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.

 

 

Cities are making a comeback with buyers and tenants

 

 

The pandemic took a toll on the UK's previously bustling cities, with empty streets and closed down businesses becoming the new norm for many residents.

 

Due to changing lifestyles, it wasn't long before buyers and tenants turned their attention to rural living, with increased enquiries and searches for properties in more remote, tranquil locations.

 

In fact, for most of 2020, demand for rural properties outweighed demand for city properties, with countryside searches on Rightmove up 69%.

 

With the easing of lockdown restrictions and the prospect of the UK getting back to normal, we've now seen that interest reverse once more, with urban living now taking the lead.

 

What are buyers and tenants looking for?

 

From January 2021, flats located in major cities have seen a 39% increase in demand, says Rightmove.

 

This shows a strong contrast from 2020 trends, where ‘larger family homes’ were the most popular choice.

 

But what are the reasons for the sudden switch in demand?

 

As well as the lockdown roadmap, another huge factor behind the spike in interest for cities is the UK's vaccination program and successful rollout, as this has led to optimism for the housing market and consumer spending in general.

 

With a range of stunning properties available with us, why not discover your next home?

 

 

 

 

 

 

Five in-demand factors buyers are now looking for

 

Working and spending more time at home has caused significant changes to people’s property needs.

 

More than a quarter of the UK’s renters and homeowners (26%) have found that their property needs have changed since the outbreak of COVID-19.*

 

 

What are the key changes likely to stay on the priority list now restrictions are easing?

 

Gardens

 

Lockdown has caused a general desire for more space, meaning that many of us are seeking homes near public gardens or green areas.

 

Unsurprisingly, the demand for gardens has also increased by 74% worldwide, with UK buyers making it a top property feature to look out for.

 

 

Accessible Wi-Fi

 

Zoom and facetime have become the key to keeping in touch with loved ones, as well as playing an important role in remote working practices.

 

This means that having fast internet is essential for those looking to buy.

 

 

Natural lighting

 

Being confined to our homes throughout lockdown has given people a craving to create open, natural spaces inside.

 

Velux windows have increased in popularity due to the natural light and improved air quality they provide, whilst high ceilings also give a sense of greater space, and have seen higher search volumes of 15% over the pandemic.*

 

 

Home gyms

 

Lockdown has encouraged people to become more active in their spare time by taking up running and cycling where gyms have otherwise been forced to close.

 

Whilst sporting and leisure facilities have now opened up again, there's still a hesitancy from some previous members about when it is safe to return, making a home gym a staple feature of any home to attract attention from buyers.

 

 

Views

 

Having beautiful views is a big selling point, with balconies also increasingly more desirable now.

 

If you've been holding off on your next move, we'd like to extend our support. Contact us today.

 

 

*Wayhome

 

 

How to avoid mortgage red flags as a prospective homeowner

 

Taking your first step onto the property ladder can seem daunting. There are a number of unfamiliar hurdles and legal requirements on the way to homeownership, but with the right support network, it can be efficient and pain-free.

 

According to recent data, around 35% of first-time buyers have experienced mortgage rejection, with certain brokers and lenders detailing unusual money mistakes as the main factor behind this.

 

 

To give you the best chance at getting approved the first time around, here are the red flags you should look to avoid.

 

Joke references when transferring money

 

What may seem like a joke amongst friends could turn out to be a very costly mistake.

 

Joke references can actually cause a delay in the mortgage process, so be careful and sensible when choosing your reference names.

 

 

Betting or gambling transactions

 

An occasional bet on something like the national lottery won’t have an impact on your application.

 

However, regular betting will be weighed up by lenders, who will decide if you are in a position to comfortably pay your mortgage each month.

 

Serious problems can arise from excessive gambling, but few take into consideration what the repercussions could be when looking to buy a house.

 

 

Making a big splurge purchase or giving money

 

Now, we aren’t telling you to not give money, but lending and spending large sums of money can raise questions from lenders.

 

The same applies to making a high number of purchases in quick succession, even if it is something for your future property, such as furniture.

 

Seeing less money in your bank than usual can cause delays throughout your mortgage process if calculations don’t quite add up.

 

 

Struggling to wrap your head around your mortgage options? Talk to the experts today, contact us for more information.

 

 

 

What is the outlook for the housing market?

 

Compared to this time last year, the value of homes being sold in the UK has practically doubled in the first 15 weeks.

 

During this period, around £149 billion pounds worth of property transactions have taken place, with industry sources predicting this to climb even higher for the rest of 2021.*

 

How busy is the housing market to date?

 

Intense activity has led to there not being enough available homes on the market to keep up with demand, with supply in April nearly 30% below the levels recorded in 2017 and 2019.

 

How has this affected house prices?

 

Annual house price growth was at 4% in March, nearly double the 2.1% recorded for the same period last year.

 

The greatest increases have been seen in the northern regions, in particular: Manchester and Liverpool at 6.5% and 6.3%, closely followed by Leeds, Nottingham and Sheffield with a 5% increase.

 

However, in London – which is the region with the highest average house price – annual growth was only 2%.

 

What could this mean for you?

 

With the search for space remaining a top priority, three and four-bedroom homes are in high demand, with many being sold over their asking price.

 

This means that homeowners selling a family home have been in a prime position to receive offers in record time, often leading to a shortage of choice for those still looking to buy.

 

Are you on the lookout for a new property, or just curious to see how much your home could be worth?

 

Get in touch with a member of our team who will be happy to assist you further.

 

 

*Zoopla

 

How valuable is your garden this summer?

 

With the summer months promising a season of sun and property market surges, we're sharing guidance on how to make your gorgeous garden pay for itself.

 

If you'd like to increase your home's value, spending some time on the outdoor space is a must, with summer buyers and sellers extra vigilant about their green space options.

 

 

Here are a few improvements you can make:*

 

Add a building

 

Potential gain = between 5% to 15% value to your home

 

Over lockdown, many of the country's professional workforce found themselves stuck at home and searching for places to accommodate working from home, opting for a noisy kitchen or dark spare room where no other options were available.

 

For those homeowners and landlords already benefitting from having an outdoor building, many found that they could use that to their advantage to raise the value of their property.

 

Outdoor buildings can be used in many inventive ways, such as an office or gym.

 

 

Letting the outside in with bi-folding doors

 

Potential gain = between 5% to 10% to the property's value

 

Over the past few years, bi-folding doors have become a fashion symbol for homes as their popularity has grown massively.

 

Fewer homeowners have opted for conservatories, instead favouring extensions in other parts of their home to avoid taking away from their gardens.

 

However, as well as opening up the space joining your indoors and outdoors, bi-folding doors can portray your property as an ideal location to entertain guests or host summer events.

 

 

Add decking

 

Potential gain = up to 10% added to the value of your home

 

For those who routinely invite over friends and family members, this feature can give a garden multiple levels and different zones, so don't be afraid to be creative when looking at ways to maximise on space.

 

 

Just a splash of paint

 

Potential gain = 5% or around 12.5k in value depending on the project

 

Whilst at first it may seem like a daunting task, adding a lick of paint to your home’s exterior can make a big difference.

 

 

Are you curious to discover how much your home may be worth? Contact us today.

 

 

 

 *MyToolShed