November Content - Property

November Content - Property




Borrowers continue to enjoy competitive mortgage rates

Whilst the mortgage industry continues to face difficulties when it comes to finding good returns, borrowers are continuing to benefit from low rates, according to the latest month-on-month data.
 

Moneyfacts.co.uk has discovered that competition within the market is continuing unabated, with rates for two-year fixed mortgages dropping just 0.01% to 2.44% and the average rates for three and five-year fixed mortgages staying still at 2.60% and 2.75% respectively. The biggest drop in rates was seen for 10-year fixed mortgages, but with the decrease sitting at 0.07% and the rate shifting to 2.91%, this hardly represents a significant fall.

 

Borrowers are

 

Mortgage fixed rate analysis

Mortgages

Two year fixed

Three year fixed

Five year fixed

Ten year fixed

Six months ago

2.47%

2.66%

2.85%

3.00%

Last month

2.45%

2.60%

2.75%

2.98%

Today

2.44%

2.60%

2.75%

2.91%

 

Savings fixed rate analysis (£10,000 investment tier)

Savings

One year fixed

Two year fixed

Three year fixed

Five year fixed

Six months ago

1.46%

1.63%

1.84%

2.15%

Last month

1.31%

1.41%

1.56%

1.88%

Today

1.29%

1.36%

1.51%

1.77%


“It appears that fixed mortgage rates are continuing to be cut despite the rise in interest rate SWAPs, a market that lenders generally use to hedge themselves against future interest rate fluctuations,” offered the website’s finance expert, Darren Cook. “The significant increase in SWAP rates indicates that markets may now be clawing back a previous factoring of a forecasted Bank base rate cut in the short term.

 

“The current average two-year fixed rate is currently 2.44%, however, this average rate reached its historical low of 2.20% two years ago in October 2017, so the current drive by some mortgage providers to cut rates could be a conscious strategy to make sure that they retain the borrowers who may be maturing from a very low fixed rate secured two years ago.



Do I need a smart meter in my home?

As we head into the winter months, the central heating will start to kick in to keep your home warm and cosy and one of the newest devices linked to your energy spending is the smart meter. However, do you have to install a smart meter into your home?

The short answer is no, you are not obliged to fit a smart meter into your home, no matter what your energy supplier is telling you and, in some cases, it is simply not possible to install one. Without a smart meter, you will continue on with your energy tariff, sending meter readings to your supplier as and when they request them.

By refusing a smart meter, however, you may be missing the opportunity to save money on your energy bills as the smart meter sends daily meter readings to your supplier, allowing them to bill you much more accurately and offer you the most appropriate tariff to suit your consumption needs.

Additionally, the costs of maintaining traditional meters are likely to increase, and the likelihood is that these costs will be passed onto you as the consumer.

“Once you get to the point of moving down from 15 per cent to 10 per cent to nine per cent [still using the old meter system] and so forth, the expense of maintaining these relic meters will be very high,” said Lord Duncan of Springbank, Minister for Climate Change.



Funding announced to create new towns

The government has recently announced that it will provide £10 million in seed funding for councils to develop their proposals for the creation of up to 10 new communities. This level of funding and investment into creating new towns has not been seen for some time from the government, and is in line with the continuing push for the creation of new homes.

The funding is locally led by individual councils who will compete for the funding through submitting their proposals independently, with Sir George Iacobescu the founding father of Canary Wharf advising the Housing Secretary on which projects to move forwards with.

“We want to drive economic growth outside London and the South East. Our new development corporations will empower local areas to come forward with ideas for new towns that deliver jobs, houses and economic growth, creating the future Canary Wharfs of the North and Milton Keynes’s of the Midlands,” commented Housing Secretary Robert Jenrick.

“In the future, development corporations could also be used on a smaller scale and used to plan High Street and town centre redevelopments as consumer trends change,” he added.

The first project has already been allocated with a new development located close to the M1 at Toton, which will be spearheaded by Sir John Peace.

Sir Peace had this to say on the government funding: “In taking forward our proposal for a Development Corporation, we will capitalise on a once in a generation economic and regeneration opportunity, of scale,” he pointed out.

“Coming together in partnership to plan and develop a new model for a Development Corporation means we will realise a much greater breadth of social, environmental and economic benefits for our communities, as we invest jointly in the future of our region,” he explained.

“We’re delighted to be bringing forward the first in a new approach of development corporations, designed to address market failure, accelerate our path to delivery and embed innovation. By working in partnership, around regionally significant opportunities and by investing together, we will ensure the future success of our communities and our region,” he added.



How does the General Election affect property?

Over the past few years, Brexit has dominated the political landscape of the United Kingdom, but for the next month the general election will take up the headlines. Here, we investigate what the general election, and its result, could mean for the property market.

With the property market performing well over the past month, with a particular uptake in the last quarter, there is hope that the general election may bring with it yet more good news as potential vendors and buyers are buoyed by the stability of a new Prime Minister. In previous general elections in 2010, 2015 and 2017, an uptick in sales volumes were reported across the property market and Nedbank, the private wealth firm, have stated that they expect a significant impact on the property market following the election.

As it stands, the two main frontrunners in the general election are the Conservative party and the Labour party, both of which may well have to rely on other political parties if they fail to reach a majority.

The Conservative Party – Focus on First-Time Buyers
As the party already in power in the UK, should the Conservatives win the vote then the biggest effect on the property market will almost certainly be the break from Europe which Boris Johnson has been working towards since taking over as Prime Minister. For months, many have been predicting a flood of property transactions as soon as Brexit is agreed thanks to the people who have been waiting to buy or sell simply due to the political uncertainty – with Brexit completed, transactions should increase in the property market.

Further to Brexit, the Conservatives have pledged to create up to 100,000 new starter homes with a 20% discount for first-time buyers under 40 years of age in order to continue with the momentum that has been seen over the last two years amongst this group. They will maintain the Right to Buy scheme which will continue to see the number of council owned properties declining, and the rental market fluid.

The Labour Party – Mansion Tax
Labour have plans to shake up the property market on a bigger scale, and this is no more evident than with their proposed Mansion Tax where property owners whose homes are worth more than £2m would face an annual charge, based on the value of the property. In line with this, those who own second homes would pay higher rates of tax, as well as those who own properties which are empty or owned by non-residents of the UK.

In terms of first-time buyers, Labour have pledged to build 200,000 homes a year in order to keep the market fluid and meet the demands of an ever-increasing population who have recently faced under-supply.



Guide to designing a Children's Room

Designing a child’s room can be tricky; there are a number of factors to consider so it is hard to know where to begin. Design trends are forever changing and your child is constantly growing, so it is important that you consider a few things before starting.

Striking the balance between fun and practical is a challenge and designing something that your child does not grow out of too quickly is not easy, but by taking the time to think it over, you can save yourself a lot of hassle and create a space that is fun for them and easy for you to manage.

Draw Up A Floor Plan

Before you start buying all sorts of cute and colourful furniture, it’s important to remember that depending on your child’s age, this room could have a variety of functions.

Have a think about what the room will be used for and draw out a plan. If the room just needs to be a comfortable place to sleep then you should have plenty of freedom, however, if it also needs to be an area to play and study, you’ll require a good amount of floor space and maybe a dedicated little corner for a desk.

Everyone’s home and preferences are different but you want to get as much out of the space as possible, so take a moment to consider the role that the room will play and how it may change over the next few years.

Choose The Right Colour

It may be tempting to simply ask your child what their favourite colour is and then start buying paint or wallpaper.

While it is a good idea to include your child in the design of their room, if their favourite colour resembles a highlighter pen, then your best option is to go with the more neutral shade of that colour.

Your best strategy is to aim for a colour palette that nicely blends with a variety of furniture and will not look so childish once your child turns into a teen. Save yourself a redecoration job in 18 months by picking a colour that will age well with the rest of the ever-changing décor.

Decide On The Flooring

When it comes to flooring you have a few options, all with their pros and cons, so you just have to decide which will be best for you.

Carpet helps keep the room a little warmer but is vulnerable to stains. Hardwood is much more durable and easy to clean but does not provide much cushion for a child that is a little more clumsy than most. You could also opt for rubber flooring that does offer the benefits of both carpet and hardwood; however, it is the most expensive option of the three.

The flooring that is best for you is dependent on the age of your child, but research your options while keeping your budget in mind and make sure your choice of flooring compliments the room and doesn’t break the bank.

Getting The Furniture Right

There are two key things to keep in mind when choosing your furniture, functionality and lifespan.

We’ve already established that space is a valuable commodity so finding multifunctional furniture can be a real lifesaver.

Beds that have storage built in underneath are quite easy to find and the extra storage they provide can go a long way, as well as free up more of the room for other essential items. This also gives you an opportunity to get a little creative and look for ways to combine 2 items into one such as adding some padding to a desk or dresser so that it also can be used as a changing table.

The other consideration for furniture is its lifespan. There is a lot of cute miniature beds, tables and chairs that might look great, but you must remember that they will grow out of it quicker than you think. A good strategy would be to buy some furniture that they can grow into. Their small clothes may not justify full sized dresser just yet, but it will not be long before you are looking for extra storage space and their feet are hanging out of the end of the bed.

Add Character Through Accessories

Now that your room has been planned out, you have chosen your colour palette, had the flooring fitted, assembled and placed the furniture, it’s time to add character.

The great part about this phase of designing the room is that because the rest of the room's features were kept neutral and timeless, you can now give your child a good amount of freedom to add their own personality to the room from accessories.

Whether it’s action figures, bed covers or posters, you can basically style the room however you want and the best part is, these accessories can be easily replaced and changed over the years at the same rate as your child’s taste in décor shifts from one thing to the next.



How to save money when furnishing your first home

You are buying your first home, which has most probably dominated the landscape of your day-to-day life for some months as you go through the property purchasing process for the very first time. You have most probably been astutely saving every penny you can in order to get your deposit together and pay any home purchasing fees, but now that the property is secured you need to furnish it.

Not considered how you are going to fill your property with furniture now that it’s secured, or just don’t have the budget left? We have put together our top tips to make your house a home, without having to spend a fortune…

Speak to the Vendor
Whoever is moving out of the property that you are buying will most likely have their own plans for their next property, and those plans often involve new furniture as they upsize or downsize. Don’t be afraid to discuss leaving any furniture behind with them – it saves them the hassle of moving items, making this is a mutually beneficial arrangement.

Buy Online
We are all aware of the proliferation of online auction sites and when furnishing your first property they should be your best friends as there are plenty of bargains and hidden treasures on the likes of eBay, Facebook Marketplace, Amazon, Gumtree or the Shpock app. Search for pieces of furniture that have small imperfections or are second-hand and you can pick up some really quality affordable pieces, especially if you’re willing to put in some elbow grease and refurbish them (think of giving a bargain Welsh-dresser a lick of chalk-paint to give it a traditional yet chic feel).

Friends and Family
Your family and friends will most certainly have items of furniture in their homes which they are either not happy with, do not have the space for or are simply looking to get rid of – this is the time to cash in on those good relationships! Offer to pick things up from their homes to take the onus off them, and in return you could end up with a fully furnished home at a fraction of the cost that you envisaged.

Destination Sweden
Love it or loathe it, there is one furniture giant which has been furnishing homes affordably for some time – Ikea. The Swedish giant certainly offers good value for money, and when it comes to the essentials, it could be a real lifesaver. We would recommend shopping around for any item of furniture and not simply furnishing a room just so that it is finished – the general consensus says to wait two weeks before making a furniture purchase just to mull over your options. Buying at specific periods will also help you to save – think Black Friday, Cyber Monday, New Year or summer which all offer extreme discounts.

Finishing Touches
If you’re furnishing a home with a budget in mind then something you will want to avoid is an aesthetic that looks “cheap” or mis-matched, and the finishing touches can help you to create that chic finish which you will no doubt be aspiring to. Soft furnishings should be at the top of your list in terms of finishing a room off – curtains, blinds, cushions and rugs can all set the tone of a room no matter what other furniture is present. Visit vintage stores and fabric shops and you will be able to find some nice fabrics to work with, especially if you are a dab-hand with a sewing machine.

Wondering what the essentials are? Here’s our list…
Sofa
Dining table and chairs
Bed
Wardrobe
Chest of drawers
Lighting
Kitchen items (kettle, toaster, pots and pans)



Improving your home's security

As the nights are drawing in and we occupy ourselves with the wintery joys of hot chocolate and cosy evenings, it is easy to forget that it is during these wintery months when burglaries are most rife. Lloyds Bank noted that there are 35% more claims for forced burglary during the darker months of the year, with criminals emboldened by the shorter days. Follow our helpful hints and tips to ensure that you can enjoy the winter months without any other worries apart from who has turned up that thermostat!

Doors
Did you know that over a third of burglars use the front door? It seems like such a simple fix, but this winter remember to secure your doors to ensure that you don’t have any unwelcome guests. Inspect all your exterior doors to ensure that the frames are strong and in good condition and don’t forget to check the hinges as well. If your door has a mailbox, then ensure that nobody can reach through by installing a mailbox protector.

Windows
As well as doors being popular entry points for burglars, windows are also amongst the most common entry points for break-ins. It’s unlikely that you will be leaving your windows open with the temperatures currently plummeting, however the latches on your windows can prove to be ineffective if put under stress. To stay safe this winter and beyond, you can improve the security credentials of your windows by adding locks or key operated levers which will prove to be much sturdier than the original fixings.

Lights
There is a clear relationship between the darker nights and higher incidence of burglaries – and that is due to the cover which the dark of the winter months provides to would-be criminals. Illuminate your home using outdoor lights in order to make your home a less appealing option to potential security risks; lights on pathways and in gardens will eliminate those darker areas. The use of motion lights is becoming more and more popular, with the element of surprise of a light turning on proving to be an effective deterrent.

Wi-Fi
When considering your home’s security, you would be forgiven for only protecting the bricks and mortar, however a key consideration in these modern times should be your wi-fi network. Your home wi-fi is a potential pathway for intruders in to your personal and financial information, and with the ever-increasing popularity of home automation apps can also make your home vulnerable to break-ins. To protect your wireless network, ensure that you are using a secure router and that you have enabled WPA (Wi-Fi protected access) or WPA2 encryption – as well as the usual staples such as a strong password and firewall protections.

Neighbours
Life these days is extremely fast-paced and British sensibilities often drive us to simply say a polite “good morning” and “good evening” to our neighbours, with little more conversation shared. These seemingly inconsequential conversations could also be used to improve your home security, however, as well as fostering better relationships with those living next to us. Use those early-morning interactions with your neighbours to discuss holidays and upcoming plans, so that they will be aware if there is something untoward happening at your home. Neighbours can also move parcels or letters left on your doorstep so that potential burglars won’t be made aware of your absence.



Landlord winter property guide

As we head towards the Winter months, now is the optimum time for landlords to prepare for the potential issues that may arise from the harsher weather. Spending a little time and effort now may well save money further down the line in the event of an accident or repair cost. Here’s our list of essential landlord checks;

Boiler Service
The number one priority for every landlord should be checking that the boiler in your property (or properties) is in good condition, as repair costs can be extremely expensive. Book a boiler service to ensure that everything is working correctly and safely as boilers can break down with the surge in gas consumption that comes in the colder months.

Protect the Pipes
Adding lagging to your pipes (specially designed pipe insulation) is an inexpensive measure which will give you peace of mind knowing that your piping will not burst due to freezing and splitting. Focus on pipes in external areas and lofts which may be subject to the most extreme temperatures and you should avoid any problems as the cold sets in.

Smoke and CO Alarms
In line with regulations from October 2015, a smoke alarm must be installed on each floor of a rental property – now is the perfect time to double check these are in good working order and that your tenants are safe in your property. If your rental property has a fireplace (or solid fuel appliance) then additional carbon monoxide alarms must be fitted in the same room, as the chances of these items being used increase astronomically in winter.

Open Dialogue
One of the key pieces of advice that we can give to protect your property through the winter is to create healthy dialogue with your tenants. As they are living in the property day-to-day, they will be able to advice on any niggles so that you know how to avoid any larger issues. Make sure your tenants know where the stopcock in the property is, where the fuse board is located and who to call in case of emergency, and they could be invaluable in saving you time and money.

Protect the Roof
Chipped, cracked or dislodged tiles on your roof could lead to significant water damage and in cold temperatures this can lead to structural issues with water freezing and expanding. Double-check that your roof is in tip-top condition, and whilst you’re at it take the time to clear out your gutters to avoid blockages when the inevitable rain falls.



This is the last month to open a Help-to-Buy ISA

This is the last month that Help-to-Buy ISAs can be opened before they end on November 30th, with no new applicants accepted onto the scheme past this period. If you have any aspirations of getting onto the property ladder, now is the time to open your account - you only need to deposit £1!

The Help-to-Buy ISA was launched at the end of 2015 and the accounts are available from both banks and building societies. The account has proved to be extremely popular as you can receive up to £3,000 from the government based on the amount of money you have put aside in the ISA.

Essentially, for every £200 saved in the account you can receive £50 with just a few strings attached;

• This is an account solely for those who have never bought a property before
• £200 is the maximum amount which can be saved in a single month
• The maximum government bonus is £3,000 (meaning that you need to have saved £12,000 to receive this)
• You may use the ISA to buy a home up to the value of £250,000 outside London, or £450,000 in London
• If you have any other ISAs open, you must transfer the value over
• You can keep saving in the Help-to-Buy Isa up until November 2029

If you miss the deadline at the end of this month, there is still the Lifetime ISA (LISA) which is similarly aimed at first-time buyers, but also for retirees. The LISA has a comparable 25% bonus from the government based on your own contributions into the account, and once you then 60 you can access the money that you have saved completely tax free.



What do home buyers value most in a property?

According to recent research, homebuyers regard traditional features as one of the most important factors in a property when looking for their next home. With the prevalence of first-time buyers in the marketplace, traditionally important factors such as school catchment areas are descending in terms of their importance to buyers.

At the top of the list of considerations for buyers is green space – either private or shared - with almost a third of those surveyed ranking this as the most important factor when looking for a property. For those currently thinking of selling, the garden may take a backseat in terms of priorities over winter; however, in light of this research it may pay dividends to ensure that your outside space remains as pristine as your home over the coming months.

With a focus on green areas, it may come as no surprise that a private car parking space was ranked second with people now prepared to travel a little further to get that all-important green space.
Interestingly, in the capital city good transport links were considered the most important factor, with 31% rating this as priority number one.

Amenities such as shops and restaurants, as well as good transport links, followed in the list of priorities with around 13% of respondents noting the importance of good local facilities.

Michael Stone, Founder and CEO of Stone Real Estate, noted that: “Buyers are now searching for the right lifestyle fit for them and not just the right property and this level of innovation by developers in order to remain competitive and stand out from the crowd has resulted in homebuyers getting much, much more for their money.”



What's the average age of a first time buyer?

With the first-time buyer mortgage market reaching its highest level since 2007, there can be no doubt that over the last couple of years, first-time buyers have experienced something of a resurgence in the property market. However, with this demographic having different priorities than seen previously, what is the age of the average first-time buyer?

In August this year, there were over 35,000 new home buyer mortgages completed, up 0.7% from the same point last year according to data from UK Finance. Although many of these buyers may have been supported in some way by family members, with recent statistics showing that almost a third of first-time buyers received some financial support from the Bank of Mum and Dad, the outlook is bright for those looking to join the property ladder.

“The main affordability constraint continues to be the need to find a large deposit, with the average first time-buyer mortgage advance being only 77.9% of the purchase price, with the remaining 22.1%, nearly £50,000 on average, having to be paid upfront,” commented Mike Scott, chief property analyst at full-service estate agent Yopa.

“These figures suggest that buyer activity in the housing market is still holding up well, especially among first time buyers, despite the continuing political uncertainty. The total number of home sales in the year should be close to 1.2 million, only slightly down on the average for the past five years,” he added.

Interestingly, the average age of first-time buyers in this climate is actually increasing, with the average of 30 years old back in January now reaching 32 years of age. The average age of a buyer hovering at around 30 years old, is in line with the recent change in activity as first-time buyers look past one-bedroom apartments and studios, to three-bedroom houses for more longevity in their purchase. Analysis by Zoopla has shown that two thirds of first-time buyers sought a house rather than a flat, with 42% looking for a three-bedroom home.

Richard Donnell, Zoopla research director, noted that: “First-time buyers are thinking about staying in a property for 10-12 years rather than a shorter period. They’re aiming higher and want to save up and get a first home they can grow into.”



Why do men find it easier to become homeowners? 

Greater focus has been placed on the difficulty that first-time buyers have in getting onto the property market, with the successful Help to Buy scheme and agent advice offering as much assistance as possible for aspiring homeowners to get their start on the ladder. However, little focus has been placed on how challenging it can be to make your start in the property market depending on your gender.

A new survey conducted by specialist bank Aldermore has laid bare the disparities between men and women when it comes to attempting to purchasing their own home, with a third of women questioned suggesting that saving for a deposit was their biggest obstacle compared to 20% of men.

Mind the gap
Unsurprisingly, the gender pay gap played a big part in this statistic, with last year’s figures revealing that the difference between men and women’s pay sat at 8.6% for full-time employees.

This has directly influenced how much women can borrow when applying for a mortgage, with broker Coreco finding that the average earning of a female first applicant on a mortgage is 65% of what the average is for a male first applicant.

With this in mind, it should shock no one to hear that women are statistically less likely to apply for their first mortgage on their own in comparison with men.

Other statistics in Aldemore’s survey revealed that women were also less likely to seek financial help from the Bank of Mum and Dad when applying for their first mortgage, with 28% of women also unwilling to considering moving back in with family to help save money for the mortgage deposit alongside 38% of men.

Managing Director of Aldermore Sue Hayes has stressed the need for the industry to ‘work together’ to provide a level playing field for mortgage applications, stating: “It is concerning to see the barriers to homeownership having a greater impact on women.

“We need to address financial inequality in our society to help tackle gender disparities so that becoming a homeowner is achievable for all.”