Your September 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.

What you need to know about mortgage holidays

It’s estimated that one in six Brits have taken out a mortgage holiday since the start of lockdown – on average, suspending payments of £755 each per month.

Initially introduced back in March and then later extended, the break on mortgage payments has proven to be a valuable lifeline for many households during the last few months.

With the government’s furlough scheme ending in October, there’s a concern that the number of homeowners and tenants facing financial difficulty will increase further.

Across the country, one in nine are currently behind on their household bills, which includes essential items such as rent, water, energy, council tax and credit card repayments.

Although the mortgage holiday deadline is open until October 31st for new applicants, experts are expressing caution before taking this option and urging for alternative solutions – where possible.

Miles Robinson – at online mortgage broker, Trussle – warns that some borrowers may be unaware of the “true cost” of taking a break from monthly payments, which may result in huge increases overall and potential difficulties in the future applying for new loans.

“The banks were very under-resourced when they were handing them out and people were allowed to essentially self-certify whether they needed one or not.”

The Financial Conduct Authority has been advising firms to help mortgage customers by offering a range of support options, such as waiving or reducing payments, once we’ve reached the end of the official mortgage holiday on the 31st October.

If you need guidance on mortgage restructuring, as well as any long-term or short-term measures in place for COVID-19 support, we’d recommend contacting your lender directly.

You can also talk to us for more information.

How your garden can add value to your property

Since lockdown, there has been a massive shift in property priorities. Gardens and outside spaces have shot to the top of the list. But did you know that a well-kept garden can add as much as £2,000 to your property’s value?

If you are looking to sell, here are some of the best ways to make money on your garden.

Research revealed that the garden feature that adds the most value is a shed. In fact, 82% of property professionals claim a good-sized shed is the most recognised feature to boost value.

Next up is a good quality patio and paving area at 76%. Followed by secure fencing, walls or gates.

The garden feature, however, with the least value worth is artificial grass at 40%.

These statistics can be beneficial for when it comes to selling your house. The right garden can add anywhere between 5 to 20 per cent to a property’s value.

With 37% of Brits spending more time in their garden than they did five years ago, outdoor space is becoming more and more in demand.

We should also point out that a combination of these top garden features is much more beneficial than focusing on one alone.

Decent sized shed:	82%
Good quality paving/patio:	76%
Secure fencing/walls/gates:	72%
Adequate outdoor lighting:	66%
Sturdy decking:	62%
Water features:	58%
Well-designed garden furniture:	54%
Artificial grass/lawn:	40%

The takeaway from this research is that you do not have to throw a lot of money into garden revamps.

Make sure your space is maintained and well kept, showcasing its true potential to your possible buyers.

There are plenty of good garden re-vamp ideas on Instagram and Pinterest so get scrolling!

Navigating the rental bounce & mandatory electrical checks

Since June this year, it has been made a legal requirement that an EICR report must be carried out before any new tenancies begin, with electrical installation inspections conducted at least every five years from that point.

With the surge in demand for rental properties set to increase even more than what we’ve experienced this summer, property certificate providers say landlords need to be prepared to deal with the influx in demand.

Following the reopening of the property market back in May, there has been a surge in demand from tenants. This growth in activity looks like it is going to continue to develop, as there have been sustained positive reports throughout June, July and August.

A recent survey from RICS found that tenant demand has recovered to +35% in July, bouncing back from -44% the previous quarter. Meanwhile other research found that the number of tenants registering with letting agencies reached a record high in June!

Almost three in ten letting agents saw landlords increasing the cost of rent in June as a result from the high demands.

With landlords processing a higher number of tenancies, this also means more administration work needing to be carried out with new and challenging compliance measures to meet.

The most recent change affecting new tenancies is the introduction of The Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 on July 1st.

There are a range of other things for landlords to follow, including providing copies of EICR reports to their new tenants.

We would recommend having access to a large pool of electricians, as this is going to be crucial to meet the high demand. An efficient online management system would also help landlords keep organised and up-to-date with each tenant.

Mandatory electrical checks have been introduced for a reason and it is to ultimately to protect your tenants and your investments. Managing this process through trusted suppliers and using highly qualified electricians is in the interest of all stakeholders.

If you’d like to talk to us about your compliance, contact us today.

The eviction ban extension for tenants and landlords

In a move that was intended to “support renters over winter”, Housing Secretary – Robert Jenrick – announced key changes to regulations surrounding tenancy evictions.

The ban on evictions, which has now been extended until the 20th of September, will mark a six-month period in which no tenant has been legally evicted at the height of the pandemic.

From September 21st, it will be a requirement for landlords to provide information on a renter’s financial circumstances in relation to the coronavirus when making possession claims regarding rent arrears.

Alongside this, landlords will now need to provide a notice period of six months when seeking possession of their property. This will apply up to March 2021.

With courts prioritising hearings based on the severity of each individual case, coming to an agreed solution with your tenants would be the preferred approach to take, where rent payments are not being met.

Of course, exceptions have been outlined for the following instances:

• Anti-social behaviour – four weeks’ notice
• Domestic violence – two weeks’ notice
• Rent arrears totalling six months – four weeks’ notice

Could there be a better solution?

Given that the vast majority of private landlords (94%) are renting just one or two properties, this could have significant consequences on income revenue for these individuals.

In a recent letter to the Prime Minister, the National Residential Landlords Association have called for reconsiderations to be made to protect the private rented sector and enable landlords to keep offering accommodation to UK renters.

They wrote that: “failure to provide any direct financial support for the sector during the pandemic means that many landlords will be forced to seek money claims against renters building arrears. This would leave tenants' credit scores in tatters.”

The NRLA put forward the argument that the only way to untangle the conflict with COVID-19 related rent arrears is to offer interest-free, government-guaranteed hardship loans to tenants.

As this has already been introduced in Wales, the NRLA argue that it would be the best solution to “sustain tenancies and remove any risk of eviction as furlough is removed”.

We're doing our utmost to protect and support our landlords and tenants at this time, contact us for more information on how we can help 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.