This month's property update

Mortgage agreements for early 2021 at their highest since the financial crisis

Mortgage approvals have reached a 14-year high, propelled by last year's property market boom.

The Bank of England’s mortgage data from the end of last year shows a 24.2% increase in mortgages agreed compared to the previous year, and at any time since the global financial crisis, with £87.7 billion worth of mortgages agreed.

In Q4 2020, mortgage lending reached £76.6 billion, with a year-on-year increase of 4.2%, whilst the share of mortgages with a low loan-to-value was 4.5% down in a year; the lowest since 2007.

Considering that the housing market was effectively closed for two months in 2020, it is incredible to see that the year ended with more approvals than the one prior.

The value of new mortgage commitments hitting a 14-year high was largely driven by homeowners who looked to move into larger properties and see savings of up to £15,000 from stamp duty tax in the process.

This activity has resulted in the annual growth rate for new mortgage commitments almost quadrupling in Q4 2020.

April should signal a turning point for first-time buyers, who will now have access to 95% mortgage options once again due to government-guaranteed support.

Having been absent until now, it's thought that the return of lower deposit mortgage products will lead to more positive growth for the sector in 2021.

As we head into the popular seasons for home selling, with schools and businesses reopening and the vaccine program continuing to take effect, we'd like to help you with your plans this year.

To learn your property's value, visit our website.

Lockdown helped third of UK homebuyers get onto property ladder

As challenging as the last 12 months have been for all of us, for many different reasons, there have been some positive stories and developments that have emerged during this unprecedented time.

According to new research from Rightmove, a third of UK home buyers have been helped onto the property ladder due to the national lockdown, with 27% of recent home buyers stating that the restrictions actually enabled them to save for their new home.

46% of those asked stated that they were able to get a foot on the ladder, as government 'stay at home' measures meant they drastically reduced their spending across social activities.

A further 33% said that having to work from home has also been a contributing factor to their ability to buy, as money otherwise spent on their daily commute or fuel consumption could be saved instead.

The other findings from this report show that savings were also made from family costs (10%) and moving back with parents or family members to save on rent and share social bubbles (5%).

Whilst it would be safe to assume we're all keen to return to some form of normality once again, it's incredible that the property market has been able to safely continue and help buyers achieve their dream of homeownership in 2020 and 2021.

With further savings available due to the stamp duty holiday extension until the end of June, it's expected that even more residential transactions will occur in the coming months.

To find out how you can get your foot on the property ladder, get in touch with us today.

What you need to know when investing in a buy-to-let property

Investing in a buy-to-let property is a dream that many of us will have at one point or another.

Property has always been a dependable investment option, with successful landlords able to set up their rentals to run like clockwork whilst benefitting from an additional source of income.

Before considering your first step, there are some key considerations to be aware of.

It won’t happen overnight

As much as we would like to say otherwise, having a buy-to-let property doesn’t just happen overnight.

Just like starting a new business venture, there are rules and regulations you need to comply with to protect yourself and your property.

Whilst some of these components can take time to understand and navigate, lettings agents like ourselves are fully equipped to guide you through all of the requirements.

Know the area you’re planning to invest in

It’s important to do your research on the area before signing on the dotted line, such as speaking to local agents about seasonal trends and rental yield opportunities.

Is it a hotspot for rental demand? Are there any attractive amenities, universities or transport links nearby that would appeal to tenants?

Ensure you can afford a buy-to-let deposit

Whilst a standard home can be secured with as little as 5% of the price of the property, a buy-to-let investment is usually much higher.

The average deposit is 25% for a buy-to-let mortgage.

It's also likely that your income will be evaluated, as you need to be earning at least £25,000 a year for most lenders.

Think about your target tenant

It’s important to put yourself in the shoes of a tenant and consider what they would want from a property.

Being a flexible landlord is key to ensure that tenants stay for longer, which is always great news for a landlord as you can minimise on void periods and secure your rental income.

When you have your buy-to-let property ready to market, it is a good idea to position your home based on the type of tenant you’re targeting, such as using the right communication methods to reach them.

For guidance on how to start your buy-to-let journey, get in touch with our experienced team.

Strict new fire regulations for HMOs and multi-tenancy buildings

The Home Office recently announced their intention to increase fire safety measures, stating that landlords of HMOs (House in Multiple Occupation) could face unlimited fines if they fail to comply.

The new enhanced procedures will be included in the future Building Safety Bill, which will be enforced in approximately 2022 and will apply explicitly to HMOs and other multi-tenancy premises.

The exact details are yet to be confirmed, but the government affirm that the act will improve the Fire Safety Order by requiring fire assessments to be recorded for each building.

Additionally, the government have verified that the new legislation will:

- Include the refinement of how fire safety information is accessed and preserved throughout the lifetime of a building.

- Better the quality of fire risk assessments and the expertise of those who perform them.

- Enhance communication and the organisation amongst those responsible for implementing fire safety and making it easier to identify who they are.

- Strengthening enforcement action, distributing unlimited fines to those impersonating or obstructing a fire inspector.

- Reinforce guidance in regards to the Fire Safety Order, which makes it easier to hold those who breach compliance in court.

- Improve engagement between Building Control Bodies and Fire Authorities when reviewing building work.

- Instruct all new flats above 11m tall to install information boxes.

If you'd like to talk about this in more detail, please don’t hesitate to contact us or learn more about our services for landlords.

What to consider when buying a home in the current market

When you're searching for your dream property, somethings never change. Consider this before buying in the current market.

Click here to read What to consider when buying a home in the current market.

Buying a house vs buying a flat in London

If you’re thinking about buying a place of your own, you’ll need to decide which type of property you want to live in.

While the price can often be a huge deciding factor, houses are not always more expensive than flats. Sometimes, choosing between the two depends on other factors.

In this article, we’ll explore the differences between buying a house vs a flat and share our thoughts on the pros and cons to consider.

What are the Pros of Buying a House?

1.   You’ll Have More Control

When you buy a house, you often purchase the freehold instead of the leasehold. With freehold ownership, you have more control over what you can do with and to the property.

For example, you can decorate, renovate or extend your property without needing permission from a leaseholder.

2.   You Should Have Free Parking

Generally, buying a house means you’ll have access to free street parking or (if the property has a driveway) off-street parking. In flats, you often have to purchase a parking space – which can be a one-off or annual cost.

However, be mindful that you may need to pay for a council permit to park outside some houses, especially if it’s near a station.

3.   You’ll Have a Front & Back Garden

Sizing varies, but almost every house has a back and front garden.

This means you’ll need to do more maintenance. But, more importantly, it also means you can enjoy gardening, decorating your front garden, and having access to private outdoor space.

What are the Cons of Buying a House?

1.   You’ll Have More Responsibility

Since you normally own the freehold when you buy a house, you’re responsible for maintaining everything related to the property. This can include upkeep of things like fences, drains, windows, boilers, gardens and the roof.

What are the Pros of Buying a Flat?

1.   You’ll Have Less Responsibility

Even though you still need to maintain your home, most flats offer leasehold ownership. This means that, while you own the flat, someone else owns (and is responsible for) the building.

Within your lease, your ‘landlord’ may be responsible for things like cleaning the windows or arranging costly building repairs.

What are the Cons of Buying a Flat?

1.   There may be extra charges

When you buy a flat, there are normally more charges than a house. For example, you’ll need to pay rent and service charges (which can change annually) to pay for general building repairs.

How to Decide Between Buying a House vs a Flat

Choosing between buying a house vs a flat depends on many factors.

Before you decide, consider the following:

What can you afford?
How long do you plan on living there?
How much responsibility you want
How important is outdoor space to you?
What parking access do you need?

If you need help deciding which option is right for you, we are your local property experts.

Our friendly team are happy to discuss our properties and help you decide which one is right for you.

Steps to becoming a residential landlord this year

People become residential landlords for a variety of reasons.

Often, it’s because someone wants to do more with their savings and sees property as a safe investment with a regular income.

Here are a few things to consider when becoming a landlord if you want to take advantage of the current lettings climate:

1. Furnished or unfurnished

You must decide whether you want to rent out a completely furnished or unfurnished property early on.

If you've inherited a furnished property, the decision may be straightforward. If this is the case, you may find that this appeals to a potential tenant, and you may be able to negotiate a better monthly rent.

If you rent out a property that isn't furnished, you won't have to buy anything for it. Some potential tenants prefer this since they can furnish it with their own belongings and make it their own home.

Don't forget, carrying out an inventory is a smart idea because it will impact your insurance coverage and may help to avoid disagreements at the end of a contract.

2. Paperwork

Being properly organised and up to date with paperwork from the beginning is one of the best suggestions for becoming a landlord.

Having a lot of paperwork can be intimidating, but organisation is crucial.

Not only will this ensure that you are not in violation of any legal obligations, but it will also ensure that you are aware of where everything is at all times. (It's also helpful when doing your accounts or double-checking information.)

3. DIY or use a lettings agency

Using a lettings service to find a tenant and set up the first agreements will relieve you of some stress.

Our lettings experts use their local rental market knowledge to assist our valued landlords in managing their properties. For further information, contact our helpful staff today.

4. Legals & Responsibility

You'll need an up-to-date Energy Performance Certificate for a property before it can be let.

Each gas appliance in the property must have a gas safety certificate, and each property must have smoke alarms and a carbon monoxide detector. Any appliances or furniture must also meet the required safety standards.

There are other regulations concerning a tenant's deposit and how it is held in a government-approved programme. We can help you with any of these if you need support.

For expert property advice and becoming a landlord, contact our team of professionals below.

DIY checklist for selling your home

Selling your home involves an overwhelming list of decisions to make and jobs to tackle.

We find it helps to break things down step-by-step, so we created this simple six-point checklist to get you started.

Organise your finances

Assuming you have ruled out adapting your existing home, it’s time to decide how to manage your money going forward. Factor in your remaining mortgage and whether you’ll incur any charges for paying it off early.

Speak to an advisor to see how much you’ll be able to borrow if you need a new mortgage.

Don’t forget to estimate extra costs associated with moving, such as legal fees, stamp duty, and hiring a removal company. This will give you a better idea of what you can afford.

Get your home valued

Of course, the amount you can pay for your new home will depend on the sale value of your current property. Even if you’ve had a valuation recently, chances are the market has already changed. Hint: we can help with this!

Choose your team

When you invite a few estate agents to value your home, take the opportunity to ask questions to decide who’s the best fit for you.

After picking an agent, you’ll also need to engage the services of a conveyancer or solicitor to attend to legal matters.

Welcome viewers

Before your home goes live, declutter, clean, and fix any glaring issues that might put off buyers.

Consider having your home professionally staged to help viewers understand the lifestyle on offer as soon as they walk through the door.

Deal with paperwork

Keep on top of any paperwork your conveyancer or solicitor sends your way to speed up the sale. You’ll also need to work with them to draft a contract with the buyer and plan the exchange.

Prepare to move

Once you have exchanged contracts, your moving date should be in sight. This is the perfect time to book a slot with a moving company and request time off work if necessary.

You can also inform your utility suppliers about your upcoming departure and put arrangements in place for a smooth transition to your new home.

If you’re ready to book a valuation or discuss your moving plan, contact us below.

Is now a good time to buy a house?

The pandemic has sparked a dramatic rise in house prices across the country, with properties achieving 10.4% more in December 2021 than they did the previous year. * This is mostly due to a smaller supply of desirable homes clashing with greater demand, changing lifestyle trends, lower mortgage rates, and the recent stamp duty holiday.

With the market experiencing such rapid growth, is now the best time to move? While buying is undoubtedly a more expensive enterprise than in pre-COVID times, mortgage lenders are still offering some good deals – especially for those with a larger deposit.

The Bank of England is also considering loosening some affordability criteria in the coming months, helping first-time buyers borrow more. While this could increase your buying power, it might stimulate prices too.

If you’re thinking about moving soon but only have a 5% deposit available, you could take advantage of the Government’s mortgage guarantee scheme, which runs until the end of 2022. Nationwide has recently estimated that a 10% deposit is currently over half of a first-time buyer’s annual income, so the scheme is great news for those struggling to get on the property ladder.

House prices may also slow in growth, but this depends on the impact of the Omicron variant and whether rising inflation, interest rates, and living costs squeeze budgets enough to affect the housing market.

So far, sales have remained strong despite increasing economic pressures. The good news is that spring brings more homes to the market as people look to wrap up a sale before the summer holidays, helping to stabilise prices. Therefore, if you’re looking to buy within the next six months, now might be the perfect time to take the plunge.

Ready to discuss your options? Contact us today.

*Nationwide