PROP

10% price surge for detached homes due to house hunters demanding more space

Since the property market reopened last summer, we've seen a market boom that's led to record activity for new listings and sales agreed in the UK, as homeowners rush to find somewhere more suited to their lockdown needs and lifestyle.

 

The average price of a detached home was £486,595 in December 2020, which when compared to the previous year is a massive increase of £43,364.

 

This increase in value seems to be directly related to the fact that house hunters are seeking properties with more space since the emergence of the pandemic, as well as the start of the working from home new norm.

The second highest increase year-on-year were for semi-detached properties, which increased 6.26% to £287,313.

Russell Galley, Managing Director at Halifax, said: “as many continue to work from home, this has led to a significant increase in demand for bigger properties, which has likely driven the boost in price we’ve seen in detached homes versus other property types.

“Over the past six months, the average UK house price has risen by 6.3%, making it the market’s best half-year performance since early 2007.”

In the last two decades, the price of a detached home in the UK has trebled. In 2000, a typical detached property could be bought for an average of £164,820.

 

However, it’s the last five years which have seen the sharpest price increase.

 

In 2015, the jump from a semi-detached to detached home would be just under £150k, with the gap widening to just under £200k in 2020.

How much could your property have increased in value by? If you've not yet obtained an updated market appraisal for your home, you could be unaware of its value in light of current market conditions.

 

To get started with your next sale or purchase, visit our website today or talk to us directly to book your valuation.

 

 

Rental growth picks up for the sixth month in a row

The rental market has picked up for a consecutive sixth month, suggest sources in the property sector, with reports showing a 4.3% increase in January – which is 0.2% higher than the 4.1% figure in December.*

The South East topped the rental growth market, seeing a 10% increase in rents over the last 12 months.

The lowest rental region in the UK was the North East, with an average rental cost of £539 per month, whilst the highest region being Greater London had an average rent of £1,556; an approximate difference of 288% for the country's capital.**

What are the main reasons for this rental market growth?

Cost is an obvious drive for rental growth as we continue to see house values rise.

 

From 2007 to 2017, the property market saw the average UK house rise in price by just shy of £40,000, which has had a knock-on effect to tenants.

Another possible factor could be that – in the last 12 months – more and more people are becoming tenants due to so called ‘risk factors’, for instance, lengthy 25-year mortgages and not wanting to worry about house depreciation over time.

 

This has been amplified by those who have decided to rent for longer, such as first-time buyers delaying their purchase plans.

Changes in society also play a massive part in the rental market, as households are embracing the ability to move out easier and not being committed to a given property.

How we can help

With a tried and tested method to support landlords, we can help you maximise your property investments and make smart choices with your portfolio.

Contact a member of our team now to explore your options.

 

 

*Letting Agent Today
**Statista

 

 

The government’s multi-billion pound intervention to end unsafe cladding

After the tragic incident of Grenfell tower in 2017, a massive investigation was launched to determine what caused the fire to spread so rapidly, resulting in an outcome that blamed the poor quality of the additional external cladding used to hold the building together.

The cladding used was below standard and the company providing the cladding ‘knew of fire risk’ – according to the BBC.*

Grenfell tower spurred on a movement within the UK, leading the government to pay closer attention to the materials used within similar property blocks.

 

After this data was released, figures showed that an estimated 1,700 buildings over 18 metres in height were identified to have unsafe cladding, affecting upwards of 321,000 current residents.**

 

 

What the government is doing

After significant pressure from the British public, the government recently announced a pledge of £1.7 billion towards the removal and replacement of unsafe cladding on high-rise residential buildings, otherwise known as the Building Safety Fund.

However, the Building Safety Fund has been criticised by some as not being adequate, as the government itself estimates the total cost of cladding restoration on all 1,700 affected buildings will be between £3 billion and £3.5 billion.

 

Another criticism of the Building Safety Fund is the available money will be distributed via a first come first served basis rather than on a risk factor, a choice that has been widely criticised.

In December 2018, the government also put a ban in place on all ACM cladding (the cladding used on Grenfell) on residential buildings to stop future high rise buildings from meeting the same fate as Grenfell tower.

 

For more information, please refer to: www.local.gov.uk/supporting-residents-who-have-been-affected-cladding-issues

*BBC News
**Local GOV.UK

Why did virtual viewings surge in January?

Online property viewing activity continues to surge due to stay at home demands from the UK government.

 

It has also been noted within the sector that buyer behaviour has changed – perhaps irrevocably – to include an initial viewing stage.

 

Whereas initially a prospective buyer might select a number of properties to visit in-person, those decisions are now being made more and more commonly online, leading to property shortlists and speeding up how quickly it can take someone to find the right property for them by maximising exposure to the whole market early on. 

 

Now that those within the sector have had 12 months to respond to the pandemic, we've been able to make great advancements in virtual viewing technology as an industry, and this has seen virtual viewings reach a record high in usage of 850% throughout the beginning of 2021.

 

Potential buyers now have access to incredibly realistic ‘walk-through’ property tours, giving them and sellers peace of mind with the sales process.

 
Ultimately, virtual viewings have provided protection during the pandemic, whilst maximising the exposure of properties on the market.

 

However, another bonus is the convenience and ease provided to all parties, as sellers find they no longer need to live in a constant state of 'showroom ready' conditions, and buyers can cut down on the amount of back and forth travelling across different cities to find the home that matches their criteria.

 

To learn more about how we've adapted our processes to accommodate safer viewings and appointments, contact us today.

*Spec.

How to maximise what you can see without physically viewing

It goes without saying that COVID-19 had a massive ripple effect on the world, and of course, the property market wasn’t left untouched by this.

 

We have seen radical changes within the sector, as agents like ourselves look at ways to adapt and evolve in order to meet new needs from our clients and colleagues.

 

One of the ways we've done that as an industry is to introduce new elements to our offering, substituting face-to-face meetings for online consultations that can be conducted safely.

 

Now, months after we've settled into this new way of doing things, a common question we get asked is ‘how can I maximise non-physical viewings?’

The benefits of non-physical viewings

A perk of non-physical viewings is being able to see the property without having to make unnecessary trips in-person to view a property, which is key in light of the current situation and restrictions.

 

Spending more time looking at online property listings, virtual tours or videos allows you to browse a larger number of homes than it may have been possible to physically view; particularly if you find it difficult to find time outside of work to arrange appointments.

 

So, this already means that you have the opportunity to see more properties in less time and refine the criteria you have by being exposed to more choice.

 

Another key benefit is that by starting your search online, you can quickly gain a feel for the homes that you want to see again, whilst identifying those that aren't suited to your needs.

 

In terms of maximising your time when talking to an agent screen-to-screen, we'd advise asking them about the natural flow of the rooms to help you envision the space more clearly, as well as the standard questions you'd otherwise ask on the seller's reasons for moving, whether there's a chain and the current conditions for the property's boiler and water pressure.

 

As we can appreciate that you'll want to see a select few properties in-person when you've narrowed down your search, there are tips for making in-person viewings right now, such as:

 

- Arranging the viewing by appointment, with only one household in the property to minimise contact

 

- Wearing a mask and using sanitising gel at the start and end of the viewing

 

- Asking any questions outside of the property so that you don't feel rushed to exit and miss anything important

How can we help?

Speak to a member of our dedicated team for any support you may need.

 

 

How you can get negotiation-ready

According to a recent source, 30% of surveyed homeowners stated that they didn’t attempt to negotiate on the price when purchasing a home.

 

22% of these respondents indicated that this was due to a lack of knowledge, confidence and skills in house price negotiation tactics.

 

Therefore, it goes without saying that many risk over-paying on their house purchases.

 

This can be particularly prevalent in certain age groups, such as adults between the age of 25 and 34, who reportedly suffer the most unease when trying to bargain on the price of their home, whereas those aged 65 and over report feeling more familiar with the process.

 

So, what does it take to get a better deal?

 

Best tips for negotiating house prices

1) Do your research

Make sure you research house prices in the area you are considering. These will give you a better indication of what you should be paying and what is considered too steep.

 

Looking at online portals such as Rightmove or Zoopla will provide quick access to an array of properties in your desired area.

 

If you find that other house prices are lower, there may be room for negotiation, depending on the condition of the property in question.

 

2) Ask questions

Don’t be afraid to ask your estate agent questions about the property, such as:

- How long has the property been on the market?
- Why is the vendor selling?
- Has the vendor secured their next home?

 

3) Be sure you can definitely advance with the purchase

Have you got a buyer for your current property and can you afford the mortgage payments on the property you are interested in?

 

Being in a strong position financially will go a long way to making you a desirable buyer.

 

4) Determine the maximum price you are prepared to pay

 

It's a good idea to have a clear idea of your limits, so that you can control the conversation and keep calm when it comes to it.

 

5) Be realistic

It is possible to offer up to 10% lower than the asking price.

 

However, be careful not to insult sellers, particularly by pointing out flaws in the house or offering too low, as this could lose you the property if there are other interested parties.

 

6) Get the estate agent on your side

It is in the estate agent's interest to help their client receive genuine offers, so showing them that you are ready and serious about buying will be fed back to the current homeowner.

 

The buying and selling process often hinges on a certain level of trust, as both parties seek assurance about the other's commitment and readiness to move forwards.

 

No one wants to waste time on a sale that could fall through, so whilst it's key to be level headed, don't let that affect your actual interest.

 

7) Be open to re-negotiating

Although it is better to be sure before making a commitment, you can re-negotiate until the exchange of contracts.

   

8) Don’t get carried away

The negotiation is not the most crucial part of buying a home.

 

Most importantly, this is your life and your future home.

 

Do you need help buying or selling in 2021? Talk to our agents today for a comprehensive valuation or to browse the latest listings in your area.

 

Landlords urged to comply with electrical safety regulation or risk fines

What are the new electrical safety standards?

The new electrical safety standards require landlords to ensure the safety of all electrical wiring and fixed electrical installations are tested and signed off for each of their properties.

 

If the test highlights any investigative or corrective work, the landlord has 28 days to rectify the issue.

What exactly needs to be tested?

The fixed electrical parts of the property.

• Wiring
• Socket outlets
• Light fittings
• Fuse box
• Showers
• Extractor fans

What does not need to be tested?

The new regulations state that the tenant is responsible for portable electrical appliances and therefore tests on these items are not required.

 

However, it is recommended that the landlord carries out tests on the portable appliance items they provide for good practice.*

When will the new standards be enforced?

For existing tenancies, an electrical safety test will need to be carried out by 1st April 2021.

For new tenancies, all electrical installations must be tested before the tenancy begins.

Who can carry out the electrical safety test?

Only a qualified electrician can carry out the test. Guidance for choosing a competent tester:

- Electrical Safety Roundtable
- Registered Competent Person Electrical single mark and register

What do you need to do as a landlord once the test has been completed?

- Provide a copy of the electrical safety report to each tenant in their existing properties within 28 days of the inspection.

- If requested, provide the local authority with a copy within seven days.

- Supply a copy of the safety report carried out to the electrician conducting the next safety report.

- Provide a copy of the most recent report to any new tenants.

- If requested, provide a copy of the most recent report to any new prospective tenants within 28 days.

- Electrical installations must then be tested every five years.

What happens if landlords do not carry out corrective work highlighted by the report?

The local authority has the right to enter the property (with the tenant's permission) to rectify the problem and will notify the landlord of this action.

 

The local authority can then bill landlords for the cost of any work completed by them.

 

If any issues highlighted within the report are not rectified within 28 days, landlords will potentially be faced with a fine of up to £30,000.

Landlords have the right to appeal to the First-tier Tribunal against any decision of the local authority.

 

Due to current restrictions with the pandemic, many within the sector are concerned about ensuring their compliance in time with qualified help.

 

If you'd like to talk about this in more detail, visit our website or learn more about our services for landlords.

*GOV.UK

Good news for first-time buyers as lenders allow smaller deposits

Over the last 12 months, first-time buyers have found it more difficult to move forwards with their purchase plans, as low-deposit mortgages became increasingly scarce.

 

Now that lenders have begun to re-introduce their 10% deposits, the current situation is looking up for new homeowners, as the number of available products at 90% loan-to-value ratio rose by 29% in the first two weeks of February.*

 

It is estimated that around £5 billion is currently being held up in the first-time buyer’s market due to the COVID-19 pandemic, as many future homeowners have decided to delay their move until they have greater financial stability and job security.

 

Are you looking to try again with your first property purchase?

Nine in ten 90% mortgages were withdrawn from the market in the wake of the COVID-19 outbreak last spring. 

 

Nearly a year on, first-time buyers have been handed a serious boost, with the majority of lenders now offering low-deposit mortgage deals and reducing the restrictions they put in place on how much of the deposit could be 'gifted' by friends or family members.

Are 95% mortgages likely to come back?

It is likely to be some time before we begin to see the full range of 95% mortgages re-appear back on to the market.

 

To learn more about your prospects as a first-time buyer, please visit our website.

 
*Moneyfacts

How many tenants have a good relationship with their landlord?

According to a recent survey, around 75% of tenants reported having a good relationship with their landlord and letting agent.

Many of those asked said a large part of the reason for having a connection with their landlord is down to having good communication between the involved parties (agreed by 59%).

 
From the landlord’s perspective, a massive 96% of landlords reported liking their tenants, with 53% saying they were ‘very happy’ with those renting the property and only 2% of all landlords reporting they were ‘definitely not’ happy with their tenants.

 

There are a range of scenarios that can lead to a rift between the landlord-tenant relationship, such as late rent payments, lack of care towards the property or failure to make necessary repairs and changes.

 

When it comes to the main causes of conflict for tenants, interestingly the research shows 75% highlighted a lack of communication from the landlord, or a slow response to repairs for non-managed properties (50%).

 

Now more than ever, managing your properties and your tenants has become increasingly more complex, as you're required to comply to new regulations whilst being restricted from having the same ease of access.

 

As leading lettings agents in your area, we take every measure to ensure your rental is successfully let, maintained and taken care of.

For years, we have worked with dedicated landlords and tenants, ensuring a good relationship between both sides and resolving any disputes or complications.

 

If you'd like to learn more about our proposition for landlords, or you're interested in seeing what we have to offer right now, go to our website.

 

 

How much could you save by re-mortgaging?

Homeowners whose fixed rate mortgage deal has ended could save hundreds by just re-mortgaging!

When a fixed mortgage deal ends, you are usually automatically put onto the lender's Standard Variable Rate (SVR), which can cost borrowers more each month in repayments than if they actually re-mortgaged onto a new fixed rate deal.

Here are some examples to show you the savings when switched:-

How much could you save re-mortgaging with 40% equity in your home?

If a homeowner owned 40% equity in their home, they would look for a mortgage deal at 60% Loan to Value (LTV).

• The average SVR currently stands at 4.41%*
• The average two year fixed rate at 60% LTV is 1.67%*
• The average five year fixed rate at 60% LTV is 1.90%*

With a property valued at £250,000, mortgage borrowers looking to re-mortgage at a 60% LTV would be looking to borrow £150,000.

Using a mortgage repayment calculator, you can calculate that if this borrower was on the average SVR on a mortgage term of 20 years, they would be paying £941.70 per month.

 

If they re-mortgaged onto a two year fixed rate deal at the average rate of 1.67%, this borrower would pay £735.61 per month in repayment, a reduction of £206.09 per month.

 

If this borrower were to re-mortgage on a five year fixed deal at the average rate of 1.90%, they would pay £751.74 each month in repayment, a reduction of £189.96 per month.

How much you could save re-mortgaging with 25% equity in your home?

Those homeowners who own 25% equity in their home would look for a mortgage deal at 75% LTV.

• With a two year fixed rate average at 75% LTV, which is currently at 2.29%
• With a five year fixed rate average at 75% LTV, which is currently at 2.49%

If your property is valued at £250,000, a homeowner would look to re-mortgage at a 75% LTV, borrowing £187,500.

 

On the average SVR of 4.41% and a mortgage term of 20 years, repayments on the average SVR would be £1,177.13 per month.

 

Re-mortgaging onto a two year fixed deal at 75% LTV at the average rate detailed above, repayments would be £974.50 per month.

 

If the homeowner re-mortgaged onto a five year fixed deal at 75% LTV at the average rate detailed above, it would make their monthly repayments of £992.65, a reduction of £184.48 each month.

How much could you save?

There are many deals available offering rates below the average, which means for some borrowers, bigger savings could be made.

 

If you speak to a mortgage broker, they’ll be able to give you the best options for your circumstances.

Contact us today for more information or help finding the right mortgage deal for you.

 

 

 

*Moneyfacts.co.uk