Leasehold Fees explained
We often get asked about Leasehold property and find that there is some confusion associated with the fees and charges for this type of property. With the help of The Conveyancing Association we unravel the facts about Leasehold property.
Leasehold means that you just have a lease from the freeholder (sometimes called the landlord) to use the home for a number of years. The leases are usually long term – often 90 years or 120 years but as high as 999 years – but can be short, such as 40 years.
• A leaseholder has a contract with the freeholder, which sets down the legal rights and responsibilities of either side
• The freeholder will normally be responsible for maintaining the common parts of the building, such as the entrance hall and staircase, as well as the exterior walls and roof. However, other leaseholders might have claimed their “right to manage”, in which case it is their responsibility
• Leaseholders will have to pay maintenance fees, annual service charges and their share of the buildings insurance
• Leaseholders normally pay an annual “ground rent” to the freeholder.
The following advice from The Conveyancing Association explains the types of lease charges and Administration Fees.
When you buy, own or sell a Leasehold property, many of your rights and obligations will be set out in your lease. One of your obligations may be to make certain payments to the person or the organisation responsible for administering and managing your building. That person might be your landlord, a management company or a managing agent instructed by the landlord or management company. In this guide, we will describe that person or organisation as the “Lease Administrator”.
Types of Charge
The types of charge can be divided into three groups - Ground Rent, Service Charges and Administration Charges.
Although the lease may initially oblige you to pay a fixed amount of ground rent, it may also contain a clause which allows the landlord to increase the rent in years to come. Ask your conveyancer to explain if there are any rent review clauses in your lease and check what this would mean to you. If you are buying a new property from the landlord then you may be able to renegotiate the ground rent if it is excessive.
Service charges normally vary according to the amount that is spent by the Lease Administrator each year on the upkeep of the building as a whole, including, for example, cleaning the common areas and replacing the roof. The charges may include buildings insurance though sometimes this is quoted separately. Generally the lease will oblige you to pay a fixed percentage or a “reasonable proportion” of that amount. You should ask your conveyancer about the items that you will need to pay for, and ensure that you know whether the lease administrator has any plans for expensive works for which you will be responsible and when they will be payable.
The Lease Administrator is likely to make administration charges if you ask for a service connected with your buying, selling or use of the property. The following are examples.
When You Sell
1. Leasehold Property Enquiries: You will probably need to pay the Lease Administrator to provide the information required by your buyer and their lender when assessing the suitability of the title of the property.
2. Licence to Assign: it is possible that your lease requires you to obtain a licence from the Lease Administrator to sell the property, this will often involve them ‘vetting’ the new owner to make sure they meet the Lease Administrator’s criteria and they will charge a fee.
3. Some leases, usually in retirement flats, may also include an ‘exit’ or ‘transfer’ fee usually expressed as a percentage of the value.
When You Buy
4. Deed of Covenant: Some Leases require that you enter into a Deed to confirm that you will be bound by the terms of the Lease.
5. Notice of Assignment and Charge: The Lease Administrator will require that notice is served on them of the change in ownership and mortgage lender. This is so that they can make sure that they have your contact details and can provide you with information about their plans and charges for the upkeep of the property during your ownership.
6. Certificate of Compliance: This is a document that the Lease Administrator provides to confirm to the Land Registry that the requirements in the lease for the change in ownership have been complied with.
7. Stock or Membership Transfer: If you will be required to become a member of the Management Company then some administrators charge a fee for transferring the share or membership in the Management Company into your name.
8. Consents: Some leases have clauses which restrict your use of the property and may require you to obtain the consent of the Lease Administrator to certain changes at the property. Examples include running a business from the property, installing laminate
flooring, a new boiler or bathroom, extending or altering the property, letting it out and even keeping a pet.
9. Notice of Charge: If you re-mortgage the property during your ownership then the Lease Administrator may be entitled to receive notice of the change of lender.
10. Deed of Variation: If there is an error on the lease or you want to change the terms of the Lease, a deed varying the lease terms is likely to be required.
For more information visit the The Conveyancing Association and download a free copy of their Leaseholder Guide
Spotlight on Stamp Duty
With the current changes imposed for individuals owning second homes or buy to let property, we offer a summary round-up of the current stamp duty laws as laid out by the HMRC.
You must pay Stamp Duty Land Tax (SDLT) if you buy a property or land over a certain price in England, Wales and Northern Ireland. The current SDLT threshold is £125,000 for residential properties and £150,000 for non-residential land and properties. SDLT no longer applies in Scotland. Instead you pay Land and Buildings Transaction Tax when you buy a property. You pay the tax when you buy a freehold property, buy a new or existing leasehold, buy a property through a shared ownership scheme, are transferred land or property in exchange for payment, eg you take on a mortgage or buy a share in a house.
Residential property rates.
You pay Stamp Duty Land Tax (SDLT) on increasing portions of the property price above £125,000 when you buy residential property, eg a house or flat. Use the Stamp Duty Calculator to work out how much tax you’ll pay.
If you buy an additional residential property, you will usually have to pay 3% on top of the normal SDLT rates as it means you’ll own more than one. You won’t pay the extra 3% SDLT if the property you’re buying is replacing your main residence and that has already been sold. If there’s a delay selling your main residence and it hasn’t been sold on the day you complete your new purchase you’ll have to pay higher rates because you own two properties, you may be able to get a refund if you sell your previous main home within 36 months.
Revive your outside space
With the days becoming longer and warmer, now is the time to start making your garden come alive and preparing to be enjoyed again; spring bulbs are starting to bloom – the daffodils and tulips are opening and hyacinths are blooming. Although the space is probably still looking a little bare, with a few simple design tips and tweaks gardens large or small can be transformed into more interesting and pleasant spaces.
A patio is usually the main focal point and entertaining space in a garden, somewhere to sit and enjoy the sun, spend time with family and friends, have barbecues, play with the kids. If your current patio is looking a little tired or dirty then why not try a jet wash machine, which can be hired or bought at all good garden centres or DIY stores. If your garden is currently without a patio area, why not look at the sunny areas of your garden and create one yourself. With a little clever design and a few bags of gravel, wood or bark chips, you can transform a blank space into an area of pleasure and enjoyment. Why not add a few pots or planters of flowers, vegetables or herbs, as this is the perfect way to add colour and bring the space to life. If you move house you can simply take it all with you, especially if you’re renting a property. Think of your patio or terrace as an outside room and choose garden furniture and accessories that connect this space to the back of your house and why not invest in a patio heater or chimenea so you can enjoy barbecues and garden parties even when the evenings become cooler.
Quintessentially British, country gardens are romantic and full of charm. A traditional country cottage garden that conjures up images of Sunday afternoon picnics and afternoon tea on the lawn. The country garden uses informal planting and classic climbers like roses and wisteria growing on walls, arbours and pergolas that offer shade and a wonderful scent. Country gardens are full of movement and interest with wild flowers mixing with perennials to create a relaxed flow and feel.
Traditionally low maintenance and modern, contemporary outdoor space can be created whether you have a roof terrace in the city or a huge, sprawling, urban garden full of wild flowers. Why not try bamboos, ferns and grasses for movement, box hedges to divide the space and offer clean lines coupled with some topiary to add interest or herbs to add fragrance. A simple colour palette of white and muted tones keeps the space modern and interesting from season to season. Have fun playing with textures and plant containers to bring space to life and create a contemporary ‘outside room’, where you and your family can cook, eat, socialise and play.
Garden jobs in March
There’s plenty to do in the garden in March, from mowing the lawn to adding compost to raised beds and containers. If you’re ‘growing your own’ it’s a great time to plant onions, cabbages and radishes, so you can look forward to eating them fresh from the garden later in the year.
Things you can do now:
•Work in mulch or manure around trees, shrubs and hedges to feed them and keep them healthy.
•While the ground’s still soft put in supports for plants that will need them. Adding them later is more difficult and will damage your plants.
•Cut back any plants you grow for winter interest – for example forsythia, heather and pansies.
•Remove faded flowers from daffodils and tulips, but let their leaves die back naturally.
•If you’re growing vegetables like parsnips, radishes and cabbages, sow their seeds under cloches.
•When there’s a dry day mow your lawn on a high blade setting.
•Use turf or lawn seed to repair any patches in your lawn and add a high nitrogen fertiliser to boost the growth of your lawn at the start of the season.
•Top up raised beds and containers with fresh compost. If they’re already full, remove the top 5cm and replace it with fresh compost.
Then sit back, relax and enjoy.
Castles Investor Evening Success!
Castles staff and our team of experts were on hand offering general advice and compliance guidance, property tax and financial help. A unique collaboration of free resource all in one place offering information to help guide investors through the increasingly bumpy buy-to-let landscape.
Beautiful canal walks
If you are stuck for things to do with the kids this month why not venture along the beautiful Basingstoke Canal?
The Basingstoke Canal offers 32 miles of pleasant walking, jogging or cycling alongside one of the most beautiful canals in Britain. It runs from Greywell Village in Hampshire to Woodham in Surrey. Different parts of the canal hold their own surprises such as the flights of locks in Surrey, the lakes and flashes near Mytchett or the rolling fields and picturesque cottages near Odiham. At the junction with the River Wey Navigation, you could continue north to Weybridge or south to Guildford alongside the River Wey.
In Odiham from March boat hire and boat trips are available. Galleon Marine offers narrowboats available for 4, 6 & 8-hour hire, a short break or a longer holiday. Also on hire are rowing boats, canoes and kayaks. “John Pinkerton” narrowboats offer public trips, themed cruises and charter hire for up to 50 passengers upon a traditionally styled narrowboat.
Alternatively, Accessible Boating is a Charity offering opportunities for disabled people or those with access difficulties to go boating on the Basingstoke Canal from Colt Hill Wharf in Odiham. They operate 2 boats: Dawn, a day boat; and Madam Butterfly, a cruising boat. Both craft are specially designed and equipped to cater for those with disabilities or reduced mobility. Hydraulic lifts give easy access for those in wheelchairs and both boats have accessible toilets. Self-drive hires are open to both novices and experienced boaters alike, as full tuition tailored to individual requirements is provided at the start of each cruise by trained dispatchers.
The canal, which loops around Farnham and Aldershot, offers 13 circular walks taking in the counties of Surrey and Hampshire. The towpath is ideal for family outings, runs, rides and picnics. Fleet, Aldershot, Ash, Ash Vale and North Camp stations are all fairly near to the canal so you could plan a return journey by train. A popular 2.5 mile walk from the Basingstoke Canal visitors centre at Mytchett, going South, takes you along an ever changing landscape, passing Mytchett Lake with its varied wildlife, ending up at The Swan in Ash Vale. From Ash Vale station walking the opposite direction along the tow path you can end in Frimley Lodge Park. Frimley Lodge Park is a 24 hectare site that offers a range of facilities for all ages and for all the family including lots of open space, ideal for a game of frisbee, and woodland, picnic areas, two children's playgrounds, a trim trail, miniature railway and meadows. There are also football, cricket pitches and a pitch and putt golf course.
Alternatively, why not try a walk starting in Odiham; with its wide main street lined by handsome 18th century buildings, Odiham is regarded as a jewel among the smaller country towns of southern England. Its focal point is All Saints' church, the largest church in North Hampshire. The impressive pulpit carved with scrolls and vases of flowers is well worth a look, as are the 17th century brick tower. The walk crosses farmland following the canal towpath until you reach the remains of King John's Castle, located by the water. Only the octagonal keep survives and in a certain light in the depths of winter, the castle ruin is deliciously eerie, the long shadows, the crumbling walls and the glow of the setting sun creating a magical atmosphere. From the Greywell Tunnel on the canal the route returns to Odiham via the Greywell Moors Nature Reserve and field paths.
The Greywell Tunnel which is around 1200m long extends under Greywell Hill in a westerly direction. The now derelict section of canal that once wound its way into the centre of Basingstoke, has long since been impassable and is now famous for having more roosting bats than any other site in Britain. The species involved are Natterer's bat (Myotis nattereri), Daubenton's bat (Myotis daubentoni), the whiskered bat (Myotis mystacinus), Brandt's bat (Myotis brandti) and the brown long-eared bat (Plecotus auritus). The tunnel consists of 880 yards (800 m) at the eastern end, which has been cut through chalk, and 153 yards (140 m) at the western end, with 197 yards (180 m) in between, where the bore has filled with soft clay as a result of the collapse. The blockage, combined with several springs in the tunnel, creates an ideal micro-climate for the bats.
There are many points of interest and routes to discover along the 32 miles of the Basingstoke Canal and wherever you choose to go or whatever you choose to do, it offers a wonderful day out filled with variety and ever changing scenery.
Tips for selling your home
We all know the clichés about baking bread when a viewer comes around, but we know plenty of other tips and tricks that can get potential buyers really interested in your property. Here are our top 10 that can get you ready for your viewings!
1. Improve your kerb appeal
The front of your house is so important to a viewer and it makes a lasting impression. Keep your garden tidy, free of clutter and get your windows cleaned
2. Keep your rooms bright
A bright room looks very appealing. Ensure that all your light bulbs are working and that the house has been well aired. Energy saving bulbs might be good on the wallet but until they have warmed up they can make a room look gloomy.
3. Remove clutter and personal items
Ask a friend to suggest some items to remove. Even items that you love, such as your bike, or shoes racks could clutter an otherwise spacious hallway. Try and clear as much as possible away.
4. Fix minor problems.
Viewers will be on their guard so be sure to take the time to fix that leaky tap, cracked tile or marks on the wall.
5. Give viewers space
Allow viewers time to talk, wander the rooms alone and have all the time they need to assess your house in peace and start picturing themselves there!
6. Put your pets away
As much as you love Fido, your viewer may have an allergy. Keep them in a separate room or with a friend and make sure you have thoroughly hoovered away any fur and cleaned the cats litter tray!
7. Keep prepared
Keep your house well maintained for late or last minute viewings – keeping on top of your washing up, surface cleaning and hovering.
8. Don’t forget the nice smells!
Candles or fragrances can make a lovely impact on a home and can really help your property have a homely touch.
9. Make access easy for your agent.
Give them a key and leave them to do the show round. Buyers will feel more comfortable and stay longer.
10. The outside is just as important.
Keep the garden tidy and put a mat by the back door so your agent can take the viewers into the garden so they can appreciate the inside and the outside space
Do you want more advice? Our team are on hand to give you even more hints on selling your home!
Fall in love with your home again.
Below we share a few tips to help organise your space and breathe a new lease of life into your rooms, without having to do any major alterations.
Give your house a thorough deep clean
Whether you’re the untidy type or happily house proud there’s always room for a deep clean of your home as we approach Spring. Take it room by room and be sure to clean and dust every nook-and-cranny in your property.
Change things around by giving your home a makeover
After you’ve cleaned up it’s time to reassess your living space – something most of us rarely ever do. Just because things have been the way they are around your home for so long, doesn’t mean it has to stay that way! Think about your daily habits and routines and see if a change around could help you be more efficient. Even just shifting a few pieces of furniture around or treating yourself to some new lamps can help.
Treat yourself to some brand new bedding
If there’s one thing even nicer than freshly washed bedding it’s brand new freshly bought bedding. So if your sheets, bed covers, pillows and duvet cover are looking a little sad and tired then it’s time to give yourself a gift you’ll never regret. After all, a good night’s sleep is so important to productivity and happiness.
Empty out your wardrobe and get rid of the clutter
Take the Spring as a great opportunity to sort this out and get rid of your clothing clutter. We suggest ditching anything you haven’t worn in the last twelve months that doesn’t have sentimental value. But make sure if the clothes are still in a reasonable condition that you bag them up and head down to your local charity shop to donate!
Start your own herb garden in the kitchen
It sounds like such a small idea but having something to care for as well as bringing a little nature and fragrance inside can really make a difference to how your home makes you feel. Plus cultivating hardy herb plants like rosemary, bay and thyme doesn’t require too much expertise at all.
Look through your food cupboards and have a clear out
Take this time to have a sort through your cupboards, pantry or larder to throw out anything that’s well past its best – because it’s worth remembering that even non-perishables eventually go off!
Give your kitchen a makeover
Painting the kitchen is the quickest and least expensive way to change the look and ambience of the room. A fresh coat of paint on the walls can make the room feel brighter and a feature colour in the alcoves can add interest. Breathe a new lease of life into cabinets by cleaning them up and giving them a fresh coat of paint. Why not add some interest and texture with a rug.
Our 25th Birthday!
February is a special month for Castles as we celebrate twenty five years since we opened the first office in Aldershot in February 1992. In our first month we listed 19 houses for sale (and 39 in the second)! The team on opening was Duncan Pate, Cynthia Farr and Martyn Jutsum. The property market was in a state and some said we were mad to open an estate agents with the prevailing economic background. Looking back it’s been quite an interesting journey.
The idea of Castles was formed in the late 1980's and realised in 1992 with the opening of the office in Aldershot. Bringing new levels of client care Castles quickly became a name synonymous with effective, quality customer service. Our Farnham branch followed in 1997, where, along with Steve Tebbutt, we honed a highly effective approach to helping people move house. Steve Tebbutt and Duncan Pate successfully worked together in 1987 and 1991, so it seemed logical for them to team up for the opening of Castles in Farnham in 1997.
Much has changed in the property market over the intervening 25 years, John Major was Prime Minister and the US president was George H. W. Bush. In that week of February people in US were listening to I'm Too Sexy by Right Said Fred. In UK Wet Wet Wet were number 1 in the charts with Goodnight Girl. Wayne's World was the most viewed movie released in 1992 while Hideaway by Dean R. Koontz was one of the bestselling books. The Bank of England base rate was 10.5%, the average house price was £51,000, the UK’s bestselling car was the Ford Escort. The last division 1 winners in 1992 were Leeds United before the creation of The Premier League and there was no internet let alone Facebook!
What has remained consistent is Castles unique blend of professional service and friendly knowledgeable staff, combined with local expertise and market insight. Our longevity is down to the relationships with local people and the community built on our straight-talking, open and honest advice and, of course, our friendly, personal service.
2017 is set to be an exciting year for Castles and we are looking forward to opening more doors for people moving in Aldershot and Farnham.
Charity Cyclathon - not long to go now!
On Saturday 25th February Castles will be sponsoring and participating in the Cyclathon at The Maltings, Farnham GU9 7QR with a team of four taking turns to ride an exercise bike within a one-hour slot.
If you would like to sponsor Castles team or donate please visit Cyclathon MyDonate and enter the charity number 200435 as the charity name and then make the donation entering Castles.
This year the main charities to benefit will be Phyllis Tuckwell, Surrey Young Carers and Children’s Homes in Kerala State with the balance of funds raised going to other local causes.
Castles Investor Evening 15th March 2017
The buy-to-let market is still going strong. If you are thinking of investing in property or looking to get the best out of your existing portfolio, why not pop along to our informal Investor Evening on Wednesday 15th March 2017 in the Oak Lounge, Bush Mercure Hotel, Farnham, GU9 7NN from 5.30pm to 7.30pm.
Castles staff will be on hand to offer general advice and compliance guidance, including ideas on what to look for along with potential yields. Bessler Hendrie Chartered Accountants, specialists in property tax, will also be available and Woodford Stauffer Solicitors and SJP Financial Services will complete the expert line-up with advice on both the legal side and mortgage options for purchasing investment property.
Come and catch up on the current market and meet like-minded individuals and our buy-to-let team for drinks, nibbles and discussion.
Email SHewson@castles.co.uk for more information and to book your place.
We look forward to seeing you!
2017 is a landmark year for Castles; on the 17th February 2017, we will be celebrating 25 years since we opened the first office in 1992. Duncan Pate, Managing Director comments “I am very proud of our success in helping people move in Aldershot, Farnham and the surrounding area for a quarter of a century”.
The idea of Castles was formed in the late 1980's and realised in 1992 with the opening of the office in Aldershot. Bringing new levels of client care Castles quickly became a name synonymous with effective, quality customer service. Our Farnham branch followed in 1997, where, along with Steve Tebbutt, we honed a highly effective approach to helping people move house.
Duncan reflects fondly on the early years, particularly working with Graham Tufnell, who sadly passed away last year. Duncan said “Graham was a pleasure to work with and we spent many enjoyable years working together, setting the standard locally for years to come and later when Graham started his own business in Aldershot. A great loss to his family and estate agency”.
Steve Tebbutt and Duncan Pate successfully worked together at Mann and Co in Woodbridge Hill, Guildford in 1987 and again at Parkers in Aldershot in 1991, so it seemed logical for them to team up for the opening of Castles in Farnham in 1997.
Much has changed in the property market over the intervening 25 years, The Bank of England base rate was 10.5%, the average house price was £51,000, Leeds United won the Premier League and there was no internet let alone Facebook! What has remained consistent is Castles unique blend of professional service and friendly knowledgeable staff, combined with local expertise and market insight. Our longevity is down to the relationships with local people and the community built on our straight-talking, open and honest advice and, of course, our friendly, personal service.
2017 is set to be an exciting year for Castles and we are looking forward to opening more doors for people moving in Aldershot and Farnham.
Check back for regular updates on our Facebook page
What's in store for 2017?
As we head in to 2017, Castles Managing Director, Duncan Pate shares his views and thoughts on the year ahead; “Brexit, Trump, two of the abiding memories of 2016, for any number of reasons, but perhaps most notably the inaccuracies of pre referendum/election ‘expert’ opinions on the likely outcomes! So who on earth wants to make predictions anymore and what value can be placed upon them? Well for what it’s worth I’ll offer a view and hope that, if I’m wrong, at the end of the year my prediction is long forgotten. If I’m right I’ll remind you of what I said! The two most prominent features of the property market in 2016 were the significant rise in transactions before the implementation of the extra stamp duty for second home purchasers with the subsequent drop in transactions afterwards and the post Brexit ‘pause for breath’, whilst everyone tried to digest what it really meant. No doubt the ‘B word’ (as it is known in my house) will still have reverberations for many months and probably years to come.
Nevertheless, for most is the realisation that life goes on, meaning; there will still be upsizing, downsizing, first time buying, deaths, births and divorces. We are expecting some lumps in the road during 2017 but the market has shown to be remarkably robust, particularly in the Farnham and Aldershot areas where demand remains strong. Demand outstripping supply and a low interest rate regime has been the driver for steady house price growth in recent years. With the stock market perhaps overblown, many continue to see bricks and mortar as a safe haven, despite the chancellor’s efforts. The lack of serious alternative investments options will see investors return, to benefit from steadily increasing rents and safer capital value.
I am expecting the market to be steady and unspectacular with lower volumes overall than 2016 and 2015, sustaining prices higher than their current level but certainly single digit increases, probably around 5%. The economic stability of the South East attracts those looking for work and provides stable employment and above average incomes to be able to sustain process well above the national average. We are fortunate in the Farnham and Aldershot areas to have avoided the fluctuations in house prices seen elsewhere in the UK. So I may be right or I may be wrong but I wouldn’t be alone in trying to predict the unpredictable in uncharted economic waters. That said working at ‘the coal face’ gives us a unique insight into the local market that help us guide our clients to make informed decisions whatever the market is doing”
Steve Tebbutt, Director of Castles Farnham adds “2016 saw a number of events likely to impact on the UK property market - Brexit, changes to stamp duty on second homes and the end of the help to buy scheme. Whilst all the former could be seen as reasons not buy it should be remembered that the idea of owning your own home and bricks and mortar being a safe investment are embedded in the British psyche and with rents rising I believe we are likely to see first time buyers continue to enter the market and investors still buy. With a continued shortage of available houses to buy the role of the estate agent will be more important than ever, to ensure sellers and buyers receive the right advice about buying and selling.”
2016 Round Up
This year’s property market has had its ups and downs but, once again, Castles have weathered the property storm and bounced back with a successful year. We’re proud to announce that, during 2016, Castles properties offered for sale were viewed more on Rightmove than any other local agents’ properties!* Castles also had the lowest percentage of reduced properties compared to our competition* and we successfully sold over 70% of our available stock (compared to our competitors at just over 50%).*
Steve Tebbutt, Director of Castles Farnham said “Brexit had an effect on the sales market, people are still cautious and careful in their home buying approach, however Farnham escaped the worst with demand for property still outstripping supply, and limited stock availability across most price bands. With money cheap, people are still prepared to buy a property and owners still view their home as their biggest asset and an investment that will appreciate over time”.
Duncan Pate, Managing Director comments “the market this year had three distinct phases with a rush at the beginning of the year, with investors looking to avoid the increased stamp duty on second house purchases, followed by the pre and post Brexit lull. The market regained some semblance of normality in the last quarter with healthy sales figures and confidence returning with the realisation that in or out of the EU, life goes on”.
Duncan continues “we are expecting 2017 to continue the trend of lower transaction numbers which, along with the low cost of borrowing, should sustain prices at near or slightly above their current levels. In a tighter market the advice and expertise of a capable local agent can have a very positive effect on making that move successfully”.
According to Rightmove, demand for property was up in November 2016 compared to 2015: website visits up by 9%; sales agreed up 5.2% nationally and up in all regions except London. The price of property coming to market fell by 2.1% (-£6,511), exactly in-line with the seasonal average of the last six years. This buoyant November indicates upwards price pressure going into next year, though tempered by ongoing uncertainty and increasingly stretched buyer affordability.
Looking forward to 2017 Miles Shipside, Rightmove director and housing market analyst comments: “Supply remains tight compared to a year ago, in terms of both new-to-the-market listings and available stock for sale. Fresh supply is little changed, being only 2% above last year, failing to keep pace with and replace the 5.2% increase in sales agreed. Consequently, the number of available properties for sale per estate agency branch is down by around 5%, dropping from an average of 59 to 56”
Miles continues “Demand from first-time buyers looking to buy rather than rent will continue, fuelled by monthly mortgage repayments being cheaper than rent, and rents forecast to rise further. Second-steppers’ family needs for more space and the right school catchment areas will help that sector, especially as their ability to trade up is assisted by lenders keen to attract their quality business. The upper end of the market, where transactions are often more discretionary, will still hang back as the cost of trading up is often a big jump for less perceived gain than in cheaper sectors. What is certain is that we will not have a skewed first quarter like this year’s, which was driven by April’s buy-to-let stamp duty deadline, and that may result in transaction numbers in 2017 being slightly down on 2016.”
*Rightmove Intel 1st January to 8th November 2016.
Tips for selling in Winter
Sellers traditionally prefer to market their home in the spring time when the days are longer and warmer and the garden is starting to bloom. However it is still possible to present your home ready for sale in the wintertime. We have put together a list of 10 Top Tips to help you market your home more successfully during the winter months.
1. Ask family and friends to remove boots, shoes and wet coats at the front door and put them away out of sight.
2. Have your carpets cleaned if necessary to make sure they are looking their best. Put door mats by the patio and back doors as buyers will still want to take a look round the garden!
3. Avoid the aroma of wet dog in the house by taking them out or leave with a neighbour during viewings.
4. Make your garden look well cared for by having your patio professionally cleaned or use a power washer to remove leaves and debris.
5. Put away your garden furniture if it is plastic or wood; if it’s metal, you can leave it out so long as it doesn’t look too forlorn. Make sure tables and chairs are clean and arranged nicely.
6. Place lots of bird feeders around your garden and outside windows. Your viewers will be able to see the wild birds feeding on them.
7. Keep your home warm at all times, ready for a viewing. If you have a real fire, make sure it is lit before a viewing and use side lamps where possible through the house to create a cosy atmosphere. Keep curtains open until around 8pm to give any drive-by viewers the chance to see how welcoming your home looks from the outside.
8. Offer viewers a hot drink and a comforting treat.
9. If possible, dress beds with darker colour bedding sets and drape sofas with throws for a super cosy look.
10. Stop all viewings over Christmas; your home never looks its best covered in Christmas decorations with your living room dominated by the tree. At the very least, it will give you a break whilst you’ve got so much to do.
Common lettings maintenance issues
This time of the year, when the weather gets colder, is the busiest time for our Lettings Management team. Penny Pate MARLA, Castles Lettings Manager highlights the main issues and ways to deal with them.
The most common issues are with boilers and radiators. Problems arise when the boiler and central heating system has not been used a lot over the summer months and as soon as the temperature drops we switch on the boiler and turn up the thermostat. Having a boiler regularly serviced and checked goes a long way to avoiding any breakdowns or issues. If it is a simple issue such as the boiler pressure has dropped or the pilot light has gone out, refer to your boiler manual or if you are unsure always call either your Letting agent or your Landlord.
If you are going to be away from home during the cold months set the timer to the frost setting to keep the boiler from stalling or the pipes from freezing.
If you find that not all of your radiators are hot or that only the bottom section is heating up, you may need to bleed it. This is fairly straightforward and doesn’t require a heating engineer (unless you don’t feel able to carry out the task yourself). Don’t forget to make sure you have the central heating system switched off before you start the process. You will require a radiator valve key (available from DIY shops) and an old piece of cloth to catch the drips. Start with the radiators on the upper floors of your home. Fit the radiator key into the valve and then turn it in an anti-clockwise direction for about half a turn. When the valve is open you should hear the hiss of air being released. Continue to release the air until water begins to drip from the bleed valve and then close the valve by turning it half a turn in a clockwise direction. It is important not to over tighten the valve. If you have a pressurised sealed system, then releasing trapped air may cause the internal pressure to drop and so this should be topped up at the boiler using the manufacturer’s guidelines.
The next most common complaint relates to mould and condensation on walls and around windows. We have a tenant guide on how to avoid this common problem as it’s very much a case of understanding how and where it’s likely to occur and taking the necessary precautions. We’ll usually tailor advice to tenants around ensuring adequate heating and ventilation to avoid the onset of condensation, and successfully helping to manage day to day moisture in the home.
The Castles team have to deal with every day maintenance issues and of course occasional emergencies, which have to be responded to immediately. With the management of our (Fully Managed) client’s property in-house, we understand we are judged on the efficiency with which these calls and associated problems are dealt with. This makes every day different and brings with it both challenges and reward in equal measure!
Christmas Jumper Day
On Friday 16th December Castles supported Save the Children Christmas Jumper Day. Castles Aldershot and Farnham dressed up in their finest Festive knits to show their support for a worthy cause. We were joined by local people who popped in for a cup of tea and festive treat.
All the money raised goes to Save the Children which helps bring essentials like healthcare, education, protection and food to the millions of children around the world who are missing out on the most basic support.
In total Castles raised £110. If you would like to support Save the Children visit Castles Just Giving Page to donate.
Visit our Facebook page to see photos of the day
Christmas Bubble & Squeak
Try this tasty Christmas leftovers recipe, especially great for leftover roast potatoes, parsnips, sprouts, peas and carrots.
Serves 4 (depending on the quantity of leftovers!)
100g lardons or streaky bacon cut into small pieces
1 onion chopped
1 clove garlic chopped
Christmas dinner leftovers very coarsely chopped
Melt a large knob of butter in a non-stick pan, allow it to get hot, then add the bacon. As it begins to brown, add the onion and garlic.
Next, add the leftover sprouts, peas and carrots.
Next, add the leftover roast potatoes and parsnips.
Work everything together in the pan and push it down so that the mixture covers the base of the pan – allow the mixture to brown and crisp slightly before turning it over and doing the same again.
Season to taste
Slice into quarters
Perfect with a soft fried egg to help with that Boxing Day hangover!
Demystifying property valuations
Sophie Barrett joined Castles in April 2014, as a Client Manager in the Aldershot office. Sophie is the youngest member of the Castles team but despite her age displays great maturity and understanding of her role. Sophie has been interested in the property industry for a number of years and recently purchased her own home and therefore understands more than ever that having a helpful, knowledgeable estate agent to guide you through a sale or purchase can make the whole process that little bit easier!
Here Sophie gives her candid comments about valuing property in Aldershot.
“Anybody can provide a price for a property, but do you really want just a price or do you want a well-informed, evidence led, marketing figure with a recommended strategy personal to you and your moving goals? With this in mind the preparation for a property appraisal is as important as the appointment itself.
When a potential seller contacts Castles to discuss the possible sale of their home, I feel a sense of pride and responsibility. To be asked to assist and be involved in what is usually one of the biggest milestones of their lives is indeed a huge responsibility. An owners home is after all likely to be their biggest, most important asset, so choosing to move is a huge decision and not one to be taken lightly. Our company name stems from the saying ‘An Englishman’s home is his Castle’ so it’s important for us to treat it that way! That is why every valuer at Castles takes the time to ensure every market appraisal is a thorough assessment of both the client’s needs and the property itself.
The groundwork starts as soon as a market appraisal is requested. I gather as much information from a potential seller as I can to ensure that the research is as accurate as possible. Once an appointment is confirmed, I would usually pop out to do a ‘drive by’, although I know the area extremely well, it is always good to get another look and take the time to assess the neighbouring areas to the property, The location, including the position and aspect all play a very important part in the overall figure.
Following the ‘drive by’, where possible, I prepare for the meeting itself the day before it is due to take place, this means I have important time to reflect. It’s important I have the most up to date information available and have enough time to get a good look into the market and where the property in question sits amongst its competitors. Research would usually include similar properties that we have sold nearby and Land Registry sold prices. The team at Castles share their knowledge discussing each valuation as a team ensuring we are taking a balanced view and drawing on all the available experience within the office.
I will also look on the property portals, to get a good view of what the property in question is likely to be competing against, so I can offer the seller the best advice on price. Once all of the information is gathered and preparation complete I head out to visit the seller’s home. At the meeting, when presenting the price to the seller I will provide a clear breakdown of how I have arrived at the valuation and marketing figure, looking at the evidence. The aim is to present a considered figure that will be a true reflection of the current market conditions. I will also cover our recommended marketing strategy and deliver a plan of action of how Castles will achieve the best price from the best possible buyer. Trust is key for sellers choosing an agent so openness and transparency from the outset is the foundation for a successful journey.
I also help a potential seller with guidance on preparing their home for sale so that it can be presented at its best. My top three tips for anyone looking to put their house on the market are:-
Clean. Make sure your home is as clean as possible. Buyers expect to see an immaculate home with no signs of dirt. Remove last night’s Indian take away from the worktops, do the washing up and make sure there is no underwear (clean or dirty!) on the bedroom floor. Potential buyers need to imagine themselves living in “your” space.
De-clutter. In order to impress potential buyers, remove all clutter from your house. If you have outgrown your home, pack items away and if you are short on space and have nowhere to put things then consider using a self-storage company.
No pets. Some people will love them, some people will hate them and some are allergic to them, so make sure that they are out of the house for the viewing.
Just these three steps can make a big difference and help maximise the saleability of your home so that you will find a buyer quicker and achieve the best possible market price.”
To find out how much your home is worth please contact Sophie on 01252 333003 or click here
Help for first-time buyers
On Monday 14th November the Rightmove House Price Index was released and gives a national picture of house prices and activity over the last month.
The price of property coming to market records a seasonal fall of 1.1% (-£3,452) this month, a smaller drop than the 1.8% average over the last six years, showing signs of a resilient market.
Despite the overall seasonal fall, one or two bedroom properties – typical first time buyer purchases - rose by 1.7% this month, resulting in an annual jump of nearly £15,000 (+8.2%) which is twice the percentage rate in other market sectors.
Those living with parents or aged 21 to 24 are most likely to shun attempting to get on the housing ladder according to new research. With the average first-time buyer age being 33, will the Chancellors Autumn statement deliver any help to get more and younger first-time buyers onto the property ladder?
Steve Perry of SJP Financial (South) Ltd, who also runs the Castles mortgage advice service, says “Despite the recent news, the mortgage market is very much in the favour of first time buyers currently, with many lenders offering incentives such as valuation and arrangement fees waived, cashback or a lower upfront interest rate.”
Steve continues “Mortgage lenders are really making an effort to help first time buyers get on the property ladder. By taking the ‘sting out of the tail’ with upfront fees, it means there is potentially more cash available to use as actual deposit, which will typically make a mortgage more affordable for the applicant. In conjunction with higher loan to values available and competitive mortgage packages overall, there is a greater opportunity for first time buyers being able to take the first step in property ownership. At the same time and with interest rates being so historically low, mortgage lenders are still committed to keeping borrowing affordable in the longer term, which means capping how much first time buyers can borrow and using stringent processes to verify the applicant’s income and expenditure, their credit standing and to ensure as far as possible, that an applicant does not overstretch themselves financially.”
If you would like more information or details of our first time buyer service, please contact Steve Perry on 01483 810445 email email@example.com
Ready for Right to Rent?
Landlords Right to Rent which now requires landlords or agents to check ID of all prospective adult occupiers, was initially rolled out in parts of the West Midlands on 1 December 2014 and across the rest of England on 1 February 2016. Where an adult occupier has a time limited right to remain, landlords and letting agents will need to conduct follow up checks. These need to be made 12 months from the initial check or at the expiry of the individual’s right to be in the UK, whichever is the later.
The Home Office announced on 2 November 2016 that the date for new offences under Immigration Act 2016, relevant to the private rented sector in England, will come into force from 1 December 2016. The new measures follow the introduction of civil penalties created under Immigration Act 2014 and aim to make it easier for private landlords to evict illegal migrant tenants, create new criminal offences for rogue landlords and agents who knowingly, or with reasonable cause to believe, let to illegal migrants. The offences are part of wider Government measures to tackle illegal immigration, and protect public services and access to the private rented sector for lawful residents.
The key points under Right to Rent
From 1 December, landlords could be charged with a criminal offence if they know, or have reasonable cause to believe, that they are letting to an illegal migrant.
From 1 December landlords will be able to obtain a notice from the Home Office to end tenancies for occupants with no Right to Rent.
The vast majority of landlords who are found to be renting to illegal migrants and who have not carried out Right to Rent checks, where the scheme has been implemented in their area, will be dealt with under the civil penalty regime. The new offences will be targeted at the smaller number of rogue landlords who are intent on flouting the law.
In a recent survey* Rightmove asked over 3000 landlords about the changes in the rental market and only 22% of landlords claim to have a good understanding of Right to Rent.
Right to Rent Checklist:
Before allowing an adult to rent your property they must have document(s) proving their right to be in the UK. This could include a UK passport, Registration certificate of permanent residence of EEA or an EEA family member Permanent Residence card.
You need to ensure the property that the tenant lives in is their only or main home. Proof of this could be showing that they live there most of the time, keep their belongings there or that they are registered to vote at the property.
You’ll need to check the person’s right to be in the UK will continue throughout the tenancy. A check at the point of right to be in the UK has expired or after 12 months after tenancy, whichever is later is suitable.
Should you discover in a follow up check that your tenant’s right to be in the UK has expired you’ll need to make an official report to the Home Office.
Ensure copies of the documentation are made and record the date.
*Source: Lettings Live 2016 survey of 3525 landlords, April 2016
Penny Pate, Castles Lettings Director added “Castles carry out tenant referencing as part of the lettings process, which also includes making the relevant checks in line with the new legislation. For landlords managing their own portfolio, conducting these checks yourself can be time consuming and inefficient. Castles Landlords service includes the facility to carry out Right to Rent checks to ensure a Landlord fully adheres to the new legislation, keeping them protected and compliant.”
Click here for further information
October Round Up
Castles property professionals regularly share their views of the current local housing market. Steve Tebbutt, Director of Castles, based in the Farnham office states “Brexit has had an effect on the sales market, people are more considered in their approach, however Farnham is escaping the worst as demand for property is still outstripping supply, with limited stock availability across most price bands. With money cheap, people are still prepared to buy a property and owners still view their home as their biggest asset and an investment that will appreciate over time”. Castles findings on a local level do reflect the national picture with the latest research from the Royal Institute of Chartered Surveyors (RICS) showing the numbers of current sellers standing at its lowest level since records began, in 1978.
The national picture has seen a slight increase in asking prices (0.9% in September 2016) following falling asking prices in two consecutive months (July and August 2016). Overall there are considerable regional differences with the average house price in the South East standing at £317,904, 12.2% up on 2015, whereas Wales has seen an increase on 2015 prices of only 2.7% standing at £144,514. The local authority showing the largest annual growth in the year to August 2016 was Newham, where prices increased by 23.7% to stand at £373,000. The lowest annual growth was recorded in the City of Aberdeen, where prices fell by 8.7% to stand at £176,000. Data from Office for National Statistics (ONS) October 2016.
The picture in and around Aldershot sees sellers in the lower and middle markets having to take professional advice to set accurate asking prices to attract buyers. The upper end of the market has seen prices holding up with more limited supply of larger family homes. In recent years both agents and sellers have got used to steadily increasing prices, now experience counts more than ever to get accurate, considered advice from those that are familiar with a changing market.
In the investment market, buy-to-let landlords are now returning after the Stamp Duty pause with buy-to-let enquiries up 30% since May as investors’ confidence returns. Data from Rightmove Price Tracker.
The Association for Residential Letting Agents (ARLA) reported recently that the private rental sector has overtaken social housing and is now the UKs second largest tenure after owner-occupied properties. Regionally the picture is mixed with average rents in London and the South East having fallen over the last quarter whilst elsewhere rental values are continuing to increase. The biggest rental rise was in Swansea up 10.2% on 2015. Average rental asking prices (excluding greater London) stands at £779 per calendar month (up 3.2% on 2015) and average rents within Greater London stands at £1,985 per calendar month (down 1.5% on 2015). Data from Rightmove.
Penny Pate MARLA Castles Lettings Director has noticed a slowing down of tenant turnover due to an increase in good quality tenants staying for longer in their existing property and an increase in renewal rents by around 5%. Demand for rental property across the Surrey and Hampshire borders remains strong with void periods at a minimum.
The increasing government legislation and obligations for Landlords has meant that the buy to let market is no longer as simple as waiting for the rent to arrive each month. Castles Lettings team, as members of ARLA, keep Landlords up to date with the legislation and assist with all aspects of their rental as well as guiding them through the maze of obligations that has become a minefield for Landlords.
If you are currently a buy to let Landlord or are considering taking the plunge, for professional advice from our experienced Lettings Management team please contact us on 01252 715444 firstname.lastname@example.org
A Taxing Issue
With the many changes taking place in the property market, Castles Estate Agents frequently get asked about how the new taxation guidelines will affect Landlords. Matthew Oliver of Bessler Hendrie Chartered Accountants offers some advice on the biggest recent change for landlords which is the restriction of income tax relief available on residential property finance costs.
Changes affecting buy to let owners
The biggest recent change for landlords relates to the restriction of income tax relief available on residential property finance costs.
Basic rate taxpayers and mortgage free properties should not be affected. However, beware, if you are currently a basic rate taxpayer the change in approach might mean your rental income moves you into becoming a higher rate taxpayer, and then these changes will affect you!
Higher rate landlords will no longer be able to deduct all their finance costs from their property income. These changes only apply to individuals holding residential properties.
How much extra tax will you have to pay?
This will depend on your marginal rate of tax and the amount of interest expected to be payable. A higher rate taxpayer will, in principle, get 20% relief for interest paid rather than 40%. So if interest paid is £10,000 p.a. the extra tax liability will be £2,000 (£10,000 x (40% - 20%)).
The change is being introduced gradually over a four-year period, with effect from April 2017 and so the full effect will not be felt until 2020/21. We are finding that many landlords have not realised the ticking time bomb!
We would recommend taking action now, as with careful planning the impact can be mitigated:-
Landlords need to do the calculations to see if they are affected, and ascertain the impact through to 2020/21.
Consider reducing borrowing, perhaps selling some of the portfolio and so mitigating the impact of change.
Do not leave any potential property disposals until the market becomes flooded by the highly geared landlords. Early planning also affords the opportunity to choose the most tax efficient time for sale.
Consider if rents can gradually be increased to offset the increased tax cost.
Review future strategies for property ownership e.g. perhaps use a Limited Company where these changes do not apply.
Professional advice is needed to ensure you adopt the appropriate strategy for you.
This briefing is published for information only. It provides only an overview of the regulations in force or proposed at the date of publication, and no action should be taken without consulting the detailed legislation and/or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this briefing can be accepted by the authors or the firm. October 2016
If you would like further information about the services and advice provided by Bessler Hendrie Chartered Accountants please visit the Publications section of their website.
Building for the future
Wellesley is an exciting new neighbourhood in the former 'Home of the British Army'. In the next chapter of this area's rich history, a large proportion of Aldershot's iconic former military barracks will be transformed into a collection of modern homes and appealing public spaces for generations to come.
Wellesley, Aldershot is the perfect spot for people wanting to enjoy the freedom of the countryside together with contemporary living, superb learning and working spaces, excellent transport links, and high-speed fibre-optic broadband services. Access to London in under an hour and the coast in just over an hour leaves Aldershot ideally placed for the perfect work life balance!
Grainger PLC, the UK’s largest listed residential property owner and manager, say they will combine historic buildings with leading-edge design, Wellesley will honour Aldershot’s past, but look ahead to its future. Their vision is to create a new sustainable neighbourhood in Wellesley, which incorporates innovative solutions and sets best practice standards. Comprising 3850 new homes and 2 new primary schools. Phase one is completed and Phase two underway with Bellway Homes offering a variety of designs of 1, 2, 3, 4 and 5-bedroom homes which they say will appeal to a wide audience, including first-time buyers, families, professionals and investors.
Duncan Pate, Director of Castles hopes the largest project to affect Aldershot since the Victorian era will bring a wider benefit to the town. He says “we have seen how developer contributions have assisted with updating the town centre and improving some of the street scene and infrastructure”. He continued “nevertheless, it will take continued effort on the part of Grainger and Rushmoor Borough Council to ensure the growth marries with the original town and existing residential area”.
Duncan commented “In time, the local population is expected to swell by 10,000 which will bring in people and families to take advantage of the facilities in the local area. This expansion is anticipated to run over 10 years. Eventually the facilities should develop to cope but there is concern that some of the current education and welfare facilities will struggle. Ultimately this will be a real boost for the town which should help reinstate Aldershot, as a once significant town, to something resembling its former importance”.
To learn more about the plans and have your say visit wellesleyhampshire.co.uk
Prepare for winter
Cold spells can be troublesome for your home. There are some simple steps you can take to protect your home from winter weather which may help reduce repairs and maintenance.
In very cold weather, water pipes can freeze and this can cause them to burst. The advice below should help avoid frozen pipes:
Protect your water pipes with insulation (lagging), especially those on external walls, in lofts and unheated rooms.
Keep your house warm by using the central heating for short periods of time throughout the day.
Ensure any cold water storage tanks in lofts are well insulated and leave a small area under the tank to allow some warm air to rise.
Keep the cupboard door under the sink open. This will let warm air move around the pipes.
Keep room doors slightly open to allow the warm air to move around the house.
Eliminate draughty doors and windows.
When you go on holiday in the winter, if you are planning to leave your property empty for a period of time, it is a good idea to do the following:
Leave your heating on for at least an hour a day while you are away from home
If severe weather is forecast, you should leave your heating on day and night at a moderate temperature setting
If you're going to be away for a while, consider turning off your inside stop tap and draining the system so there is no water in the pipes to freeze.
If high winds are forecast, make sure objects such as garden furniture or ladders are fully secured.
In severe weather, consider asking a friend or relative to visit your home every day while you are away. This will mean that, if you do suffer a burst pipe, it will be detected as soon as possible. Make sure that they know where the stop tap or stopcock is located.
For further advice and information visit The Met Office
Interest Rate Cut: How Will It Affect You?
With the Bank of England reducing the base rate to just 0.25%, here’s an insight into the likely impact it will have on mortgages, savings, pensions and of course house prices.
If you have a fixed-rate mortgage, then it doesn’t change anything for you unfortunately. However, if any of your borrowing is on a variable rate then its more than likely good news!
Those who will see their monthly repayments fall (probably from the start of this month), are the 1.5 million borrowers with mortgages that track the base rate. For a homeowner on the average variable mortgage rate of 2.86% and a mortgage of £150,000, a reduction in line with the base rate will mean monthly repayments falling by £19.68 to £687.
There are no longer any borrowers with tracker rates below the base rate, but there are some people lucky enough to be paying just 0.09% above the Bank base rate. These are Chesham building society customers who took out lifetime tracker mortgages several years ago – their pay rate will fall to just 0.34%!
But, don’t expect your overdraft or credit card to get cheaper because of the base rate cut – the interest rates on these types of borrowing are detached from the Bank base rate and have been rising in recent months.
Although these cuts bring great news to many with a mortgage, it’s not so great news for those that are saving as they are likely to see returns fall further as a result.
Savers have been suffering since the last interest rate cut but according to Moneyfacts, there are 385 savings accounts that could end up offering no interest at all if banks and buildings societies pass on the whole reduction.
Anna Bowes, who runs SavingsChampion.co.uk, says many savings accounts can’t actually accommodate a 0.25% cut because they are already paying rates below that level. She also says since Funding for Lending was introduced in 2012 (under which the government gives the banks cheap loans) consumers have had nearly 4,700 cuts to existing savings accounts. “Savers really have been the sacrificial lambs of this downturn. While borrowers have benefited from historically low rates, savers have never known it so bad. However, they must not lose hope as there are still providers that want savers’ cash and are willing to pay a competitive return for it,” she says.
It’s pension savers that could be the biggest losers from the cuts though with critics calling it a ‘hammer blow’ to workplace schemes and predict that pension payouts could fall to record lows.
Pensions that offer a payout based on salaries often invest heavily in gilts, and the lower return available means they will face a struggle to meet their promises and deficits could grow.
Patrick Bloomfield, a partner at Hymans Robertson, said: “[The BoE’s move] is a huge deal for pension funds. There were some that were already under an unprecedented level of pressure. After today, some schemes are going to reach tipping point.”
As for house prices, the interest cuts could actually be a good thing and push them up as the low cost of lending may encourage more people to take out mortgages. A fall in bond yields has already started to reduce the cost of 10-year fixed-rate mortgages and fixed-rate deals are either at or near an all-time low across all time periods.
How Much are Buyers Willing to Spend on the Perfect Home?
When it comes to buying a home we’d all love to find that hidden gem that’s perfect for our needs and within budget. The reality of buying a home isn’t always that easy and you can guarantee that if you find your dream home, it won’t come cheap. Most buyers have a maximum budget in mind when it comes to searching for a property, but how many people are willing to over-spend for the perfect property and by how much?
A recent study has looked into data from millions of buyers, revealing a surprising amount of people that are prepared to go above and beyond for their dream home. A survey conducted by Ocean Finance found that 78% of the UK - roughly 43 million buyers - would be happy to spend more than they originally intended for the property that ticks all the right boxes.
What’s possibly the most surprising statistic of the entire study is that 62% - 31 million buyers - would be prepared to spend up to 10% over budget, which could add an average £28,000 to the price tag or just over £900 in rent annually.
There are even some buyers willing to go a huge 20% or more over budget, with 2% of people willing to pay approximately £56,000 more than intended on a property or just less than £1,900 in rent annually.
The findings of this research also revealed specific areas where buyers are prepared to overspend, with 77% of London based buyers and 79% of Scottish & Northern Irish buyers appear more likely to dig a little deeper into their pockets for the right home. The research also shows that the same applies to under the age of 35, with 80% of this demographic prepared to borrow that little extra towards a home.
On the other end of the spectrum, we have roughly 1 in 4 people who would not be tempted to go over their original budget, even if the home came extra features on their wish list.
Spokesperson for Ocean Finance, Ian Williams spoke on the recent results stating that “Whether we are renting or buying a property most of us have a budget that we can afford in mind. But three quarters of us are happy to ignore the budget and stretch our finances to get the home that ticks all our boxes,”
Is Build to Rent the Future for Investors
There have been plenty of changes in the property market of late. With changes ranging from changes to stamp duty rules to interest rates being cut, property investors have definitely had plenty to think about.
There has also been a lot of talk over the past 12 months regarding what the best move for investors will be going forward. The emerging Build to Rent market appears to be a potential growth area and has raised some questions. What is Build to Rent? What opportunities does it hold? Will it replace Buy to Let? We look into all of this below.
What is Build to Rent?
With a shortage of housing and home ownership seemingly on the decline, renting appears to be the way forward the upcoming generation - dubbed ‘Generation rent’ - and the government has responded to this shift in the property market.
The Build to Rent scheme was launched alongside many other government initiatives in 2012 to help deal with the increasing demand for housing. Through this scheme the government is providing funding, through loans, for viable development schemes of residential properties used only for rent.
What is the benefit for Landlords?
Although Buy-to-Let previously provided a great way for aspiring landlords a route into the property market, the recent changes in regulations and upcoming changes in tax allowances for landlords has caused enough of a stir that some landlords will be considering their options.
Build-to-Rent offers landlords a different option when it comes to property investment with seemingly less risk. Buy-to-Let, although the traditional option, comes with a variety of risks such as unreliable tenants and the extremely hands on task of managing the property itself.
Build-to-Rent properties are managed through companies instead of individual investors, which removes the hassle of chasing unpaid rent and worrying about void periods. Another bonus for the Build-to-Rent sector is its continuing growth, with over 60,000 purpose built rental units now in development in the UK and forecasts of the sector being worth approximately £50bn by 2020, making up 5% of the private rented sector over the next 4 years.
According to current statistics, roughly a third of the British population currently rents their home (20 million people) and recent surveys have shown that a quarter of these renters don’t intend on ever buying a home. The number of renters in this UK continues to grow, meaning the demand for suitable rental accommodation will do the just the same.
The major benefit of Build-to-Rent and most likely the reason for its sharp rise in popularity, is the way in which the properties are developed. With this accommodation being purpose built for renting, it also means it's built for the renter’s lifestyle in regards to facilities and location.
For investors looking begin or further develop their portfolio, this growing market is without doubt worth your consideration, however, landlords that feel more comfortable with a hands on approach to their investment, entering Build-to-Rent sector may be a tougher decision to make, but still holds opportunity for those willing to give up some of the workload.
How to Keep Your Home Damp Free
Soon the clocks will change, the evenings will get darker and we’re reminded that winter weather is just around the corner. During the next few months, we start to feel the cold more and you might start to notice the damp and condensation issues in your home.
Excessive dampness within your home can cause structural damage and can also cause health issues if not cleared properly. Preventive maintenance is the best line of defence against damp, so it’s important to identify the problem.
The reason for condensation in your home is due to a lack of adequate ventilation. During winter, we spend more time indoors and with our homes are now more energy efficient, so the build-up of moisture levels increase.
Did you know, four people living in a 3-bedroom property would create 112 pints of moisture a week from just breathing, cooking, showering and boiling the kettle?
Steps to help reduce condensation in your home
- When cooking on the hob, cover pans.
- Dry washing outdoors when possible, or in the bathroom with the fan on/window open
- Get rid of portable gas bottles and paraffin heaters. Not only do they produce a lot of moisture, along with a lot of toxic fumes, they’re also a health and safety hazard.
- If you don’t have an extractor fan in your bathroom or kitchen, ensure you wipe down the surfaces when you have been cooking or taking a shower to remove any excess moisture that has settled.
- Ventilate to remove moisture. Improving ventilation in the property is key to allowing the moisture laden air to exit the property quickly.
- For rooms that are used most often, try to keep a small window ajar.
- When using kitchens and bathrooms, ventilate by opening the windows wider.
- Close kitchen and bathroom doors when these rooms are in use, even if these rooms have an extractor fan, moisture can still escape into other rooms.
- Allow space for the air to circulate in and around your furniture. Try to leave a space between the back of wardrobes and the wall, where possible, try to position furniture against internal walls.
- If you replace your windows at any time, ensure they’re double glazed and fitted with trickle ventilators.
- Insulate, draught-proof and heat your home
- Insulate your loft, draught-proof the hatch but do not block the opening.
- When the weather’s colder, keep your heating on all day at a low temperature.
- Consider cavity wall insulation, however it’s important to note that buildings regulations approval is required.
- Help! I’ve already got damp and don’t know how to clean it. Make a solution of chlorine bleach and water – 1 part bleach to 3 parts water. Use a stiff-bristled brush, scrub the blackened area. Rinse thoroughly, dry and ta-dah! GONE!