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Our Latest News

 

 

 

 

25Feb

Often, we feel like we have to compromise on space to find a home in the most desirable locations. Sure, when it comes to living in more lucrative postcodes, especially city based ones, the properties tend to come in smaller packaging.

But there’s no need to worry because we have come up with a selection of simple tips that will instantly transform little to large.


Keep your home tidy

This is by far the most important rule - mess and clutter make even the largest of rooms feel smaller. The good news is that small spaces are usually easy to maintain, so there’s no need to spend hours sweeping and polishing.

Choose clever furniture

Opt for furniture that is proportionally suitable to the size of your apartment or house. By choosing furniture on legs, you can bring a sense of lightness to rooms. Make sure you leave a gap between the furniture and walls to create breathing space.


Paint your walls light
It’s no secret that painting walls in pastel shades helps to optically enlarge rooms but there are some other techniques you can also use. Try using darker shades lower down and lighter shades higher up to give a room added height. You can help your furniture to blend in by painting it the same colour as your walls.

Use vertical space

Think shelves, ceiling storage and assortment of holders. You’ll find a wide range of innovative ideas for creative storage options using walls, doors and ceiling room online. Think outside of the box and utilise every bit of space available – but be careful to avoid clutter and make sure all storage blends in with the decor.

Go heavy on glass
If used wisely, glass can completely change the dynamic of your interior. Opt for a glass coffee table or a glass bookcase in your living room to optically declutter the room. Mirrors also work great to bounce natural light around the room.

Create focal points
Arrange the rest of your décor based on a few focal points to draw the eye around the room. Often, this will help you gain a whole new perspective and you’ll notice details that might otherwise have a negative impact on the overall look of the room.



Work with natural light in the kitchen
Dress your windows with cream coloured blinds so you can let the light in during the day. Shiny material for your surfaces works especially well to reflect light. Consider buying granite or stainless steel worktops and glossy floor tiles to create an airy and spacious feel.

Personalise you space
Decorating your living room with items such as furry rug, vibrant cushions or a cosy throw will give the room that unique touch and highlight multiple areas in a room. Buy every piece with you and your daily routine in mind to avoid getting carried away and creating clutter.

Follow the cantaloupe rule
Only display items that are larger than a cantaloupe melon and instead opt for a few statement pieces as these help avoid a busy look. Avoid small, elaborate patterns that can create the impression of a clutter and instead, opt for plain fabrics or bold prints. It’s also a good idea to leave some shelves and surfaces empty.



Invest into expandable dining table  
A quality expandable dining table is a must for anyone with a small home, yet a big social life. It fits perfectly into a tiny kitchen but you will definitely welcome the table’s ability to stretch when having family and friends round for a dinner party.

25Feb

There are many reasons that you might find yourself needing to sell up and move fast. Maybe you’ve already bought your next property, or you need to release the equity for financial purposes. Perhaps you need to move quickly for personal reasons or you’re starting a new job in a few weeks and need to get organised.

So how do you sell property quickly and can you really sell your home in 48 hours? There’s no sure formula that will definitely sell your home within a couple of days, but the following tips will help make your home more appealing so you can find that buyer sooner rather than later.


Price
Make sure your property is reasonably priced and go for the valuation that seems most realistic. When you invite estate agents round for valuations, tell them you want to sell quickly so they can value your property accordingly. And ask them to explain their valuation so you can carefully consider which one you're most confident in. But be careful of under-valuing your property – this could make buyers question what’s wrong with it and actually put them off.

Research your estate agents
Don’t just choose your estate agent based solely on the valuations. Do some research and find out if they have a strong track-record of selling homes like yours. Pay them a visit too, and speak to them about how they can market your home effectively. This way, you can be confident that they’ll do everything in their power to sell your home fast.

Get talking to your solicitor now
By getting the ball rolling with the solicitors now, they can start making preparations so you’re ready to complete quickly once your property has sold. Remember, you can’t hand over a property until all the legal issues are sorted, so make this a priority.

Hand the notice to tenants
If you have tenants, hand them the notice so they can make preparations to leave. If you’re struggling to sell with your tenants still occupying the property, consider taking it off the market until it’s empty. Then you can then give the property a quick once over and repair any damage, making it much more appealing to a wide range of buyers including families, single professionals and investors.

Start packing before you’ve sold
By starting the packing process in advance, your property will look less cluttered and personalised, making it more attractive to buyers. Plus, you’ll be in a good position to move quickly once you’ve sold.

Make your house look appealing from the outside
Kerb appeal really is important. In fact, according to Barclays Mortgages, the majority of house-hunters take just 10 seconds to decide whether they like a property from the outside. So make it look as attractive as possible by painting the front door, trimming any trees or bushes, power-washing the driveway, and investing in a couple of pretty plants to stand by the front door.

Make sure the photos are beautiful
It’s essential that you get people through the door for viewings, so have professional photos taken. These will make your property look enticing on your estate agents’ website, the national portals and social media so it catches peoples’ eye.  

Be available
Make sure the property is free for viewings throughout the day. Handing the viewing responsibility over to your estate agent means it’s all taken care of while you’re away from the house. Sometimes, this might be inconvenient, especially if you have children, but it will really help your house to get snapped up quickly.

Get your pets looked after
According to AOL, 53% of people are put off houses because of bad smells, and pets can be one of the strongest odour creators. Consider booking them into kennels, catteries or boarding services so they are away from the house for a couple of weeks, or ask friends and family to look after them. If this isn’t possible, try and take them with you during scheduled viewings so they are out of the house. Alternatively, hide away all beds and blankets they have been sleeping on and give your home a huge deep clean to help eliminate the smell.

Move your car
If you have a parking space, make sure it’s empty during viewings so it’s easy for your buyers to park. This will help make the viewing experience a positive one and give buyers a welcoming first impression of your home. If the parking is for residents only, contact the council and ask if they are able to send you some visitors’ permits. You can give these to your estate agent who can hand them to your buyers during viewings.

22Feb

It’s a classic question: should I sell my current home before buying my next home? There’s no straightforward answer to this complex dilemma. A great deal of your decision depends on your situation and how quickly you need to move.

We’ve created a list of pros and cons to help you decide which option is best for you. Remember, there’s no correct way of approaching the property market, and keeping your options open means you won’t miss a valuable opportunity.


Selling first - The Pros

The Power of Negotiation – By selling first, you have the advantage of time and, therefore, you shouldn’t have to lower your asking price in order to sell quickly.  

Strong Buying Position – When it comes to buying, you will be in a strong position as you can move quickly. This is often attractive to those who are keen to sell, which allows you to negotiate a competitive price for the property. You’re also in a favourable position to other buyers and this can help you to secure your dream home if you’re in competition.

Knowing your Costings – Once you’ve sold your home, you know how much you can afford to spend on your next property. This can make your property search much more practical and straightforward.

Selling first - The Cons

Missing your Dream Home – If you concentrate on selling your home first, you could let your dream home pass you by. It’s advised that you keep your eyes open for properties coming to the market while you’re selling to avoid missing out on that ideal home.

Priced Out – If house prices are rising, you might be disappointed with the houses that you can afford once you’ve sold. Use the expert market knowledge of your estate agent so you can stay on top of the market and avoid getting priced out.

Renting – In order to keep your buyer, you may have to move into rented accommodation and put some of your furniture into storage if you haven’t bought your next home. This can be costly, but it puts you in a strong position when you want to make an offer on your next property.  

Buying first - The Pros

House Viewings – With no pressure to move out of your existing home, you can enjoy the buying process and take the time to look into different areas and houses.

Secure your Dream Home – If you’ve found your dream home, it can be a good idea to buy first to secure the property while you have the opportunity.

Rising House Prices – If house prices are rising, you can buy a property while it’s still in your price range and avoid getting priced out of the market.

Buying first - The Cons

Quick Sale – You may have to accept a lower offer on your existing property in order to sell your home in time.

Two Mortgages – Buying first could leave you in the precarious financial position of having to pay two mortgages at the same time if your current home doesn’t sell quickly enough. You could get a bridging loan to cover the transition but be aware that rates can be high. Another option is to rent out your existing home, but this gives you the added pressure of being a landlord whilst trying to move.

21Feb

From next month, important new regulations are coming into force that all businesses, including estate agencies, need to be aware of and adhere to.

There is a growing focus on money laundering, and HMRC has been increasingly strident in their approach to compliance. Fines imposed on estate agents have been as much as £169,000, and our own Park Lane office has recently been inspected.

This new requirement is part of the government’s drive to increase transparency and trust in UK companies, whilst at the same time tackling crimes such as terrorist financing and money laundering.

Here is a brief guide to the new legislation:

What are the latest changes?

From 6 April 2016, most UK companies and limited liability partnerships (LLPs) will be required to keep and maintain a new register – a register of persons with significant control (PSC) over the company or LLP.

Companies and LLPs will need to keep this information internally from 6 April 2016 and will need to file this information at Companies House from 30 June 2016 – either as part of the new annual confirmation process (which will replace the annual return in June 2016) or on a new incorporation.

What is a PSC register?

The PSC register will identify and record people who have significant control over the company/LLP and contain stipulated information about them.

In summary, companies and LLPs will need to:

keep an internal register of their PSCs from 6 April 2016

take reasonable steps to identify those persons who should be registered on the PSC register

enter the required information on the PSC register - and keep this information updated

make the PSC register available for public inspection free of charge or provide copies on request for an optional flat fee of £12

file information about their PSCs at Companies House (as set out above) from 30 June 2016 onwards

PSCs will be under a corresponding duty to notify the company/LLP of their interest.  Failure of the PSC or the company/LLP to comply with these duties is an offence.  And if a relevant person fails to respond to a company’s requests for information, this may eventually result in the company being able to apply restrictions (for example restrictions on transfer) on the affected shares. 

All companies must keep a PSC register – even if they have no PSCs or the process of investigating who may be a PSC is still ongoing. The PSC register can never be empty - and there is prescribed wording to be included depending on the specific circumstances.

Who is a PSC?

Very broadly speaking, a person is a PSC if he/she:

1. holds, directly or indirectly, more than 25% of the nominal value of the company’s issued shares;

2. holds, directly or indirectly, more than 25% of the voting rights in the company;

3. holds the right, directly or indirectly, to appoint or remove a majority of the board of directors of the company;

4. has the right to exercise, or actually exercise, significant influence or control over the company; or

5. exercises or has the right to exercise significant influence or control over a trust or firm, which itself meets any of the above conditions.

The test for LLPs is very similar but is amended to reflect their different ownership structure. 

What do you need to do?

Based on what is currently known, it is likely that at the very least a company/LLP will need to contact its shareholders/members to ask them to confirm or provide details to enable completion of the PSC register. Both the Regulations and statutory guidance are still in draft form at this stage, so it is probably best to start your compliance process by considering whether you have any potential PSCs and possibly what procedures you will need to put in place in order to ensure you take 'reasonable steps' to identify them.  

For companies/LLPs with a simple ownership structure, this should not involve too much additional work. 

What information is recorded? 

Personal information:

For individuals on the PSC Register, certain personal information will need to be disclosed including name, service address, nationality, date of birth and usual residential address. The Act and the Regulations contain safeguards on how this personal information may be used and disclosed. 

An application may be made to Companies House to omit material from the public register or to prevent disclosure of PSC Register information. However, this will be limited to circumstances where there is a serious risk of violence or intimidation towards a registrable person or someone who lives with them. There will be no protection afforded for cases of commercial sensitivity or confidentiality.

A key point to note is that from 6 April 2016, a company's PSC Register must not be blank.  

How will the PSC Register be made available to the public?

A company's PSC Register will need to be kept at its registered office (or other inspection address) and be available for public inspection in the same way as for the register of members. The information on the PSC Register will also need to be confirmed to Companies House at least every 12 months and will be held by it on a publically searchable database. In addition, from June 2016 companies will be able to elect to keep their PSC Register (as well as other statutory registers) at Companies House. 

Companies will also be obliged to provide free access to the PSC Register and copies of it to any person on request for a flat fee of £12 per copy.

Duties and penalties

The new legislation will impose clear and unequivocal obligations both on companies and on persons with significant control.

Companies must take reasonable steps to identify those persons and legal entities which should be included on its PSC Register and must keep it up to date. If companies do not comply with their duties in relation to the PSC Register, they, and their directors, face criminal liability.

Registrable persons (PSCs) and legal entities must respond to notices and provide information, or volunteer such information where the company doesn’t contact them. Failure to respond to a company’s request for information will entitle the company, effectively, to freeze their interest until compliance. This may lead to a loss of dividend, voting and other rights while the interest is frozen.

Where to find the new rules and guidance

The rules are to be implemented by the insertion of a new part 21A and schedules 1A and 1B into the Companies Act 2006 ("Act") with the detail surrounding certain provisions being contained in The People with Significant Control Regulations 2016 ("Regulations"), the final draft of which can be found here. 

In addition, The Limited Liability Partnerships (Register of People with Significant Control) Regulations 2016 here apply the provisions to LLPs. 

The most up-to-date versions of these can be found on the Government website here.  

In addition, we are also expecting the Government to publish non-statutory guidance aimed at assisting PSCs in understanding their obligations under the new law, but this has not been made available yet.

What issues may there be with the PSC Register?

The major issue facing companies and LLPs required to keep the new PSC Register will be putting in place the internal processes necessary to enable them to compile and maintain the register and, where this has not already begun, companies should start this process now.

The way forward

Because full guidance on “significant influence or control” is not being made available until October, the full impact on businesses is currently unknown. However, given the short timescale to proposed implementation, companies should take steps to ensure they will be able to comply in time.


03Feb

Remortgage borrowing on the rise


The latest figures from the Council of Mortgage Lenders showed that lending had increased substantially year on year.  That applied across the board for first time buyers, homemovers and remortgage borrowers alike, reflecting the continued improvement in the mortgage market. 

The annual increase in remortgage borrowing was up by a whopping 36%, a clear sign that borrowers are taking advantage of the competitive rates currently on offer.  In fact it amounted to the highest volume of remortgage loans in November since 2011.

The level of competition in the market is only likely to increase, which is great news for borrowers as lenders fight hard for their business.  As a result, rates have been driven down and have improved across the board, not only for those with a large slice of equity in the property.  

It therefore makes sense for borrowers to keep their mortgage under review, especially when it is likely to be the single biggest outgoing for most households.  Shaving the rate on a mortgage could equate to a saving of thousands of pounds per annum.  

Borrowers can choose from a wide range of product types so may also take the chance to plan ahead for the day when interest rates start to climb.  Fixing the mortgage rate will mean that they know exactly where they stand for a period of time.  Those that feel rates will remain low for longer and can deal with an increase may prefer a variable or tracking rate.   

However, it is important to factor in any costs associated with the switch as fees can mount up and eat into the potential savings. There is a huge range of deals on the market though and many lenders offer help with switching costs.  

For some borrowers, a slightly higher interest rate with lower or even no fees will offer better value so it makes sense to shop around.  Advice tailored to your individual circumstance and requirements will help navigate the mortgage maze to find the best deal for you.


Guild Mortgage Service, Provided by London & Country Mortgages

YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

The FCA does not regulate most Buy to let mortgages.

03Feb

Mortgages for the self-employed


Within the mortgage market, lending criteria has tightened enormously over recent years, focusing heavily on ensuring borrowers can prove affordability, both now and in the event of a rate rise. All applicants are subject to the same affordability checks and are required to provide evidence of their income for underwriting purposes, but for the self employed this can sometimes prove difficult.

While an employed applicant can confirm their income using payslips and P60s, the self-employed will often need to provide 2 to 3 years worth of full accounts or self assessment returns (SA302s) from HMRC. This can be particularly tricky however for someone who has changed to a self-employed status more recently. 

One such couple approached the mortgage service for the Guild of Professional Estate Agents, looking for advice on purchasing a new property. Both were sole traders, but applicant 2 had only made the transition from employed to self-employed when the couple relocated in 2013. After carrying out a range of non-contracted work from ad-hoc clients, she began a rolling contract with a consultancy in 2014, and as a result could only provide 1 year’s worth of accounts. 

Despite their limited proof of income, the couple’s mortgage adviser was able to place the applicants with a smaller, more specialised lender, who would consider a minimum of 12 months trading history.

They decided on a fixed rate deal, allowing them to secure their mortgage payment for the first 2 years, while also giving them time to build up their accounts further and have access to a wider range of lenders when their deal comes to an end. 

Although there is often an assumption that securing a mortgage if you are self-employed is almost impossible, there are options available. As can be seen here, getting advice from a mortgage broker can be invaluable when it comes to finding a lender with the most suitable approach to underwriting. 


Guild Mortgage Service, Provided by London & Country Mortgages

YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

The FCA does not regulate most Buy to let mortgages.


03Feb

LAND REGISTRY DATA: NOVEMBER 2015 (released 30 December 2015)

The headline statistics of the November 2015 Land Registry report on house prices are identical to those reported for October, the monthly increase in average house prices across England and Wales being 0.4 per cent and the overall annual price change 5.6 per cent. 

Regionally, the highest monthly increase was seen in London at 1.6 per cent, followed by the North East at 1.3 per cent; prices decreased in the West Midlands, East Midlands and Yorkshire & The Humber with falls of 0.3 per cent, 0.7 per cent and 0.9 per cent respectively.

The average house price in England & Wales now stands at £186,325 and in London at £506,724. London saw the highest annual change in prices at 11.2 per cent, followed by the East at 9.8 per cent and the South East at 8.0 per cent. The lowest annual increase was seen in Yorkshire & The Humber and the North East, both at 1.3 per cent, but no region experienced a fall. Reversing last month’s statistics on property types, detached properties showed the highest annual increase at 5.8 per cent, while the lowest increase was seen in terraced properties at 5.2 per cent.

In greater detail, ten counties and unitary authorities saw an annual fall in prices, the greatest being Hartlepool at minus 2.5 per cent; Reading again experienced the highest annual rise at 16.2 per cent. The strongest monthly growth was seen in Merthyr Tydfil with an increase of 3.5 per cent, while Ceredigion had the most significant monthly drop at minus 3.3 per cent. Eight counties and unitary authorities saw no monthly price change.

Of the metropolitan districts, Knowsley again showed the largest annual price increase at 11.2 per cent; six districts saw a fall, the greatest being Barnsley at minus 3.7 per cent. South Tyneside experienced the highest monthly price increase at 2 per cent, while Sunderland saw the greatest monthly fall with a movement of minus 2.1 per cent.

Of the London boroughs, Hillingdon had the highest annual price rise at 14.4 per cent, while Kensington & Chelsea saw the smallest annual increase at 0.3 per cent. On a monthly basis, Barking & Dagenham showed the highest increase at 2.2 per cent. Richmond upon Thames and Kensington & Chelsea experienced monthly falls of minus 0.3 per cent and minus 1.4 per cent respectively. 

The volume of properties sold in September 2015 was 8 per cent lower than a year earlier in England and Wales and 13 per cent lower in London. Over the same period, properties sold for more than £1 million across England and Wales as a whole increased by one per cent but fell in London by two per cent. 

Month on month, the total number of properties sold across England and Wales fell from 74,596 in August to 72397 in September – a decrease of 2.9 per cent. The number of property transactions from June 2015 to September 2015 averaged 79,315 per month, compared to 83,095 over the same period a year earlier.


03Feb

ECONOMIC NEWS: December 2015/January 2016


At its December 2015 meeting, the Bank of England’s nine-member Monetary Policy Committee again voted by eight to one to hold the UK interest rate at 0.5 per cent amid expectations that inflation will remain low after a sharp fall in the oil price and a levelling off in wage growth. The Bank maintained its view from November that inflation would not exceed one per cent until the second half of 2016. Meanwhile, interest rates for millions of UK savers have sunk to a new low with the average rate on Individual Savings Accounts (ISAs), for example, falling from 0.99 per cent in November to 0.85 per cent in December.

Later in December, the US Federal Reserve voted unanimously to raise interest rates by 25 basis points to between 0.25 per cent and 0.5 per cent – the first rate increase there since 2006. However, it is widely believed that the Bank of England will not follow suit when it meets again in mid-January. 

The Bank of England’s annual survey of 6,000 households compiled by NMG Consulting and published in December 2015, suggests that households ‘appear a little better placed to cope with an increase in interest rates than a year ago’; it also found that the share of mortgagors with high debt servicing ratios had fallen close to an historic low. However, it warned that some households, whose finances were especially vulnerable to a rate hike, might suffer from continued cuts in state spending. The Bank also released figures showing that unsecured debt in November 2015 had reached £2,759 per household, excluding student loans; one reason for this high figure is believed to be the current popularity of car loans – car sales reached a record level in 2015, when, according to the Society of Motor Manufacturers and Traders, some 2.63 million new vehicles were registered.

According to a Trade Union Congress (TUC) survey, published in early January, the proportion of household debt is at its highest for five years. Based on data from the Office of National Statistics (ONS), which includes student loans but excludes mortgages, the average UK home owed 26.5 per cent of its annual income on loans and credit cards in the third quarter of 2015, the highest proportion since 2008. The average amount owed by households is £11,800, the highest level yet. However, debt was proportionately greater in 2008 at more than 30 per cent of household income. 

In addition to low inflation, another factor that keeps the lid on UK interest rates is the current strength of the pound, particularly against the euro, which makes imported goods cheap. However, in early January, the ONS reported that the UK’s trade deficit in goods and services had narrowed in November 2015 after the value of oil imports fell; the three-month figures also showed a narrowing in the trade deficit, down £1.0bn from the previous quarter. 

In a speech early in the New Year, Chancellor George Osborne warned that 2016 is likely to be one of the toughest since the financial crisis; this assertion contrasts with the positive tone of his Autumn Statement, when he said that the UK was ‘growing fast’

03Feb

Consultation on Stamp Duty for Additional Properties Launched


The Chancellor announced in the Autumn Statement that the purchase of additional properties would attract an additional surcharge of 3% on the applicable Stamp Duty rates from April 2016.  The reason given was to give first time buyers a greater chance of competing against those buying an additional property such as a second home or a property to let. 

The Treasury has now published its consultation document which gives more detail on the proposed implementation.  Below we outline some of the key elements, although it must be stressed that the full rules will only be confirmed following the consultation.

When will the higher charges apply?

The new surcharge will apply to the purchase of any additional properties that complete on or after 1st April 2016.  It proposes that if contracts were exchanged on or before 25th November 2015 but the purchase completes on or after 1st April, the higher rates will not be applied.  That could apply to a situation such as the purchase of a new build property where contracts were exchanged long before completion. 

What if I am buying a new main residence?

The use of the property is not generally the determining factor but if a homebuyer is purchasing a replacement for their main residence they may not be liable to the higher rates, even when they will own more than one property following the purchase.  

For example, let’s say a buyer owns a couple of Buy to Let properties and their own home but is planning to buy a new main residence.  If they sell their current main residence when they purchase the new home, it’s proposed that higher rates will not apply as they are replacing their main residence.  

If they don’t sell their current home, for example a let to buy situation, then the main residence is not replaced and the new purchase would be subject to the higher charges.

What if I can’t sell my home at the same time as I buy?

The consultation proposes that where a purchase and sale are not simultaneous the higher rate will be charged.  However, if the original property is subsequently sold within 18 months then the stamp duty surcharge may be reclaimed.

Treatment of Couples

The consultation suggests that married couples and those in civil partnership will treated as one unit.  As a result, if the main home is owned in one name only and an additional property is purchased by the other, the higher rate will still apply as together they will own more than one property. 

Buying for a Child

If a parent helps their child to buy a property and is a joint owner then the higher rates would apply.  That would be avoided if the parent acted as a guarantor and was therefore not a joint owner.

Bulk Purchase

The consultation seeks opinions on how large scale investors, who can have a positive impact on housing supply, should be treated.  For example the consultation asks whether those making a bulk purchase of 15 properties or more should avoid the higher rates.

Purchase by a company 

It’s proposed that even the first purchase by a company or collective investment vehicle will pay the higher rates.  This is designed to prevent the use of companies to avoid tax that would otherwise be payable.

It’s clear that while the new stamp duty regime will hit landlords first and foremost there could also be consequences for others.  However, it’s important to underline that all of this is still under consultation so there could be further changes to come yet.  


Guild Mortgage Service, Provided by London & Country Mortgages

YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

The FCA does not regulate most Buy to let mortgages.

03Feb

Base rate to stay low longer. Again.


Over recent months expectations of a rise in Bank of England Base Rate had started to grow, with many commentators forecasting a rise this summer, and some suggesting it could come rather earlier.

This would be the first move in Base Rate since it fell to 0.50% in March 2009, and the first increase in 9 years.  As many noted, that could be a disturbing prospect for many thousands of new homeowners who’ve never experienced an interest rate rise.

The good news for those people is that in a recent speech, the Bank’s Governor Mark Carney has again suggested that first rate rise is still some way off.

He was at pains to stress that the Monetary Policy Committee’s (which sets interest rates) primary concern is to control inflation.

With Base Rate at just 0.50% the expectation is that, as inflation starts to grow, interest rates can be increased gently to stop it running too high (if we have to pay more for our mortgages, we’ll have less to spend on other things and retailers can’t hike prices as they otherwise would!).

The problem, as far as returning rates to a more “normal” level is concerned, is that inflation has remained stubbornly low and largely for reasons well outside the Bank of England’s control.

In recent years it’s been Europe, and specifically Greece, causing uncertainty. With the European crisis apparently over, or at least dormant, a recovery under way at home and America finally confident enough to increase rates to 0.50%, it felt like the time was approaching when we could contemplate a similar move.

That has all turned on its head in a remarkably short time. The combination of drastically falling oil prices and the slowdown in China (with its knock-on effects in commodities, industrial goods, and our own steel industry) has returned us to an uncertain world with a weaker outlook. 

As Governor Carney said, with a nice turn of phrase, “Last summer I said that the decision as to when to start raising Bank Rate would likely come into sharper relief around the turn of this year. Well the year has turned, and, in my view, the decision proved straightforward: now is not yet the time to raise interest rates.”

The first rate rise seems deferred again, but it will come sooner or later. Homeowners have a little longer to prepare and hopefully put the petrol-pump savings to good use.


Guild Mortgage Service, Provided by London & Country Mortgages

YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

The FCA does not regulate most Buy to let mortgages.

14Dec

Remortgage – time to review

As we enter Autumn, lender focus turns to the end of year and building pipeline business for the New Year.  Those that have perhaps not managed as large a volume of business as they would like will be eyeing their year end target nervously.

Not all lenders’ financial year will be the calendar year but those that are eager to get more business on the books before Christmas need to act now.  As a result it’s not unusual to see lenders make a final push to attract customers. 

There is often particular attention on remortgage business as that can typically be quicker to reach completion than new purchases.  This year is showing no signs of bucking that trend and many lenders have been repricing their mortgage rates recently.

The market remains very competitive and cutting rates is a good way to grab the attention of borrower’s.  That has also been helped by a calming in funding costs as the threat of an imminent rate hike has eased.  As a result rates have dropped back after having nudged up a little in recent months.

It’s therefore a very good time for borrowers to review their mortgage and see if there could be an opportunity to cut their monthly cost.  The headline interest rate is only part of the picture though and borrowers need to be sure to consider overall value.

Some of the lowest rates can carry big set up fees which can quickly erode the savings.  However, most lenders will offer a variety of options with different rate/fee combinations. 

In addition, many deals will come with incentives such as free valuation and legal work or a cashback to help deal with switching costs.  It can therefore pay to opt for a product with a slightly higher interest rate but low set up fees.

What certainly doesn’t pay is apathy and failing to review your deal could be costly.

Guild Mortgage Service, Provided by London & Country Mortgages

YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

14Dec

The Buy to Let Punchbowl

Buy to Let lending seems to be back at the top of everyone’s agenda again. Recent figures from the Council of Mortgage Lenders suggest buy to let has been one of the key drivers of the market recovery since the credit crunch, and claim it accounts for an astonishing “more than 70% of the overall growth in mortgage balances outstanding” in the last five years 

Certainly lenders seem keen to get in on the action, be it new entrants such as specialist Fleet Mortgages or Indian giants Axis Bank and State Bank of India, challengers like TSB and Metro Bank coming into the sector or established names like Santander, Natwest, Virgin Money and Leeds BS substantially improving their offering.

More new lenders are said to be on the horizon and competition is increasing all the time. Even the big specialists Birmingham Midshires (part of Lloyds group) and The Mortgage Works (Nationwide) have upped their respective games and most recently Paragon subsidiary Mortgage Trust slashed rates by as much as 0.60%.

Why is buy to let booming so much? Ever since the credit crunch lenders recognised there was low risk business to be had in this sector, with better returns than they could get from homeowners.

At the same time, restrictions first on availability of loans for first time buyers, and more recently in affordability assessments, along with continued undersupply of new homes, have made for a thriving rental market – giving confidence to landlords and lenders alike.

With that backdrop, it’s little surprise that the Bank of England and Treasury have been watching the buy to let sector closely. The Bank’s Financial Policy Committee – charged with monitoring the stability of the economy and  where possible heading off potential threats – has been raising the topic for quite some time.

At a recent session of the Treasury Select Committee, Chancellor George Osborne signalled the Bank of England would likely be given powers to intervene in the buy to let market. While there’s no guarantee any intervention would immediately follow, the direction of travel seems clear.

So it looks like buy to let is at something of a crossroads and it could be we’re seeing the last hoorah for a while, before the brakes are gently applied. Or, to borrow the former BoE Governor Mervyn King’s metaphor, the punchbowl can’t be topped up that much further before it gets taken away.

 

Guild Mortgage Service, Provided by London & Country Mortgages

 

YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

 

Most Buy-to-let mortgages are not regulated by the FCA

14Dec

Securing a deposit

Despite a climate of record low interest rates and ever improved deals for borrowers over the last 12 months, First Time Buyers still face a range of challenges when it comes to getting onto the property ladder, the biggest of which is building up a large enough deposit.

 

Figures from the Office of National Statistics, published in The Times this month, showed that the average price of a First Time home is now around £215,000, so even those aiming for the minimum 5% deposit will need a significant level of savings.

 

The launch of the new Help to Buy ISA on 1st December should provide a useful option for those looking to save. It allows for an initial deposit of £1,000 plus £200 per month thereafter. The Government then provides a 25% uplift on the money saved, to a maximum of £3,000.  While hitting the required amount for a deposit may still seem out of reach, this type of account provides a welcome boost for potential buyers.

 

For many First Time Buyers however, using their own savings will not be enough, and it is for this reason that cash gifts are still the most common way that the ‘Bank of Mum and Dad’ can help. Most lenders are happy with this as a source of deposit, as long as it can be confirmed in writing by the parent. Bumping up the deposit from 5% to 10% also opens up a much wider range of mortgage deals with lower interest rates.

 

Further options exist for parents who want to help without physically parting with their savings. Some lenders allow money to be held in a separate savings account, allowing parents to keep their savings in their name, while still providing the additional security needed and often securing a better rate.

 

While getting a deposit together can feel like an uphill struggle at times there are options available, and with some financial discipline and planning, stepping on to the property ladder for the first time could become a reality.

 

Guild Mortgage Service, Provided by London & Country Mortgages

YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

14Dec

More support for Help to Buy Announced

The Autumn Statement brought a number of important announcements for homebuyers, not least a doubling of the housing budget to boost the supply of new homes.  Much of the focus is on affordable housing and builds on the 200,000 discounted Starter Homes that have already been pledged.

In addition to the Starter Home Initiative the Chancellor announced Help to Buy: Shared Ownership.  This is expected to number 135,000 homes which will be available to those that want to purchase an initial share of the property, with the option to increase to full ownership as their circumstances change.

Shared Ownership is not a new concept and many housing associations offer it as an affordable way for aspiring buyers to take a first step onto the property ladder.  Different housing associations can apply varying eligibility criteria depending on the target buyer.  The new Help to Buy Shared Ownership properties will not carry any such restrictions, other than qualifying households will earn less than £80,000 outside London and £90,000 in London.

The Help to Buy equity loan scheme has been highly successful in offering an alternative for homebuyers struggling with deposit and affordability requirements.  The scheme has been extended until 2021 and a new variant is to be launched in early 2016.

London Help to Buy will offer a 40% equity loan, double that of the standard 20%, recognising that house prices in London are substantially higher than elsewhere.  Although more detail is due in the New Year it sounds like it will follow the approach of the existing scheme. 

Available on new build property the equity loan is interest free for the first 5 years and available for those with just a 5% deposit.  Assuming it works in the same way, the repayable amount will be the equivalent percentage of the sale price. 

All in all, the Autumn Statement included a number of measures to boost the supply of new properties and hopefully increase the availability of affordable homes.

Guild Mortgage Service, Provided by London & Country Mortgages

YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

14Dec

Long Term Fixed Rates


Expectations for an interest rate rise may have eased over the last couple of months, but even so borrowers are beginning to plan for the future, and think about what it will mean for them when rates do start to edge up.

 

Our clients approached the mortgage service for the Guild of Professional Estate Agents looking for advice when purchasing a new family home. A move up the property ladder meant taking on a bigger mortgage, and with two young children, their main objective was to secure a competitive long term rate and stabilise their mortgage payments for the foreseeable future.

 

After discussions with their mortgage adviser regarding the difference in cost between 2-3 year deals and those over a longer term, the couple decided that a 10 year fixed rate mortgage would fit their requirements.

 

Their intention was to stay in the property for at least that length of time, and they felt that securing a mortgage now while interest rates remain extremely competitive could give them an advantage in the long term, if rates do start to rise. Their mortgage adviser was able to secure a 10 year fixed rate with a high street bank and the family are hoping to move in to their new home before the end of the year.

 

Borrowers must of course be made aware that the majority of long term deals carry Early Repayment Charges for the length of the fixed period. It is therefore important for homeowners to think about any changes in circumstances that are likely to occur over the next decade, and decide whether more flexibility may be required.

 

Most deals are portable, but there is no guarantee that a borrower will meet the lender’s criteria when they come to move.  As a result, being locked into a deal for this length of time will not be suitable for everyone but for the right borrower it could be a good chance to secure peace of mind for the future at today’s rates.

 

Guild Mortgage Service, Provided by London & Country Mortgages

YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

14Dec

House Prices Rise but Regional Gap Widens

Recent figures indicate that UK house prices are continuing to rise.  Nationwide’s house price index showed that UK prices rose by 0.5% in September.  That meant that the annual rate of price growth increased to 3.8%.

The Building Society’s chief economist was encouraged by the modest pick up in house price growth, noting that prices rises were stabilising and somewhat nearer to the pace of earnings growth.

However, there are many that continue to point to the imbalance between the supply of property and the strong demand from buyers.  With fewer properties on the market and plenty of interest from buyers it would not come as a surprise for there to be a continued pick up in house price growth.

The UK wide price increase masks a wide range of regional growth rates.  London in particular continues to see price increases far and away higher than elsewhere in the country.  In fact, Nationwide figures show that the price of a typical home in the capital is now more than twice the UK average.

Far from the rocketing prices of London some areas have shown a slowdown in the annual rate of growth.  To underline how different the growth rate can be depending on location a couple of areas saw a small decline in prices.

The regional variation in prices has led to the divide between prices in the North and South of England reaching a record high.  The third quarter of this year saw prices in the South of England up 8% year on year whilst those in Northern England increased by just 1%.  Putting that into cash terms means that the gap between average prices in the South and North of England has exceeded £150,000 for the first time. 

However, most areas continued to see gains in the third quarter and with the risk that construction activity could lag behind strengthening demand there could continue to be upward pressure on house prices.

Guild Mortgage Service, Provided by London & Country Mortgages

YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

14Dec

ECONOMIC NEWS FOR NOVEMBER 2015

At the beginning of November, the Bank of England’s Monetary Policy Committee voted by eight to one to maintain interest rates at 0.5 per cent. The Bank also signalled that a hike in interest rates has now slipped back until at least the latter months of 2016. At the same time, the Bank produced its quarterly inflation report in which its inflation and growth forecasts were cut.

In the wake of that, The Office for National Statistics (ONS) reported that the UK’s inflation, as measured by the Consumer Prices Index, remained at minus 0.1 per cent in October, which marks the first time that it has fallen on an annual basis for two months in a row since it was created in 1997. The Retail Prices Index, which includes housing costs, fell to 0.7 per cent from 0.8 per cent in September and is the lowest RPI rate since November 2009.

At the end of the month, the ONS confirmed that the UK economy grew by 0.5 per cent between July and September. Although this was a drop from the 0.7 per cent increase experienced in the preceding quarter, it still marked the eleventh consecutive quarter of growth. The slowdown is largely blamed on a widening trade gap and a contraction in construction output of 2.2 per cent.

November closed with The Chancellor’s Autumn Statement, which announced that buy-to-let landlords and people buying second homes will have to pay a 3 per cent surcharge on each stamp duty band from April 2016. The Statement also included an extended Help to Buy scheme in London, which will see buyers who can find a five per cent deposit given a loan worth up to 40 per cent of the property; elsewhere the existing maximum loan is for 20 per cent of the property’s value.

The Statement also reported that the Government is putting £6.9 billion into housing, which includes an extra £2.3 billion in loans for the Government Starter Homes programme and £4 billion lent to housing associations and local authorities to build more homes for shared ownership. The Government also announced a pilot scheme to trial the Government’s Right-to-Buy programme for housing association tenants.

14Dec

Stamp Duty Increase for Landlords and Multiple Homeowners

In the Autumn Statement, Chancellor George Osborne announced a substantial increase in Stamp Duty on the purchase of additional residential properties.  That will therefore apply to situations such as purchase of a property to let out or of a second home.

From April 2016 any such properties will face an additional 3% charge, on top of the existing levy.

This means the new stamp duty structure in England and Wales will look like this:

 

Property Value

Standard Rate

Additional Properties

£0-£125,000

0%

3%

£125,001-£250,000

2%

5%

£250,001-£925,000

5%

8%

£925,001-£1.5m

10%

13%

Above £1.5m

12%

15%

 

Stamp duty is applied only to the portion of the property value falling in that band, similar to income tax.

So while a sole home valued at £300,000 would incur £5,000 stamp duty, if that same £300,000 were an additional Buy to Let property for example, the stamp duty charge would increase to £14,000 from April.

 

Property Value

Standard Rate

Additional Properties

 

Rate

Applied to

Cost

Rate

Applies to

Cost

£0-£125,000

0%

£0

£0

3%

£125,000

£3,750

£125,001-£250,000

2%

£125,000

£2,500

5%

£125,000

£6,250

£250,001-£925,000

5%

£50,000

£2,500

8%

£50,000

£4,000

Total charge

£5,000

 

£14,000

 

Clearly that’s a massive increase in costs so we can expect a flurry of activity as potential “additional property buyers” seek to beat the April deadline.  Anyone thinking about becoming a new landlord or adding to an existing portfolio is bound to be keen to complete the purchase before the new higher charges come into effect.

That could therefore intensify competition for suitable property in the next few months.  From April, however, aspiring first time buyers may find life a little easier as investor numbers ease back. 

 

Guild Mortgage Service, Provided by London & Country Mortgages

 

YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

 

Most buy-to-let mortgages are not regulated by the FCA

05Nov

In early October, the Bank of England’s Monetary Policy Committee held its monthly meeting and voted by eight to one to keep interest rates unchanged at 0.5 per cent. Ian McCafferty was the dissenting voice who voted for a quarter-point rate rise for a third month in a row.

Shortly after, the Office for National Statistics (ONS) announced that construction output fell by 4.3 per cent in August – its sharpest drop since late 2012 – while house-building fell by 3 per cent from July. An ONS official said that the weak construction figures for August may have been linked to wet weather during the month.

In the middle of October, the ONS reported that inflation, as measured by the Consumer Prices Index (CPI), fell to minus 0.1 per cent in September. The chief contributors to negative inflation were falling motor fuel prices and a smaller than usual rise in clothing prices. The Retail Prices Index (RPI) measure of inflation fell to 0.8 per cent in September from 1.1 per cent in August.

More recently, ONS statistics showed that the UK’s Gross Domestic Product (GDP) grew by only 0.5 per cent in the third quarter of 2015, compared to 0.7 per cent in the preceding quarter, and lower than analysts’ predictions of 0.6 per cent. This slowdown in the UK economy resulted largely from a fall of 0.3 per cent in the output of the manufacturing sector in the three months to September; the manufacturing sector has now experienced a decline for three consecutive quarters. Another contributing factor was the biggest downturn in construction output in three years, a drop of 2.2 per cent; nevertheless, the services sector grew by 0.7 per cent.

The maintenance of inflation well below the Bank of England’s target of 2 per cent, coupled with the slowing down of growth in the economy, may suggest that a hike in UK interest rates in the near future is retreating. According to a recent poll of economists by the news agency Reuters, their average forecast of when the Bank of England will start to raise interest rates has been pushed back to the second quarter of 2016 from the first quarter. Meanwhile, the October monthly meeting of the US Federal Reserve has also voted to keep its interest rates unchanged.

05Nov

LAND REGISTRY DATA: SEPTEMBER 2015 (released 28 October 2015)

The September 2015 Land Registry data showed a monthly increase in average house prices across England and Wales of 1.0 per cent. In London, prices increased by 1.8 per cent, well ahead of all other regions; the North East experienced a fall at minus 0.3 per cent.

The overall annual price change now stands at 5.3 per cent, making the average house price in England & Wales £186,553 and in London £499,997. London saw the highest annual change in prices at 9.6 per cent, followed by the South East at 8.5 per cent and the East at 8.3 per cent; the North East was the only region to see a fall at minus 0.3 per cent. By property type, flats and maisonettes showed the highest annual increase at 5.6 per cent; the lowest was seen in terraced properties at 5.2 per cent.

In greater detail, 12 counties and unitary authorities saw an annual fall in prices, the greatest being Darlington at minus 5.1 per cent; Reading continued to experience the highest annual rise at 15.3 per cent. The strongest monthly growth was seen in Newport with an increase of 2.2 per cent, while Merthyr Tydfil had the most significant monthly drop at minus 3.3 per cent. Only two counties and unitary authorities saw no monthly price change.

Of the metropolitan districts, Sandwell again showed the largest annual price increase at 9.1 per cent; three districts saw a fall, the greatest being South Tyneside at minus 2.7 per cent. Knowsley experienced the highest monthly price increase at 2.5 per cent, while South Tyneside and Sefton both saw the greatest monthly price fall with a movement of minus 1.3 per cent.

Of the London boroughs, Newham once more had the highest annual price rise at 13.6 per cent, while only Hammersmith & Fulham saw a fall at minus 0.5 per cent. On a monthly basis, Hounslow showed the highest increase at 2.1 per cent, while Hackney experienced the only fall at minus 0.3 per cent.

The volume of properties sold in July 2015 was 4 per cent lower than a year earlier in England and Wales and 10 per cent lower in London. Over the same period, properties sold for more than £1 million across England and Wales as a whole fell by 9 per cent and in London by 16 per cent. In England and Wales and in London, volume falls were also seen across all price brackets under £250,000.

Month on month, the total number of properties sold across England and Wales rose from 70,404 in June to 81,696 in July – an increase of 16 per cent. The number of property transactions from April 2015 to July 2015 averaged 71,766 per month, compared to 78,330 over the same period a year earlier.