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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.”

Tips for selling your home at Christmas

There are some things that the British public simply cannot believe at this time of year; how cold it is, how dark it is and, above all, that it’s nearly Christmas. Nevertheless, Christmas is indeed upon us and if you are selling your home, or thinking of selling your home, you may be under the impression that it’s not the optimum time to bag a sale. Our top tips to sell your home at Christmas will show you that not only is it possible to sell your home during the festive season, it is a doddle.

Picture perfect

The average time that a buyer takes to look at a picture on a property advert is three seconds, so having the perfect image is essential in your quest to sell your home – especially at Christmas. When having your home photographed, it is important to think about the staging; ask yourself whether the clutter around your home has been put away, can you remove some of your personal items in order to create more space or give everything one last polish? Once you’ve ticked off those basics, think about the Christmas factor – do not include heavily decorated rooms in your photographs as they will detract from the space and may age your property if your home remains on the market into January.

Keep the pine in line

Of course, at this time of year the Christmas tree has taken its place in our living rooms and other communal spaces, but make sure that the tree isn’t dwarfing the space it is in. We can all get carried away with the festivities, but this may not be the year to get the 7-foot Nordic spruce of your dreams – in the same way that cramming a king-size bed in to a single room will make the room appear cramped, an over-sized tree will also make your room seem smaller than it is. Buyers like to imagine their own furniture in potential new homes, so allow them the space to do so.

Serious offers only

Although some may suggest that Christmas is a difficult time to attract buyers to your home, what the period does provide is serious buyers. You can make the most of the serious buyers in December by ensuring that you see each property viewing as the optimum chance to sell – making sure that your home is in pristine shape and you are welcome and positive about the property and the area. Potential buyers can glean an image of what it may be like to live in the area from their interactions with you as the homeowner, so ensure that you are up-to-date about local schools and solely positive when they ask you any questions. Similarly, being flexible may bag your buyer as an accommodating vendor, who allows for viewings at irregular hours, for example, could help clinch that crucial sale.

Preparation is key

Being organised could be the key to securing your Christmas sale. Make sure that your fixture and fittings list is put together, you have the legally required energy performance certificate and, if you have had work completed on the house, make sure you have the relevant consents. Solicitors can be the make-and-break in a sale scenario, with a slow solicitor frustrating both buyer and seller, so take recommendations from your estate agent and have an efficient solicitor all lined up, ready for a sale.

Being in a new home by the New Year can seem to be an impossible task, however by showing restraint with your festive decorations, and taking the appropriate steps to be prepared and organised you can certainly sell your home this Christmas and start your 2019 with the perfect gift – a new home.

Group Office Owner Jim Parker said, “You’re as busy or as quiet as you want to be. The overall demand for buying a property is still evident. It, however, takes a longer time to sell due to restrictions on viewers availability as it gets darker quicker and not everyone can view during the day, so it has to be weekends. Therefore, we feel it is so important that we still provide this valuable service to our customers to ensure we do viewings when needed and not your typical viewing person that has no prior experience and can only suggest that you call the office on Monday to get the answer to your important questions.”

To book an initial consultation on selling your home with one of our specialist agents please tap the link:

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

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/

 

How much of an impact can a street name have on a home?

When considering the purchase of a property there are a number of variables to consider; how many bedrooms you need, if there are good schools in the catchment area and what the local amenities are to name but a few. However, it seems that there is one aspect which should also now be taken in to account – street name. Recent studies have shown that the name of the road which you live on can have an impact upon the value of your property – so the old adage of “location, location, location” may be even more accurate than ever previously considered when buying a home.

The regal touch

Streets with regal names such as Royal, Palace, Lord and Bishop can boost the value of your home – showing that royal prestige extends well beyond Buckingham Palace. Nearly 10% of house-hunters surveyed are willing to pay more for a property with a regal suffix, with 8% prepared to pay up to an enormous £30,000 more. This perception of prestige clearly has an impact on the price of a home and the overall appeal to buyers – so think carefully when browsing through all those homes for sale and don’t just consider their curb -appeal, but also their catalogue blurb-appeal.

The house on the hill

Aside from the prestige of the monarchy, it seems that certain road names also exert a hypnotic appeal upon buyers with properties on “Hills” and “Lanes” worth 50% more than the national average. Naturally, when you consider a hill or a lane there is the image of peace and tranquillity, which could be a contributing factor in their popularity amongst buyers. On the other hand, properties with “Street” or “Terrace” in their address are amongst the least expensive in the UK, perhaps because of the frequency of these names and as such, a perceived lack of exclusivity.

Bishop’s Hill or High Street?

Property buyers are a discerning bunch, with never-ending lists of requirements, and it would seem that a new addition to this list is an “exclusive” sounding address with many prepared to pay a premium for a premium-sounding address. This preparedness to pay for the privilege of living on “Royal Way” or “Hill Lane” however is split regionally – with those in London 24% more likely to pay extra for an address when compared to those in the North East. Perhaps, then, it is the high prices of the capital city and the greater level of investment it takes to buy in London which can woo buyers into spending just that little bit more – a premium-sounding address to reflect the premium cash outlay required to buy their property.

Fife Properties Managing Director, Jim Parker commented: ‘It is amazing how a simple a thing such as a street name can make a fundamental difference but in the past, we have had “Lovers Lane”, “Witches Wynd” which have all attracted more than their fair share of interest.’

What makes up the price of a property?

If you had to rebuild your home from scratch, how much do you think it would cost, and are there any special features which would cost a premium to emulate should the worst happen? According to a new study conducted by Direct Line Premier Insurance, the average person overestimates the rebuild costs for their home by 38%, showing that the general public has little idea when it comes to the bricks-and-mortar cost of rebuilding their properties. Then again, the true value of a property is clearly made up of more than simply the basic construction costs, with other considerations such as local amenities also playing a part in the overall value of a home.

On average, the base construction costs of our homes make up around 59% of the property’s actual value, according to Direct Line. Other considerations which influence the market value of a home include access to local amenities, schools and public transport; these account for over two-fifths of a property’s value. Naturally, there are regional variations in terms of the premium which is paid for these location-based factors and, perhaps somewhat unsurprisingly, it is in London that the highest location premium is levied.

In the capital, a three-bedroom property costs on average £647,000 which is an astonishing £442,571 above the rebuild cost of £205,000 – quite the location premium indeed. In fact, the location premium in London is so high that it is higher than the average market value of homes across the rest of the UK. After London, other locations with higher premiums include Brighton, Bristol and Edinburgh – all with location premiums of 60% or higher when compared to the actual rebuild costs of homes in these areas.

“Although people may be surprised by the amount of value placed on a property’s qualities beyond bricks and mortar, this analysis shows just how much intangible benefits such as; local amenities, location and transport links add to the price of a property,” said Nick Brabham, head of Select Premier Insurance.

The adage of ‘location, location, location’ has long been engrained in the property buyer’s psyche and this new research demonstrates just how tangible that cliché can be, in real monetary terms. An important reflection considering these figures is that of property insurance and the devastating impact which an inaccurate home valuation could have upon an insurance claim, with the effect of over-paying for some and underpaying for others.

Fife Properties Managing Director, Jim Parker commented, “On a more local level we can see the same with St Andrews, the London of Fife. It’s frightening to think how much more they could be paying. After all, the rebuild value of a 3 Bedroom Detached Villa will generally be the same anywhere in Fife so why should they have to pay more for insurance”.

If you want to discuss this further, then the local experts at Fife Properties can often get expert advice for you. You can book a FREE initial consultation today at the following link https://www.fifeproperties.co.uk/property-valuation/

How much do top schools add to a property’s price?

If you and your family have ever looked for a new home, there is a good chance you’ve taken a look at the local schools so you can make an informed decision about your purchase.

If you’ve got young children then living in the catchment area of a good school is without a doubt a bonus, but have you ever considered how the top schools impact the price of your home or how much buyers are willing to pay to be near one? New research from Santander Mortgages has sought to answer these questions.

According to their data, homes located in the catchment area of one of England’s top 100 state secondary schools, receive a 42% boost to their value.

This price premium even applies at a primary school level, as homes in the catchment area of a top 1000 state primary school are valued at 8% more than homes in the surrounding areas.

It appears that parents are happy to pay a little extra for a home near a top school, with Santander’s research finding that they would be willing to pay almost £27,000 more than the average price of a home in the UK.

What is more interesting about these statistics, is that top schools rank far above any other local amenity, such as low crime rates or good transport links, as buyers are only willing to pay 11% and 10% for these benefits.

The research also found that 30% of parents with children of school age are considering finding a new home within the next 2 years in order to secure their child a place at a top school and just under 1 in 4 parents would even consider downsizing to send their child to a private school.

Managing Director of Mortgages at Santander UK – Miguel Sard – offered his comments on the results of the research, he said; “Living in the vicinity of a top-ranked school carries a significant house price premium. If families are looking to move into a catchment area specifically to boost their chances of getting into an elite school, they can expect to pay a hefty price

“It is important when considering purchasing a property that people understand the true costs as the house price is just one of many. Stamp duty, solicitors’ fees and moving costs mount up. Parents are prepared to sacrifice a lot to give their child the best start in life and given these costs, it is important to find a mortgage lender that offers the best rate for you to ensure repayments are manageable, and the buying process is made as smooth as possible”

Fife Properties can do arrange a FREE mortgage health check with one of our preferred partners. You can book a FREE initial consultation today at the following link https://www.fifeproperties.co.uk/property-valuation/

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