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At its mid-September meeting, the Bank of England’s Monetary Policy Committee unanimously voted to leave its main interest rate at 0.25 per cent. The Bank halved its interest rate from 0.5 per cent to the new historic low in August with the aim of maintaining the stability of the UK’s banking system following the June referendum on membership of the European Union.
A number of indicators measuring near-term economic activity suggest that the impact of the Brexit vote has been weaker than at first feared. However, the Bank still expects that the pace of economic activity in the July to September quarter will still be half the growth rate recorded earlier in the year. The Bank reiterated that it might yet need to cut interest rates further in the coming months.
The Monetary Policy Committee also voted to stand by its August decision to expand quantitative easing. The Bank will purchase an extra £60 billion of government bonds, which will take the total to £425 billion. It will also buy a further £10 billion of corporate bonds as part of its continuing measures to prevent the economy falling into recession.
Under a new timetable, the next Monetary Policy Committee meeting will not take place until November.
One of the economic indicators that seems to show that consumer confidence has not fallen away since the Brexit vote is that UK retail sales were stronger than expected in August. The Office for National Statistics reported that sales volumes fell by just 0.2 per cent from July and were up by 6.2 per cent from August last year. Furthermore, the sales increase for July was also revised upwards from 1.4 per cent to 1.9 per cent, representing the best performance for the month in 14 years.
Another positive indicator was the slight fall in UK unemployment to 1.63 million between May and July. The unemployment rate was 4.9 per cent compared to 5.5 per cent a year ago. However, the number of people employed in the public sector is at its lowest level since the Office for National Statistics started collecting the figures in 1999, down to 5.33 million, indicating that it is the private sector that is making the jobs.
A key measure of the economy is the UK Consumer Prices Index of inflation; in the year to August, the average cost of everyday household goods and services went up by 0.6 per cent, unchanged from July. The Retail Prices Index, which includes the cost of mortgages, dropped to 1.8 per cent in August from 1.9 per cent in July.
The latest monthly report produced by the Royal Institution of Surveyors has indicated that the housing market is stabilising in the wake of the UK’s vote to leave the EU.
The report gathers the observations of surveyors across the country, and is considered to be a good measure of confidence within the market.
Following the referendum result, initial findings suggested a drop in prices as uncertainty amongst buyers grew. Members of the Institution are now forecasting an increase of around 3.3% a year for the next 5 years.
One of the main factors in the predicted increase is a shortage of property for sale. Average numbers on estate agents books have been dropping over recent months, with numbers close to the record low recorded last December.
However, the recent base rate cut, record low mortgage rates and low unemployment levels, should help to boost the confidence of potential buyers over the next few years, as negotiations to leave the EU begin.
When the Bank of England decided to cut interest rates in August, the main aim was to make the cost of borrowing cheaper. A less-reported side effect is that it also helps consumers borrow slightly more.
A while ago the Prudential Regulatory Authority brought in rules to ensure that lending wasn’t purely based on the record low interest rates we’re currently enjoying. If it were, many people could find themselves in serious difficulties when interest rates eventually rise.
When assessing affordability, lenders are required to check that the loan would still be affordable if rates increased by 3%. This is what they call the “stress rate” and will typically be 3% above the lender’s Standard Variable Rate - even if the actual deal you’re applying for is much, much lower.
Of course when the rule came in no-one expected Base Rate would in fact fall further. But that’s what’s happened and so you could borrow slightly more today, than you could in July. That’s not just theory – a number of lenders have announced reductions to their stress rates, including big names like Barclays and Nationwide.
In real terms a 0.25% reduction to the stress rate isn’t going to make a huge difference to the amount you can borrow but anything that helps buy your dream home is good news.
Saving up to buy your first home can be a challenge, but assistance is at hand in the form of the Government Help to Buy ISA.
This initiative allows a First-Time Buyer to deposit an initial £1,000, followed by £200 a month. When they decide to buy, the Government will provide a 25% bonus up to a maximum of £3,000. This means savings of £12,000 will be boosted to £15,000.
There has been some recent criticism over when the bonus can be claimed. The bonus is only available on completion rather than at exchange of contracts, when the deposit is normally paid.
Purchases can go ahead however without the need to pay the typical 10% deposit at exchange.
The best way to avoid issues further down the line is to make sure that the solicitor is aware from the outset that a Help to Buy ISA is being used.
First Time Buyers should certainly not be put off using a Help to Buy ISA to get their foot on the ladder. At the moment interest rates are better than on most standard savings accounts, and that 25% bonus will provide a much needed boost.
Each person can have one of these ISA’s, so those buying jointly could bump up their deposit fund significantly, and get a foot on the first rung of the property ladder a little quicker.
Most of our attention has been centred on fixed rates over recent years, as economic uncertainty grew and borrowers looked for some peace of mind.
With the Bank of England cutting the base rate to an all-time low of 0.25%, and questions being raised over the possibility of a further cut, there is now likely to be more interest in tracker mortgages.
These are variable mortgages that move up or down in line with another rate (usually the Bank of England Base Rate) and as such the monthly repayments are also variable.
The potential for another drop in monthly payments will appeal to many. Borrowers should check with their lenders however. In recent years some have applied a collar to their deals, which would prevent monthly payments from going down any further, even if base rate was to be cut again.
The variable nature of tracker mortgages mean that they will not be suitable for everyone, and many borrowers will still prefer the security of a fixed rate, especially as they are so low at the moment.
Are you in a hurry to sell your home? Or are you feeling impatient now you have committed to selling? There are no guarantees, but here are some sure-fire ways to grease the wheels of your sale:
1. The right time to sell
Knowing the right time to sell can depend on many factors. For example, it makes a difference if your property is a three-bedroom home with a garden or a studio flat. The family buying your three-bedroom home could be reluctant to move during the summer holidays – not only are they likely to use that time for their annual holiday, but it would be far easier to pack the house when the children are in school all day!
Read more about when to sell your property.
Your estate agent will be able to guide you through this process, and you can always call and get their opinion ahead of committing to your sale. However, a swift sale may be necessary due to specific circumstances meaning there is no chance to pick the best time. That’s when settling on the right price with your agent can make all the difference.
Find a Guild Agent in your local area.
2. Is the price is right?
Price is everything. It’s important you explain your time-frame to your agent when you instruct them and make it clear what your aims are. For your own reference, you can compare your property like-for-like with similar properties in the local area to give you an idea of what is achievable. If you are desperate for a speedy sale it could be that a slightly lower price will move the process along, but speak with your agent – their advice will be based on their detailed, in-depth knowledge of the market.
Read more about how to spot an overpriced house.
3. Declutter and clean all
Chuck out everything you don’t need and then give what’s left a thorough clean! Nothing will put people off quicker than a muddled mess. Let the features and space shine through your furniture and personality to capture your prospective buyer’s imagination.
4. Pack up your troubles
Wanting to turn your property around in a matter of days means being seriously organised, especially when it comes to the large, time consuming jobs. Packing is a bit of an unknown quantity, depends on how much ‘stuff’ you have, and how much you threw away in your clean and declutter phase. Whether you mean to hoard or not, removing around a third of your furniture and things will make your home look even better.
However, no one wants to shuffle around a room avoiding the fort of boxes in the centre of what should be your dining room. So, unless you have ample room in the garage for a discreet line of boxes that won’t be sabotaging a viewing, rent some storage. You will be so ahead of the game that you can move out almost at a moment’s notice.
5. Get your paperwork straight
Do you know where your title deeds are? If you have just decluttered, clean and then packed you certainly should! Legal delays can often slow a sale down and there is no need for you to postpone your move because you haven’t dug the deeds out of the box under your bed.
6. All the world’s a stage
Pretend your house is a show home: you are selling a lifestyle to someone, so don’t overlook the small details. Although packing ahead of time is good, leaving your home completely bare isn’t the aim. A sofa cushion seems a trivial item, but it can imply comfort and relaxation. Indicating to your potential buyer this is a space to unwind after a long week, or a place to curl up on a winter’s evening – it could make all the difference.
7. Leave no space unused and unloved
Your spare room doesn’t need to look spare, and it certainly needn’t be a dumping ground. Even if you are using it as a dressing room, sort the floor-drobe out and transform it into a dressing room. Wherever possible you should make the most of the space in your property – if you are selling home with a dining room, put a table in it!
8. Wow-factor kerb appeal
First impressions are so important – many people make their minds up about a house within seconds. Make your potential buyer want to live in your property, to be proud to call it home. Cleaning and decluttering is just as important outside as it is inside, so remove toys, weeds, gnomes, wash the windows, and so on.
Read more about maximising your kerb appeal.
9. Shout it from the rooftops
If you want to sell your home fast, people need to know you’re selling it! A Guild agent will provide you with a comprehensive package to market your property, however if doesn’t hurt to tell people you’re moving, after all someone at the local shop may know someone who is looking to buy in your area.
10. Always be prepared
Your home should be ready to view at a moments’ notice. Whether you have a strict timeframe or not, making viewings difficult will absolutely get in the way of selling your home.
Read more about how not to sabotage your sale.
Wondering whether an open house is the right choice for you? There are many factors to take into consideration: is there enough interest to warrant an open house, or would just one couple turn up? Do you have a tenant and will they cooperate?
A good estate agent should be able to answer these questions and suggest whether or not you should opt for an open house style viewing.
Here, Guild member agents offer their views on the practicalities of hosting an open house and how successful they can be with the right attitude.
Holroyd Miller Estate Agents say:
Before you rush out to buy ground coffee and a bread-making machine there is a less extreme approach.
Of course de-clutter, attend to those pesky maintenance jobs, tidy up – make it visually appealing, but before any of that you must employ the right agent for the job.
There’s no point in appointing an agent that has no experience of the town/village you live in. You will need an agent who is well and truly embedded in the community, knows the area and, more importantly, one that knows who your target audience is.
At Holroyd Miller we approach the open house format very differently. In fact, we purposely don’t call it an open house, and with very good reason. We prefer to organise grouped viewings; the main distinction is we book each individual viewing with its own time slot and dedicated attention with a member of our team, but, the appointment is designed to slightly overlap with the next booked session. The overlap creates a steady stream of visitors and it indicates serious interest in the property. It encourages faster decisions rather than a ‘walk away and think about it’ approach.
This steady stream also allows us to do the best job we can with the ultimate aim of obtaining an offer that day. We have found a higher percentage of potential buyers are reluctant to walk away without putting their cards on the table. It works for us, we achieve more instant offers with approach, and more importantly the house is sold much quicker!
Gary Butler at Trading Places Estate & Letting Agents commented:
An open house viewing day/event strategy is only beneficial in certain circumstances. Firstly, the market, or at least the property in question, should warrant an open day e.g. there should be sufficient buyer demand.
We have found that by allocating specific viewing time slots, you allow prospective buyers their own time to take everything in. Even if those time slots are just 10-15 mins long, the prospective buyer is able to focus on the viewing, instead of bumping into others. In our experience, and based on client feedback, house hunters really do appreciate this one-on-one time and they feel more comfortable asking questions.
We would usually start with a 2 hour viewing window and have the event take place 7-14 days after the property goes onto the market. When the viewings are being booked you will usually find that the initial viewing window will increase, dependant on the level of interest coming in.
We believe it’s important to be clear with those viewing the property as to exactly what would happen should they wish to make an offer. Each prospective buyer is given a set of property details along with an Offer Form. The form requests information to assess a buyers’ circumstances and buying credentials, for example ‘what is the offer you wish to make?’, ‘do you require a mortgage?’ and ‘what level of deposit do you have?’, and so on.
The Offer Form explains how to submit an offer and the timeframe. For example, since these events are often conducted on a Saturday, offers are to be received by midday on the following Monday or Tuesday.
We strongly advise the seller to go out for the day, and leave everything to the agent. That being said, when sellers spend a few pounds on some sandwiches, crisps, cold drinks, even a few bottles of wine, the prospective buyers really appreciate the gesture. Bringing children to a viewing can be demanding for them, so a few light refreshments go down very well. Of course, this kind of scenario may not suit every situation, but it has never failed to impress and is not a big expense for the seller.
Getting any tenant on side can save issues. Whilst the seller is motivated to find a buyer, it often pays to work with the tenant; a day’s free rent in return for making the property as clean, tidy and uncluttered as possible, as well as going out for the day, could well be worth it.
Like this post? Read more about selling your home here.
Thomas Morris holds many open house events and has enjoyed huge success with them. Below are some key tips they would offer:
Pricing. The price of the property is incredibly important. In order to generate high levels of activity and ensure a busy and successful open house the price needs to be attractive. We have found that where this is the case the final selling price is often far in excess of the initial asking price as having a number of interested buyers, when handled correctly, will inevitably push all potential buyers to offer their maximum for the property. In most cases, when holding an open house, we will set the property price as a guide price only, as this seems to be far less fixed and helps to encourage offers above the asking price.
Timing. When organising an open house, our teams put much thought into the most appropriate time to hold the event. When is it most likely that potential buyers will be available? We have always found that weekends encourage more interest, and in particular scheduling it across a lunchtime may mean people who work weekends can find the time to visit.
Pre-event marketing. It goes without saying that the higher the marketing exposure you are able to give the event, the more likely it is to be a success. However, it is also important to consider the period of time given to market the property before the event. If the property and the event are not marketed for long enough, it won’t generate the maximum levels of interest. Conversely, if the property is marketed for too long then buyers can lose interest before the open house as other properties take their eye. The optimum marketing time can depend on a number of things; price, desirability and likely demand for the property, time of year, current market conditions and other factors should all be considered when deciding when to book the open house.
Conducting an open house. Staff hosting are always fully versed with as much information as possible on all relevant aspects of the property, including the seller’s situation, the immediate location and wider area, current market conditions and the offering and sales process. The ability to address and answer all of the buyers’ concerns will give them the confidence to make strong offers.
There are many different ways to approach the event, and each agent works out the best way to deal with their own, based on their many years of experience and detailed knowledge. With the right approach, an open house event can be extremely successful!
Like this post? Read more about giving your home kerb appeal!
In celebration of London Fashion Week, we take a look at the TOP 10 stylish homes in the capital:
Live in the lime-light in this five-bedroom Victorian property. The modern kitchen is perfect for cocktails and canapes, and any party would perfectly spill from the elegant glass extension onto the patio area. Ultimate relaxation can be found at the end of an evening in the freestanding tub positioned in the centre of the statement bathroom.
Like this kitchen? Take a look at Ten of the best Bake Off Kitchens!
What is more fashionable than investing in a future development? Due for completion in 2020, this two-bedroom apartment will offer 750.6 sq ft of living space and an additional 54.7 sq ft winter garden.
Rising 50 storeys, the ultra-modern AYKON London One tower will stand proud between Vauxhall and Nine Elms. Stone, terracotta and glass come together in a fresh and distinctive world-class design to create an inspiration in luxury living, inside and out. The communal roof gardens are suspended above the city and you will be able to choose a garden to suit your mood - a large, south-facing roof garden, a generous terrace with city views to the north or a sun deck terrace. Everything you could possible desire.
Moments away from the City of London and directly next to Tower Bridge, this apartment is within walking distance of some of the finest dining and culture the capital has to offer. This three-bedroom, 7th floor apartment boasts two balconies with views over Central London. The 1,689 sqft apartment also benefits from a large open-plan kitchen and reception room which fills with light thanks to the floor to ceiling windows. The development further benefits from a concierge and gym and spa facilities, including a swimming pool.
Although these images are just indicators of the finish, you can see just how stylish this apartment could be. Situated in Bolander Grove North, the owners can enjoy modern, open plan living. As you approach the avenue from Seagrave Road, the eye is drawn towards the heart of Lillie Square, taking in the complementary relationship of the various buildings. The distinctive contemporary architecture reflects the design principles of this predominantly Georgian and Victorian neighbourhood. The architecture of this space alone is a real statement.
Consider this fifth floor, west facing apartment with a terrace over the communal gardens which spreads over1,188 sqft, and comprises of two south facing double bedrooms and two luxury bathrooms.. There is no need to travel far in search of most things as this development offers a luxury Fitness Suite, Spa, Cinema, Business Suite and 24-hour Harrods Concierge.
Located near Child’s Hill, this beautifully presented semi-detached five-bedroom home is arranged over three floors, extending to 3210 Sq. Ft. The clean white kitchen is stylishly lit with tinted up and down strip lighting – perfect for serving nibbles to friends as they sip champagne; or you can enjoy a garden party on the decking, overlooking the garden. The balcony leading from the bedroom gives a real sense of grandeur, as though you are enjoying a hotel room for the evening.
St Michael’s Street
A stunning duplex loft apartment in this attractive period building. Measuring over 2500sq ft the apartment has been comprehensively refurbished. The top (third) floor boasts an exceptionally spacious 1686sq ft space with vaulted ceilings giving light and space to the kitchen, dining and living area. The purple feature lighting highlights the modern, clean lines of this space.
The bedrooms are finished in a glamourous style and have plenty of space to keep the many clothes you might
This elegant Mansion Block apartment is located on the corner of the second floor. Make the most of the large reception room with a bay window and the abundant period features, such as the beautiful fireplace. Located just a short distance from West Kensington station, this plush pad is in a great location and perfectly suited for entertaining friends over a delicious meal. The current interior style is elegant and regal – but the possibilities are endless beneath the high ceilings!
This south facing apartment boasts far reaching views over London. The 11th floor apartment consists of two bedrooms and bathrooms with nearly 1000 sqft of living space. A state of the art kitchen, full width floor to ceiling windows and access to a balcony with river views would really impress. This apartment includes access to the Gym, Atrium Pool, Library, Cinema and Games Room (coming in 2017), 24-hour concierge and virtual golf!
Spaced over four floors, this three-bedroom mews has an abundance of natural light throughout. Complete with a garage, secluded internal vertical garden, a bright reception room, open plan kitchen with the dining room and 3 en-suite bedrooms, this is a chic family home.
The open plan dining area and modern kitchen make a great social space. All the floors benefit from the quirky vertical garden running the height of the house, giving this city home a hint of green.
Moving might be commonplace, but the average person doesn’t actually do it very often! It’s surprisingly easy for sellers to get in the way of selling their own home, so here are 10 top tips to keep you on track:
1. First things first; do you really want to sell your home? If you’re putting obstacles in the way of selling, you may have a case of sellers-remorse. Be sure you want to move and then be fully committed – only being 50% sure will absolutely hinder your sale.
2. Overpricing your property is likely to dampen your chances of selling. If you insist on selling your home at the wrong price you may be your own worst enemy. Speak with your agent and agree a realistic figure based on the market, location, condition and so on.
Find out how to spot an overpriced home
3. Clean up! No one wants to view a dirty home – don’t let traipsed-in mud, excessive dust or cobwebs stand in the way of a good viewing!
4. Fix it! If the tap is leaking, call the plumber. Small repairs could stand in the way of a great viewing when they don’t need to. If your agent mentions something needs replacing or updating, listen to them – they know what they’re talking about.
5. You love your pets, but it doesn’t take much to become ‘nose-blind’. Don’t let smells put potential viewers off. Your agent can help by being the objective third party here and give you an honest opinion; if you aren’t sure, ask.
Find our what devalues your home
6. Present your home in the best possible light. Imagine your interior as a shop window and present your space appealingly. It can be hard for buyers to imagine the decor differently, so make it as versatile as possible. Painting over a lime green wall with a more neutral colour could be worthwhile, and decluttering will dilute your personality and create more of a blank canvas.
7. Make sure the interior and the exterior match; presenting your home doesn’t just mean your rooms. Potential buyers should be able to take pride in the exterior of the property and, if there is a garden, look forward to enjoying the outside space with friends and family.
How to give your home more kerb appeal
8. Leave the viewing to your estate agent. You know your home inside out, but being present at viewings, or insisting on doing them yourself, can be off-putting. The things you consider important could be utterly irrelevant to, or even hated by, your house-hunter; not everyone loves a serving hatch or a dumb waiter! Your estate agent’s skills come into their own here – let them make your property shine. They understand what the buyer is looking for and can sell your home in the best way.
9. Make your home available. You should never assume that someone will come back if you prevent a viewing. There are plenty of house-hunters who will not try to rearrange or they may find another house they like in the meantime, and all because you haven’t given the bathroom a quick clean in time. Order your priorities so that you are as close to viewing-ready as possible whenever you need to be.
10. Keep the momentum. If you’ve had a few viewings and no luck, your enthusiasm is likely to wane. Vendors love their homes and when others aren’t feeling the same love it can be disheartening. Remember, it only takes one buyer! Maintain your presentation and tidiness because it will be worth it in the end.
People are always told not to judge a book by its cover, but with property, first impressions are extremely important. Use these top tips to give your property serious kerb appeal:
1. The approach
No one wants to stumble through a gate falling off its hinges, unless you are selling a ‘project’. If you are replacing it, choose a suitable gate for your property; does wood or wrought iron work best, for example. If you’re painting your current gate, the aim is to be appealing but in keeping. Think neutral colours for a fresh, palatable look.
Tidy the path up, by removing any weeds and cleaning the edges. Trim the grass or plants neatly or sweeping the stones off the path. Make a manicured ‘yellow brick road’ to your front door.
2. A touch of green
Many people love quirky, off-beat looks, but consider giving your front door some symmetry with a matching set of shrubs or hanging baskets. It can create a clean, precise look and be pleasing to the eye.
Alternatively, layer some plants around your porch to give depth and definition. Having a selection of plants in various pots gives a ‘garden’ feel, while keeping the look casual and contemporary. It will also give a low-maintenance and achievable feel.
Remember even the most polished, modern homes will be softened by some greenery, breaking the aspect up.
3. The front door
Take a closer look at your door fittings and be objective. If you don’t want to press your finger into the mouldy-looking ringer, no one else is likely to! Choose something in keeping with your home.. Think about whether a knocker or a door bell is more in-keeping and a nice clean handle is a good starting point.
Also, take a look at the door itself. Start by giving it a good clean and remove dust and cobwebs which have built up. You could also give it a new lease of life with a fresh, colour. Avoid neon pinks, but you can be bolder than you think and give your property some character.
When it comes to the welcome mat, opt for something simple and welcoming. A personalised mat may put people off when trying to imagine your property as their home.
4. General tidy up
There is no need to have your children’s summer toys strewn all over the garden or piled in the sandpit, collect them and store them away. Your potential buyers may not have children, which could make the toys extremely off-putting.
Remove weeds in any plant beds, mow the lawn and tidy the edges up. Even if you aren’t into gardening, there is no need for it to look messy.
Don’t forget to take a good look at your windows – they should be clean and streak-free, just in case your viewers choose to peek inside.
General tidying up is one thing, but the guttering needs your attention. Get your rubber gloves out or call someone who can help you; you should replace it if absolutely necessary. It’s something we often put off, but a gutter full of leaves and black muck will be one of the first things people notice. If you have gone to the effort of cleaning the rest of the house, the guttering should match.
6. Artwork, sculptures or water features
Give your home some personality with a sculpture or water feature. It doesn’t need to be pretentious or twee, a simple waterfall could work and would make a lovely sound. Be wary of families with small children and don't go for anything too deep. Gnomes tend to stir strong feelings in most, so maybe choose something different!
There will undoubtedly be some viewers who do a late night ‘drive-by’. Light your property with affection – give it a homely glow that looks inviting on a winter’s evening. There’s no need for neon uplighters which upset everyone on the street. Instead, some subtle solar lights along the path, or well-chosen lamps by your front door will look lovely.
8. Don’t forget the garage
If your garage and its door is visible when approaching your house, it is definitely part of your kerb appeal. Again, give the door a good clean to freshen it up – although you should get the paint brush out if you need to. Plants are another way to style and hide the garage a little, making if feel like part of your home rather than an ugly, forgotten extension.
9. Hide your rubbish
Following a thorough spring clean, you’re likely to have lots of rubbish – don’t leave it out in piles for people to see! Think ahead and clean and declutter before any visits and in time for bin collection day. Of course you can’t predict when you may have a viewing, but you should be prepared to let people in whenever.
10. The pavement
The street outside your home may not be your responsibility, but it is part of the viewing experience. You can’t possibly control it all, but there are some things you can do. If you live on a leafy street, sweep away the dead leaves. If your neighbour’s bins are strewn all over the path, straighten them up. The little details might just help.
The recent cut in the Bank of England base rate may have come as welcome news for many mortgage holders, but for savers it has been yet another hit on their returns.
There is light at the end of the tunnel however. At times when homeowners are struggling to make their savings work for them, offset mortgages offer an excellent alternative, and can also be big money-savers.
This type of mortgage works by allowing homeowners to ‘offset’ the balances held in their savings and current accounts against the mortgage debt, thereby reducing the amount of interest payable on the mortgage. Put simply, instead of earning interest on their savings, a borrower pays less interest on the mortgage.
There are a number of other attractive benefits to offsetting. Because no interest is earned on the savings, there is also no tax to pay, so this can be particularly useful for higher rate taxpayers.
Like this post? Read more on this topic here.
There is also a greater degree of flexibility than can be found with many traditional mortgages. Most deals provide an overpayment facility, but this is often restricted to 10% of the mortgage balance per year. Offset mortgages generally provide an unlimited overpayment facility and, perhaps more importantly, borrowers retain easy access to their savings at all times.
This type of mortgage can be especially effective for homeowners with variable sources of income. The self-employed, for example, might use their offset account to put money aside over the course of the year to pay their tax bill, so having that easy access is essential.
Lenders generally offer two options depending on how the borrower wants their mortgage to work. They can choose to reduce their monthly payments as a result of the reduced interest charge, if cutting costs is a priority.
Many opt to keep their payments as they are however, in order to reduce the overall term of the mortgage. This means making savings on the overall amount of interest paid and clearing the debt much quicker.
The interest rates available for offset mortgages are higher than for traditional mortgages, so borrowers will need to do their sums before deciding if this is a worthwhile option for them. However, with interest rates currently at record-lows, and savings accounts offering little in the way of returns, now may be the time for borrowers to consider using their money in a different way, and ultimately for their own benefit.
If you are considering an offset mortgage or simply need mortgage advice, then please speak to the Guild Mortgage Service provided by fee free L&C Mortgages.
You can contact L&C mortgages on: 0800 073 1945
Economic News August 2016
On the 4th of August, the Bank of England Monetary Policy Committee unanimously agreed to cut the base interest rate to 0.25 per cent from its already record low level of 0.5 per cent, where it had remained since March 2009. The aim of the cut is to encourage households and businesses to borrow more and to encourage banks to create more money for loans and thereby keep money flowing into the economy. However, as rates are so low, the effect may be limited.
As the cut was announced, some major mortgage lenders, including HSBC, Santander and Nationwide agreed to pass on the cut. However, Tesco Bank raised rates on a dozen tracker loans for new customers and the Halifax has followed suit, increasing the interest rate on two-year trackers offered to borrowers with small deposits to 2.04 per cent.
At the same time as cutting the base rate, the Bank of England announced further measures to stimulate the economy, which included a new round of quantitative easing to the tune of £60 billion, as well as buying up to £10 billion of UK corporate bonds. It also set up a new £100 billion Funding for Lending-style scheme. The Bank stated that there was still scope to cut the interest rate further if the economy worsens.
The Bank’s quarterly inflation report, delivered alongside the rate decision, downgraded Britain’s future growth forecasts but maintained the 2 per cent forecast for 2016 following a better-than-expected 0.6 per cent GDP growth in the three months up to June, up from 0.4 per cent in the first quarter of the year. A further positive note was sounded when the Office for National Statistics reported that UK industrial output grew at the fastest rate for 17 years in the April to June quarter. The figures were 2.1 per cent up on the first quarter of the year.
Mixed views are being reported on the state of the housing market. According to a survey by the Royal Institute of Chartered Surveyors, the UK housing market is continuing to slow in the wake of the Brexit vote, with a significant slowdown in price rises in the three months to the end of July. The Halifax said house prices fell by 1.0 per cent in July compared to June but the Nationwide said prices rose by 0.5 per cent. On an annual basis, the Halifax said house prices had increased by 8.4 per cent, while the Nationwide said annual house price inflation was 5.2 per cent. However, the latest House Price Index published by the Office for National Statistics affirms that UK house prices in June had increased by one per cent over May and by 8.7 per cent over the previous year; the official July figures will be released in September.
The Office for National Statistics reported that UK construction output fell in June but stated that there was ‘little anecdotal evidence’ of a Brexit impact. This contrasts with the Markit/CIPS purchasing managers' index, which suggests output in July shrank at its fastest since June 2009.
New inflation figures were released in mid-August. The Consumer Prices Index rose from 0.5 per cent in June to 0.6 per cent in July. The main reason cited was an increase in fuel prices, which are priced in dollars and thus affected by the fall in the value of sterling. The Retail Prices Index measure of inflation also increased from 1.6 per cent in June to 1.9 per cent in July.
UK HOUSE PRICE INDEX: June 2016 (released 16 August 2016)
The June 2016 house price index data for the UK showed a monthly rise of 1.0 per cent across England, Wales, Scotland and Northern Ireland, while in England the increase was slightly lower at 0.8 per cent. In London the monthly change was 0.2 per cent but it was the South East region that experienced the highest monthly growth with a rise of 1.5 per cent. The West Midlands and the North East each saw the most significant monthly price fall with a movement of minus 0.2 per cent.
On an annual basis the price change across the UK was 8.7 per cent, bringing the average house price to £213,927. In England the annual price increase was a little higher at 9.3 per cent and the average house price £229,383. London experienced a rise of 12.6 per cent making the price of an average London home £472,204. However, it was the East of England that saw the greatest increase over the year with a rise of 14.3 per cent, while the North East saw the lowest annual price growth at just 1.5 per cent. In terms of property type, flats and maisonettes once again saw the greatest annual increase in prices both across the UK as a whole at 9.8 per cent and in England at 10.6 per cent.
Detailed statistics for local authority areas continue to show a wide variation but ten areas saw a fall in prices over the year, notably Hammersmith & Fulham and South Lakeland at minus 3.2 per cent. The highest annual rise was seen in Slough at 24.6 percent, while Stevenage, Croydon, Luton, Newham and Waltham Forest also saw increases of 20 per cent or more.
Sales volumes for England in April 2016 totalled 42,938 compared to 102,597 in March. April sales were also 33.4 per cent down compared to a year ago when 64,467 completed house sales were made.
Statistics relating to building status showed that the average price of a new build property in England in June was £268,703, down 4.6 per cent on May but up 9.2 per cent on a year ago. The average price of a resold property was £227,377, a rise of 1.6 per cent over May and 9.6 per cent higher than 12 months ago.
Statistics on buyer status in England showed that the average price of a house sold to a first time buyer was £192,987 and to a former owner occupier £259,780. Prices to first time buyers increased by 0.6 per cent over May, while re-purchasers saw an increase of one per cent. Over the year, prices for both first time buyers and former owner occupiers increased by 9.3 per cent.
The latest figures on funding status, which compare average cash and mortgage prices, show that in England the average cash price was £215,534 and the average mortgage price was £236,363. The monthly change for cash buyers was an increase of one per cent, while mortgage purchase prices rose by 0.8 per cent. However, the annual change for cash purchases was 8.7 per cent, while for mortgage purchases it was rather higher at 9.6 per cent.
The seven-year itch
Both Coventry Building Society and Barclays Bank have announced the launch of some highly-competitive 7-year fixed rates.
These deals not only offer longer term security for borrowers, but have been priced to match the cost of some of the best 5-year fixed rates currently on the market.
Deciding how long to fix your mortgage for is not an easy decision, and for some, locking in to a deal for 10 years may seem too long. These new offerings will provide a useful alternative for homeowners.
The recent vote to leave the EU has resulted in a degree of uncertainty, and this combined with falling funding costs could mean that now is the perfect time for borrowers to grab some peace of mind for the medium to long term.
These deals do carry Early Repayment Charges throughout the fixed period, so it’s important to be mindful of any potential changes in circumstances over the next few years.
Fixing for this length of time will not suit everyone, but for some a seven year deal will provide peace of mind for the future, and being able to do so at record-low rates is an added bonus.
Leeds Building Society improves its Buy-to-Let criteria
Leeds Building Society has introduced a greater degree of flexibility into its criteria, by announcing that it will no longer impose a maximum tenancy period for Buy-to-Let mortgages.
Criteria regarding tenancy agreements has improved throughout the market in recent years.
Rather than insisting on a maximum of just 6 to 12 months, most lenders now allowing tenancies of 2, and in some case 3 years.
Very few currently go beyond this however, so the move by Leeds has been welcomed by many.
With people renting for longer, and an increase in the number of families with children living in the rental sector, there is a definite need for more security of tenure.
Leeds has now opted to accept agreements for a time period which is suitable for both landlord and tenant.
This will provide more choice for those who would prefer to have a longer agreement in place and offer a greater level of security for both parties.
Fixed or variable?
Falling funding costs and a recent cut in the Bank of England Base Rate means that the choice of mortgage deal is as good as it’s ever been for borrowers.
Fixed rates are currently at record lows, so now is the perfect time to protect your mortgage payments for the foreseeable future by locking in to one of today’s highly competitive rates.
With talk of another cut in the base rate later this year, some borrowers will be attracted to variable rates, such as trackers or discounts, and the chance to make savings now. Many of these deals also come with no Early Repayment Charges, so the flexibility on offer can prove useful.
It is worth noting however that, since the base rate cut, some lenders have already increased the margins on their tracker mortgages, and others are likely to follow suit.
It is also worth checking the small print, as some tracker deals contain a collar, which would prevent it from dropping any further.
The choice of mortgage comes down of course to personal preference, but it’s important to consider how much room you have in your budget to cope with rising payments.
Anyone concerned about the prospect of an increase should look to fix now and take advantage of some rock-bottom rates.
Bank of England cuts base rate
Last week saw the Bank of England cut Base Rate for the first time in over 7 years, to a historic low of just 0.25%.
The move follows months of speculation, and mortgage-holders will now be keen to find out what it means for them financially.
Most borrowers with an existing tracker mortgage linked to the base rate should see the full 0.25% cut passed on to them, and a drop in their monthly payments as a result.
It is worth checking the small print however, as some lenders have applied a ‘collar’ which would prevent the payable rate from falling below a certain level.
Homeowners currently on a Standard Variable Rate may have to wait a little longer to see what their lender will do, and there are no guarantees that the full cut will be passed on.
Many will be tempted to wait and see what their lender will do over the coming weeks. Rather than settling for a small drop in their rate however, it makes sense to review the market and find out what other options are available.
There are much lower rates to be found and the savings will be far more significant.
As Poldark returns to our screens on 4th September, the beauty of the Cornwall and its exquisite coastline is once again in the spotlight. There are plenty of remarkable homes hidden in the Cornish hills, here are ten of our favourites.
Blisland, Bodmin. £745,000
You can explore Poldark country until your heart is content in Blisland. Just a few miles from St Breward, the filming location for Poldark’s home, is this six-bedroom country farmhouse.
Positioned in 3.2 acres of land, this property is currently used as a guest house with fantastic ratings. There is also a fine range of stables and workshops with the property – there is so much opportunity with this Victorian house dating back to 1890.
Restronguet Weir, Mylor. £1,750,000
The property has been aptly named Sunrising as its coastal setting on Restronguet Weir is picture-perfect. After ambling down a quiet country lane surrounded by fields, this four-bedroom family home can be found perched right by the sea. The property makes the absolute most of its spectacular view of the Fal estuary, especially in the main, open-plan living space which is characterised by the atmospheric blue view.
The low maintenance patio area is idyllic for indulging in the panoramic view. If you want to get a little closer to the water, the boathouse, slipway and quay make a voyage as easy as possible with all the private facilities literally on your doorstep.
Church Street, Helston. £139,950
This former Church Hall is packed with character. The property has an open plan lounge/kitchen/dining area which makes the most of its high vaulted ceilings. The kitchen has a contemporary, industrial feel thanks to the pan rack suspended in this light airy space. The wood burning stove is perfect for weathering stormy nights, while the low maintenance, enclosed garden is ideal for a dining alfresco in the warm Cornish summer months.
From here, a 15-minute drive will take you to Gunwalloe Church Cove where the Poldark shipwreck scenes were filmed. It is next to the Dollar Cove, named after local tales of a Portuguese treasure ship sinking offshore in 1526, and in 1783 a ship carrying silver dollars was also wrecked nearby. A fantastic story and the perfect reason to go exploring.
Fowey, a charming seaside town in south Cornwall, is surrounded by miles of coast and countryside, much of which is in the ownership of the National Trust. This impressive four-bedroom home is spread over three floors showcasing its location – the living space is particularly special as it frames the view. The private balconies are perfect for enjoying a glass of wine (after watching Poldark, of course). This property boasts direct access to the water via galvanised steps and a running mooring under licence, which is ideal in this natural harbour that provides some of the best sailing waters in the country.
Tropical Cornwall is on show in this private beachside residence. Set within 2 acres of sub-tropical gardens with a panorama over the coastline of Whitsand & Looe Bay, this property has a very special location. Rame Head, the Eddystone Lighthouse are on the horizon and Looe Island is in the west. The balcony and extensive level terraces adjacent to the property provide ample space for entertaining and alfresco dining.
Between the seaside villages of Downderry and Seaton, this property sits atop the hillside, just a short walk from the long sandy beaches it gazes over. The mix of rock pools and sand make this beach a fantastic place for children to explore.
Gerrans, Portscatho. £975,000
The Rectory is a beautiful Grade II listed property believed to have been built in the late 19th century. This four-bedroom home in has views across Gerrans Bay to Gull Rock, Nare Head and beyond. Sold by the Diocese of Truro in 2013, in a state of complete disrepair, the property has since been lovingly renovated from the ground up.
The kitchen is a lovely space with limestone floors and LED down-lighters that really help to showcase the light from the large south-facing bay, wooden, sash windows. But if you want to indulge in the coast, the Portscatho beach is isn’t far.
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Engollan, near Padstow. £425,000
The Burgeys is a semi-detached period cottage built of traditional Cornish stone with a natural slate roof, sitting in gardens of approximately one quarter of an acre. The stone fireplace is a beautiful feature.
This property has been successfully holiday let providing a substantial income for a number of years and is ideally located. Engollan is a picturesque rural hamlet about 2 miles of Porthcothan Bay – the filming location for Poldark’s Napara Cove. The historic harbour town of Padstow is within roughly 6 miles.
Great Pinnock, Fowey. £450,000
The historic port of Charlestown is a berth for tall ships in Poldark. It has also been featured in many other films including the Three Musketeers and The Eagle Has Landed.
This unique detached home is just up the road from Charlestown in Fowey. Built circa 1900, this home is set in countryside with fabulous rural views and a mere 2 miles to the centre of the town. The kitchen has wide windows which make the most of the wonderful view. A little sprucing up and this could be the perfect country retreat.
Pentewan, St Austell. £335,000
Still within 5 miles of the beautiful Charlestown, is this Grade II listed three bedroom detached Georgian House. It is positioned on the outskirts of the highly sought after coastal village, Pentewan.
This well-proportioned home is finished with a dressed local stone exterior, small paned sash windows and natural slate roof. Internally there are a number of notable features, from the Oak entrance door leading into the main living room with two open fireplaces finished in exposed stone either end of the room.
The owners can enjoy a short walk to the village centre or the beach from this great location. There are beautiful coastal walks covering many miles, and the busy active fishing village of Mevagissey is only a mile further South while the Lost Gardens of Heligan are only two miles distant.
Church Street, Tywardreath, Par. £177,000
This three-bedroom, end of terrace period cottage on Church Street, situated in the heart of Tywardreath, is a great find for a first time buyer, not far from Polkerris or Polperro. The property consists of three bright and airy bedrooms, charming and cosy lounge with exposed brick feature fireplace and exposed wooden beams.
Close to the Eden Project, or Poldark’s Charlestown, this is a great location from which to explore and enjoy the Cornish coastline.
If you work in the City but prefer to leave the bright lights of the capital behind as you leave the office, here are 10 of our top places to live outside of London and best of all, they're all within a 60 minute commute by train.
High Wycombe, Buckinghamshire
Home to the Hellfire Caves, dug by hand in the 1700's, High Wycombe has plenty to offer including the National Trust's West Wycombe Park, showcasing 45 acres of landscaped beauty.
Commute time: 33 minutes to Marylebone
Average house price: £396,984
With it's famous cockle sheds and excellent fish restaurants, Leigh-on-Sea is a picturesque town. The old town retains it's sense of history as a working fishing village. Hadleigh Country Park is home to 389 acres of marsh, sea wall and grassland and is a haven for birdwatchers.
Commute time: 47 minutes to Fenchurch St
Average house price: £337,757
A commuter town since 1862, Sevenoaks is home to 'The Vine', the cricket pitch on which the first-ever nationally reported cricket match was played, as well as numerous golf courses. There are beautiful walks to be taken in the North Downs Way and the Sevenoaks Wildfowl Reserve.
Commute time: 33 minutes to Charing Cross
Average house price: £598,770
38 miles west of London, Reading is popular with commuters for a wide variety of reasons, including the high number of Ofsted Rated Outstanding schools. Reading is a commuter hot spot itself due to the large number of big-name firms who operate there, including Microsoft and Ericsson. In addition to being home to one of the biggest summer music festivals, there are also a number of pretty canal-side walks for quieter days!
Commute time: 29 minutes to Paddington
Average house price: £403,288
Surrounded by some beautiful countryside, Berkhamsted is a prosperous old market town. With scenic towpath walks along the Grand Union canal and a thickly wooded common, it plays host to a number of local events including a monthly farmers market - a perfect slice of the countryside.
Commute time: 31 minutes into Euston
Average house price: £640,057
Housing is arranged in a grid pattern with a mix of everything from starter homes to retirement flats in each segment. The centre:mk offers an extensive shopping experience with big High Street names such as Joules, Cath Kidson and John Lewis all under one (enormous!) roof. There are many sporting opportunities in Milton Keynes including Xscape, home to the UK's biggest indoor real snow ski slopes and Willen Lake which is ideal for watersports.
Commute time: 35 minutes to Euston
Average house price: £274,288
St Albans, Hertfordshire
Deemed as one of the smartest places to live north of the city, St Albans has a mix of Georgian and Edwardian housing, beautifully mixed with 15th-century coaching inns and charming cottages. The Cathedral is a great space for enjoying some serentity after a long week at work.
Commute time: 19 minutes into St Pancras International
Average house price: £555,411
A maritime town, the economy of Gravesend has always been bound to the River Thames. Although a number of the traditional riverside industries have closed down, the Port of London Authority and Customs and Excise have their headquarters based here. The riverside part of town is rich in history with narrow streets and alleyways and historic fortifications.
Commute time: 52 minutes to Victoria
Average house price: £290,528
Granted city status in 2012, Chelmsford is home to a large number of commuters largely due to the excellent schools. V Festival, one of the biggest summer music festivals, takes place every August and there's also plenty of shops, bars, cafes and pubs in the city centre. RHS Hyde Hall is a 360 acre estate and includes the Hilltop Garden, historic hedgerows and woodland.
Commute time: 34 minutes to Liverpool St
Average house price: £349,018
With history dating back to the Battle of Hastings, Reigate is a market town, nestled at the foot of the North Downs. Home to a range of independent shops, there are also numerous restaurants. Priory Park has 200 acres of woodland and open space and has recently undergone major investment.
Commute time: 42 minutes to Victoria
Average house price: £563,398
*Commute times and season ticket costs as per www.commuterguide.co.uk
**Average house prices from www.zoopla.co.uk
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Bake Off is back! Talented or not, baking is something everyone can enjoy – not every bake has to be a show stopper. From homely scones to delicate and sophisticated sugar work, these kitchens are a fantastic place to start your baking journey.
Bethersden, Ashford. £900,000
Built in a traditional style, The Woodlands is a newbuild situated in the popular village of Bethersden in the heart of Kent. The open plan kitchen and dining room is light and spacious – and the granite-topped island would be perfect for practising your star bake! The space is great for spreading out your utensils, but the island also allows you to carry on being part of the conversation or keep an eye on small children! There is an Aga as well as an oven and induction hob to meet your big-batch baking needs. The French doors leading out to the garden will keep the space light and cool.
Reading Street, Tenterden. £900,000
Brockett Farm is a detached country property in an Area of Outstanding Natural Beauty. This four-bedroom, 18th Century Kentish farmhouse has been the subject of meticulous improvement; the results are elegant yet practical.
The u-shaped kitchen surface would wrap any baker in an ideal preparing space. The kitchen, partially separated from the dining room with three beams, provides a great view of the garden as though you were in the actual tent at Welford Park! With triple-aspect patio doors, the light would also be ideal for any delicate decorative sugar work you might like to try. The fruits of your floury labour can then be enjoyed in the sun-drenched dining room, or outside on the patio with a cup of tea.
Brickendon, Hertfordshire. £900,000
Clementsbury, a four-bedroom Victorian family home, could be the ideal place to perfect your Victoria Sponge! Just two miles from the market town of Hertford this once Victorian Dairy Farm is full of charm and character. It has been cleverly restored and modernised and is now a romantic period home with high ceilings and original features.
The sleek, white kitchen is ideal for the modern baker - more Paul than Mary, perhaps. Sculpted cupcakes and bespoke biscuits would delight visitors as they lounge on the l-shaped sofa beneath the frosted windows.
Woking, Surrey. £500,000
This four-bedroom family home in Woking has been extended to the rear to add a fantastic kitchen/breakfast room. The galley-style kitchen is fitted with quartz work tops and splash backs which give a refined, natural stone feel.
There is plenty of light thanks to the rear and side-facing windows, and the well-placed down lighters keep your prep area light in the winter months when it’s time for crumbles and warm chocolate cakes. For those who simply cannot wait to enjoy what they’ve made, the breakfast bar is the ideal place to indulge straight from the oven!
Timsbury, Near Bath. £900,000
The Lodge, once the lodge house to the original Kingwell Hall, is a five-bedroom, 19th Century home nestled in about 2 acres of landscaped gardens.
The star of this dual aspect kitchen is the stunning granite worktops – the colouring gives this room so much character. Cool and smooth, it’s great for rolling out fondant icing to top your Christmas cake! With the dining room just a couple of steps down from the kitchen, this home is perfect for a large family who love sharing their time over some delicious cake.
Tulsemere Road, London. £899,950
The kitchen is a real gem in this four-bedroom period terraced family house, situated on the borders of Dulwich. With windows to the rear and doors to the garden this space really lets the outside in.
The fitted kitchen includes a range of contemporary soft-close wall and floor units which will save the house listening to doors slamming when baker-temper strikes because the dough hasn’t risen as hoped! The granite work surfaces and the white brick-style tiling set off the charcoal walls above giving the kitchen a light, yet dramatic feel. The light wood flooring is a lovely finishing touch, and won’t show up a floury dusting!
Long Clawson, Melton Mowbray. £500,000
This four-bedroom home is a beautifully upgraded, detached period home where modern meets country in the neat, stylish kitchen.
The powder blue wooden cupboards are finished with traditional, black wrought-iron style handles which match the dark wood beams. The light coloured recycled work tops are deep, beautifully capping the pale blue units. The open shelving is a great place to display your sweet treat books for easy reference, as well as some key ingredients like flour and sugar. Thankfully, there is no need to despair at the quantity of post-bake washing up, as the basin has a beautiful view out of the wide window to the garden.
North Creake, Norfolk. £500,000
This is an impressive three-bedroom cottage just a few miles from chic Burnham Market in Norfolk. It’s packed with character yet full of modern features.
The bespoke kitchen is a lovely space. The pebble coloured units give a brilliant, clean look which are luxuriously topped off with solid oak worktops. The central island has a matching oak surface and offers a breakfast bar area. North Norfolk may well be studded with delicious places to eat, but this kitchen is begging to be a family run bakery with homemade pizza and cookie specialities. The French style doors to the rear open out onto the patio giving the room a cool breeze amidst the baking frenzy!
Langport, Somerset. £300,000
This natural Blue Lias stone home, just a mile from Langport, boasts a modern kitchen family room. With a bespoke fitted kitchen, cream-painted units and solid wood work surfaces the country feels very close in this Somerset home. The sea blue/green tiles give the room a restful feel and Mary Berry would feel at home with the porcelain tiled floor.
Given you are spoilt for choice in Somerset for places to indulge in Afternoon Tea, this home will offer its owners the perfect excuse for perfecting scones and smothering them in clotted cream and jam. Whether it is fruit or plain, this homely kitchen will be the ideal spot to enjoy baking.
Churchstanton, Somerset, £500,000
The spacious kitchen wraps around the family table in this four-bedroom home near Taunton. While there’s ample space to measure and weigh ingredients on the beautiful granite work surface, the current owner’s kitchen table creates a real focal point. Resting the bowl on the table while whipping up a bowl of frosting to top a carrot cake seems like the ideal way to spend an afternoon when Bake Off has inspired you.
This barn conversion is full of character and combines quality, space and style. Preserving original features and enhancing the home with superior modern fittings has worked a treat.
*All properties on sale at the time of publication