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.

Buy-to-let market still viable

With average rents rising across the United Kingdom, and rife competition in the mortgage sector creating attractive buy-to-let rates, it is evident that the public rental sector still has plenty of life left in it for both would-be and portfolio landlords.

Recent analysis from HomeLet has shown that average rents across the UK have increased by 3.2% - outstripping the increases in house prices throughout 2019 and showing that there are still strong returns available for savvy landlords. Excluding London, the average rent stands at £784 pcm – with the average rent in the capital city double that at £1,665pcm.

David Alexander, joint managing director of apropos, said: “There is still money to be made in the private rented sector and being a landlord can provide a reasonable income and a healthy pension. But landlords need to be more savvy to make it work and much more pro-active than in the past.”

“You must ensure your finances are arranged as efficiently as possible, that your costs are reduced to the minimum, and that your margins are as good as they can be.”

HomeLet data has shown rents increases across the whole of the United Kingdom, with Wales leading the way;

Region	Nov-19	Nov-18	Annual Variation
Wales	£630	£599	5.2%
Yorkshire & Humberside	£652	£623	4.7%
Northern Ireland	£667	£639	4.4%
Scotland	£664	£635	4.6%
North East	£540	£517	4.4%
North West	£721	£694	3.9%
Greater London	£1,648	£1,597	3.2%
East Midlands	£642	£625	2.7%
South East	£1,013	£989	2.4%
South West	£838	£819	2.3%
East of England	£917	£898	2.1%
West Midlands	£701	£688	1.9%
UK	£947	£918	3.2%

Section 21 evictions

2019 was filled with talks of abolishing Section 21 “no fault” evictions. The Government initially announced the abolition in April 2019, which was followed by a consultation process from July to October 2019. With the political uncertainty throughout the year that has recently settled, the Queens speech has confirmed that the abolition proposal is still intended as we move forward into the new year.

What exactly is a Section 21 eviction?
Included in the Housing Act 1988, Section 21 is the recovery of possession on expiry or termination of assured short hold tenancy. This essentially allows landlords to evict tenants from their properties with two months’ notice, without any reason given.

Why is this being abolished?
The ability that landlords have to evict any tenants without reason has been argued to have negative effects on tenants’ well-being and cause huge disruption to their lives. This can disrupt the lives of good tenants who may have done nothing wrong in relation to their tenancy agreement. It can also be extremely unsettling families who may have children settled in local schools and communities.

What impact will the abolition have for tenants?
The abolition of section 21 of the Housing Act 1988 will provide some protection for tenants by assuring them that their tenancy agreements will be upheld for the duration of their contracts. This is providing that they do not breach this. The abolition is a positive step for tenants; especially families who are renting on a long-term basis as it reassures them that their housing requirements are met allowing families to settle.

What impact will the abolition have for landlords?
It could leave landlords vulnerable to tenants who may abuse their home, leaving them with less power to regain possession of their property and making this process longer. Without an updated alternative provision to support landlords to protect their property, it could deter them from offering their property on the rental market. This could contribute to further demand for rental property, but with a reducing supply; driving rental asking prices to increase. To address this, the Government has proposed to strengthen Section 8 of the Act, which allows eviction due to the tenancy agreement being broken. This would ensure that the landlords needs are also protected with effective channels for them to use in the event of undesirable circumstances.

The Policy Director for the Residential Landlords Associations explained that it is crucial to also reform the way repossessions take place to avoid a rental crisis. A new system is required for landlords as well as tenants so that it is fair market for all. There must continue to be a lawful procedure to protect landlords in legitimate circumstances such as anti -social behavior, and tenant rent arrears.

It takes just 8 minutes to decide on a home

As any estate agent can tell you, a successful sale hinges on a good first impression. Prospective buyers possess a sixth sense when it comes to viewing a property and if things aren’t up to scratch – inside and out – you can guarantee they will spot it.

In fact, a recent study has revealed that the average house hunter only needs eight minutes to decide if a property is for them or not and six in ten adults will also choose not to buy a property based on the condition of the exterior of the property, without even needing to view the inside.

In comparison, 18% of buyers admitted to buying the very first property they view and 15% said they decided to buy the property before they had even viewed it in person.

This decisiveness extends online, with the average buyer spending eight minutes deciding whether or not to visit a property – highlighting the importance of a good online advert.

75% also confessed to being irritated upon finding that an advert or online listing does not accurately represent a property when visiting in person.

The study also revealed which aspects of a viewing signalled an early exit for many prospective buyers. The main offender was an obvious damp patch, which 60% of buyers said would put a stop to any future transaction, whilst a house on a main road or cracks in the wall would also put an end to the viewing.

For the buyers who are good at seeking out the problematic finer details of the property, there were some decisive reasons for buyers backing out of the viewing, such as dirty toilet pipes, overflowing bins, wheelie bins left in front of the property and faded or yellowed paintwork.

Some viewers take issue with a sellers lack of preparation for the viewing such as untidy rooms, poor DIY and ashtrays left around the house.

Other reasons included logistical problems such as the size of the rooms being too small for the buyer’s furniture or issues with the natural lighting of the property. The current owner’s furniture cluttering up the layout of a room which preventing the buyer’s imagination from running wild led to over a third of buyers to back out of a purchase.

The list showcases the importance of sprucing up your home, both before putting it on the market and before every viewing. A prospective buyer needs to weigh up the additional costs and work involved in buying a property, so ensure you give your home the most generic makeover possible and organise your possessions and furniture in a way that won’t distract the prospective buyer.

Local first-time buyers set for 30% discount

In the Queen’s speech it has been announced that the Government has pledged to provide more support to first time buyers to get onto the property ladder. They have announced that a scheme, named First Homes, will be created to provide local people who are yet to buy a home, a whopping 30% discount off purchasing their first property. This significant reduction could result in new local buyers saving tens of thousands of pounds.

In her speech, the Queen said, “my Government will take steps to support home ownership, including making homes available at a discount for local first-time buyers”. The motivation behind the scheme is to enable local people a fairer chance at owning property in the increasingly competitive market; with current competition from overseas buyers and investors steadily invading the market. This will drastically improve the affordability of homes for the average working person which provides a glimmer of hope for their home ownership pursuit.

According to the Monevator, “over the past 30 years house prices have risen nationally by 428%; with London house prices rising by an average by 559%”. Whilst this does not take inflation into consideration, it is easy to interpret that wages have not risen at the same accelerated rate during this time making it difficult for the average working person to save a large enough deposit to buy a home. Considering this, it is fair to say that the introduction of a 30% discount scheme would be welcomed by all and will enable a stronger sense of community. This is because the scheme names ‘key workers’ as part of those that it will target; recognising and offering support to those who contribute to their community.

This scheme seems to be a replacement for the recently closed to new applicants Help to Buy ISA, with further focus on helping first time buyers. To enable the First Homes scheme to function, councils will be able to use contributions from housing developers to facilitate the discounts.

The First Homes scheme should not be viewed as taking away from these other areas, as the Government has also pledged to rejuvenate the Affordable Homes Programme and Shared Ownership Programme so that they can also deliver on their promises. An overhaul of the rental system to make it fit for contemporary society and will strengthen the rights of tenants has also been discussed.

The Queens speech has delivered some promising news to start 2020, but the success of the First Homes scheme will be truly measured by its detailed workings in practice. At present, the specifics of who counts as ‘local’ to qualify for the scheme is unclear (such as does someone have to live, where do they have to work, and how long for?). Despite the lack of detail, it is safe to say is that the Government clearly want to give back to the community to continue its growth and prevent homes being left empty in this time of growing demand.

Great British Pudding Demonstration

Tuesday 28 January

19:00 - 22:00

Click here to read Great British Pudding Demonstration.

Hedgerows and Farmland Birds

Wednesday 29 January

10:00 - 13:00

Click here to read Hedgerows and Farmland Birds.

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.

Delving Deeper into Your Family History

Thursday 30 January

10:30 - 12:30

Click here to read Delving Deeper into Your Family History.