-term property trading in commercial property? (England, Scotland and Wales separately)

Answer 5

England: Stamp Duty Land Tax (excess of £150k)

Scotland: Land and Buildings Transaction Tax (1% 150,001 - 250k and rising to 5% beyond)

Wales: Land Transaction Tax: (1% between 225k-250k and increasing on a sliding scale beyond this)

Question 6

The Gov. try to keep inflation rates beneath what figure?

Answer 6

2%

Question 7

Who sets interest rates and how often do they set them?

Answer 7

The Monetary Policy Committee (MPC) of the Bank of England on a monthly basis.

Question 8

Where does the standard variable rate for mortgages tend to sit in relation to the BoE rates?

Answer 8

Around 1.5-2% higher

Question 9

How soon after the rates are set do financial institutions tend to adjust their rates?

Answer 9

Within a couple of days

Question 10

What do the government reference to set the inflation target?

Answer 10

Consumer Price Index (CPI)

Question 11

What do residential property owners not have to pay when selling a property? (2 answers)

Answer 11

Capital Gains Tax

Imputed Value Tax (common in other countries, tax on the rent saved by owner occupation).

Question 12

What is Inheritance Tax? (IHT)

Answer 12

Tax payable on the estate of a deceased person’s net assets plus any gifts received within the last 7 years.

Question 13

What is the 22/23 threshold for IHT?

Answer 13

£325,000

Question 14

Explain the thresholds of Residence Nil Rate Band (RNRB)

Answer 14

Assets excluded from IHT - this is £175,000 of the deceased’s home from total assets. If the home is passed down to descendants they will have a NRB of £325k plus an additional band of up to £175k Allowing a couple to avoid IHT on up to £1m. (Each parent’s NRB is transferable to the other)

Question 15

What challenges must the gov. social policy address?

Answer 15

Ensure that local people are not priced out by commuters/holiday home buyers

Facilitate labour mobility so that key workers can meet housing needs

Ensure that the special needs of certain groups are addressed

Question 16

How can local authorities support the social policy?

Answer 16

Restrictions on planning permission etc

Question 17

What consequences can arise as a result of a sharp rise in interest rates?

Answer 17

Reduced disposable income for households.

Cuts housing market turnover

Increased borrowers in arrears

Reduced demand = lower house prices

Question 18

Roughly how much does disposable income reduce by following a 1% increase in interest rates?

Answer 18

3%

Question 19

What are some examples of action taken by businesses to support sustainable development goals?

Answer 19

Green mortgages

Support for beneficial enterprise

Reduced support for harmful enterprise

Funding projects related to sustainable energy

Question 20

What are some examples of innovation regarding social factors and the aging UK population

Answer 20

Equity release products

Personal pensions

Income protection/critical illness insurance

FCA Vulnerable customers guidelines

Question 21

What is it now recognised that corporate governance should take into account?

Answer 21

The needs of customers, suppliers, the community and the environment