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What are the top priorities for buyers looking for a home?

Good schools, good commuter links and a good kitchen; traditionally, this is what has been considered to be the magic triad of priorities for buyers.  However, new research has suggested that this is no longer the case. Read on to see what buyers are prioritising whilst on the hunt for a new property…

A poll from a regulated property buyer has shown that a budget supermarket has ousted the school catchment area for one of the top spots in buyer priorities, with almost 40% of those surveyed stating their desire to live within close proximity to an Aldi or Lidl. School catchment areas remain high on the wish list of buyers with 29% saying that they would move home in order to be in a specific catchment area.

The desire for good-value shopping could be linked to the need to economise after purchasing a new property, so it is no surprise that it is the younger generations who rate the budget supermarket highest; some 54% of 18 to 24-year olds want to live near to one. This figure gradually declines to 34% of over 45s sharing the same view.

The outright top spot on buyer priorities, however, is for a scenic view with 44% of people preferring a property with scenic surroundings. Budget supermarkets follow this in second place, and local bars and restaurants come in at third in the wish list of buyers.

“Everyone has their own priorities when moving to a new house, but it’s interesting to see how the overall patterns are changing. Budget supermarkets are definitely growing in popularity, especially among the younger generations, and their presence in a region is now making a place more desirable to live,” said Ross Counsell, director at Good Move.

Once a property move is completed, research also revealed what people first investigate once they have moved to a new area. Public transport links are the first item which people look into with 21% of people researching this immediately, followed by local schools, crime rates and broadband speeds.

Fife Properties Group Office Owner, Jim Parker said, “It is no surprise that budget supermarkets are moving up the list of priorities as people realise every penny counts. So it is just as important to get the best mortgage deal and that means a specialist to check you are better off. Often it far outweighs the fee for arranging the mortgage itself”

If you want to book a FREE initial consultation with our specialists, please tap the link to contact any of our local offices or book online https://www.fifeproperties.co.uk/contact/

Buyers rush to beat Brexit: mortgage approvals increase

Research from chartered surveyor e.surv has shown that mortgage approvals reached a peak of 66,390 in December of last year, which amounts to a 7.8% annual increase. This seasonal rise has led to claims that there is a pre-Brexit rush to purchase property, and that the political uncertainty arising from the imminent break with Europe is actually fuelling current demand in the property market.

Commenting on the figures, Richard Pike, sales and marketing director for Phoebus Software, said:

“It is hard to talk about anything at the moment without mentioning the ‘Brexit’ word: it is all-consuming and there is little doubt that it continues to affect the housing market.

“The fact that house purchase approvals were up in December suggests that people are planning ahead and making their move before the March deadline. Interestingly the number of remortgage approvals took a dip compared to the same month in 2017, which bucks the trend throughout the rest of the year.”

“Nonetheless, I would expect it to be the remortgage sector that will be keeping the mortgage market going in the coming months, as we wait to see how our exit from the EU pans out.”

Throughout the year, types of mortgage being approved also reflected the influx of first-time buyers in the property market, with mortgage products offering loans at 95% of a property’s value increasing in popularity.

Data showed that over a quarter of mortgages approved in December were taken out by borrowers with a small deposit (less than 20%), and this was also the case in November. A key step-change in property has been the introduction of government schemes in order to alleviate the headache of saving for a deposit, and these statistics show that this is having some success in the marketplace.

Tony Sutton, managing director of mortgage brokerage group Specialist Financial Services, said lenders have become more competitive as they seek to protect their market share.

Mr Sutton said: “There is a wider choice of products available, serving a broader range of people with more sensible underwriting decisions.

“Lenders are trying to maintain market share and have increased the terms they are willing to offer.”

Such an increase in mortgage offerings has clearly made the process of gaining a mortgage easier than ever before – with some lenders even offering 100% mortgages on properties in an effort to maintain their place in the marketplace. With more options available offering more flexibility, it is no wonder that mortgage approvals have increased, which bodes well for the year ahead for property.

Fife Properties Group Office Owner, Jim Parker said, “It is a highly competitive market out there and to stay ahead of the game it is always best to get a specialist to help get the best deal. Often it far outweighs the fee for arranging the mortgage itself”

If you want to book a FREE initial consultation with out specialists please tap the link to contact any of our local offices or book online https://www.fifeproperties.co.uk/contact/

What can we expect from the property market in 2019?

2018 has been a year of ups and downs in the property market, with the overriding factor being the imminent break from Europe. As we move in to 2019 and March 29th (the official date of Brexit), there remains a certain level of uncertainty in the market, however this should be tempered with cautious optimism when looking at the gains that property could make in the post-Brexit period.

 

Interest rate uncertainty

Something which is currently subject to extreme uncertainty throughout 2019 is interest rates, with the Bank of England having already increased rates last year for only the second time in over a decade. On the one hand Mark Carney, governor of the Bank of England, has indicated that the Monetary Policy Committee (MPC) will continue to gradually increase the base rate next year. However, Carney has tempered this intended rise in base rates by stipulating that in the event of a disorderly Brexit the MPC would be prepared to similarly cut rates in order to support the economy.

Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “It looks set to be an intriguing year. We expect interest rates to end the year around 1% and mortgage rates will reflect this.”

 

Competitive mortgage market

During the course of 2018, the competition in the mortgage market has become rife with more offers available and more options to entice buyers into the market than ever before. Looking to 2019, there is no indication that this competition between lenders will subside, making mortgages more accessible to a wider market. Currently, there are 1,459 cashback incentives available on residential mortgages which is nearly two-and-a-half times more on offer than in 2011, according to Moneyfacts.

David Hollingworth, of L&C Mortgages, offered: “This year has been very, very competitive with mortgage lenders pushing hard to attract borrowers. I don’t see a reason why that would change in the new year and it might just be a tighter market with even more intense competition.”

 

First-time buyers

2018 saw an unprecedented number of first-time buyer transactions in the property market, with numbers reaching an 11-year high. With the news from the Budget that the Help to Buy scheme will be extended a further two years, many potential purchasers should also join the property market in 2019. Often, saving for a deposit is the chief hurdle for those wanting to buy a home, however with the availability of deals for people borrowing 95% of their home’s value soaring to 304 different mortgage options, this hurdle is now being circumvented by the mortgage industry. With more mortgages with lesser deposits available, as well as shared ownerships and purchase schemes offered, we should see first-time buyers once again on the rise throughout the course of the new year.

 

Remortgaging

With lenders in stiff competition with one another and low interest rates still present, many agree that 2018 has been a good year to remortgage and 2019 will continue to offer favourable conditions for those looking to capitalise.

Rachel Springall, finance expert at Moneyfacts, says: “Throughout 2018 the mortgage market has had to absorb the base rate rise back in August, which has inevitably pushed the average standard variable rate to its highest level in almost ten years. This has meant the incentive to remortgage has probably never been greater.”

Fife Properties Group Office Owner, Jim Parker commented, “It is a great time to consider switching mortgage providers by getting a FREE up to date valuation from us and speaking to our mortgage partners who have always provided great deals” To book a FREE valuation and mortgage consultation click on the following link:

https://www.fifeproperties.co.uk/property-valuation/

The 2018 Budget and its impact on the property market

The recent Budget has ramifications for all of us – with the Chancellor setting out levels at which we pay income tax, fuel duty prices and the all-important “sin taxes” around cigarettes and alcohol. What, therefore, does the Budget 2018 mean for property?

Stamp Duty

Stamp duty has been abolished for all first-time buyers of shared ownership homes (whereby the buyer purchases a share of a home, with the local council or housing association owning the remainder) up to a value of £500,000. The policy will be retrospectively applied from the 2017 budget meaning those who already bought a shared ownership property within the past year will also benefit from the change. Further to this, first-time buyers do not pay any stamp duty on homes below £300,000.

Stamp duty rates in Scotland are now as follows:

  • First £145,000: 0% (£175,000 for First Time Buyers)
  • £145,001 to £250,000: 2%
  • £250,001 to £325,000: 5%
  • £325,001 to £750,000: 10%
  • £750,000+ : 12%

Help To Buy Scheme

There are a few changes being made to the Help to Buy scheme, one of the key points being that the term has been extended to 2023. Further to this extension, the new iteration of the scheme from 2021 to 2023 will only be available to first-time buyers rather than to all, as is the case with the current scheme.

Overseas Investors

A new tax will be introduced for overseas investors, the revenue from which will be used to tackle homelessness across the country. Overseas investors will face an extra charge of 1% to 3% when they buy a UK property, in addition to current stamp duty charges. As well as using the revenue to tackle the increasing problem of homelessness, the intended effect is to dissuade some of the rife competition from the London market which is making purchasing increasingly difficult in the capital.

New Homes

Although the Help to Buy scheme is being extended by two years, there are fears that the cessation of the scheme will slow down new-build homes as there will be fewer buyers able to purchase. The government is intending to give an extra £500 million to councils through the Housing Infrastructure Fund in order to promote the building of new homes and avoid any slowdown in the production of new properties.

Transformed High Streets

As part of a billion-pound boost to the UK’s struggling high streets, the Chancellor has announced a £675 million fund to help councils support their retail zones through this difficult period. An unexpected result of this could be the redesigning of empty retail units into homes – with the chief executive of the Federation of Master Builders, Brian Berry, estimating that as many as 400,000 new homes could be created by making use of empty space above shops on high streets.

Group Office Owner Jim Parker said: “Stamp duty is one of the biggest cons in the government’s history. Raising taxes on what is a necessity while not actually adding any value to the transaction at all or putting anything back into the system. Plus the 3% extra duty on 2nd homes has not solved the initial problem at all, which was to stop overseas buyers.”

Should the 100% mortgage be reintroduced?

A recent poll from YouGov suggests that almost half of the United Kingdom think that the re-introduction of the 100% mortgage is a good idea. A total of 9,713 people were included in the government survey and participants were asked whether borrowing the entire cost of a home is either a ‘good idea’, ‘bad idea’ or ‘unsure’. Almost half of those surveyed, 48%, stated that the reintroduction would be a ‘good idea’ and almost a third regarded the borrowing as a ‘bad idea’ – showing that there is some consternation around the subject.

Currently, a total of nine lenders offer a 100% (or ‘loan-to-value’) mortgage. However, there are conditions around the borrowing option in its current format. In order to apply for a 100% mortgage, and depending on the mortgage provider, you must either have a guarantor who has a property to act as collateral against the mortgage or you will have a ringfenced amount of savings which can act as security (essentially making it an offset mortgage).

The suggestion to reintroduce the 100% mortgage would circumvent the necessity for guarantors or separate security accounts and could therefore help those who are struggling to take that first step on to the property ladder. Legal & General Mortgage Club head of lender relationships Danny Belton disputes whether the reintroduction of this type of lending would be beneficial, however, stating “the thinking and rationale behind the return of 100% LTV mortgage is interesting, but this is not the solution to the current issues facing first time buyers.”

Belton continues to critique the 100% mortgage, offering: “At the very least it would mean lenders would have to significantly increase the amount of capital they would be required to hold, which is just not sustainable. What would be more beneficial is for more buyers to utilise schemes such as shared ownership and Help to Buy, or even make use of a guarantor mortgage.”

In terms of age groups, the poll returned some interesting results, with 46% of those aged 18 to 24 responding positively to the proposition, compared to 49% of those aged 65 and over considering it a poor idea. The disparity in the age groups could be linked to the differences in the stages of property ownership; there’s the younger survey participants that are keen to get on the property market and are therefore more responsive, whilst the older participants have a higher likelihood of already owning a property and are thus more circumspect when faced with new propositions, such as the 100% mortgage.

Although the initial prospect of a mortgage for the full value of a property may appeal to potential buyers struggling to get on to the property market, the realities of living with such debt and the inflexibilities around it could dissuade the majority. The YouGov survey clearly demonstrates that younger people are keen to buy property and hence any new prospects which may help them in this endeavour will be well-received.

However, as Danny Belton has stated, there are several alternatives available to help people onto the property market. Those considering the 100% mortgage to be a good prospect should look in to shared ownership schemes and Help to Buy before plunging in to the loan-to-value option, no matter how attractive the prospect may appear on first glance.

Group Office Owner Jim Parker said, “The return of 100% mortgages is on the one hand good for the market in the short term. However, have we not learned any lessons at all from 2008 market crash? People will take as much as you give them as long as they can get their dream home, so the banks must bear some responsibility to ensure we do not return to this situation”. If you are looking for sensible advice on getting a mortgage, we are best placed to help with this in conjunction with our specialist partners who can search for the best deals out there. Some that are only available to them. Just call any of our office numbers by clicking the link:

https://www.fifeproperties.co.uk/contact/

UK property market set to revive next year after Brexit

With Brexit negotiations in Brussels reaching their crescendo, the reality of Britain leaving Europe is now truly upon us, and for the property market, it seems that this could lead to something of a revival.

During the drawn-out periods of consternation and uncertainty around Brexit, sellers and buyers alike have shown some restraint in their interactions with the market, and this pent-up demand is set to boost activity next year.

“People with important and costly decisions to make tend to pause and reflect, waiting for a time when the outcome is more predictable. The ongoing machinations of the Brexit process for the last two years are no exception, so it is little wonder that the property market has become increasingly subdued as time has gone on” said Richard Watkins, the land and planning director for Aston Mead.

“What’s more, despite the risks involved in the current challenging market conditions, we expect that come April 2019, those hoping to trade up will find that the gap in sale values and onward purchase prices will be the narrowest it has been for half a decade. So there continue to be real opportunities out there” he concluded.

First-time buyers will be buoyed by the two-year extension to the Help to Buy scheme offered by the government in the recent Budget and, with house prices growing at a steadier rate than in historical years, people looking to take their step on to the property ladder will surely benefit from the post-Brexit period.

Despite the well-publicised Brexit uncertainties, the property market has remained relatively stable this year and endured the period of political instability better than most predictions initially forecast. However, 2018 has still seen some slowdown in property transactions throughout the year, and therefore the notion of a post-Brexit revival will be good news for many. With the demand for properties now at an all-time high, and new-builds unable to keep up with this vociferous appetite by the masses to own a home, buyers and sellers should benefit equally after March 2019.

Fife Properties Group Office Owner Jim Parker said, “People move because of their circumstances so even if we see a slowdown just now it will speed up later. If you are selling though and wondering when to do this the answer is NOW. Waiting any longer will only leave you exposed to a higher risk as uncertainty over Brexit continues and there is nothing to gain by waiting any longer. There isn’t going to be a jump in prices even though it’s a favourable outcome”. To book your FREE initial consultation on selling your home with one of our specialist agents tap the link:

https://www.fifeproperties.co.uk/property-valuation/

 

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