Latest news from Gilson Bailey

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.

How does the General Election affect property?

Over the past few years, Brexit has dominated the political landscape of the United Kingdom, but for the next month the general election will take up the headlines. Here, we investigate what the general election, and its result, could mean for the property market.

With the property market performing well over the past month, with a particular uptake in the last quarter, there is hope that the general election may bring with it yet more good news as potential vendors and buyers are buoyed by the stability of a new Prime Minister. In previous general elections in 2010, 2015 and 2017, an uptick in sales volumes were reported across the property market and Nedbank, the private wealth firm, have stated that they expect a significant impact on the property market following the election.

As it stands, the two main frontrunners in the general election are the Conservative party and the Labour party, both of which may well have to rely on other political parties if they fail to reach a majority.

The Conservative Party – Focus on First-Time Buyers
As the party already in power in the UK, should the Conservatives win the vote then the biggest effect on the property market will almost certainly be the break from Europe which Boris Johnson has been working towards since taking over as Prime Minister. For months, many have been predicting a flood of property transactions as soon as Brexit is agreed thanks to the people who have been waiting to buy or sell simply due to the political uncertainty – with Brexit completed, transactions should increase in the property market.

Further to Brexit, the Conservatives have pledged to create up to 100,000 new starter homes with a 20% discount for first-time buyers under 40 years of age in order to continue with the momentum that has been seen over the last two years amongst this group. They will maintain the Right to Buy scheme which will continue to see the number of council owned properties declining, and the rental market fluid.

The Labour Party – Mansion Tax
Labour have plans to shake up the property market on a bigger scale, and this is no more evident than with their proposed Mansion Tax where property owners whose homes are worth more than £2m would face an annual charge, based on the value of the property. In line with this, those who own second homes would pay higher rates of tax, as well as those who own properties which are empty or owned by non-residents of the UK.

In terms of first-time buyers, Labour have pledged to build 200,000 homes a year in order to keep the market fluid and meet the demands of an ever-increasing population who have recently faced under-supply.

Borrowers continue to enjoy competitive mortgage rates

Whilst the mortgage industry continues to face difficulties when it comes to finding good returns, borrowers are continuing to benefit from low rates, according to the latest month-on-month data.

Moneyfacts.co.uk has discovered that competition within the market is continuing unabated, with rates for two-year fixed mortgages dropping just 0.01% to 2.44% and the average rates for three and five-year fixed mortgages staying still at 2.60% and 2.75% respectively. The biggest drop in rates was seen for 10-year fixed mortgages, but with the decrease sitting at 0.07% and the rate shifting to 2.91%, this hardly represents a significant fall.

Borrowers are

Mortgage fixed rate analysis

Mortgages	Two year fixed	Three year fixed	Five year fixed	Ten year fixed
Six months ago	2.47%	2.66%	2.85%	3.00%
Last month	2.45%	2.60%	2.75%	2.98%
Today	2.44%	2.60%	2.75%	2.91%

Savings fixed rate analysis (£10,000 investment tier)

Savings	One year fixed	Two year fixed	Three year fixed	Five year fixed
Six months ago	1.46%	1.63%	1.84%	2.15%
Last month	1.31%	1.41%	1.56%	1.88%
Today	1.29%	1.36%	1.51%	1.77%

“It appears that fixed mortgage rates are continuing to be cut despite the rise in interest rate SWAPs, a market that lenders generally use to hedge themselves against future interest rate fluctuations,” offered the website’s finance expert, Darren Cook. “The significant increase in SWAP rates indicates that markets may now be clawing back a previous factoring of a forecasted Bank base rate cut in the short term.

“The current average two-year fixed rate is currently 2.44%, however, this average rate reached its historical low of 2.20% two years ago in October 2017, so the current drive by some mortgage providers to cut rates could be a conscious strategy to make sure that they retain the borrowers who may be maturing from a very low fixed rate secured two years ago.

This is the last month to open a Help-to-Buy ISA

This is the last month that Help-to-Buy ISAs can be opened before they end on November 30th, with no new applicants accepted onto the scheme past this period. If you have any aspirations of getting onto the property ladder, now is the time to open your account - you only need to deposit £1!

The Help-to-Buy ISA was launched at the end of 2015 and the accounts are available from both banks and building societies. The account has proved to be extremely popular as you can receive up to £3,000 from the government based on the amount of money you have put aside in the ISA.

Essentially, for every £200 saved in the account you can receive £50 with just a few strings attached;

• This is an account solely for those who have never bought a property before
• £200 is the maximum amount which can be saved in a single month
• The maximum government bonus is £3,000 (meaning that you need to have saved £12,000 to receive this)
• You may use the ISA to buy a home up to the value of £250,000 outside London, or £450,000 in London
• If you have any other ISAs open, you must transfer the value over
• You can keep saving in the Help-to-Buy Isa up until November 2029

If you miss the deadline at the end of this month, there is still the Lifetime ISA (LISA) which is similarly aimed at first-time buyers, but also for retirees. The LISA has a comparable 25% bonus from the government based on your own contributions into the account, and once you then 60 you can access the money that you have saved completely tax free.

Landlord winter property guide

As we head towards the Winter months, now is the optimum time for landlords to prepare for the potential issues that may arise from the harsher weather. Spending a little time and effort now may well save money further down the line in the event of an accident or repair cost. Here’s our list of essential landlord checks;

Boiler Service
The number one priority for every landlord should be checking that the boiler in your property (or properties) is in good condition, as repair costs can be extremely expensive. Book a boiler service to ensure that everything is working correctly and safely as boilers can break down with the surge in gas consumption that comes in the colder months.

Protect the Pipes
Adding lagging to your pipes (specially designed pipe insulation) is an inexpensive measure which will give you peace of mind knowing that your piping will not burst due to freezing and splitting. Focus on pipes in external areas and lofts which may be subject to the most extreme temperatures and you should avoid any problems as the cold sets in.

Smoke and CO Alarms
In line with regulations from October 2015, a smoke alarm must be installed on each floor of a rental property – now is the perfect time to double check these are in good working order and that your tenants are safe in your property. If your rental property has a fireplace (or solid fuel appliance) then additional carbon monoxide alarms must be fitted in the same room, as the chances of these items being used increase astronomically in winter.

Open Dialogue
One of the key pieces of advice that we can give to protect your property through the winter is to create healthy dialogue with your tenants. As they are living in the property day-to-day, they will be able to advice on any niggles so that you know how to avoid any larger issues. Make sure your tenants know where the stopcock in the property is, where the fuse board is located and who to call in case of emergency, and they could be invaluable in saving you time and money.

Protect the Roof
Chipped, cracked or dislodged tiles on your roof could lead to significant water damage and in cold temperatures this can lead to structural issues with water freezing and expanding. Double-check that your roof is in tip-top condition, and whilst you’re at it take the time to clear out your gutters to avoid blockages when the inevitable rain falls.

Christmas Lights Switch On

Fri 29 Nov 2019 17:30

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Art Fair East at St Andrew's Hall

Fri 29 Nov - Sun 1 Dec 2019 10:30 to 17:00

Click here to read Art Fair East at St Andrew's Hall.

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.

Deepdale Christmas Market 2019

Fri 29 Nov 2019 onwards, 10:00 to 17:00

Click here to read Deepdale Christmas Market 2019.