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More than 4 million people are paying too much for their mortgages by relying on standard variable rates. This is according to L&C Mortgages, the UK’s largest fee-free mortgage broker.
Standard variable rates are typically higher than other mortgage rates on the market, which means homeowners could be overspending by an average of £216 a month, equivalent to nearly £2,600 a year. If interest rates rise in the future, which the Bank of England has hinted is a possibility, then homeowners could see their payment increase even further.
L&C examined a range of data to establish the type of mortgage deals homeowners are on, how much they owe, and the length of their mortgage terms. Using this information, they identified a potentially better rate and worked out the monthly mortgage savings that could be made.
David Hollingworth of L&C Mortgages said: “Not only have we found that more than a third (36%) of homeowners are on their bank or building society’s standard variable rate, but 3.4m people don’t know their mortgage rate. They could potentially save hundreds or even thousands of pounds a year by re-mortgaging to a new deal’’.
The research also looked regionally at how much homeowners are paying on their mortgages. It found households in the capital overspend by the most, typically paying £266 a month more than necessary. Those in the North pay £201 more than needed, while households in the Midlands and the south of England could save £222 a month if they were on a different deal.
Worryingly, the research revealed that a further 1.1m households are effectively throwing away a collective £2.78bn by sitting on the wrong mortgage deal. The average pre-tax income for households with a mortgage is £45,141, with households paying an average of £597 per month. Over a third of homeowners said they can’t imagine a time not having to pay their mortgage, yet over half of UK homeowners (58%) have never re-mortgaged to save money.
David Hollingworth added: “A mortgage is likely to be someone’s biggest monthly outgoing, and in only a few easy steps they could find a better deal. It’s crucial that homeowners regularly review their mortgage, to see how their rate stacks up against the record low rates that alternative deals currently offer”.
The Prime Minister Teresa May has signed Article 50, starting the two-year process for the UK to withdraw for the EU. After uncertainty in the property market after the Brexit vote in June 2016, what will this new development mean for UK housing? The Guild’s CEO Iain McKenzie shares his thoughts.
What changes do you expect to see with the housing market in the future?
If there is to be a change after Article 50, it may be that the market will become more favourable for buyers. It may change the supply and demand of homes, making some properties longer to sell, giving buyers a greater choice.
Will Article 50 and Brexit have a negative impact on home building?
There is some fear in the industry that the 8% of construction workers who are EU Nationals could set back rates of property building. However, the Government White Paper set out clear plans for increased levels of home building and I am confident that the drive to meet house building targets should negate any downturn leading from this.
Will Article 50 increase confidence in the housing market and encourage people to move?
The market shock of Brexit is now over. All indicators are saying that it is business as usual, even in London. Confidence has already returned to the housing market, and I expect this to be maintained when Teresa May triggers Article 50.
At a recent meeting of The Guild’s National Advisory Committee, 16 of the country’s top independent agents reported that there are already favourable trading conditions in the marketplace. When asked about invoking Article 50, they believed that sentiment and confidence are already high, and this will continue into the future.
Interest rates on mortgages are low at the moment and lending is readily available, which will help more people onto the housing ladder.
How will 2017 compare to the previous year in terms of sales?
Early indications are showing a small increase in year-on-year instructions. It will be hard to compare actual completion levels in 2017 over 2016, as the market saw an increase in transactions in March 2016 with unprecedented levels of buy-to-let completions taking place ahead of the Stamp Duty changes which came into force. However, Guild Members are now reporting increases in instructions and sales.
Is Brexit likely to overshadow the housing crisis over the next two years?
I am concerned that the public and media’s focus on Brexit will lessen the attention given to the housing crisis during the period of leaving the EU. Housing charity Shelter said: “By 2008, the number of new homes being started had fallen to its lowest peacetime level since 1924 – and house building has barely recovered since then. At the moment, we're building around half the amount of homes we need a year. To solve the housing shortage we should be building 250,000 homes a year.”
The government has already started to support first-time buyers with Help To Buy and Shared Ownership. But I would like to see more done to get young people on the housing ladder. For example… Stamp Duty is geared to first-time buyers, which is good as we want to see more people buying their own home.
What advice do you have for people looking to move?
Always seek advice from a trusted independent established agent. Choosing a Guild Member will ensure that you receive honest, transparent advice that you can trust. The Guild has a strict code of conduct for its members, ensuring professionalism. We run two Associate Schemes where Guild agents undergo a rigorous training programme and are tested on their industry knowledge. More than 150 people have become Guild Associates in 2017.
Contact the team in Park Lane for advice and assistance on how to join The Guild (020 7629 4141 or email@example.com).
A new chapter has been unveiled for The Guild of Property Professionals, with Iain McKenzie as the newly appointed CEO. The enthusiastic and well-recognised leader in the property industry sets out his vision to expand The Guild into new areas.
Q1: What is your background?
A: The estate agency world has been my life for 30 years this year. I started at the tender age of 17 on a youth training scheme in Devon. I quickly progressed through the ranks and at the age of 26, I became a Regional Manager and moved to Hampshire. Three years later, I set up an independent estate agency called Complete Property Services and became a member of The Guild of Property Professionals. This was my first encounter with The Guild and I was extremely impressed with the services that were offered to me. In 2011, I joined Countrywide as Managing Director for the Solent subsidiary, which grew year-on-year to a business of 100 branches. Now, at the age of 47, I am starting a new adventure as the CEO of The Guild.
Q2: Tell us a bit about yourself? What are your interests? What have you been doing?
A: I have two fabulous daughters, who are apple of my eye. I am keen skier and I try to go as regularly as possible with my family and friends. Work life is priority but home life is an extremely important part of my life too.
Q3: What is your vision for The Guild?
A: My vision for The Guild is to be the leading voice of the industry to consumers. This includes representing independent agents, so they maintain and sustain their independent status while giving them the benefits of belonging to a nationwide organisation. But what does this mean? The Guild will offer help and advice at all times, giving a seal of approval of knowledge, integrity and results from the general public’s perspective. We will be the helping hand and safety net for our members with all compliance matters informing them of changes to important legislation which will help to keep them compliant and generally advising them on all relevant matters.
Q4: How are you going to embrace digital?
A: Cleverly. The public seek modern methods but traditional values. The Guild will be at the forefront of this principal. I intend to work closely with the Media Centre at The Guild head office in Park Lane. It is key that there is transparency across the industry, whether this is through traditional estate agents or online platform. I’m very au fait with the current online offering from my experiences from my previous employer and I am confident about adapting this to suit to the independent sector.
Q5: What are your core values?
A: Honesty, integrity, transparency – I think anybody who has met me would agree with this. I am a great believer of developing people, I am open to suggestions, have a can-do attitude and I’m an all-rounder. I never ask anybody to do something that I am not prepared to do myself.
Q6: Where do you envision the Guild going in the next five years?
A: Growing from strength to strength, The Guild will become an authority in the estate agency sector from a consumer and independent perspective. The Guild will always be a pillar of support, expertise and vision for its members. I hope The Guild to be a publicly recognised kitemark of approval.
Q7: What do you plan to achieve in the first 100 days?
A: Within the first 100 days, I intend to connect with every member through regional meetings. Where I will deliver my vision for The Guild. I plan to engage in open and honest conversation with the National Advisory Council (NAC) and to reinforce the value of The Guild to its members.
Q8: What are the opportunities for estate agents? What does the future hold?
A: The sector is going through radical change with online disturbers having recently entered the marketplace. I strongly believe that ‘Cost is an issue, in the absence of value’. The opportunities are still the same as ever. Excellent customer care creates loyal raving fans, which in turn leads to repeat business recommendations. The leading agents are seamlessly incorporating technology into the traditional customer service model, and we want to do the same.
Q9: How many members
are there? How do you see The Guild expanding?
A: Currently, The Guild has around 800 members. My intention is to enhance The Guild’s offering and to expand to 1000 members in time for our 25th anniversary in May 2018. The Guild is one the best-kept secrets in the property world and I can speak from personal experience when I say that The Guild helped me to secure more instructions when I was an independent agent. It played a crucial part than any other tool in my toolbox.
Q10: Why should people join The Guild?
A: There are very few unique selling points (USP) in the estate agency sector. However, the Guild is one of them. The four pillars of strength that The Guild is built on are: Trust and Confidence, IT and Intelligence, Marketing and Exposure and Additional Revenue Streams. We are exceptional in all of these areas.
In addition, we also deliver full trading standards accredited training, compliance audits and free PI insurance to our Members.
For more information about The Guild of Property Professionals, visit: www.guildproperty.co.uk or contact 020 7629 4141.
Mortgages offering incentives like cashback are becoming increasingly popular to draw homebuyers in. Is this the right option? We take a look at the pros and cons.
More and more lenders now offer mortgage deals which come with incentives to attract borrowers and to differentiate themselves from the competition. Mortgage rates are currently extremely competitive, so an extra benefit or bonus is one of the only ways for a deal to stand out from the crowd.
Incentives can take several different forms. For example, lenders will require a valuation of a property to make sure it is security for the loan and worth as much as the homebuyer is paying for it. The cost of a valuation will depend on the size of the property, but typically starts from around £250, rising to about £2,500 or more for homebuyers purchasing high-end homes.
Some lenders will offer a free valuation as part of a mortgage deal, although this will usually only cover the cost of a basic valuation report rather than an extensive structural survey, which many people opt for when buying a home. Also, lenders may set a minimum purchase price and only offer free valuations on properties over that value.
Other lenders provide free legal work for those who are mortgaging, but remember to check the small print for any restrictions.
Cashback is becoming one of the most popular mortgage incentives. Lenders will pay borrowers a lump sum, typically starting from £250, when their mortgage deal completes.
The amount of cashback offered has crept up in size in recent years, with many lenders now providing cashback of around £500, although some payments can be as high as £2,500. This can be particularly appealing for first-time buyers who often put the money towards stamp duty or moving costs.
However, it’s important that homebuyers do not to base their mortgage decision on incentives alone. Deals which offer cashback or any other incentive may charge a higher interest rate than deals which don’t come with any added extras, making them more expensive overall.
It’s vital that homebuyers think carefully about how important up-front cash is compared to lower monthly payments. Could an interest rate saving outweigh any incentive in the longer term? If in doubt, homebuyers should seek professional advice on the best combination of rate, fees and incentives to suit their individual circumstances.
Need some mortgage advice? Get in touch with L&C Mortgages today.
Are you thinking of getting on the property ladder this year? It is often a daunting task, but interest rates are currently low and there are government schemes that can help, too. We asked Guild agents across the country for their advice to help more people buy their first home sooner.
• “Do research on how much finance you can secure based on your current salary.
• Know what deposit you need and what Help to Buy schemes (www.helptobuy.gov.uk) are available in your area.
• Determine how much deposit you actually need, taking into account your purchasing costs.
• Research exactly what your purchasing costs might be to your lawyer, your bank, and surveyor.
• Work out where you want to live or indeed be comfortable living in that location.
• Work out the time frame. Buying a property often takes longer than people imagine.
• If your family is helping with a deposit, then make sure you give them plenty of warning as their capital may be tied up in a savings scheme that requires more notice than just one week or a one month.
• Finally, it is more important that the deposit is large enough to help secure the property in the location you like.”
“I often encourage people in rented accommodation to compromise on what they want in the short term to be able to purchase their own home. Once they buy a property, they can work on overpaying their mortgage, which will give them a larger deposit in the longer term. Often moving to a slightly more affordable area in the short term is the key.”
“We would like to see more pressure put on mortgage companies to offer products with higher loan to values which are specifically aimed at first-time buyers. Personally, we do not see many new developments within Dartmoor or the Teign Valley, where we conduct a lot of our business. More targeted products to allow younger people to get on to the property ladder would be a massive boost for first-time buyers, too.”
“In recent years, high property prices have made it difficult for first-time buyers to get on the housing ladder. Despite this, it is a good time to take the first step into property ownership. Mortgage interest rates are incredibly low at the moment and the government offer various schemes to enable first-time buyers to get on the ladder with a small deposit. These schemes include, Help to Buy options and shared ownership schemes. The advice of a good mortgage company is invaluable. Also first-time buyers will need a minimum deposit to get started aside from help from the “bank of Mum and Dad”. There really is no substitute for saving and starting early.”
“What is my advice for a first-time buyer? Find your ‘inner estate agent’. It is essential that your first step is the right one. So you need to make sure that you buy your home for the right price. If you research the market properly, this will give you a head start when making an offer.”
“We seem to think that it is harder now for first-time buyers to purchase a property than it was for our parents and their parents. I always feel that it has always been hard, in fact with the various government schemes and banks offering 95% mortgages, it could be argued that it is easier now than it has been for a very long time. It is easier said than done but my advice for first time buyers is to spend less and save more.”
• “Make sure you are on the voters roll, even if you don’t want to vote.
• Check your credit file.
• Get a credit card, spend a small amount each month and then repay it immediately, it helps you build up a credit file profile and shows lenders you can handle credit responsibly.
• Shared Ownership is the best scheme in our opinion.”
“We recommend people bide their time, save like crazy and keep an open mind regarding the type and exact location of the property. When ready to buy, think value-for-money and learn to get handy using power tools. Before committing, we also advise our buyers to factor-in all the buying costs including legal, repairs and of course block service charges. Lastly, strict monthly budgeting and maybe even taking in a lodger can help soften the load.”
“There are a few things first-time buyers should attend to before taking that first step onto the property ladder. Although the Internet, parents and friends are probably the first sources of advice be aware the advice isn’t necessarily relevant or correct. The first and most important piece of advice you can take is from an independent mortgage advisor. You may find you can afford the property you didn’t think was in your league, or adversely you may find you really don’t have the budget for the property you wanted. It is also important to research the area you’re looking to buy in."
Housing was not a focus of Chancellor Philip Hammond’s first Spring Budget on 8 March 2017. CEO of The Guild of Property Professionals, Iain McKenzie, shares his thoughts on what the government can still do to support the housing market.
“It was disappointing that Chancellor Philip Hammond did not show an understanding of how crucial it is to support the housing market at this uncertain time. The lack of measures to support first-time buyers, investors, and homeowners could have a negative impact on the industry over the coming year. At the Guild, we hoped to see a clearer commitment from the government to ensure the success of the housing market both in 2017 and in years to come.”
“The housing market has been impacted by the rise in Stamp Duty far more than anything else over the last 12 months, even more than Brexit. By ignoring calls from the industry, the Chancellor has set back the housing market, particularly with buy-to-let investors who are hit with an additional 3% of stamp duty when buying second properties. This could have a negative knock-on effect on the rental market.
“These measures were initially brought in to allow first-time buyers to get onto the housing ladder. Only time will tell if this will prove to be effective. As it stands, only 39% of adults under 40 own a property, compared with 61% from 20 years ago.
“The lack of change means that the top end of the market could continue to move slowly, particularly with homes valued over £1,500,000.”
“The government announced a new National Productivity Investment Fund (NPIF) to provide £23 billion of high-value investment between 2017-18 and 2021-22. One of the objectives for this fund is to accelerate housing supply. This is a good step for first-time buyers. An increase in home building could ensure that more affordable, good quality homes are available to help people onto the housing ladder.
“However, more needs to be done to ensure that enough new homes are built to fulfil an increasing demand. I think that the government needs to look again at planning regulation for councils to allow new building projects to be approved without delay. It is unpopular with some, but building on the Green Belt may be necessary to meet demand.”
“There was no update on the banning of rental fees in the lettings market. The government previously stated that the ban would come in ‘as soon as possible’, and there was no new guidance at the Budget as to when this could be. I agree that renting should be more fair for tenants and that there should be complete transparency around fees. However, there is a high chance that scrapping rental fees could lead to landlords charging higher rates for tenants, negating any monetary benefit for either party.”
It’s the last spring Budget. What does Philip Hammond, Chancellor of the Exchequer, have planned for homeowners? How will first-time buyers and landlords be affected? Guild Members share their wish lists ahead of the Budget on March 8th.
“More money needs to be invested into helping first-time buyers,” said Ian Southall, Director of Chess Moves of Tewkesbury. “Incentivising parents or grandparents would be a good angle to explore.”
“The most important thing the Government should do is look at Stamp Duty on higher priced properties,” said James Gibbs of Gibbs Gillespie.
“I have heard that stamp revenue is down at present, caused by the stamp duty increases, especially to those homes valued over £1.5 million and the extra 3% on top for second homes. Generally speaking, few people are sympathetic to those affected by this situation. However, I think the extreme levels of tax should be lowered.”
“Taking a proper look at Stamp Duty would have a positive effect,” said Ian Southall, Director of Chess Moves of Tewkesbury.
“No one wants to pay Stamp Duty, and every homebuyer would love to see it scrapped, but it is very unlikely to happen,” explains Simon Miller from Holroyd Miller. “I doubt there will be any amendments made to the Stamp Duty changes already made during 2016. However, if there has been significant pressure on the government to re-think their second home Stamp Duty charge, there may possibly be some respite for the investors and developers who were affected. Locally, my view is that Stamp Duty currently works, it is fair, and much improved from the old regime.”
"I would like to see a huge simplification of the Stamp Duty Land Tax because it would help the fluidity of the market," said Philip Jackson, Director of Maguire Jackson. "It would allow more transactions to take place and would encourage individuals into the market who might wish to move again within a short period of two to five years. At the moment, the high transaction costs of purchasing and selling mean that it may be cheaper for many to rent.
"The other feature I would like to change is an easing of the burden now placed on second home owners, particularly those who use the property's income as part of their pensions."
“There may be an announcement concerning new-build homes, certainly in areas of the country where the population demands it,” said Simon Miller from Holroyd Miller. “In Wakefield, we have 4,500 new homes under construction within a two-mile radius of the city, and with the Help to Buy Equity Loan Scheme, and Help to Buy ISA still supported and widely used, I’d be astounded if changes were made to slow this down.”
“To find possible solutions to the housing crisis, we must look internally to the professional practices of the industry and to the rental market,” suggests David Kutas from Victorstone in Camden. “In the UK, there is currently no formal licensing or government sponsored control over the thousands of agents currently operating. This is in stark contrast to many other countries, most notably the USA where all agents must pass multiple examinations in different areas of the industry before they are permitted to sit in an office and market a property for sale.
“Punishable actions include practices which are considered everyday procedure in Britain, such as the over-valuation of property during market appraisals, as the valuing agent is legally liable to the value given and marketing of properties which have sold or have been withdrawn from market. The end result of this control has given the USA an extremely desirable industry with considerably less competition, which is carefully regulated in their practices, formally qualified agents come as a guarantee, sales fees are higher and the entire market is far more stable than our own.
“Entry requirements in the UK do not exist; most job adverts for estate agency merely ask for GCSE level qualifications and no formal training. Introducing formal compulsory licencing to the industry would industry service standards, make buying a home easier, and prevent over-valued properties being brought to market and acting as comparable data for future valuations.”
In the Autumn Statement 2016, it was announced that lettings fees will soon be banned in England and Wales. Will this be discussed again in the Budget?
“The ban intends to lower the cost of renting to the millennial generation, who are increasing unable to purchase their own home and forced to rent,” said David Kutas from Victorstone. “However, it was inherently flawed because the Housing White Paper approached the industry from the perspective of the tenant. Removing the fees will lower the initial move-in costs, but it will do nothing to slow the ever-increasing cost of property and the diminishing rental yields for landlords.”
• Watch the Budget live on the BBC from 12.30pm on Wednesday 8th March.
Choosing the right agent is key to selling your property. We have seen an increase in online estate agents in recent years and there has been discussion as to whether sellers should sell their home with an online agent or stick with an established high-street estate agent. Here Guild agents share their views on high-street and online agents.
Thomas Devlin-James from Essex Guild Homes talks us through why homeowners should choose a high-street agent for several reasons:
⦁ "No sale, no fee. There is a genuine desire to achieve the best possible price from buyers in the best position.
⦁ No hidden costs.
⦁ Local agents often chase those in a chain to progress the sale faster. They also know local solicitors, who are specialists in their area. But the most important point is experience in the local area, both working and living close to the properties they are selling. "
Expertise is the key
William Taper from Willmotts explains that the traditional agent "has a wealth of experience within the geographical area and this can be put to good use for the client. Your agent only typically gets paid if the sale or letting goes through, so the incentive to complete the deal is significant. Your agent is also able to deal with any potential buyer and has the expertise to get the best possible price in a suitable time frame. The agent can also deal with solicitors and other mortgage lenders to facilitate the sale."
Simon Bradbury from Thomas Morris tells us that the high-street estate agent offers a full service. "The internet only estate agent does not normally offer the full range of essential services required by sellers and landlords without charging additional fees for those services. For example, conducting accompanied viewings."
"This full service includes substantial online marketing for each property via property portals and other internet based marketing channels. Additionally, it may also include significant promotion in newspapers and magazines, which consequently attract purchasers from different sources. Plus, they will have local property knowledge and will only get paid if the house sells at an acceptable figure."
The part of the Help to Buy scheme designed to help first-time buyers with only a 5% deposit to put down has now finished, but there are still deals available to help people with smaller deposits.
The mortgage guarantee element of Help to Buy was originally set up to boost 95% lending. As its name suggests, the scheme provided a government guarantee to lenders prepared to lend up to 95% of the property value.
The guarantee meant that the government would compensate lenders, to help reduce their risk.
The scheme proved successful, encouraging more lenders to offer mortgages to those with only a 5% deposit to put down. Some lenders introduced 95% mortgages even without the guarantee.
The impact for first-time buyers has therefore been positive, and has given them access to a much wider choice of 95% deals, with some major lenders maintaining the rates they offer even now the scheme has ended.
Average rates on 95% deals have also fallen, although buyers must meet affordability criteria to qualify.
Those who manage to save larger deposits will have far more mortgage options available to them, but broadly it is a healthier market for homebuyers, whatever size deposit they have.
Halifax, one of Britain’s biggest lenders, has recently relaxed the criteria borrowers are required to meet if they want an interest-only mortgage.
With this type of mortgage, as the name suggests, you only repay the interest on the amount you’ve borrowed each month. The capital must be repaid when the mortgage term ends.
Homeowners used to need a minimum £1million pension pot to be eligible for an interest-only mortgage with Halifax.
Now they only need to prove they have a pension which will reach £400,000 by the time they retire.
They can also sell their home as a means of paying back what they owe. To be eligible, however, homeowners must have an income of £100,000 or more, or £150,000 if applying as a couple. They must also have at least £200,000 equity in the property.
Interest-only deals were very popular prior to the credit crunch, but lenders have since made it harder to qualify for this type of loan.
Most lenders do still offer interest-only mortgages, but may impose eligibility requirements. For example, Virgin Money will lend on an interest-only basis to borrowers with a joint income of £50,000, while NatWest requires a minimum income of £100,000.
Changes such as those made by Halifax show that lenders are re-assessing their approach to interest-only, although borrowers will still need to demonstrate a repayment plan to ensure it’s appropriate.
First-time buyers aged between 23 and 40 may soon be able to buy a new home at a discount of a least 20% below market value, under the government’s ‘Starter Home’ initiative.
The properties will start being built this year, the housing minister Gavin Barwell confirmed at the beginning of the New Year, with an initial group of 30 local authority partnerships leading the schemes.
Funding will be supported by the government’s £1.2 billion Starter Homes Land fund, which was established last April.
The fund was set up to assist the aim of building 200,000 Starter Homes by 2020 on brownfield sites in England, such as those currently or previously used for commercial or industrial purposes.
However, critics of the scheme claim that as the maximum price after the discount has been applied will be £250,000 outside London and £450,000 in the capital, the new properties won’t be affordable for many first-time buyers.
It’s expected that they won’t be able to sell on or let their Starter Homes at their open market value for a period of at least five years after the initial sale.
Increased competition between lenders has seen the number of fee-free fixed rate mortgages more than double over the past twelve months.
According to recent data from Moneyfacts, there were 556 fee-free deals just over a year ago, compared to 1,162 by the end of 2016.
Although the number of fee-free deals has increased, average fixed rate fees have gone up by £30 from £954 to £984 over the past year. The average two-year fixed rate, however, has fallen from 2.67% to 2.34% in the last 12 months, which suggests some lenders are introducing lower rates but with higher fees.
Fee-free mortgages usually have slightly higher rates than those which do charge a fee, but they often still work out to be more cost-effective overall once fees are factored in.
Calculations show that borrowers with a 25% deposit opting for the lowest two-year fixed rate deal with a fee could be more than £1,000 worse off than if they’d gone for a deal with no fee.
It’s important that when comparing deals, borrowers always look at the total cost, rather than just the headline rate of interest charged.
Every seller is tempted to overprice their home. They may
have carried out lots of work over the years or may need the extra money to
Buy as a buyer, you want to pay the market price.
So how do you spot an overpriced home? Here are our top five tips.
How long has it been on the market?
If it’s more than 60 days, chances are that it is not selling because it’s overpriced. Though be aware that some high-end homes can be on sale for a longer period.
Have home improvements inflated the price?
If an owner has just spent a lot of money on an extension or refurbishment, they may price their home higher because they want to make a profit. But love and investment in a home doesn’t always get a reward.
A home in poor condition should not try to compete with a newly refurbished home on the same street, either.
Does it match the value of other properties nearby?
If the house next door recently sold for a fraction of the one you are viewing, something isn’t right.
Take a look at current listings and properties that were recently sold in your postcode area to compare. Remember, the asking price isn’t the same as the sold price, but previously sold prices could guide you towards a good offer.
Do your research
Always do your homework. At the Guild, we recommend looking at lots of online resources, from mortgage advice to solicitor reviews. Getting things in order now will save time and stress down the line.
Is the location desirable?
Similar properties can vary in price hugely from one side of town to the other. The trendiest place is always going to fetch a higher price, so keep that in mind.
The best solution is to set the price sensibly. Sometimes a low price may generate more interest. If in doubt, talk to your agent.
You can get more information on overpriced homes on the Guild’s blog online, as well as lots of other topics to help you with buying and selling.
The December 2016 house price index data showed a monthly drop of 0.1 per cent across the UK, minus 0.1 per cent in England and minus 1.2 per cent in London.
Regionally, the East of England experienced the highest monthly growth at 1.3 per cent, while prices in the North East fell by minus 1.3 per cent.
On an annual basis, prices across England rose by 7.4 per cent, bringing the average house price to £232,655.
Despite the dip this month, London prices rose by 7.7 per cent from January to October, making an average London home cost £474,475.
Flats and maisonettes are performing best, with a 7.6 per cent rise compared to October 2015, proving that they can be a great investment. Terraced properties have seen the slowest growth, rising by 5.4 per cent.
We have the England sales figures for August, and they show a 20.3 per cent drop compared to August 2015. Though that still equates to a lot of people moving, with 67,396 properties exchanging during the month.
The average price of a new build property in England in October was £307,983, which is up 28.6 per cent up on a year ago. Meanwhile, resold property prices averaged at £210,917, which dipped by 0.7 per cent from September, but this is still 5.4 per cent higher than the same time last year.
So what does this tell us? Figures are holding steady, but we aren’t seeing the constant growth that was commonplace before the Brexit vote and extra stamp duty changes, which came into force in 2016.
However, flats and maisonettes are still proving to be great for investors with their steady rise in prices.
Holiday lets can be extremely rewarding. Where are the best places to buy a holiday let? What is the best way to start your search? And what types of properties make the best holiday lets? There is a lot to consider, so we asked our agents for their opinions.
“In Northumberland we are spoilt with the best of both, with holiday lets near the coast and in the country. If you’re in the market for a holiday let, speaking to local independent estate agents should be high on your list. Also contact holiday letting companies who may have clients wanting to sell.
“Given that Falmouth was crowned the best place to live in the South West by The Sunday Times last year, it is not surprising that we deal with purchasers keen to secure a second home here on a daily basis. Historically, the bustling town of Newquay or quaint St Ives on the North Coast would be the first ‘port of call’ for some. More recently, those seeking an all year-round resort offering golden sandy beaches and some of the finest sailing waters in the country have chosen Falmouth. So what makes the perfect holiday home? It would appear that the formula is relatively simple – a good location, water views and parking,” says Natalie.
“We are very lucky to live and work in a county as lovely as Dorset. Our office is in the Victorian town of Swanage, which is a popular family holiday location. It has award winning soft sandy beaches, beautiful surrounding countryside and is well known for being the gateway to the Jurassic Coast, England’s first world heritage site. The area has many miles of footpaths and bridleways making it popular with walkers and cyclists. Attractive country cottages and properties with sea views close to the beach are always top of list. The population of Swanage doubles in the summer months and with annual fish, pirate, jazz, blues and folk festivals is a popular destination all year round for a holiday let,” explains Kelly.
“The pretty coastal town of Hythe in Kent has much to offer the holiday let investor. From views across the English Channel to France, an unspoilt seafront promenade, the famous Romney Hythe & Dymchurch light railway running as far as the unique landscape of Dungeness. The town itself offers a traditional high street with a wealth of independent shops and restaurants as well as a wide variety of sporting options including tennis courts, sea kayaking and a selection of local golf courses.
Click here to find your local Guild agent.
No one wants an empty house. One of the main worries that
many landlords experience is the possibility that a month or more will pass
between lets without any rental income. It is crucial to minimise void periods
where possible by acting fast and making sure you get the next tenant for your
property. It is inevitable that circumstances will change and people will move
on but there are quick and easy steps to reduce void periods.
This is one of the cheapest and most effective ways to finding a new tenant. Most people have access to some form of internet, whether it is on your mobile phone or laptop. Using one of our Guild agents is an easy way to get your rental property noticed without having to do all the work yourself. This means your property will be promoted by them, which should help you gain interest from potential tenants.
Word of mouth
An old-fashioned way of finding a suitable tenant, word of mouth can still be surprisingly effective. Talking to people living close to the empty property or your friends could lead to finding someone who might be interested in renting your property.
Setting the right rent
It’s always good to do a little research into competitive rental rates. Make sure that the property is good value for money and all repairs are up-to-date as potential tenants will always do a thorough search before making their choice. You want to make sure that your property is at the top of their wish list.
It may be worth posting about your vacant property on social media sites such as Facebook, Instagram and Twitter. One of your contacts may know of a person who is looking for a property to rent.
Finding the right tenants
Trying to fill the void period may be quite time consuming, but it is worth spending time trying to select tenants that will be delighted to call your property their new home. Make sure you have the correct references and requirements from the new tenant before having them sign the contract to rent your property. It is important to see whether the tenant can pay rent on time and continue to do so without occurring late rental charges.
Do you have a property that is for rent? Are you looking for your next tenant? Contact your nearest Guild agent now.
Putting your home on the market is a big decision, so it’s important to make sure that you’re doing it at the right time of year. There has always been debate about the best time to sell a property, so we asked Guild agents to share their thoughts on the prime time to sell.
Spring (March, April, May)
If you’re selling, spring and early summer are more active months. Things tend to get going in March around North London; i.e. once the clocks go forward and Easter is upon us. For buyers, an upside is that there are typically more properties to choose from between mid-March and early July.
For the selling market, there tends to be a seasonal trend, but this can be affected by the economic climate. Coastal areas tend to be more productive in spring and early summer. This is because the coast draws many retirees who would rather move in the better weather and are generally not forced by a job move, children’s schooling etc.
The optimum time is spring, from March to June when viewings are at their highest. Many people want to complete their purchase by the summer ready for the September school term. The quietest period for the housing market are the holiday periods of late July to August, followed by mid-November to early January.
We have always recommended that late spring is the best time to sell, particularly for larger country properties. This equally has a bearing on the best time to buy as there tends to be the greatest volume of properties coming onto the market, which gives the buyer a greater choice.
The best time to sell is Q1 and Q2. After June, the holiday season kicks in, followed by a diminishing window of opportunity before thoughts turn to Christmas.
Summer (June, July, August)
Oxford benefits from its own unique economic bubble and doesn’t follow the national seasonal trends. However, it makes complete sense that properties will sell better from spring through to summer with blue skies and gardens in full bloom. With the internet becoming increasingly important in marketing properties, photography is the key selling tool. With luscious green lawns, blue clear skies and rooms flooded with sun light, the general look of a property will be greatly improved.
Autumn (September, October, November)
The season is busiest from February to July, then from September to November. For homes with extensive grounds and beautiful gardens, the early autumn season can be ideal when gardens are at their best.
The market has already become a hive of activity since the beginning of February with more and more houses coming to the market and a huge influx of purchasers.
Winter (December, January, February)
To gain the best price, the best month to sell is February when buyers start to make decisions after Christmas. Available property levels tend to be low, but more and more is coming to the market which makes it a very busy and exciting period in both sales and lettings.
The best time of year to buy a house is during the first few weeks of December. It's at this point that any vendor who is motivated to sell will be more flexible as there are fewer buyers motivated to look.
As for home sellers, they are looking at the best time to sell in March as they get the first of the Spring tide so to speak. The other months of the year tend to vary as a result of economic trends etc. Country and rural properties at the higher end of the market usually wait until April/May time as the gardens start to look more inviting.
December is usually a quiet month, however, buyers may come across an opportunity to pick up a bargain, especially if finances are good to go and they have a proactive solicitor.
Perhaps a seller has just lost their buyer, with the chain and any plans of buying their dream home now set to fall apart. With fewer active buyers in the market and with Christmas only weeks away, people are usually too busy shopping, planning and organising for the festivities, so house hunting is low on priority lists. This makes it the perfect time for motivated movers to close a sale.
It’s worth contacting your local estate agents and let them know you are actively looking. Then if they have any sellers in need of a speedy transaction, they should give you a call.
November and December can be great months as a buyer, especially as many sellers may be keen to agree a sale pre-Christmas and may be more flexible. This is especially true with slow moving stock from the summer. Sometimes, people buying garden flats may keen to ensure they get to enjoy their first summer, so may be keen to tie down a sale by April/May.
For the savvy homeseller, marketing a property in February represents the perfect opportunity to obtain a buyer before most other sellers have got their property on the market. Although the weather is cold and wet, don’t forget that it is the same for everyone – buyers are looking at every property in the same weather conditions. Serious buyers must move come what may, and in my experience, most aren’t remotely bothered by the time of year. They are much more concerned with location, condition, size, and asking price of their dream home.
Any time of year
High activity levels through Christmas 2016 has helped to confirm that the housing market is less seasonal than it once was. We even received calls and emails on Christmas Day!
Historically, spring was considered the optimum time to move, autumn was busy, summer was slower and winter, particularly through Christmas, was very quiet. Now, easy availability of information on the web means buyers can look at houses anywhere at any time. Seasonal variations, which were largely driven by the constraints placed on peoples time at different times of year are becoming increasingly less severe.
My advice to buyers and sellers based on this? Buy and sell when its right for you. You can sit and wait for a perceived busier period, but whilst waiting you may have missed any number of opportunities.
There are no fixed rules, or certainly not in our local market. Traditionally spring has always been seen as the season for interest in buying and selling property. The property market in Wakefield is driven by economic factors, not seasonal.
People are much more sensitive to media reporting and the uncertainty around Brexit or global politics; these do have an impact on people’s actions and have a tendency to create a more sensitive customer base.
However the economic climate in Wakefield is very secure. Unemployment is low and job security is good. Of course, some things never change - Christmas and the summer holidays always see a decline in interest as priorities shift. However, clients sometimes place their properties for sale or rent during these times to ensure that they are ready and waiting for people to view when the holidays are over.
With a buoyant market and real time listings we're finding all months are equally productive. What we still feel is a slow down for school holidays and a market place that has become more sensitive to positive and negative data releases, which suggests more savvy and news-connected buyers.
If you would like to consider putting your home on the market, click here to find your local Guild agent.
The eyes of the property industry recently turned to the Government’s Housing White Paper, which was released on Tuesday 7 February. Now that experts have had time to digest the information, The Guild of Property Professionals have noted that there is style in the report, but little detail to carry out the proposals. CEO Marcus Whewell shares his thoughts.
“Overall, the white paper is lacking important details,” said Whewell. “The Government has the right intentions, but there are no clear strategies to reach their aims, particularly in relation to building more properties. To build an additional 240,000 new homes per annum, the planning approval systems need a comprehensive review.
“Regarding lettings, some of the underlying principles in the white paper are controversial at best. Committing to more affordable new build properties offering minimum guaranteed tenancies is commendable. However, suggesting that large corporate companies should be relied upon in future for lettings over private landlords is highly questionable. To really boost the rental market, the Government needs to remove additional stamp duty charges for Buy to Let and encourage private landlords, whilst also increasing rental regulation to improve standards. Taxing this important group out of the market makes little sense.”
Impact on rentals
The white paper says the Government will build more homes for private rent and encourage family-friendly tenancies.
“Moves to require builders to provide more affordable rental stock is a logical step, as is offering three-year minimum tenancies to help families plan their futures with more certainty, such as with children’s schooling,” said Whewell.
However, the report’s plan to make renting fairer for tenants is likely to have an adverse impact on lettings agencies.
“The decision to remove or cap lettings fees is controversial; whilst some landlords and agents have undoubtedly taken advantage of vulnerable tenants, others have acted much more fairly and consistently and this proposed action seems ‘a big stick’ to address a selective problem,” said Whewell. “Landlords and agents will no doubt look to recover this loss of earnings, which could mean delivering a poorer service and opaque increases in rents. Until supply and demand rebalance, there remains a natural upward bias in the system, exacerbated further if private landlords exit the market.”
“I think a solution could be to introduce licensing for private landlords; if every landlord commits and adheres to a minimum standard, then tenants will be treated more fairly. Pricing small, private landlords out of the market is not the answer as this puts unnecessary upward pressure on rent prices.”
Corporations becoming landlords
The Government is reportedly encouraging more institutional investors to come into housing, potentially as landlords to replace private suppliers.
“Following the recent tax changes relating to private landlords, there is a sense that the Government would like large corporations, such as pension funds, to step in and invest in affordable rental stock replacing the current ‘micro model’,” said Whewell. “This is seen as a better new world where the rights of the tenant are better respected by companies who want to do the right thing, or are obliged to act diligently in order to protect their brand or meet corporate governance rules.
“The potential issue here is that the record of large private organisations in providing high quality, locally sensitive services is less than stellar. Also, such corporates normally have shareholders demanding dividends - so the pressure to improve ‘efficiencies and returns’ may not bode well for their tenants, whereas smaller, local landlords can better read the market conditions and flex charges accordingly. Another option might be to provide more assistance to Housing Associations who are less profit-focussed.”
Planning for future homes
A lot of information was included in the white paper about the role of local authorities in overseeing planning applications for new housing. The Government wants to give communities a stronger voice, provide greater certainty to authorities planning new homes, boost the local authority’s capacity and capability to deliver, as well as holding authorities to account through a new housing delivery test. The report also mentioned continued protection for the green belt, unless local authorities can prove that building on this land is the only option available.
“When it comes to supply, planning will be a key issue as one of the most significant inhibitors to accelerating the building programme,” said Whewell. “Continuing to respect and protect ‘green belt’ land means that local councils maintain the whip hand in deciding access to such potential sites, with an understandable tendency to protect existing residents. The white paper fails to provide a solution to this quandary. There is also evidence from the BBC of local councils manipulating the existing numbers to reduce their future obligations regarding the provision of new homes. Relying on local intelligence and decisions may not deliver the step change in volume that is required.”
The Government expressed a desire to look at sites and find details of the owner to determine if the area is suitable for new housing. By making more land available for homes in key locations, they plan to make it easier to build new settlements.
Whewell said: “Land banking is a complicated issue. Developers need to see a clear return on their investment before commencing building work. If they are in doubt, they will leave potential sites alone as an asset on their balance sheets.
“I think the answer is a mixture of more transparent planning, a more predictable residential housing market, and some pressure on builders to ‘use it or lose it’ – but this strategy is fraught with difficulty and may overstep the boundary between regulation and intervention.”
UK property prices rose by 6.5% in 2016, Halifax said, while according to Nationwide Building Society’s House Price index, prices were 4.5% higher by the end of the year, having risen by the same rate as in 2015.
The building society said that all regions of the country experienced house price growth in 2016, with East Anglia seeing the strongest price increases over the year. Average prices there were up more than 10% year-on-year.
Luton and Bedfordshire
According to Halifax, Luton recorded the biggest percentage rise in house prices among the largest UK towns and cities in 2016, with the average property price in the Bedfordshire town rising by 19.4% over the year.
Scotland, East Midlands, Northern Ireland
Nationwide’s house price report, which includes a look at the differences in affordability across the UK, found that certain areas such as Scotland, the East Midlands and Northern Ireland have seen improvements over the last decade.
2017: what next for house prices?
Both Nationwide and Halifax suggested that house price growth will be more modest this year, due to uncertainty surrounding Brexit negotiations, combined with slower economic growth.
Nationwide is expecting a gain of around 2%, while Halifax expects prices to slow to between 1% and 4% in 2017. The bank’s chief economist, Martin Ellis, said the wide range for the forecast reflected the “higher than normal degree of uncertainty regarding the prospects for the UK economy this year”.
Both lenders said that a lack of housing supply combined with low mortgage rates should help underpin the property market over the next 12 months.
Low rates not only benefit existing homeowners, who are often able to substantially reduce their monthly outgoings by remortgaging to a cheaper deal, but also buyers, as they make it more affordable for them to purchase property.
Although some of the lowest deals have now been withdrawn, homebuyers still have a very competitive range of mortgages to choose from, with many deals accessible to those with smaller deposits to put down.
Annual house price growth is expected to slow over the course of 2017, according to some of Britain’s biggest lenders, but will be supported by a shortage of properties and low interest rates.
Offices from around the UK were commended for their exceptional performance at the Guild of Property Professionals – previously known at the Guild of Professional Estate Agents - gala dinner and annual awards, which was held at The Vox conference centre in Birmingham on Friday 27 January.
The awards were presented after a full day at the Guild’s annual conference, where the company’s new brand was revealed. This is the biggest change in fifteen years, and includes changing the company name from the Guild of Professional Estate Agents to the Guild of Property Professionals, as well as a new look.
The awards ceremony was once again sponsored by The Telegraph, who commented said: “As the UK's best-selling quality daily newspaper, The Telegraph is looked to by its readers as a trusted source of expertise. It is therefore fitting that we are able to celebrate excellence in the property industry by sponsoring the awards ceremony at the Guild of Property Professionals."
The awards were presented by Marcus Whewell, CEO of the Guild, and property TV presenter Melissa Porter.
The prestigious ‘Best National Guild Member’ award was given to Victorstone Property Consultants, which has offices across London. Scott Hailou, Area Director of Victorstone, said: “This is a very proud moment. We sincerely appreciate our staff’s excellent performance, participation and promotion of the Guild. Our business has not only benefited from their diligent work, but they have now set a benchmark in a nationally recognised network within our industry.”
The Gold Lettings Award was given to Bassets Estate Agents. Quentin Thatcher, Head of Bassets Lettings, said: “To win the Gold Award for Best Lettings Agent for the second consecutive year is an outstanding achievement for all of us at Bassets. We are honoured to be recognised for our hard work and dedication at a national level. I’d personally like to thank my team for always striving to go above and beyond what is expected to enable us to provide our clients with an exceptional, personable service.”
As competition for the lettings category was so fierce this year, a Silver Award for Lettings was introduced, which was given to Sawyer & Co.
Awards were given to the best Guild Member in each region of the country as follows:
• North West - Logic Estates
• Midlands - Bentons
• Wales - Williams and Goodwin
• East Anglia - Thomas Morris Estate Agents
• South East – Sawyer & Co
• South – Seymours Estates
• South West - Sawdye and Harris
• North East - Next2Buy
• Home Counties – Oasis Estate Agents
• London - Victorstone Property Consultants
Marcus Whewell, CEO of the Guild of Property Professionals, said: “Once again, I am very grateful for the wonderful support of our estate agency members, guest speakers and partners for our annual conference. The market is unpredictable, but the opportunity to the share ideas and opportunities is a key benefit of being part of such a prestigious network.
“We are proud that The Telegraph have sponsored our awards for the second year running. We received a fantastic breadth and quality of entries, and our congratulations go to all the worthy winners, especially Victorstone Property Consultants and Bassets Estate Agents, who were announced as best overall estate and letting agents of the year respectively.”