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Property investors unfazed by Brexit

As we’re now finally closing in on 29th March, our scheduled departure date from the European Union, there is anticipation as to what Brexit will look like. In terms of property development, however, a recent study has shown that the majority of property investors are unfazed by the political upheaval and remain steadfast in their faith in the British property market.

A recent global survey carried out by SevenCapital, a leading property developer, has found that 85% of individuals who are currently investing in property around the world are investing in the UK’s property market, in spite of the Brexit furore whipped up by news headlines.

Andy Foote, director at SevenCapital, said: “These figures demonstrate that people generally recognise that there are bigger factors to consider over Brexit when it comes to the overall trends in the UK property market. Realistically, it’s the fear and the perception of Brexit that will have any effect, rather than the physical act of leaving the EU.”

“Ultimately, if the market were to take a dip after Brexit, seasoned investors will know that this would more likely be a catalyst for the inevitable swing back. The property market is a prime example of well-known cyclical patterns, growing through recovery and emerging stronger than previous peaks. In other words, if it takes a dip, as it did 10 years ago, it will recover and come back stronger.”

The survey of “High Net Worth Individuals” (HNWIs) – defined as earning more than £100,000 per year – has shown that property remains as popular as ever for global investors, with 59% investing in property, second only to stocks and shares. Out of those who responded, more than 30% of those from within the United Kingdom confirmed they were investing in UK property and, furthermore, almost a quarter actually cited Brexit as one of their reasons to invest.

With cities such as Birmingham performing impressively well post-Brexit vote, with property prices growing 16%, the investment possibilities remain strong. Moreover, the rental yields being posted by the likes of Birmingham, Manchester and Liverpool are amongst some of the highest around the country at between 5 – 10%.

Overall, the sensational headlines which Brexit has provided have been utilised well by the media as a means to engage people. However, when we look at the statistics it is evident that there are further far-reaching events which weigh more heavily on the property market, such as interest rates. With property investment remaining encouragingly high across the United Kingdom, first-time buyer activity at unprecedented levels and the pound being predicted by Goldman Sachs to be the highest-performing G-10 exchange rate this year, the property market is set for a strong and stable year ahead.

First-time buyer activity at its highest level for over a decade

The number of first-time buyer mortgages has reached its highest level for 13 years, with some 370,000 new first-time buyer mortgages completed in 2018. Official trade body UK Finance has released data which shows that the highest number of first-time buyer mortgages since 2006 was reached last year, underlining the fiscal viability of purchasing a home for first-time buyers.

This consistent increase in the number of first-time buyers entering the property market can be seen as a result of; government schemes, greater mortgage availability and fewer rental properties on the market. Government policy has consistently targeted buyers who are keen to enter the property market primarily through their Help-to-Buy scheme and financial aid to first-time buyers, whilst competition amongst mortgage providers has brought a greater variety of finance options to the market.  Amongst these mortgage varieties, we have seen more providers offering the 100% mortgage (or Loan-to-Value) and variations thereof, thereby opening up property to more people than ever before.

Richard Campo, managing director of Rose Capital Partners, said: “Lenders have been making it easy for first-time buyers over the last couple of months, with several providers announcing reduced rates on high loan-to-value mortgages.

“There are currently over 17,000 products available for first-time buyers.”

Twinned with the influx of mortgage varieties, and mortgages demanding a lower deposit value, is the reduced cost of these lower-deposit mortgages. The average two-year fixed rate LTV mortgage has fallen by over half a percent since last August, and big brands are also reflecting the consumer desire for LTV mortgages with Barclays, HSBC, Lloyds Bank, NatWest and Santander all cutting their rates.

Fife Properties Managing Director Jim Parker commented: “Since FTBs drive are currently a mina factor in driving the housing market, allowing home movers to find a buyer and take the next step on the ladder, this is good news for the whole market.”

In fact, the Halifax bank has recently found that first-time buyers are now so active in the marketplace that they make up the majority of home purchases bought with a mortgage in the United Kingdom. Based around the same UK Finance statistics, Halifax has found that the average price of a typical first home has jumped by 39%, from £153,030 in 2008 to £212,473 in 2018 with terraced houses and semi-detached remaining the most popular choices for first-time buyers.

Housing supply and demand are both on the up

If you’re of the mindset that the property market is in the midst of a period of difficulty, then the latest figures from the National Association of Estate Agents (NAEA) will surely change your mind, with both the supply of housing and the demand for housing at increased levels proving the market’s current health.

The NAEA Propertymark’s latest figures have shown that the supply of available housing increased by 20% in December. The number of properties reached the highest level for December since 2014, with housing supply per branch increasing to 42 – an increase from 35 per branch in November. Simultaneously, the number of house hunters also increased by 8% in December, with overall demand up 13% year-on-year.

Mark Hayward, chief executive at NAEA Propertymark, said: “This month’s findings prove that despite the current political climate, people still want to move. There is movement in the market with demand from house hunters up 13% year-on-year, and the supply of available properties also rising. Although the number of sales agreed hit a 12-month low, this is something we always see in December, with Christmas festivities typically taking priority over any plans to buy or sell.

“While many are adopting a ‘wait and see’ strategy until there’s further clarity over what Brexit might mean for the market, there is choice for those who want to buy now, and there are people on the market looking for new homes.”

First-time buyer sales also showed an increase in December, with the number of properties sold to the group increasing to 24%. With first-time buyers integral to the health of the property market, rising statistics in terms of their buying potential is always a good indicator of the viability of the market.

As we move further into 2019, it is difficult to predict whether the health of the market will remain consistent in the face of political instability and the financial effects of this lack of consistency. On the other hand, there are other macroeconomic conditions which are favourable for the health of property across the country, such as historically low-interest rates and the relative ease to obtain mortgage credit. These conditions mean that more people than ever are in a position to take out a mortgage and purchase a property, with schemes also available to alleviate the trouble which some find in saving for a deposit, and this increased demand should shore up the market even after Brexit has (or indeed, hasn’t) taken place.

Fife Properties Group Office Owner, Jim Parker said, “It is always best to get a specialist to help get the best deal on financing. 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/

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/

What property type has the best rental yield?

With property renting still booming, and the so-called “generation rent” of 25 to 34-year olds still firmly entrenched in the rental market, it would seem that investing in rental property is still a safe bet for consistent returns. If you are thinking of investing or diversifying your investment portfolio, which is the best property type to invest in for the best yields?

Recent research from Yieldit shows that three out of the top five highest-yielding properties are houses with three bedrooms or more, producing net yields of up to 11%. This would indicate that properties which can house multiple tenants or larger families make a smart investment choice, as these properties are more frequently freehold rather than the less desirable leasehold, as well as having no service charges. Research from Mortgages for Business also supports this notion of HMOs (Houses in Multiple Occupation) giving the best rental yield with these properties bringing in the highest rental yield in 2016 and 2017 at 8.9%.

Houses as a property type produced average net yields of 6.4%, followed by studios at 5.3 % and apartments at 4.9%. When looking at investment data for apartments, the Yieldit data showed that for rental yields, apartments with fewer bedrooms actually command a higher net yield – the inverse of houses. The data showed that the average one-bedroom apartment produced a yield of 5.4%, compared to 4% for a two-bedroom apartment.

“Deciding on what type of property to invest in is one of the biggest choices a landlord has to make. Houses suitable for families remain a popular choice, and yields can be significantly higher when you remove costs like ground rent, service charge and self-manage – however, it’s important to note that this type of property might require more work and unexpected maintenance costs could affect annual returns,” says a Yieldit spokesman.

Fife Properties Group Office Owner, Jim Parker commented, “Being a Landlord is not for the fainthearted however I personally have been doing this for over 25 years and Fife Properties has been voted the No.1 Letting Agents in Fife for 8 years at the UK ESTAS awards by their existing landlords. This is a track record that no other agent has replicated plus we have all the experience to navigate a landlord from their purchase decision to full property management while protecting their investment”

To book a FREE Initial Consultation click on the following link: https://www.fifeproperties.co.uk/property-valuation/

“You will not be disappointed.”

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.’

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