December

42% price premium for properties in Garden hotspots

Having a green space to relax in during the warmer months is an absolute must for some buyers. However, new research has revealed that having a garden does in fact add a considerable premium to the price tag of your property. With the findings also suggesting that the price can vary depending on the amount of land taken up by residential gardens within your area.

 

The study, conducted by Emoov, looked at areas in the UK that have ‘the highest percentage of residential gardens in relation to total land use’ in order to determine the impact it has on a property’s value.

It discovered that homes located in areas where residential gardens account for 30% or more of the total landscape hold an average value of &343,344, a staggering 42% more than the current average price for a home in the UK, which stands at &246,286.

This is not a huge surprise as surveys that took place last year found that more than half of buyers in the UK wouldn’t even consider a home without a garden, whilst having a well-maintained garden can increase a property's value by up to 20%.

Homes within areas where gardens occupy 20%-30% of the total land come with an average price tag of &303,545 and homes in the 10%-20% range aren’t too far behind, with an average value of &300,170.

Even properties in the 0%-10% bracket see an average boost of 5% to their home’s value, taking the average price to &255,159.

CEO at Emoov, Russell Quirk commented on the findings of their research, offering: “A garden is right up there with some of the most desirable features of a property and so it’s important to maximise its property sale potential.

“While the presence, positioning and size of the garden are ultimately the factors that dictate the price premium of your property, a well-presented outdoor space can be the tipping point in converting a viewer to a buyer. Buying a property is an emotive process and so enabling someone to picture themselves in your garden can make all the difference.”

Should the 100% mortgage be reintroduced?

A recent poll from YouGov suggests that almost half of the United Kingdom think that the re-introduction of the 100% mortgage is a good idea. A total of 9,713 people were included in the government survey and participants were asked whether borrowing the entire cost of a home is either a ‘good idea’, ‘bad idea’ or ‘unsure’. Almost half of those surveyed, 48%, stated that the reintroduction would be a ‘good idea’ and almost a third regarded the borrowing as a ‘bad idea’ – showing that there is some consternation around the subject.

 

Currently, a total of nine lenders offer a 100% (or ‘loan-to-value’) mortgage. However, there are conditions around the borrowing option in its current format. In order to apply for a 100% mortgage, and depending on the mortgage provider, you must either have a guarantor who has a property to act as collateral against the mortgage or you will have a ringfenced amount of savings which can act as security (essentially making it an offset mortgage).

The suggestion to reintroduce the 100% mortgage would circumvent the necessity for guarantors or separate security accounts and could therefore help those who are struggling to take that first step on to the property ladder. Legal & General Mortgage Club head of lender relationships Danny Belton disputes whether the reintroduction of this type of lending would be beneficial, however, stating “the thinking and rationale behind the return of 100% LTV mortgage is interesting, but this is not the solution to the current issues facing first time buyers.”

Belton continues to critique the 100% mortgage, offering: “At the very least it would mean lenders would have to significantly increase the amount of capital they would be required to hold, which is just not sustainable. What would be more beneficial is for more buyers to utilise schemes such as shared ownership and Help to Buy, or even make use of a guarantor mortgage.”

In terms of age groups, the poll returned some interesting results, with 46% of those aged 18 to 24 responding positively to the proposition, compared to 49% of those aged 65 and over considering it a poor idea. The disparity in the age groups could be linked to the differences in the stages of property ownership; there’s the younger survey participants that are keen to get on the property market and are therefore more responsive, whilst the older participants have a higher likelihood of already owning a property and are thus more circumspect when faced with new propositions, such as the 100% mortgage.

Although the initial prospect of a mortgage for the full value of a property may appeal to potential buyers struggling to get on to the property market, the realities of living with such debt and the inflexibilities around it could dissuade the majority. The YouGov survey clearly demonstrates that younger people are keen to buy property and hence any new prospects which may help them in this endeavour will be well-received.

However, as Danny Belton has stated, there are several alternatives available to help people onto the property market. Those considering the 100% mortgage to be a good prospect should look in to shared ownership schemes and Help to Buy before plunging in to the loan-to-value option, no matter how attractive the prospect may appear on first glance.

2018 Budget: impact on the property market

The recent Budget has ramifications for all of us – with the Chancellor setting out levels at which we pay income tax, fuel duty prices and the all-important “sin taxes” around cigarettes and alcohol. What, therefore, does the Budget 2018 mean for property?

 

Stamp Duty

Stamp duty has been abolished for all first-time buyers of shared ownership homes (whereby the buyer purchases a share of a home, with the local council or housing association owning the remainder) up to a value of &500,000. The policy will be retrospectively applied from the 2017 budget meaning those who already bought a shared ownership property within the past year will also benefit from the change.

 

 

Further to this, first-time buyers do not pay any stamp duty on homes below &300,000.

 

Stamp duty rates in England and Wales are now as follows;

 

• First &125,000: 0%
• &125,001 to &250,000: 2%
• &250,001 to &925,000: 5%
• &925,001 to &1.5m: 10%
• &1.5m+ : 12%

Help To Buy Scheme
There are a few changes being made to the Help to Buy scheme, one of the key points being that the term has been extended to 2023. Further to this extension, the new iteration of the scheme from 2021 to 2023 will only be available to first-time buyers rather than to all, as is the case with the current scheme.

Overseas Investors
A new tax will be introduced for overseas investors, the revenue from which will be used to tackle homelessness across the country. Overseas investors will face an extra charge of 1% to 3% when they buy a UK property, in addition to current stamp duty charges. As well as using the revenue to tackle the increasing problem of homelessness, the intended effect is to dissuade some of the rife competition from the London market which is making purchasing increasingly difficult in the capital.

New Homes
Although the Help to Buy scheme is being extended by two years, there are fears that the cessation of the scheme will slow down new-build homes as there will be fewer buyers able to purchase. The government is intending to give an extra &500 million to councils through the Housing Infrastructure Fund in order to promote the building of new homes and avoid any slowdown in the production of new properties.

Transformed High Streets
As part of a billion-pound boost to the UK’s struggling high streets, the Chancellor has announced a &675 million fund to help councils support their retail zones through this difficult period. An unexpected result of this could be the redesigning of empty retail units into homes – with the chief executive of the Federation of Master Builders, Brian Berry, estimating that as many as 400,000 new homes could be created by making use of empty space above shops on high streets.

A tenants guide to moving out

Your tenancy has come to an end, and now you must juggle a series of different tasks before you can successfully leave the property. But don’t fret! Take a look at our guide to moving out for some handy tips to make the process a little less stressful:

 

Round off all your bills

Unpaid rent is the most common reason for tenants losing their deposit, so it’s a good idea to check with your landlord or property manager before you move to make sure you’ve paid the correct amount.

You should also give your energy suppliers plenty of notice before you move so that they can organise a final bill. Make a note of your meter reading on the final day for reference – this will prove useful, should you be billed an incorrect amount.

You could also consider having your mail re-directed to your new address and you should also inform any of your service providers such as TV, internet etc. that you will be moving to a new house.

Give the place a good thorough clean

Landlords will need the property to be ready for the next tenant, so there will likely be a clause in your contract that stipulates that you will need to clean every nook and cranny of the property before you move out. If the property isn’t spotless, you could lose some of your deposit to a cleaning bill.

Spruce up the garden

The garden will also need to be in the same condition as when you moved in. Pull up any weeds, mow the grass and dispose of any garden waste properly. If the gardening tools belong to the landlord, ensure you leave them behind for the next tenant.

Thoroughly check the property for a final time…

Moving out of your rental property is a different proposition to moving out of your parent’s house or a property you may have owned. For the duration of your tenancy, you have essentially played the part of guest and caretaker of someone else’s property, so a good deal of the process will be focused on the condition of the property when you moved in vs when you left it.

To help avoid any issues, it’s a good idea to do a walkthrough of the property and compare it to the condition report and/or any pictures you or the lettings agent might have taken before the move. It’s also a good idea to take new images before you leave.

… and review the inventory

The inventory you received at the beginning of your tenancy will detail any items that the landlord had in the property, for example, gardening tools, small items of furniture, kitchen appliances etc. You will need to check that all these items are still in the property and that they’re all in working order, or you might face losing a portion of your deposit.

Homes England's 5 year growth plan

The government’s target of 300,000 new homes being built each year is soon to be missed, and with the efforts of current policy failing to increase the capacity at which new homes are being created, Homes England has set out a bold new plan to try to bridge the gap in terms of new properties being built.

 

During the course of the past 12 months, 222,000 new homes have been built, which is some way from the government target, but nevertheless, it’s a step in the right direction as this represents a significant increase in the delivery of new homes to the UK market. With demand for homes increasing faster than ever, now at 39%, the push for new homes to be delivered has never been more important.

Homes England chairman, Sir Edward Lister, told delegates at a recent ‘Construction News’ conference: “We’ve had a great year, we’ve built 222,000 homes. You could say that the industry is at capacity; it’s not going to leap up to 300,000 at present. We can’t go on with the current model, so we’re moving into modern methods of construction, doing things differently.”

This different tact being taken by Homes England reflects a highly interventionist role which the government agency has taken in recent years. Reflecting Sir Lister’s comments above, Homes England is planning on incentivising modern methods of construction (MMC) in order to accelerate delivery of new homes. The agency will incorporate a requirement to use MMC in leases when working with housebuilders, as well as providing finance to developers that both partner with Homes England and use MMC. Homes England’s plans reflects its move to acting as a partner to the housing industry, rather than a moderator.

Key aspects of the plan, which runs up to 2022/2023, involve; making land available to build upon, ensuring that a range of products are available to support housing and infrastructure (including more affordable housing and homes for rent) and improving productivity of construction and offering expect support for priority locations. These actions have the intention of providing longevity in the delivery of new homes – with the priority being the increased production of homes at a sustainable level.

Student accommodation: a sound investment

With a recent survey compiled by Frank & Knight showing that 76% of students were happy with their housing choice, it is clear that the student market is buoyant at the moment, with happy renters and landlords content with their wise investments.

 

The old stereotype of student accommodation being dark and dingy homes in need of some serious TLC is simply not representative of the current realities of modern, chic student housing. Students are now willing to pay a premium for their lodging, with the largest percentage of students saying that they would be happy to pay over-the-odds for fast wi-fi, a large bedroom or an on-site gym.

Additionally, the competition for student accommodation is more rife than ever with 57% of second- and third-year students securing their accommodation by the end of March - despite most university terms not starting until September. This ever-increasing competition to secure a humble student abode is great news for investors who have seen capital values in the student accommodation market increasing 6.5% year-on-year in the 12 months to September. The increase of 6.5% is up from the previous 12 months growth rate of 4.5%, showing a consistency in the growth of the market. In fact, the student market is outperforming the regions in terms of capital value growth– for example in London the student market totalled returns of 17.5% for the past 12 months compared to annual total returns of 10.5% in the regions.

Jo Winchester, executive director of student accommodation valuation and advisory services at CBRE UK, a real estate services and investment firm, says the first published student accommodation index demonstrates the continued strong performance of the sector.

“UK student accommodation is now firmly established as a mainstream investment sector,” she said. “Investors will find the increasingly sophisticated raft of influences on performance highlighted by this index, including location, asset scale, university rankings, applications, and distance to university very informative.”

With the student accommodation market proving a sound investment for landlords across the UK (albeit with differing rental yields dependent upon the university town) and demand for student property higher than ever, it is clear that further education is popular when economies are booming and also when economies are struggling – such as during current Brexit uncertainties. In terms of longevity of investment, there is also the knock-on effect of students remaining in their city of study once they have graduated. In Birmingham, for example, 49% of students who study in the city remain there after having completed their studies. This stimulates the local economy and sees demand for more and more student accommodation increase year on year, with flats effectively taken out of the equation each year by those who leave university and remain in the city requiring accommodation themselves.

Tips for decorating at Christmas

Yes, it really is that time of year again. Decking the halls is practically obligatory for all of us during the Christmas period, and with so much pressure on presenting a perfectly preened pine tree and creating a winter wonderland so festive that reindeer land on your roof, here are a few tips to help you create a Christmas to remember.

 

The Tree
For many of us, the focal point of the Christmas decorations is the tree itself and that presents a few initial decisions – the first being the choice between real or artificial. In recent years, the difference between real and artificial trees has narrowed quite substantially, meaning that many of us are now opting for the longer-lasting artificial tree. However, if you like the traditional option of a fresh tree then consider delaying putting it up by a week or so to ensure that it is still looking its best on Christmas morning – one traditional suggestion would be to wait until 12 days before Christmas on December 13th.

Chic or classic
The next decision for that all-important tree is around the decorations themselves; do you go for a chic colour scheme straight from the pages of Vogue or for the traditional charm? If you choose to go for a colour scheme, then keep it clean and simple – whites and silvers are understated and elegant, lending themselves to most homes. Also, to ensure that your tree has maximum impact then extend the theme in to its surroundings and decorate the rest of the room in the same colour palette as your tree. If you shy away from ‘fashionable’ trees and colour-matched accessories, then the traditional Christmas accoutrements of home-made baubles, paper snowflakes and vintage accessories are probably more in-line with your Christmas aesthetic. Dust off those tree decorations given to you by friends and family, made by your children or passed down through the generations and showcase them on your tree of choice; just make sure that they are evenly distributed so they get the admiration that they deserve.

Twinkle, Twinkle
When it comes to Christmas decorations, one thing that never goes out of style is a little bit of sparkle! Having lots of reflective decorations around the home really helps to set a festive atmosphere – think lots of candles of different sizes (it’s nice to play with heights of candles for a little more interest) and tealights in crystal glasses. All of the sparkling candles and crystal reflections will set a truly magical tone throughout your home and turn even the most Scrooge-like guests in to Christmas converts.

Stairway to Christmas Heaven
Don’t neglect surfaces such as mantlepieces and staircases, if you really want to have the maximum impact whilst decorating for Christmas. Using offcuts from real trees, lining the handrail of your staircase with branches decants an intoxicating smell of Christmas around your home. When it comes to surfaces such as mantlepieces, use fruit centrepieces to create a feeling of decadence, with very little expense.

Light it up
For many of us, decorating outside of the home seems like an awful lot of effort for such a short period, however when it comes to adding that touch of festive flavour to the outdoors it doesn’t have to be a lighting extravaganza. Thanks to the homemade delights of Kirstie Allsopp, the Christmas wreath is storming back in to fashion for 2018, with ever-more people opting to create their own wreaths. Simply pick out some choice items for your door wreath – such as pinecones, pine tree branches, fruit and ornaments - and adhere them to a wire frame in the shape of a circle and voilà – your outdoor decorations are complete.

Of course, that’s not to say that seeing a home adorned with many a Christmas light doesn’t still stir up that feeling of childhood Christmas excitement in all of us, so if that’s your plan for the exterior of your home, then we insist that you go ahead and light it up!

Tips to sell your home at Christmas

There are some things that the British public simply cannot believe at this time of year; how cold it is, how dark it is and, above all, that it’s nearly Christmas. Nevertheless, Christmas is indeed upon us and if you are selling your home, or thinking of selling your home, you may be under the impression that it’s not the optimum time to bag a sale. Our top tips to sell your home at Christmas will show you that not only is it possible to sell your home during the festive season, it is a doddle.

Picture perfect
The average time that a buyer takes to look at a picture on a property advert is three seconds, so having the perfect image is essential in your quest to sell your home – especially at Christmas. When having your home photographed, it is important to think about the staging; ask yourself whether the clutter around your home has been put away, can you remove some of your personal items in order to create more space or give everything one last polish? Once you’ve ticked off those basics, think about the Christmas factor – do not include heavily decorated rooms in your photographs as they will detract from the space and may age your property if your home remains on the market in to January.

Keep the pine in line
Of course, at this time of year the Christmas tree has taken its place in our living rooms and other communal spaces, but make sure that the tree isn’t dwarfing the space it is in. We can all get carried away with the festivities, but this may not be the year to get the 7-foot Nordic spruce of your dreams – in the same way that cramming a king-size bed in to a single room will make the room appear cramped, an over-sized tree will also make your room seem smaller than it is. Buyers like to imagine their own furniture in potential new homes, so allow them the space to do so.

Serious offers only
Although some may suggest that Christmas is a difficult time to attract buyers to your home, what the period does provide is serious buyers. You can make the most of the serious buyers in December by ensuring that you see each property viewing as the optimum chance to sell – making sure that your home is in pristine shape and you are welcome and positive about the property and the area. Potential buyers can glean an image of what it may be like to live in the area from their interactions with you as the homeowner, so ensure that you are up-to-date about local schools and solely positive when they ask you any questions. Similarly, being flexible may bag your buyer as an accommodating vendor, who allows for viewings at irregular hours for example, could help clinch that crucial sale.

Preparation is key
Being organised could be the key in securing your Christmas sale. Make sure that your fixture and fittings list is put together, you have the legally required energy performance certificate and, if you have had work completed on the house, make sure you have the relevant consents. Solicitors can be the make-and-break in a sale scenario, with a slow solicitor frustrating both buyer and seller, so take recommendations from your estate agent and have an efficient solicitor all lined up, ready for a sale.

Being in a new home by the New Year can seem to be an impossible task, however by showing restraint with your festive decorations, and taking the appropriate steps to being prepared and organised you can certainly sell your home this Christmas and start your 2019 with the perfect gift – a new home.

Property market set to revive after Brexit

With Brexit negotiations in Brussels reaching their crescendo, the reality of Britain leaving Europe is now truly upon us, and for the property market, it seems that this could lead to something of a revival.

 

During the drawn-out periods of consternation and uncertainty around Brexit, sellers and buyers alike have shown some restraint in their interactions with the market, and this pent-up demand is set to boost activity next year.

“People with important and costly decisions to make tend to pause and reflect, waiting for a time when the outcome is more predictable. The ongoing machinations of the Brexit process for the last two years are no exception, so it is little wonder that the property market has become increasingly subdued as time has gone on” said Richard Watkins, the land and planning director for Aston Mead.

“What’s more, despite the risks involved in the current challenging market conditions, we expect that come April 2019, those hoping to trade up will find that the gap in sale values and onward purchase prices will be the narrowest it has been for half a decade. So there continue to be real opportunities out there” he concluded.

First-time buyers will be buoyed by the two-year extension to the Help to Buy scheme offered by the government in the recent Budget and, with house prices growing at a steadier rate than in historical years, people looking to take their step on to the property ladder will surely benefit from the post-Brexit period.

Despite the well-publicised Brexit uncertainties, the property market has remained relatively stable this year and endured the period of political instability better than most predictions initially forecast. However, 2018 has still seen some slowdown in property transactions throughout the year, and therefore the notion of a post-Brexit revival will be good news for many. With the demand for properties now at an all-time high, and new-builds unable to keep up with this vociferous appetite by the masses to own a home, buyers and sellers should benefit equally after March 2019.

Wage growth increase makes purchasing easier

Renting a home in Britain has become a necessity for many, in large part due to the difficulties that people face in getting started on the property ladder. Upfront deposits to secure property are at such a high level that many people are either forced to turn to their parents for financial aid or assistance, or are excluded from searching for a home of their own altogether.

However, there might be some good news for ‘Generation Rent’, as it’s become commonly known. Wage growth has finally overtaken the rate of rental growth across all areas of the country, according to the latest Landbay Rental Index. Given that your average UK tenant (excluding London) pays out about a third of their pre-tax monthly salary on rent, this is great news for those renters looking to save for that first big deposit.

There has been a stark decrease in the number of people buying their first home in their 20s during the last decade, from 37% to 27%, and the total percentage of British residents renting currently sits at around 20% as of 2017, up 10% from 20 years ago. With that in mind, this increase in wage growth could have an impact on the property market in terms of the amount of renters who could become potential buyers.

The figures suggest that rental growth for every region of the country excluding the capital has increased by 1.25%, averaging out at an increase of &120 each year, but with monthly gross pay increasing by &768 per year, tenants could be better off by a tidy sum of &648.

This is dependent on where you currently reside, of course. Given that London rents can eat up as much as half of the average monthly wage, it’s no surprise that London, the South East, East and South West are the most costly areas of the country for proportion of wages spent on rent. Each of these regions sit above the 30% recommended threshold, with those in London renting a one-bedroom flat paying almost half of their average salary to their landlord.

At the opposite end of the spectrum, you’ll spend a far lower proportion of your wages on rent if you’re located in the North East, Yorkshire or North West, although the former has seen the lowest earnings growth of any British region.

“Improved affordability is welcome news for renters,” offered Landbay’s CEO John Goodall. “For tenants looking to save up for a house, the prospect of having more money in their pocket each month will help them get one step closer to owning their own home. Wage growth is continuing to improve across the UK so the outlook for tenants can only get better. Brokers can use this data to help clients to look for opportunities across the UK where higher wage growth will boost demand for properties.”

Help-to-Buy scheme extended by two years

The Government’s Help to Buy scheme has been extremely successful, with a duality in its accomplishments; firstly, in encouraging people to take a step on to the property ladder and secondly, in encouraging housebuilders to develop new homes in the knowledge that they have a government-backed safety net of potential buyers, just waiting to purchase their newly-built homes. With the news from the recent Budget that the scheme which is due to end in April 2021 will be extended, albeit in a new format, by two years prospective buyers should be buoyed by the government decision.

 

Help to Buy will have been in existence for a decade by the time the extended period finishes and is available to first-time buyers as well as current homeowners looking to trade up on the property ladder. Essentially, the scheme provides a government-backed loan to people who want to buy a new home but cannot afford the deposit. For developments participating in the scheme you only need a 5% deposit (ie. &10,000 for a home worth &200,000) and the government then lends 20% of the cost (topping up the deposit), with the remaining 75% consisting of a mortgage. The 20% loan from the government is also exempt from fees for the first five years of the scheme.

The extra two years of Help to Buy will be available to first-time buyers throughout the UK for houses worth up to a new regional price cap, rather than the current scheme’s cap of &600,000. As well as new regionalised limits for the equity loan, the scheme will solely be available to first-time buyers whereas currently, you do not have to be new to the property market in order to buy through the scheme – a fact which very few are aware of.

The scheme in its current guise has helped more than 300,000 people purchase a property, all of which have been new-build homes. It is this interaction between buyers and new-build homes which has helped to answer the ever-increasing demand for properties across the UK, and with the scheme forecast to end in 2023 there will surely be an impact upon the ready availability of new homes from this point onwards.

Housebuilders have had the luxury of a steady supply of buyers ready to purchase through Help to Buy who otherwise would not have been able to purchase their properties, and after 2023 there is the real possibility of a slowdown in new building projects due to the cessation of Help to Buy. Companies such as Barratt, Taylor Wimpey and Persimmon have reaped the rewards of the scheme since it’s introduction in 2013 with around 40% to 50% of their sales from Help to Buy homes.

For five years, potential homebuyers have been able to purchase properties which would otherwise have been outside their price range – and for first-time buyers in particular, this has allowed a first foray in to property ownership. The announcement of an extension to the length of this scheme should therefore encourage potential buyers to take the plunge, and allow building firms to continue to reap the rewards of a particularly lucrative sector of the property market.

Smart homes becoming more commonplace

Smart homes have typically been seen as a luxury for those with money to burn, or, if you’re feeling particularly unkind, those of a lazy disposition. The ability to control your central heating with your smartphone or turn your house lights on and off using voice commands certainly has an element of usefulness, but popular opinion around the idea appeared to be that such technology wasn’t high on people’s lists of priorities when it came to managing their home.

 

Recent research by the Property Expert suggests that this isn’t the case, however; according to their findings, almost three-in-four homes have at least one connected smart automation device of some description already. Further research has advised that by 2023, this sort of technology should be commonplace across the country, with close to 1.5 million homes planning to fully automate their home in the next five years.

What’s the thinking behind this surge to make your home work for you? The data seems to suggest that it comes from a practical place, with 40% of those people with smart home technology confirming that their purchasing habits were based around a desire to make their lives easier. When you consider the practicalities of turning your heating on prior to your arrival at home during the cold winter months, or controlling your TV watching or music listening activities without having to get up from the sofa, perhaps it’s no wonder!

Beyond that, 31% profess their purchases to be down to a desire to keep up with the latest technology, with a further 18% citing a need to cut their energy bills with the installation of smart meters. At the other end of the scale, 3% simply wanted to keep up with their neighbours.

Currently, the most popular forms of in-home gadgetry are smart TVs, smart meters, home hubs such as Amazon Echo, heating and smart speakers. The landscape could change drastically by the time we hit 2023, of course; technology like smart fridges with the capacity to order food or sensors that monitor your movement and adjust the lighting in your home accordingly could become more prevalent as smart speakers and TVs become the norm.

There’s certainly an element of attraction to automation too; it can add value to any kind of home, be that purchased or rental property. With that in mind, should you be wondering of ways to increase the price of your house, flat or abode, you could do far worse than investigate ways to kit your domicile out with the last technology.