Your February 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.

Latest eviction ban “more balanced” than past examples

Just after we started 2021, Housing Secretary – Robert Jenrick – announced an extension on the ban preventing tenants from being evicted.

This meant that – apart from the most serious of cases – no evictions would be carried out until at least 21st February.

In the previous bans, the substantial rent arrears exemption only applied when there were nine months of arrears before 23rd March 2020.

Many landlords have been suffering severe hardship by rent arrear levels significantly below that figure, which prompted a change to the arrears threshold to six months, making it more balanced for landlords and tenants.

Bailiffs that are enforcing the few evictions permitted to be carried out are being told to take caution and proceed in accordance with the regulations – if they can do so safely.

There is also a question mark over how a bailiff should deal with a situation where a tenant is self-isolating.

The presumption from many bailiffs is that the eviction could not be carried out for their own safety.

Not all landlords and representatives welcomed the extension.

However, Housing Solicitor – George Cohen – seems to think more landlords will begin to accept the change, due to the regulations being “more balanced”.

With the six-month notice period also reaching its conclusion at the end of March, many within the sector are now wondering what measures will be introduced by the government for landlords and tenants.

If you have any concerns about your living situation or property investments, we urge you to speak with our team today for more information.

Decorating mistakes that could stop your home from selling

With the property market seeing a lot of demand, sellers need to present their homes in the best possible light to beat the competition.

These common mistakes could mean that your home receives less interest and fewer offers, so it's worth your time and consideration to rectify the following:

Misplaced curtains

Curtains are a really effective way to keep your house warm, frame your windows and add a splash of colour or texture to any room.

However, the positioning of curtains can impact the look and feel of the living space in a negative way.

Whilst you might assume that they should be hung just above the window, this actually makes the area feel smaller than it is, so it's advisable to emphasise the height of the room by fixing them as high as possible.

Open wardrobes

These can look great in pictures and act as a really beneficial feature to your property, however, they can soon appear untidy or ruin the room's aesthetics.

It’s important to remember that for open wardrobes to look good, a minimalistic layout is necessary.

This can often be unpractical, especially if you're still living in the property, but try to create clear spaces to avoid deterring buyers and devaluing your home.

Overkill on florals

Whilst the 80s trend of floral patterns could be making a comeback, it’s important to not get too drawn into trends.

Going for strong design elements is a way to express your own character on your home, but you run the risk of putting buyers off by using overly decorative styles that aren't suited to every person who comes across your home.

If you do decide to opt for patterns, use them as an accent rather than for every wall and piece of furniture, as this will add longevity to the design.

Buying furniture that is too big for the room

Sometimes when shopping for new furniture, we can be completely drawn to a certain item, regardless of whether it works for the space we have.

However, it’s vital that you try to avoid any purchases that don't make sense for your home, if you're planning to move in the next few months.

A room that is too cluttered could make it seem much smaller and takes away crucial space, which is becoming increasingly important to the nation's homebuyers.

If you’re thinking about selling your home, start the process today by booking a valuation with us.

Help-to-buy extension has been confirmed

The deadline for the current help-to-buy scheme is set to be extended by a further month – taking it to the end of March – in order to take into account delays to the sector caused by the pandemic.

Aimed at first-time buyers, it was during July 2020 that the practical completion deadline was initially extended from the end of December to February 28th this year.

This came down to matters regarding COVID-19 and how the current climate has drastically affected the property market as a whole, whereby the government were asked to rethink the date in order to benefit those looking to step onto the property ladder and move into a new build home.

At this point in time, practical completion can be done up until March 31st, however, that stands as the final deadline for legal completion.

The only exemption is where Homes England has previously granted extension to legal completion regarding those homes reserved before June 30th 2020, and who now have until 31st May.

Statistics that were officially published last year indicate that 278,639 new homes were bought on a help-to-buy scheme between April 2013 and June 2020.*

If you require further guidance or support, please don't hesitate to contact a member of our team today.

*GOV.UK

House-buying behaviour continues to be shaped by working from home

With the number of vaccine jabs administered in the UK now over 10 million, we can start to imagine a future beyond the pandemic, but it's expected that the 'new norms' many of us have adopted will have lasting effects in our day-to-day lives.

Working from home has gone from being an infrequent luxury to a very real reality – whether we've wanted it that way or not.

Jobs advertising remote working tripled since November 2019, going up from 26,600 to 80,700 listings in November 2020.*

With remote working now an expected part of life, the desire for a home office has skyrocketed, leading to interesting levels of activity on the market for larger properties.

COVID-19 has impacted the behaviour of homebuyers, as well as the priorities of employers and businesses, who now recognise that proximity to the office is no longer a prerequisite for their team members, allowing for greater flexibility on where people choose to live.

In a recent 'Home Moving Trends' survey, 35% of participants cited an office space as being more important since the emergence of the pandemic.**

The survey also showed that broadband was high up on homebuyers’ agendas, with 37% wanting enhanced Internet speed when searching for a new home.

If you're no longer restricted to a property based near your work premises, we'd like to help you.

Browse our latest properties or talk to our team about your home-buying criteria.

*New Street Consulting Group

**Conducted by the Property Academy on a national level

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.