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02Aug

Ten-year fixed rates

There has been good news for borrowers over recent weeks, as lenders have responded to falling funding costs by launching some record-low 10 year fixed rates.

Products that lock borrowers in for that length of time have not always proved popular, but the gap in margin between interest rates for 5 and 10 year deals has reduced significantly. 

Certainly the prospect of protecting your mortgage payments for the next 10 years at a record low rate will be attractive to many, particularly in such uncertain times.

Borrowers need to be aware however that the majority of long term deals carry Early Repayment Charges for the length of the fixed period.

It is important therefore to consider any changes in circumstances that could occur over the next decade, and whether more flexibility is needed. 

This type of deal is not suitable for everyone, but for the right person it could provide peace of mind for the foreseeable future.


Guild Mortgage Service, Provided by London & Country Mortgages

02Aug

Lenders react to possible base rate cut

All eyes were on the Bank of England this week, following widespread speculation of an impending cut in the Base Rate - the first since March 2009. 

The Monetary Policy Committee has however voted 8-1 to leave rates unchanged, opting to wait until August’s inflation report before taking any action.

A number of lenders, including Halifax and Santander, have already withdrawn or increased their tracker rates over the last few days. In some cases the increases have been nearly 0.50%.

This certainly suggests that lenders believe the Bank of England is preparing to cut Base Rate very soon, and are looking to protect their margins. 

A drop in base rate will of course benefit homeowners who already have tracker mortgages, and would immediately see a drop in their monthly payments.


Guild Mortgage Service, Provided by London & Country Mortgages

02Aug

UK HOUSE PRICE INDEX: MAY 2016 (released 19 July 2016)

The May 2016 house price index data for the UK showed a monthly rise of 1.1 per cent across England, Wales, Scotland and Northern Ireland, bringing the average house price to £211,230. In England the rise was slightly lower at 1.0 per cent but the average house price now stands at £226,807.

In London the monthly change was 1.5 per cent and the average house price £472,163, but higher monthly changes were seen in the North East at 2.1 per cent, the South East at 1.8 per cent and the East Midlands at 1.6 per cent. Monthly falls were seen in the West Midlands at minus 0.1 per cent, Yorkshire and The Humber at minus 0.2 per cent, and the North West at minus 0.3 per cent.

On an annual basis the price change across the UK was 8.1 per cent and in England 8.9 per cent. London saw the highest annual change at 13.6 per cent, followed by the South East at 12.9 per cent and the East of England at 12.8 per cent. The lowest rise was seen in the North East at 3.2 per cent. Detailed statistics for local authority areas show a wide variation but only nine areas saw a fall in prices over the year, notably the City of London at minus 9.2 per cent and Burnley at minus 6.2 per cent. The highest annual rise was seen in Slough at 23.3 percent. Broxbourne and five London boroughs also saw increases of more than 20 per cent.

Sales volumes for England in March 2016 totalled 102,597, an increase of 52 per cent compared to a year earlier. In terms of property type, flats and maisonettes saw the greatest annual increase in prices both across the UK as a whole at 9.2 per cent and in England at 10.1 per cent.   

Statistics relating to building status showed that the average price of a new build property in England was £293,461, up 9.6 per cent on the preceding month and up 17.9 per cent on a year ago. This contrasts with resold property, which has an average price of £222,455, just 0.4 per cent higher than a month earlier, and 8.3 per cent higher than a year ago. 

Statistics on buyer status in England showed that the average price of a house sold to a first time buyer was £191,099 and to a former owner occupier £256,593. The monthly and annual increase in prices was broadly similar for both: first time buyers saw monthly increase of 1.1 per cent, while re-purchasers saw an increase of 1.0 per cent. Over the year, prices for first time buyers increased by 9.1 per cent, while former owner occupier experienced an annual change of 8.8 per cent. 

The latest figures on funding status, which compare average cash and mortgage prices, show that in England the average cash price was £212,618 and the average mortgage price was £233,971. The monthly change for both cash and mortgage purchases was much the same at 1.0 per cent and 1.1 per cent respectively. However, the annual change for cash purchases was 7.9 per cent, while for mortgage purchases it was rather higher at 9.4 per cent. 

02Aug

Help-to-Buy 

The Government Help to Buy initiatives have proved popular since their launch in 2013, allowing thousands of First Time Buyers to step onto the property ladder.

It is worth noting however, that these schemes are not just for the first-timers, but are also open to existing homeowners looking to move property. 

Recent figures showed a notable difference between the increase in house prices compared to those of flats. Someone looking to make that move to a larger property may therefore find they do not have as much equity as expected, so bridging that gap may be difficult.

Both Help to Buy schemes – the Equity Loan and Mortgage Guarantee – allow borrowers to put down just a 5% deposit. 

For those not keen to re-visit the Bank of Mum and Dad, this could prove to be a lifeline.

Guild Mortgage Service, Provided by London & Country Mortgages


02Aug

Economic News - 12th July 2016

The referendum vote at the end of June in favour of leaving the EU will have a major effect on the UK economy in both the short and the long term. 

In the immediate aftermath, the Bank of England issued its twice-yearly Financial Stability Report, in which it warned there was already some evidence that the risks it had identified in relation to a Brexit vote, such as the slump in sterling, particularly against the dollar, were emerging and that the outlook for UK financial stability was ‘challenging’. 

However, the Bank averred that its preparation ahead of the referendum was paying off as financial markets continued to be relatively stable and there had been a fall in borrowing costs to both government and business, while the pound’s decline had provided a boost for exporters and businesses that earned revenues overseas. However, the weak pound is seen by others as a double-edged sword, as many UK exporters are also importers as a result of global supply chains and so will be up against higher input costs. The Bank has eased its special capital requirements for banks, which potentially frees up £150 billion for lending and could help if the uncertainty from the leave vote causes the economy to slow down and banks become more wary.

Nevertheless, the Bank’s Financial Policy Committee (the FPC) said there were risks apparent in the commercial property market, where vital foreign inflows had fallen by 50 per cent in the first three months of 2016. The FPC also repeated its concern over the significant level of UK household indebtedness and the vulnerability of some households to higher unemployment and borrowing costs. It also said that house prices could come under pressure, especially if buy-to-let investors abandoned the market.  

Recently released figures from the Office for National Statistics show that the trade deficit in goods and services widened to £2.26 billion in May from a downwardly revised deficit of £1.95 billion in April. The figures, which precede the Brexit vote, show that the deficit on trade in goods alone increased to £9.9 billion in May, up half a billion from April. 

Growth in the UK service sector slowed in June to its lowest level since February 2013 according to the closely watched purchasing managers’ index (PMI) produced by Markit/CIPS. Almost 90 per cent of the data was collected before the EU referendum result was known and a further slowing or possible contraction is feared likely in the coming months following the uncertainty created by the referendum. The Markit/CIPS construction purchasing managers’ index also fell in June to its lowest level since June 2009. 

Meanwhile, Moody’s, one of the three large credit ratings agencies, has downgraded the outlook for the UK economy from ‘stable’ to ‘negative’ over concerns about the impact of leaving the EU. Moody’s currently score the UK with the second highest credit rating on its scale but is now warning that it may lower it, which means that a higher rate of interest may be imposed on money borrowed by the government in international financial markets.

Currently, mortgage rates continue to creep downwards with several lenders cutting rates since the referendum. Many economists now believe that there is a high chance that the Bank of England will cut the base rates.

02Aug

Coventry Building Society increases rental requirement


Coventry Building Society has become the latest lender to raise the rental income requirement on their Buy-to-Let mortgages. As of this week their calculation has increased from 125% coverage to 140%.

This follows a string of lenders who have reviewed their policies in response to a Bank of England consultation earlier this year. The regulator has put a focus on affordability and stress testing to ensure that Buy to Let mortgages remain sustainable, even if costs rise.

Lenders including Coventry, The Mortgage Works and Barclays have already taken action, changing their criteria to account for future increases in costs and the potential for lower profitability.

Clearly property investors need to be aware of the increasing costs, including changes to tax relief, over the coming years and take account of this when planning any future purchases. 

The good news is that Buy-to-let rates are currently very low, so now is a good time to review any existing mortgages and look at cutting outgoings now.


Guild Mortgage Service, Provided by London & Country Mortgages

28Jul

To put it simply, selling a home often boils down to the price. There are a few ways you can quickly identify properties which are overpriced, and this knowledge will put you in a better position when you’re looking to buy. It could well be a refreshing change to find that a property you love is actually overpriced, and not just completely out of your budget!   
How long has it been on the market?
Typically, the first month on the market is when a property gets the most action. When the flurry of activity dies down and the property has been for sale for six months, it can become stale. An often-quoted statistic is if a home has been on the market for 60 days or more, the chances are it’s not priced correctly. Although, it is worth noting that high-end homes are often on sale for a longer period.




What condition is it in?
Emotional overpricing is a serious possibility. The love and investment we put into our homes feels like it should be rewarded. A home that is priced according to home improvements and amenities is unlikely to be accurate, especially if the owner is insisting on selling at a price which is based upon their monetary investments to the property, rather than on the value they have added. If this is the case in reverse, a home in poor condition which is trying to match the price of properties with a high-quality finish on the street is also likely to be overpriced.




Does it match the value of neighbouring properties?
If the property next door is worth a fraction of the home for sale something is amiss. House prices should be, within reason, comparable. Take a look at current listings and recently sold properties; this should give you a realistic view of the local market as what houses are listed at isn’t always what they sell for.  




Where is it?
Location is everything. This is an extension of evaluating the local neighbourhood in some ways, but houses with a similar footprint will be valued differently according to location. A less desirable part of town is not going to achieve the same selling price as one on the trendiest street in town.




Essentially, something that is overpriced won’t sell – but that can also be an opportunity. If there have been no offers and a property has been on the market for a couple of months, it is worth making a lower offer. There is no need to make an insulting offer, but with a justified figure you may get lucky!

25Jul

City living and city cycling go hand-in-hand. Choosing cycling over driving will not only reduce your carbon footprint but you will also arrive to work energetic and carefree, having avoided that frustrating peak hour’s traffic. Since most cities now have dedicated cycle routes, and are usually backed by government investment, there are no more excuses! In case you need any help to get on your bike, here are some cycling-cities to try:


CAMBRIDGE
Claiming to have one of the highest levels of cycling in the country, with one in four residents cycling to work, Cambridge is certainly the ideal city for cyclers. It’s relatively flat, and the extensive cycle route network, covering over 800 miles, is perfect for all ages and abilities to enjoy.



In this historic city-centre cycling opens an entirely different world. Much of the pathways across the university campus are only really fully accessible on two wheels. Whether you are a history buff or not, this is a beautiful city with remarkable architecture to admire on your bike.


LONDON
Cycling in our capital has been made much easier thanks to the Santander Cycles. This self-service, bike-sharing scheme is perfect for short journeys. You can hire a bike from as little as £2. Simply go to any docking station with your bank card and touch the screen to get started. There's no need to book - hire a bike, ride it where you like, then return it to any docking station.

There are plenty of cycle lanes to navigate on two wheels. Tourists might like to follow the river, the perfect pathway through the city.




OXFORD
A hybrid of history and cosmopolitan life, Oxford is a wonderful city to explore. A famous university city, it has many narrow streets through historic buildings. Although they may not be some of the smoothest cycle routes, there is the opportunity to see some of Oxford’s most mesmerizing architecture. Try a cycling tour which is ideal for those who want to explore, but not get lost! For the dedicated, there is a 10-mile loop of the city.




BATH

Bath is even more beautiful by bike. There is a self-service system called nextbike enabling you to hire a bike from nine docking stations around the city. There are also plenty of places to hire a bike from for just a couple of hours upwards. If you feel like cycling to the next city, the Bath to Bristol cycle path is a lovely, flat 13-mile route.




YORK
Getting around York by bike is easy. Being centrally located, York also provides the perfect base for touring the wider Yorkshire region by bicycle where you can enjoy mles of scenic routes. Hop on your bike with a cycling tour for the best views of some of the fantastic attractions. There is also the North York Moors to explore which offers some great views – York has a wonderful mixture of sightseeing and open country to keep you interested!





Although it is a great way to get around, a word of warning: be careful! Make sure you can always be seen, which means keeping your distance around lorries and wearing hi-vis material at night. And, like your mother always told you – don’t forget to wear your helmet!

20Jul

It’s no secret that moving house is listed as one of the most stressful things you can do. Choosing a good estate agent who will act as your partner during this process is a great starting point, but what do you do if things get a little overwhelming mid-pack?

For some more practical advice about how you can organise your move, which will in turn save some stress, take a look at our Top 10 tips to make your move as easy as possible, for some great advice. No matter how well-planned your move is, stress can still arise. Here are 6 ways to help keep you calm and collected:

Make a list
There will be many things which will stress you out when moving, but there are some things which might take you by surprise. You know yourself better than anyone, so if you know that a muddled sock drawer is one of your trigger points be prepared for it! A list is a good way to do this - it can act as an anti-stress to-do list as well as keep you organised.

Relaxing activities

We are all different and how we decompress varies greatly. Trying some simple yoga moves can help you to centre yourself and shut out your environment. If you are a beginner, be careful since the last thing you need is to pull a muscle and render you out of action. Similarly, meditation can be a good way to reframe your thoughts.



For others the sense of calm after a work-out is the ultimate release; exert your energy on something else for a while like running or walking and experience the power of endorphins.





Think positive
Negativity can be overwhelming - don’t forget to laugh! If the books fall out the bottom of the box, laugh; they can be repacked. Some of the tensest moments of our life’s often turn out to be the most lovingly reminisced so give yourself chance to enjoy the moment - you won’t move out of this house again.

Get some space

Feeling stressed can be quite claustrophobic. Get some distance from your anxiety by removing yourself from the situation for a moment. If you are tight for time, try shutting yourself in a quiet room (preferably one which isn’t caught in the mid-packing chaos) or stepping outside for some fresh air. Otherwise, a trip out for a cup of coffee might be just the answer.



Breathe
Breathing exercises can really take the edge off intense moments. Try taking a couple of deep breaths, in through the nose and out through the mouth. With a nice, steady pace try this for three to five minutes to give yourself chance to feel the benefit. Again, it may be wise to try and find a quiet spot, away from children and removal men to get the maximum benefit from this.





A good nights' sleep

It isn’t possible to underestimate the power of a good night’s rest. Feeling tired will only heighten your stress levels. Turn the TV off (if you haven’t packed it!), shut off the laptop and make the space as calming as possible. Consider keeping the bedroom box free so that you aren’t constantly reminded of your state of limbo.

Like this article? Read more on this here.

18Jul

In an ideal world there would be no such thing as compromise – houses would perfectly match our long list of criteria, and fall within our budget. Sadly, the reality is a little more complex.

Even within the same household, desires are often mismatched; there may be a good quality pint of IPA within walking distance, but there is no space to entertain friends. Trivial as these things may seem, where we live is an extension of who we are. Of course we adapt and change to our new home over time, but we are always seeking the ideal. Some of us are better at focusing on the practicalities, but moving house has a certain element of fantasy in it; we have to imagine our lives in the space, or how do we choose a new home?

Knowing where you are prepared to compromise before you begin viewing properties will make the process that little bit less stressful. Here are some things we suggest you consider:

Location
Take a moment to think about how important location actually is to you. Be realistic about the distance you are prepared to travel each day – buying a beautiful home but having no time to enjoy it is most definitely not the aim. Are you someone who needs to be near some green space? Do you crave being on the trendiest high street in the area? If location is non-negotiable, be prepared for the likely trade-off when it comes to the property, smaller rooms or no study for example.

Evaluate the local schools provision. If you are relocating children who are already in a school, this is likely to be top of your list, but if children are in your future it is still worth looking into. For example, a couple buying a two-bedroom house has the space to grow as a family – it would be sad to find you need to move for a better school.

Knowing what the local crime levels is really important, make sure you do your research. Ask your Estate Agent for their comments, they can share their local knowledge with you. 



Outside space
British summertime is somewhat illusive – so ask yourself how much you would use the outside space if you had it. If it is for sunbathing, it can be reprioritised.

If the garden is smaller than you hoped, be creative. Window boxes and planters will add a splash of colour and you can experiment with pots in different shapes, sizes and materials. Consider adding a seat and trailing some plants over it to give a secret garden feel.
You can always rent an allotment. It isn’t private, but the dedicated outside space will give you a sense of purpose and you’re likely to be very productive when you visit; think the good life! If you find you don’t go, just stop renting it.



Parking
If you have a small child, a toddler and a boot full of shopping looping the block in search of a parking space can be a real headache. If parking is non-negotiable it is important you know this from the beginning because there are plenty of places where a silent war over parking goes on daily.

Similarly, the garage is often an issue. Ask yourselves whether you need the garage to park the car or whether you just want to fill it with junk. Maybe you see it as extra living space? Knowing why you want the garage is the first port of call.

The finish
A property that is finished to a high standard will obviously be reflected in the price. However, buying a fixer-upper gives you the freedom and flexibility to create your dream home. Depending on the scale of the work to be done, investigate and understand the costs involved – if the price is still over budget go back to list and be a little more ruthless.

How much of the renovation work could you do yourself? Cosmetics including tiling and landscaping will be projects that you could manage, but never bite off more than you can chew. Be realistic or the stress will outweigh any potential benefits.




Bedrooms

Statistics indicate that bedroom requirements are typically set in stone; if you need three bedrooms to accommodate your family, then you need three bedrooms. Maybe you hope to need the extra rooms one day? Perhaps in truth you wouldn’t want to raise a family in this home, but love the idea of having a guest bedroom? Will you use the extra room as a dressing room, a dumping ground or a study? These are all questions you should ask yourself before claiming the number of bedrooms is unchangeable.

Like this article? Read more on this topic here.

15Jul


For today’s First Time Buyers, one of the biggest challenges involved in trying to get a foot on that elusive property ladder is raising the deposit.

With house prices seemingly on the increase all the time, even getting together 5% of a property’s value can equate to thousands of pounds, and securing a 95% mortgage has also traditionally meant having to accept considerably higher rates than borrowers at the other end of the market with plenty of equity.



Recent reports however have shown an almost five-fold increase in the number of deals available up to 95% loan-to-value over the last couple of years, helped in part by the introduction of the Government Help to Buy Mortgage Guarantee scheme in 2013.

This initiative is due to end this year, but certainly seems to have done its job in terms of reviving what has generally been considered an under-served area of the mortgage market. The range now on offer to borrowers is considerable, and is set to continue whether Help to Buy is extended or not.

Not only are there now more deals available for those with smaller deposits, but interest rates have also reduced over the last few months.  Rates at lower loan-to-values have already hit rock bottom, and as a result lenders have begun to look at the ‘riskier’ end of the spectrum. With more lenders and more deals, comes greater competition, and this can only be welcome news for First Time Buyers.

Of course potential borrowers will still be required to demonstrate that a mortgage is affordable, and pass the necessary credit checks. The Mortgage Market Review has resulted in tougher lending criteria and underwriting procedures across the board, but this in itself has given lenders a greater level of confidence to compete more actively for business.

Saving for a deposit is still a difficult task, but with a greater number of deals and lower interest rates on offer, the boost from Help to Buy has been a noticeable one, leaving the higher LTV market in a much healthier place.

If you are considering a high loan-to-value mortgage and need mortgage advice, then please speak to the Guild Mortgage Service provided by fee free L&C Mortgages.

If you are considering a high loan-to-value mortgage and 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


Like this post? Read more on this topic here.

13Jul


Music is extremely powerful; it can stir up dormant memories and emotions and transport us through time and space in an instant. So could you use music to sell your home? It is no secret that marketing relies heavily on music to influence behaviour and, since selling your home is an exercise of advertising, maybe you too could use some melodic help?



Ok. Let the music play! Simple! Or not... There is a surprising amount to consider: Which music best suits your home? Should you play different music in different rooms? How old are your buyers? Are they downsizing? Buying a first home? Seeking a family home? Choosing a home for their retirement? Always dreamed of living by the ocean? Are they just desperate for a large cupboard under the stairs?

The first point to make is that your home can be totally reimagined by its buyers – your plush classical style could be monochrome in a heartbeat. Think about your buyer rather than the character of your home. It may be an extension of you, but to them, it could be a modern interior trapped in a classical shell. Knowing your buyer should inform your choices as you want to impress them.

External factors are also influencers, like the seasons and the weather. Playing something from spring as your visitors wade through snow to get to the front door is likely to leave a jarring impression. That being said it, even if it is pouring, perhaps avoid Alanis Morissette’s It’s Like Rain.



As a good example, Ed Sheeran is likely to be a good call for first time buyers. Chances are, he will spark their romantic ideal of owning their first home and seal the deal. In fact, most people like Ed! He has a wide appeal and most of his tracks aren’t overpowering.

Ultimately, you want the buyer to imagine your house as a home, to see themselves enjoying your space with their own family and friends. Music is very personal, making it tough to appeal to all, so opt for ‘easy listening’, and avoid anything especially niche or too eclectic. Artists such as Bruno Mars, Adele and Nina Simone could also be good suggestions. Or how about putting the radio on? Rather than it seeming like the music is an exclusive extension of your musical taste, the radio gives a little background noise which can alleviate the pressure of a silent house.




If you finally make a decision on which music to play, there are a few other things to consider:

Check the volume. Deafening people in the living room could foster feelings of claustrophobia and betray your palatial living area.

Where will it be playing? Think about whether music in the bathroom is a good idea; your female visitors could well be dreaming of luxuriating in the bath, but your male visitors are likely to be less keen!

It might be a good idea to ask a friendly neighbour to take a tour and telling you how your music makes them feel. The pace they move through the house is also important; stores often use music to slower traffic and improve sales. So something at a slower tempo should give your buyers the chance to take in everything your house has to offer.

If you have a success story, share it with us on our social channels – we would love to hear!  

Like this article? Read more like this here.

11Jul

Two weeks on, and the world (or at least the UK) seems to be getting to grips with the implications of our historic vote. The trains and buses are running as usual, cash dispensers are still working, and some of the frankly wild speculation is dying down (remember the talk of ‘emergency budgets’?). Marcus Whewell, CEO of The Guild, explores the uncharted territory and some of the more intelligent predictions that are emerging.

Finance

The Bank of England have taken early action to boost liquidity, ensuring that the banks can continue to lend. It is also quite likely that interest rates will fall to historically low levels over the next few weeks as they seek to retain consumer confidence and spending levels. This may not necessarily be passed on to mortgages in the short term, but it does suggest a continued period of very competitive lending for the next 12 months.

George Osborne has also relinquished his target of balancing the budget by 2020, and this is another clear indication that the Government will continue to ‘pump prime’ the economy to help stave off any recessionary influences.

Economy

As sterling falls, exports become cheaper, providing a valuable fillip to manufacturing, maybe boosting employment. However, the costs of imports will rise so there should be a gentle upward trend in inflation, meaning the Bank of England will need to maintain a careful watch. This, in turn, may put some upward pressure on interest rates from 2017 onwards (as this is the Bank’s main lever to influence its key objective – control of inflation).

Unusually, we are experiencing both inflationary and deflationary pressures simultaneously in the UK economy, and these should balance out to provide a steady state economy for the next 18 months.

Property

I believe that we will see very different performances for residential and commercial property.

Commercial may suffer quite significantly, as businesses look to reduce risk and costs, and delay major new ventures. This is already being highlighted by several investment houses suspending their property funds, which are mainly vehicles for pooling commercial investments. Lease costs may well fall as owners, such as pension funds, try to prevent voids or empty buildings. Owners may also have to sell property below book value to meet other commitments, which might put pressure on commercial property prices across the UK. This is unlikely to adversely affect the major banks, as they have deliberately reduced their exposure to this sector over recent years.

In the case of residential property, we can expect further price rises as demand continues to outstrip supply, although maybe moderated downwards to between 2% and 5% p.a.  If the larger developers delay some big projects (as they wait to assess future yields and construction costs rise with shortages in labour and increases in material prices), this will further restrict the number of homes and again tend to nudge prices up.


So Brexit may make the average house cheaper than otherwise might have been the case, but could also deplete the number of houses being built.

We might also expect investors to seek safe havens for their assets; the price of gold has already seen more than 25% increase, and normally residential property is also seen as a relatively secure option – another factor that might mitigate any deflationary tendencies.


London will probably fare even better, given foreign investment is attracted by sterling depreciation, the reputation of the capital, and continued attractive yields on rental properties. Already estate agents are reporting a trebling of new instructions and 10% higher sales agreed since the referendum result, as confidence starts to return.

Mortgage rates have also fallen further, with 2 year deals available at under 1%, and remarkably 5 and 10 year fixed rates at under 2.5%. If mortgagees wanted to reduce their risk, then this is an ideal time to do secure some remarkable deals!
Currently, vendors are still delaying coming to market (there are apparently many more buyers than sellers, which is not logical), but there are signs that they are becoming more realistic over offers received; higher levels of transactions would be good news as this reduced the strain on longer chains and should reduce the number of fall-throughs.

For rentals, ‘buy to let’ has already started to pick up after the Stamp Duty changes in March, and the weakening pound may attract more foreign investment. If house prices were to fall, this would increase yields and encourage more investors to the sector; but returns are expected to remain above 4% and with uncertainty in the eyes of some potential buyers, this may encourage people to continue to rent rather than buy in the short term which would sustain or even slightly increase rents. 

Summary
Consumers, businesses and investors all dislike uncertainty, and therefore it may take some time for confidence to return. However, the outlook for the UK residential property market is generally benign, given the increasing demand for housing and the remarkably low costs of borrowing.


04Jul


Having your own space is the ultimate luxury but, whether renting or buying, we don’t live in isolation: everybody needs good neighbours. Here are a few hints and tips it may be worth remembering to help live happily ever after.

Say hello! The proverbial, clichéd cup of sugar could in fact be the perfect ice-breaker. Often cited as a condition of modern life, it is now entirely possible to live next door to someone for months and never really know them. So make the effort to be friendly, a smile goes a long way and can be a great foundation – although it is never too late to start.



Being considerate will always help. Tell them if you are having a housewarming or perhaps just celebrating the end of the week. Even if you choose not to invite them, a note through their door may save an awkward late-night conversation. Likewise, let them know about renovations or building work, anything which will impinge upon them.

No one likes to admit it, but it’s worth acknowledging you too might upset your neighbours. Try as you might, it may be near impossible to quiet your teething child from screaming into the night. Be a little emphatic, in case you too need some sympathy one day.



Don’t judge too quickly. When the garden is a mess and the rubbish is piled high, it is irritating, but maybe there is a good reason. Circumstances from illness to bereavement, and everything in between, can stop us in our tracks and make cleaning a distant concern.

Think before you speak. When their cat likes to use your perfectly manicured grass as a lavatory, maybe they aren’t aware of how you feel? Perhaps they think you love their pet dearly and are happy to share your garden with them. Explaining how you feel is sometimes necessary, and the rule is to stay calm. This is a good example because it raises difficult questions: who is to blame? Are your protests reasonable? What can your neighbour really do? Using carefully considered words in a measured tone might just save you some strife.



Escalating the problem. Sometimes it is necessary to report incidents to landlords or authorities. Keeping a diary of what has happened will mean accuracy and detail, recording may benefit you in the long run, and you don’t need to use it if your issues are resolved.  
Be prepared to seek advice. Sadly, friendly negotiations aren’t fool proof. There are mediation services available and the Citizens Advice Bureau would be a great starting point on how to escalate your concerns where necessary. At this point, being aware of your rights, boundary lines, tenancy agreement and so on would be very valuable.

Do you have an ongoing dispute with your neighbour? Visit the Government website for more information on how to resolve it in the most efficient way.


01Jul


After some extraordinary recent market valuations, some financial analysts, such as Jefferies, the firm that advised Zoopla on their flotation, have warned that online estate agent Purplebricks is set to underperform. In a note in early June, Jefferies noted that their business model was about listings, not sales, commenting: “The numbers in the business model look very attractive, however it is our view they don’t add up. With no reward for actually selling a home, all eyes are focused on winning instructions, especially if Local Property Experts want to get close to the advertised On Target Earnings.”

For those of us who are not professional investors, this is an important insight. Our touchpoints with estate agents are normally about moving home, and we select and employ them to secure us a positive result - not to flatter us and then fail to deliver what they promised.



Most experts in the property industry will tell you that marketing property on the major portals is relatively straightforward: the key skills of a successful agent focus around qualifying buyers, property presentation, constant re-assessment of local prices, understanding important local details such as school catchment areas, matching databases, managing chains of buyers and sellers, dealing with solicitors and surveyors, and literally holding together complex deals over the 18 weeks it currently takes on average to complete a transaction.

In the case of the so-called pure online agents, their model is that you pay a non-refundable sum (normally the best part of a thousand pounds) up-front, whatever the outcome. When you don’t sell or the offers secured seem very low, this may no longer look like such a good idea. Your potential saving has become a non-recoverable cost and valuable time may have been lost.

Like this post? Read more on the topic here.

The vast majority of ‘clicks and mortar’ agents (as in reality, all estate agents are online) receive a fee only when they find a buyer or tenant and complete the transaction, so their interests are entirely aligned and mutual with their client. They receive a higher fee for a better price achieved. You only pay them when they meet expectations, and as the vendor or landlord you can walk away at minimal or no cost, should you feel that they are not fully focused on your particular case. This ‘stacks the deck’ heavily in favour of the vendor, which should encourage and reward regular communication and good service.

So the two models actually start from completely different positions and motivations; if the new online websites can perform to the same high standard as their more established counterparts, then a revolution really is at hand. Unfortunately, many vendors who choose pure online as ‘a quick and easy option’ may find themselves wiser - but poorer and frustrated.

30Jun

In the last budget George Osborne announced that tax relief for landlords is to be cut, limiting the amount of income they can offset against mortgage interest payments. While the detail is fairly convoluted the basic outcome is that many, if not most, let properties will be less profitable – or indeed make an annual loss (though it’s to be hoped property price growth will ultimately overcome this).

The change is to be phased in and won’t be fully in place for another four years but already landlords will be starting to feel the pinch.

In recent weeks lenders have started looking ahead to the full reduction in tax relief and tightening lending policy as a result: if the property will be less profitable in a few years time, they reason, we should assess it on those terms today.

The first and biggest name to go was The Mortgage Works, increasing their requirement from 125% coverage to 145%. So for example, under the previous policy a £150,000 loan at a notional rate of 5.50% would cost £687.50 per month. 

The Mortgage Works wanted an extra 25% coverage of that, so to qualify for the £150,000 loan landlords needed £860 rent per month. Under the new policy they would need £997 per month – almost £140 more.

Other lenders have started to follow suit including Barclays, Keystone and Newcastle, and it’s certain all lenders are reviewing their stance though many have yet to make a move. 


So how should landlords react to this? 

While many lenders have yet to tighten policy, that’s not necessarily a signal to get in before they do – the driving force behind this is that, all other things being equal, most buy to lets will perform less well in the future. 

But it does present an opportunity to review current properties and try to mitigate the impact: securing a low rate now could cut outgoings and help build up a reserve to either cover rental shortfalls or reduce the mortgage in future.

Increasing rent is an option too of course, and no doubt many will, but there’s naturally a limit to how far this can go, determined by local housing supply and incomes. 

Clearly any planned purchase needs to be assessed on how it’s going to work in a few years time, not just at the outset.

If you are an existing landlord or are considering purchasing a Buy-to-Let property, and 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

30Jun

UK HOUSE PRICE INDEX: APRIL 2016 (released 14 June 2016)

[The new UK House Price Index comprises figures collated by the Office for National Statistics from data supplied by Land Registry, Register of Scotland, Land and Property Services, Northern Ireland and the Valuation Office Agency. In addition, there are separate detailed reports for England, Wales and Scotland. New statistics are included relating to the status of the building (new build or existing resold), the buyer (first time or repurchase) and the funding (cash or mortgage). The following summary looks at some aspects of the overall report for the UK and the detailed report for England]

The new April 2016 house price index data for the UK showed a monthly rise of 0.6 per cent in average house prices across England, Wales, Scotland and Northern Ireland, bringing the average house price to £209,054. In England the rise was slightly higher at 0.7 per cent and the average house price £224,731, while in London the monthly change was 0.6 per cent and the average house price £470,025. 

However, most regions showed a higher monthly rise than London, including the North West at 2.3 per cent, the West Midlands at 2.2 per cent, the East Midlands and Yorkshire & The Humber both at 1.6 per cent, and the East of England at 1.2 per cent. The South East trailed behind London at 0.3 per cent while falls were seen in the North East at minus 0.9 per cent and the South West at minus 2.8 per cent.

On an annual basis the price change across the UK was 8.2 per cent and in England 9.1 per cent. London saw the highest annual change at 14.5 per cent, followed by the East of England at 13.6 per cent and the South East at 12.3 per cent. The lowest rise was seen in the North East at only 0.1 per cent. Detailed statistics for each local authority area show a wide spectrum of annual changes from minus 4 per cent in Hartlepool to increases of more than 20 per cent in Slough, Thurrock some London boroughs.

By property type, terraced properties saw the greatest annual increase of 9.0 per cent, followed by semi-detached properties at 8.8 per cent, while in terms of sales volumes the annual change from February 2015 to February 2016 was 1.1 per cent. 

New figures are also reported for funding status, which compares average cash and mortgage prices. In England, the average cash price was £210,602 while the average mortgage price was £231,866. For cash purchases, the monthly change was 0.1 per cent and the annual change 8.1 per cent, while for mortgage purchases the monthly change was 1 per cent and the annual change 9.6 per cent. 

New statistics relating to property status showed that the average price of a new build property in England was £275,487, up 4.9 per cent on the preceding month and up 11.2 per cent on a year ago. This contrasts with resold property, which has an average price of £221,315, only 0.4 per cent higher than a month earlier, and 9 per cent higher than a year ago. 

New statistics on buyer status in England showed that the average price of a house sold to a first time buyer was £189,179 with a monthly change of 0.9 per cent and an annual change of 9.3 per cent. However, the average price of a house sold to a former owner occupier was £254,409, showing a monthly change of 0.5 per cent and an annual change of 9 per cent. 


30Jun

At the end of May, the Office of National Statistics (ONS) announced that their second estimate of the Gross Domestic Product (GDP) for the first quarter of 2016 would remain unrevised at 0.4 per cent. The report showed that the economy was strongly reliant on consumer spending, which increased by 0.7 per cent over the period, while companies had reduced investment owing to uncertainty over the outcome of the EU referendum. A trade deficit had also detracted from the GDP for the third consecutive quarter. The Bank of England revised its growth forecast for the second quarter of the year down to just 0.3 per cent.

Early in June, better news came with the announcement that the trade deficit in April had narrowed after goods exports rose to a near three-year high, while UK manufacturing output in the same month grew at the fastest pace for nearly four years at 2.3 per cent, the biggest monthly rise since July 2012. A significant contribution to manufacturing output was the 8.6 per cent increase in the pharmaceutical industry. The wider measure of industrial output saw an increase of 2 per cent, representing the biggest rise since July 2012.

Between February and April unemployment fell to 1.67 million, cutting the jobless rate to 5 per cent, the lowest since October 2005. At the same time, inflation as measured by the Consumer Prices Index was reported as unchanged in May at 0.3 per cent. The Retail Prices Index, which includes some housing costs, rose to 1.4 per cent in May from 1.3 per cent a month earlier. Following on, the Bank of England’s Monetary Policy Committee monthly meeting on 16th June unanimously agreed to maintain the interest rate at 0.5 per cent and the quantitative easing asset purchase programme at £375 billion.

With respect to housing, figures released by the Department for Communities and Local Government at the end of May showed that housing starts in England had collapsed in the first three months of the year to 35,530, down 9 per cent on a year ago and one of the steepest rates of decline in the last decade. The figure was also 3 per cent down on the previous three-month period. The total starts for the financial year were up by one per cent to 139,680, which is still way below the 250,000 needed according to experts. The Government had set itself a target of one million new homes by the end of its current parliamentary tenure.

The recent announcement of an undercutting fixed rate mortgage package from the Yorkshire Building Society is believed to reflect evidence that first time buyers have benefited from the introduction of higher stamp duty on buy-to-let in April. Estate agents have reported that more than 32,000 first-time transactions were completed in April, the highest monthly total for two years.

The release of the new monthly UK House Price Index, which is now collated by the ONS, showed that over the year to April, prices climbed by an average of 8.2 per cent across the UK and by 14.5 per cent in London, taking the average UK property value to £209,054.

30Jun

95% loan-to-value mortgages improve

For today’s First Time Buyers, one of the biggest challenges involved in trying to get a foot on that elusive property ladder is raising the deposit. 

With house prices seemingly on the increase all the time, even getting together 5% of a property’s value can equate to thousands of pounds, and securing a 95% mortgage has also traditionally meant having to accept considerably higher rates than borrowers at the other end of the market with plenty of equity.

Recent reports however have shown an almost five-fold increase in the number of deals available up to 95% loan-to-value over the last couple of years, helped in part by the introduction of the Government Help to Buy Mortgage Guarantee scheme in 2013. 

This initiative is due to end this year, but certainly seems to have done its job in terms of reviving what has generally been considered an under-served area of the mortgage market. The range now on offer to borrowers is considerable, and is set to continue whether Help to Buy is extended or not.

Not only are there now more deals available for those with smaller deposits, but interest rates have also reduced over the last few months.  Rates at lower loan-to-values have already hit rock bottom, and as a result lenders have begun to look at the ‘riskier’ end of the spectrum. With more lenders and more deals, comes greater competition, and this can only be welcome news for First Time Buyers.

Of course potential borrowers will still be required to demonstrate that a mortgage is affordable, and pass the necessary credit checks. The Mortgage Market Review has resulted in tougher lending criteria and underwriting procedures across the board, but this in itself has given lenders a greater level of confidence to compete more actively for business.

Saving for a deposit is still a difficult task, but with a greater number of deals and lower interest rates on offer, the boost from Help to Buy has been a noticeable one, leaving the higher LTV market in a much healthier place.

If you are considering a high loan-to-value mortgage and 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

29Jun

Yes, Wimbledon fortnight is now upon us, inspiring us all to dust off the tennis rackets and head off to the nearest courts for a knockabout with friends. There are many things synonymous with Wimbledon, such as the rain, Cliff Richard sing-a-longs, tears, tantrums, Pimms and of course, strawberries.



Wimbledon just wouldn't be Wimbledon, without the television coverage panning to adults and children alike, tucking into big bowls of strawberries and cream. According to the Wimbledon.com website, over 28 tons of strawberries (1.4 million berries to be precise) are consumed over the course of the tournament. Now that's a LOT of berry picking!



This month sees our beloved British strawberries come into season. Supermarket shelves heave with juicy punnets and 'Pick Your Own' farms are bustling full of people with red, stained mouths. So why not get picking (from a shelf or a farm - your choice!) and make the most of these beautiful berries whilst they're at their peak.


When you're picking strawberries, look for unblemished berries with bright green hulls; let them come to room temperature before eating and always wash gently before you tuck in. And if you're lucky enough to end up with a glut of strawberries, here are some berry tasty things to do with them. Simply visit your friend Google to learn the methods and enjoy the fruits of your labour.

Jam
Who wouldn't like to spread homemade strawberry jam on their toast in the morning or enjoy a jam scone as a treat? Why not look out for some beautiful little pots, fill with homemade jam and give to a friend as a thoughtful gift.

 



Strawberry and Prosecco ice lollies
Try combining strawberries with your favourite fizz in an ice lolly mould and freeze. What better way could there be to cool down and get the party started on a beautiful, hot, summer evening...




Homemade ice-cream
You don't need fancy machinery to churn out tasty homemade strawberry ice-cream, just be prepared to stir your mixture in the freezer every few hours to achieve a smoother texture. You could combine with other seasonal berries such as blueberries and raspberries for extra fruitiness.



Eton mess
Take inspiration from the old-school dessert and add your own twist, such as a splash of kirsch to turn it into an adult-only version.


Chocolate strawberries
What's not to love about the sweetness of a strawberry combined with the crunch of a chocolate shell? Delicious!



Salad
Jazz up your salad by adding some fabulous colour, sweetness and texture in berry form.



DIY face mask
Spot test on your neck or hands first to see how your skin reacts and get mashing, mixing and relaxing with a strawberry face mask that can help to cleanse and brighten your skin.