A Property Market Update

Buy-to-Let still proving to be a sound investment

The buy-to-let market has had somewhat of a difficult time over the past few years due to changes in government legislation and taxation. Since July this year, however, the number of buy-to-let mortgages being approved has risen considerably and is proving that there is life in the market for those looking to invest.

With competitive mortgage rates available, especially if a larger deposit has been accrued, anybody who has the desire to become a landlord now has the opportunity to do so. A new report by HomeLet showing that the average rent around the UK has reached a record high of £970 per month demonstrates that the potential to reap rewards through buy-to-let is exceptional.

HomeLet data shows that rents have increased in every single region of the United Kingdom over the past twelve months, up to 3.5% greater than at the same point in 2018. For those looking to invest, this presents tremendous opportunity to be able to invest locally and see the benefits.

Biggest annual increases in average rents

Region	August 2018	August 2019	Annual Change
London	£1,632	£1,689	+3.5%
North West	£717	£741	+3.3%
South West	£826	£852	+3.1%

In terms of rental yields, we are also seeing record highs in terms of the average yield that landlords are reaping, with the average now reaching 4.5%, up from last year and the highest in three years. For those looking to maximise their yields, there is a growing trend towards Houses of Multiple Occupancy, or HMOS, as they tend to provide a yield approximately 20% higher than a typical rental property.

Which region provides the best rental yield?
North West 6.20%
Yorkshire & The Humber 5.90%
East Midlands 5.40%
Scotland 5.30%
West Midlands 5.10%
North East 5.10%
South West 4.40%
Wales 4.20%
East of England 4.10%
London 4.10%
South East 4.00%
National average 4.50%

Everything you need to know about the Bank of Mum and Dad

There are huge lenders in the mortgage market around the United Kingdom, with high-street names competing fiercely with one another for potential business. One of the largest current lenders may well surprise you, however, as rather than a large financial institution it is the bank of mum and dad which sits at 11th in the list of largest mortgage lenders in the UK.

Parents and family members are set to lend more than £6bn in 2019, which amounts to a higher amount in mortgage pay-outs than well-known brands such as the Co-Operative Bank and Skipton Building Society. With deposits becoming ever-increasingly difficult to amass, many people are now counting on their relatives to help them take that first step onto the property ladder; recent research from Legal & General and Cebr has found that nearly 20% of all property transactions are now aided by parents and grandparents.

Those lucky enough to be able to tap into this valuable resource will be aided predominantly by cash gifts, with some releasing the equity in their homes in order to help their children (16%).

Nigel Wilson, Group Chief Executive at Legal & General, says: “The Bank of Mum and Dad continues to be the ‘iceberg’ mortgage lender beneath the surface of our housing market – all but invisible yet exerting a massive influence, funding purchases across the country and helping people to defy the economics of affordability and realise their housing dreams.”

If you are thinking of using the bank of mum and dad, then there are a few considerations to take into account:

• Banks and building societies will accept a deposit, or part thereof, that has been gifted to you – some may require confirmation in writing that the money is indeed a true gift.

• If cash is gifted to you then this may be subject to Inheritance Tax (IHT) if the gift giver is deceased within seven years of the gift.

• Inheritance limits are £3,000 per year, and previous years’ allowances may be utilised before IHT comes into play. For example, two parents could gift £18,000 with no IHT due as long as they had not gifted anything in the previous three years.

• If the money is a loan, then this will need to be declared to your potential mortgage provider detailing repayments, interest, timescales and caveats.

Family Fun and Crafts

Friday 21st February

Join in with craft activities to create your own Antarctic adventure.

Click here to read Family Fun and Crafts.

Buy To Let Mortgage Availability

Now that the property market is resuming activity we have seen property demand increase, especially in the lettings market. Research by Rightmove found that demand for rental homes rose by 33% in May 2020, which is higher than the same time last year! Mortgage lenders have also re-introduced many of their products to accommodate the increased activity.

The range of mortgages has expanded over the past few weeks with buy to let options re-entering the market. There are many lenders that are offering a range of mortgage products with excellent rates. If you are a landlord and have not needed a mortgage payment holiday, this could be your window of opportunity. Landlords may wish to use this time to consider expanding their portfolios as there are plenty of prospective tenants looking for their next home. Investing in property now could lay the foundations for long term capital gains.

How has buy to let mortgage availability changed?
The outlook for buy to let landlords has improved vastly recently. Landlords who are seeking buy to let mortgages now have more choice with Barclays, Lendinvest, and Virgin Money (to name a few) renewing their products to include increased variety. Over the past month, buy to let products have increased to levels almost the same as March 2020. If you are a landlord, now if a great time to re-assess your property portfolio and consider expanding, or recalculating your portfolio financing. There are an additional 280 further options for buy to let mortgages. This rise shows the mortgage lenders shift in focus from existing borrowers, to including new borrowers too. This means that if you have been considering renting your home the market has options available for you.

What about interest rates?
Buy to let mortgage rates are low, as with all mortgage rates currently. This is because the Bank of England’s base rate is still currently sitting at 0.1%; making rates increasingly competitive. The greatest savings have been identified with 5 year fixed rates; the greatest reductions can be found with five year fixed with 80% LTV. If you are in a position to switch your mortgage deal, or enter the buy to let market, now is the perfect time to look around.

New Sales Agreed Reach Early March Levels

As the United Kingdom was plunged into lockdown, we saw property portals and online property websites reporting huge numbers of visitors and this online activity is now being translated into sales agreed. Zoopla are reporting a huge spike in sales agreed with current figures now matching those back in early March when the market was booming, showing that the property market in England is experiencing a true resurgence post-lockdown.

In the month following the reopening of the property market, up to 7th June, analysis shows that demand for housing was 54% higher than at the start of March, with new sales agreed having risen by 137% since the market reopened.
Interestingly, the higher the values of the property the greater the increase in the volume of sales agreed when compared to before the Coronavirus crisis. Home sales for properties priced £1m and above are 16% higher than three months earlier – this could be attributed to homeowners looking to trade up in terms of location or property size. The impact of the Coronavirus can be seen on the most searched terms for properties – with home offices and outdoor space now higher in buyers’ priorities.

Zoopla’s Director of Research and Insight commented:

“The rebound in housing demand over the last month is not solely explained by a return of pent-up demand.

“COVID has brought a whole new group of would-be buyers into the housing market.

“Activity has grown across all pricing levels, but the higher the value of a home, the greater the increase in supply and sales as people look to trade up.”

The analysis from Zoopla is supported by Rightmove’s recent data publication which revealed that 40,000 new sales have already been agreed since the market reopened – with the average asking price of properties up by an average of 1.9% compared to pre-lockdown.

Property expert Miles Shipside commented:

“Following the initial shock of the early reopening of the housing market, England is getting moving again with a boom in traffic on Rightmove,” said Shipside.

“There are no signs of panic selling or even a price dip. Some sellers who had agreed a sale before lockdown have been worrying that their buyer may try to re-negotiate with a reduced offer.

“On this evidence buyers may now be trying to exchange quickly, as there are signs of high pent-up demand and upwards price pressure, rather than downwards.”

Our Top Tips For Designing A Home Office

People have been working from home for a while now. With businesses offering a greater level of autonomy and flexibility to their workers for the long run, many of us will have created office spaces in our homes. These spaces are vital to our productivity, and we have therefore put some of our favourite design ideas together in order to make your home office a hotbed of efficiency.

Nail the basics
When designing a home office, it can be easy to get caught up in the design aesthetic first and foremost, but the basics of a suitable desk and comfortable chair are not to be overlooked. These two pieces of equipment could make your working-from-home bleak or blissful, so take the time to choose wisely. When choosing your seat, ensure that the height and lumbar can be fully adjusted; your thighs should be at a right angle to the floor and your feet totally flat to provide the most ergonomic seating position.

Don’t neglect storage
The old adage of ‘tidy space, tidy mind’ is prevalent for a reason – we tend to work best when we’re in comfortable, organised spaces. It’s easy to forget that a home office will need to have masses of storage in order to store your working documents, as well as any accoutrements you need on a day-to-day basis. When planning your home office, incorporate space for storage which includes shelving, cupboards and filing cabinets.

Create an oasis
Your home office should be a space that you want to visit; therefore, creating a pleasant and attractive room should be high on your priorities to encourage you to use it. Studies have suggested that using greenery in our work spaces can make us happier and improve cognitive functions, so adding plants or herbs in your office space are an easy method to incorporate some natural elements. In line with the greenery, keep the general feel of your home office light and airy by keeping walls and décor neutral, perhaps with one simple accent wall in a colour such as navy blue, which is supposed to help with concentration.

Creating space
Not everybody will have an extra room to dedicate to a home office, but don’t let that stop you. If you have an alcove in any rooms in your house, you can turn it into a mini home office simply with a fold down desk. You could also double up the use of your dressing table or kitchen table. One of the benefits of not having a dedicated fixed office space is that you can move your home office around if you feel like you need a motivation refresh.

Landlord Update - Electrical Legislation

As a landlord, it is important to keep up with the latest legislation in order to keep your tenants and yourself secure. The latest change to keep abreast of is the government’s new electrical safety regulations – specifically for electrical installations in your properties. Fall foul of these rules, and you could be facing financial penalties of up to £30,000.

In recent years we have seen somewhat of a reform to the rental sector with seismic changes including the Tenant Fees Act, Fitness For Human Habitation Act and a potential review of Section 21 evictions. The new Electrical Safety Standards regulations will apply to all new tenancies from July 1 2020 and for existing tenancies from April 1 2021.

One of the key features of the legislation is electrical inspections, with landlords having to ensure that all electrical installations in their property are inspected and tested by an appropriately qualified electrician at least every five years. Documentation around these inspections then need to be shared with new, existing and prospective tenants as a legal requirement. Should the local authority request the paperwork, a landlord is also then required to supply this within 7 days of receiving the request.

Here is an overview of the changes;

• A landlord is required to obtain an inspection and test report from a qualified person, supply that report to each tenant within 28 days, and to the local housing authority within seven days of a request. A copy must be retained until the next inspection is due.

• For new tenancies, the landlord must supply a copy of the last report to any new tenant before occupation, or any prospective tenant within 28 days of a request.

• If the report requires further investigative or remedial work, this must be carried out within 28 days or sooner if the report suggests. Written confirmation of the work being carried out by a qualified person must then be given to the tenant and the local authority.

• If a landlord is in breach of the regulations, the local authority can serve remedial notices, if necessary, carry out the required works themselves recovering their costs from the landlord and can impose financial penalties of up to £30,000.

If you would like to read the full guide for landlords published by the government, you can do so here or if you would like to talk to us about your rental properties, please do not hesitate to contact us and we will be able to advise you.

Norwich Community Choir

Tuesday 25th February

A friendly local choir for anyone who loves singing.

Click here to read Norwich Community Choir .

Our guide on 'gazumping' and how to avoid it happening to you.

If you’re looking for a new home, or are looking for your first home, then “gazumping” may be a term that you aren’t particularly familiar with. Essentially, gazumping is when you have had an offer accepted by a seller, and are in the midst of the buying process, when another buyer comes along and offers a higher price, effectively stealing (or gazumping) the sale.

Over the period between January 2016 and October 2018, analysis by TwentyCi found that 16% of buyers were gazumped. In the current property market, where demand for properties is high, gazumping continues to be prevalent, and the research found that Sheffield is the area with the highest level – with 35% of buyers out-bid at the last moment.

Phil Spencer, TV presenter and co-founder of Move iQ, said: “For anyone who thought gazumping vanished with the runaway price rises of a few years ago, our findings will come as a reality check.

“Gazumping is alive and well, and still causing heartache for tens of thousands of buyers across England and Wales.

“Britain’s fragmented property market is throwing up huge regional extremes. In hotspots where prices are still rising fast, sellers can be tempted to go back on their word to a buyer if they get a better offer elsewhere.

“Meanwhile, in slow markets, the lack of homes for sale can lead sellers to leave would-be buyers in the lurch if they get a last-minute offer from someone else.

If you want to avoid the spectre of being gazumped, then having all of your buying processes in place before making an offer will help. These involve having a mortgage in principle in place, a conveyancing solicitor and a surveyor in mind; all will help to avoid long periods of waiting which offer the opportunity to others to make a higher offer. When you make your offer on a property, you could also ask as a condition of the offer that the property be taken off the market immediately which will then protect you from other prospective offers.

Britain’s Gazumping Hotspots

Sheffield – 35%
Madistone – 32%
Cambridge – 28%
Birmingham – 26%
Manchester – 25%

The importance of realistic asking prices

Recent analysis from comparison site Zoopla has shown the benefits that are reaped when a property is priced correctly rather than over-ambitiously, with overvalued properties taking up to two months longer to sell.

In addition to a longer sale period for properties which are overvalued, the research also found that by dropping the price in order to attract buyers, these properties also achieve an average asking price of £12,000 less than their more accurately valued counterparts.

“Our research highlights the importance of accurate pricing and reveals the areas where there is the healthiest alignment between a seller’s expectations and what a buyer is willing to pay for a property,” said Charlie Bryant, managing director of Zoopla.

“When a home is valued too ambitiously at the start, or simply overpriced, the sales process can be derailed. Homes can languish on the market for much longer than they should and the vendor loses control of the sale, often leading to price reductions,” he pointed out.

“Agents in Salford, Driffield and Dronfield stood out in our report in aligning their vendor expectations with the realities of the market, and what a potential buyer is willing to pay for that particular house, in that particular location.

“The English and Welsh average sold price, which amounts to 96.3% of the asking price, indicates a market realism, and moreover a market that is transacting good values, despite wider macro-economic and political concerns,” he added.

This research shows the important part which an estate agent plays in those initial meetings, with an over-valuation extremely attractive at first, but damaging in the long-run. If you are thinking of selling your property, then complete your own research so that you can have open and honest conversations with your agent in order to list at a realistic value.

Tips on selling as the days get shorter

As the days get shorter, it is more important than ever to present your property in an appealing manner if you are going to attract potential buyers. With that in mind, we have put together some season-specific advice to help you find a buyer…

Let in the light
Never is it more important in the year to keep your rooms bright and airy than during the change between seasons. This is because of how quickly the levels of light fluctuate, turning your lovely property into a less-appealing version of itself, with dark rooms and corners. To avoid this, use uplighters to brighten up your rooms during viewings – this type of lighting can be easily placed into corners or areas which may appear darker. Furthermore, blinds and curtains should be drawn back to allow plenty of natural light and don’t forget to turn any lights on in cupboards etc. to create multiple sources of brightness.

Keep paths clear
During this time of year, leaves may start to fall from the trees leaving debris around your property. Ensure that your kerb appeal is kept to its maximum by clearing away any errand plants and debris from your property, especially on the path to your front door where potential buyers will most certainly be surveying. If you have the time, consider tidying up your flower beds and removing and shrubbery which may not be looking quite as lovely as during the summer months.

Clean, clean and clean again
Of course, presenting your property in a clean and tidy state is a given, but it’s also worth considering any other areas that you can spruce up in order to maximise the available light. Clean your windows regularly to ensure that they sparkle for prospective buyers and let in as much natural light as possible (this will also help with the aforementioned kerb appeal). Clean your front door so that it looks at its best – many of us will have white UPVC doors to match double glazed windows, and if this is the case then use some bleach to rejuvenate it.

Increase the pressure
You want your property to seem cosy and inviting, and the drop in temperature gives you the perfect chance to make your home comfortable and welcoming. Turn the thermostat up so that during viewings your property is warm and incentivises viewers to really take their time looking around before they brave the cold weather once more. If you have a fireplace, think about lighting it up or at the very least light some candles.

Government announces reforms to planning and Help-to-Buy

Housing secretary James Brokenshire has recently unveiled his plans to introduce new quality controls on housebuilders, whilst also implementing new legislation to try to prevent developers from selling houses on a leasehold basis through Help-to-Buy.

“We have long recognised that we have a responsibility to confront unfairness in the leasehold market,” commented Brokenshire. “Last year we consulted on proposals including the leasehold house ban and ground rent reduction.

“Today I can confirm we will go ahead with our original plan to reduce ground rents on future leases to zero, as opposed to a cap of £10 per year.

“And we will legislate to ensure that in the future save for the most exceptional circumstances all new house will be sold on a freehold basis. We are committed to taking bold action to reform the sector and will be pressing ahead as soon as parliamentary time allows helping us delivery our promise to make the home buying and selling process quicker, cheaper and easier.”

The housing secretary’s plans aim to help future homeowners in purchasing their first properties in a more timely and cheaper manner. These plans go hand-in-hand with the government’s pledge to deliver 300,000 new homes a year by 2020. According to the plans, if a buyer is sold a leasehold home then they will be able to get their freehold at no extra cost.

The Help-to-Buy scheme has been a flagship system that has been fundamental in first-time buyers entering the market since April 2013. From 2013 to 2018 the number of new-build property sales has increased from 61,537 to 104,245 – which can be largely apportioned to Help-to-Buy, with 38% of all new-build sales supported by the scheme.

Addams Family Musical

Thursday 27 February - Saturday 29th February

At the Jane Austen College, Norwich

Click here to read Addams Family Musical.