Buyer demand for property continues to outstrip available supply

No one can have failed to notice the rise in house prices and the Buyer demand for property, particularly since the lockdown eased. Reports from the Royal Institution of Chartered Surveyors (RICS) tell us that the number of properties being put up for sale is not keeping up with the increased demand.

According to RICS the predominant requirement from prospective buyers is for property with more internal and external space, an understandable reaction to the lockdowns which have seen urban dwellers, especially, suffering from the effects of being cooped up for long periods of time.

The recognition by most of us of how badly we need to have access to space for our own mental health and that of our families has been brought into focus during this pandemic and, for those of us with the means, looking for alternative accommodation promising a better lifestyle has been a major factor in the surge in demand.

The other main reason has been the suspension of stamp duty land tax (SDLT) on property valued at £500,000 or less, which has proved to be a massive incentive by cutting the costs on a £500,000 property by £15,000. If you purchase a residential property in England between 1^st July 2021 and 30^th September 2021, inclusive, you will start to pay Stamp Duty Land Tax on the amount that you pay for the property above £250,000.

On the 1^st October, the SDLT rates revert to their original pre-covid levels.

The demand for properties has also given rise to other issues for estate agents and sellers. While properties are selling almost before the property details are put up on agents’ websites, the numbers of prospective buyers are overwhelming agents’ abilities to cope with organising viewings. It has been reported that some agencies are asking for written proof of a potential buyer’s ability to purchase before they will allow a property to be viewed.

While it is understandable to try and weed out the ‘sightseers’ who only want to look and have no intention of buying, the ways that estate agents can use to do this need to be scrutinised. Unconfirmed reports of one agent charging £5 upfront in cash to view a property looks very suspect. Other accounts of an upfront fee being levied by agents which is non-refundable if the prospective buyer does not show up, illustrate just how overheated the market has become. We would urge caution if any kind of fee is requested by an agent as a condition of seeing a property. In addition, be extremely careful in providing any personal financial details to agents before seeing a property. Without a clear demonstration of how your data is used and securely held, it might be better to look elsewhere.
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Help is at hand for property leasehold owners

Are you aware of the differences between owning the freehold of your home and property leasehold?

Someone who owns a property outright, including the land it is built on, is a freeholder.

With a leasehold, the person owns a lease, which gives them the right to use the property for a set period via an agreement with the person or company which owns the freehold.

While it is common to buy a flat on a leasehold basis, the practice of selling houses in this way has mushroomed in the last few years, as developers and builders realised that, in addition to achieving the sale price on a property, they could charge an annual rental payment (ground rent) with the potential to double the cost of this ground rent every 10 to 15 years. Developers can also sell freeholds to outside investors, who can (and do) ramp up ground rents. Attempting to buy your own freehold from a developer after the sale has gone through on a leasehold basis is allowed, but the developer or investor can demand whatever price they wish.

In addition, the leaseholder buying a new property will normally be offered a lease over a fixed period of between 99 and 125 years. Although there is a right to extend leases, it can be expensive and under current rules leaseholders of houses can extend their lease only once, for 50 years, with a ground rent.

However, help is now at hand. The Competition and Markets Authority has ruled that doubling ground rent every 10 or 15 years is unfair because, apart from the increasing cost for no extra benefit, it makes it more difficult to sell the property.

Campaigners calling for leaseholds to be banned on new builds now have backing from the government with the Housing Minister, Robert Jenrick, saying that unfair practices like those described “have no place in our housing market”.

As the government has announced the biggest changes to property law in 40 years, this means that homeowners caught in this trap will gain greater control of their properties and free themselves from ground rents which have been costing them so much.

When the legislation is passed, leaseholders will be able to extend their leases to 999 years with no ground rent. Whilst the cost of extending a lease, which has been known to go into tens of thousands of pounds, will also come down under the plans. The reforms mean both house and flat leaseholders will now be able to extend their leases to 999 years with a ground rent set at zero.

Even when the legislation is passed, it is important that when it comes to buying a new property, you have a clear understanding of your rights and obligations as a freeholder or leaseholder. Our advice is always to make sure that your solicitor or conveyancer gives you full explanations and takes you through the terms and conditions.
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Have you though of challenging your council tax band (England and Scotland)

Most of us will have received our council tax bills for the year 2021/2022 and seen the almost universal 5% increase and wondered how it could be justified given the difficult year we have all endured.

There is not much we can do to challenge an increase, but we can see if our property was placed in the right tax band and perhaps obtain a lower bill if it was proved.

In 1991, Council Tax was due to be introduced and to make it happen on time (1993), every property had to be valued and assigned to a tax band. The process was rushed in order to make the deadline and therefore there is a possibility that your property and that of your neighbours were not properly assessed at the time. Property in Wales was all reassessed in 2003, so this only applies to property in England and Scotland as Northern Ireland has its own Rates system.

Steps to take.

1. Talk to neighbours in the same postcode with similar properties and see if you are in the same tax bracket.
2. If you bought your house after 1991, you can use its price and date of sale to find the value at that time. It’s also worth doing this with similar neighbouring properties to check there are no anomalies and make use of house price websites to note down the price and date of similar properties to yours in your street.
3. Now check whether your property was placed in the right tax band – see below

Council tax bands at 1991 property values

BAND	ENGLAND 1991 PROPERTY VALUE	SCOTLAND 1991 PROPERTY VALUE
A	All properties under £40,000	All properties under £27,000
B	£40,001 – £52,000	£27,001 – £35,000
C	£52,001 – £68,000	£35,001 – £45,000
D	£68,001 – £88,000	£45,001 – £58,000
E	£88,001 – £120,000	£58,001 – £80,000
F	£120,001 – £160,000	£80,001 – £106,000
G	£160,001 – £320,000	£106,001 – £212,000
H	Over £320,000	Over £212,000

At this point, if the indications are pointing towards a case for appeal, then you can apply for a reassessment. However, be aware that the council review could find that you were actually in too lower a tax band and you and your neighbours would find yourselves paying more.

4.If you are still sure that you are in the wrong band with a prospect of paying less council tax, including backdated payment for the difference between the old and new rates from the time you bought the property, you can formally apply for a reassessment.

Go to this site https://www.gov.uk/council-tax-appeals which will show you the steps needed to start the process.
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How to avoid scams online – staying one step ahead of the fraudsters

All of us are relatively positive that we can avoid scams online or over the telephone and yet, the Office of National Statistics (ONS) latest ‘Crime Survey for England and Wales’ reveals just how effective the scammers are.

There were an estimated 4.4 million fraud offences of all types and yet the figures from the police and other bodies such as the National Fraud Intelligence Bureau (NFIB) showed just 730,765 offences, a rise of about 2,000 from 2019 suggesting that just 16.6% of frauds are being reported, you need to avoid scams online.

Turning to cybercrime, the ONS‘ Telephone operated Crime Survey for England and Wales

(TCSEW) estimated 1.7 million offences to the end of September.

One of the most ‘popular’ scams at the moment preys on the rise in internet ordering linked to home delivery. The Royal Mail scam relies on people expecting a delivery, who receive a text claiming that a parcel is awaiting delivery by Royal Mail. The text claims that a notional sum needs to be paid before delivery can be made. If the link is pressed it goes to a Royal Mail lookalike site, which then asks for personal and payment details. The result – another stolen identity, try to avoid scams online.

It is not just Royal Mail but also any of the well known courier firms which are servicing the growth of online shopping whose sites are being mocked up. The key to a successful scam is how plausible it seems, as in this case.

Police and anti-fraud offices’ advice centres on a few key areas where we as individuals can protect ourselves. 

1. Be more vigilant. Taking more responsibility to ensure that we think carefully before blindly connecting to sites (as above) and responding to texts and emails from individuals or businesses with which we have had no connection.
2. Only download apps from official app stores, such as:
   • Apple iTunes
   • Android Marketplace
   • Google
   • Play Store
   • BlackBerry World
3. Don’t download anything from unofficial or unknown sources, as your computer or phone could be infected by malware or a virus.
4. Keep your computer and phone’s operating systems updated with the latest security patches and upgrades. Your operating system provider normally sends these.
5. Never give your mobile banking security details, including your passcode, to anyone else and don’t store them on your phone.
6. For added security set up a password or PIN to lock your mobile.
7. Just like on your computer, you can get antivirus tools for your mobile; use a reputable brand. Some banks offer free antivirus software for their customers’ phones. Check your bank’s website for more information.
8. Be wary of clicking on links in a text message or email. Don’t respond to unsolicited messages or voicemails on your phone. Your bank will never email or text to ask for your PIN or full password.
9. Protect family members. Every youngster has a smartphone and increasingly elderly relatives are switching to smartphones as the pandemic has forced businesses and services to move to online representation. They need to be made aware of the above.

Lastly, let’s all use our common sense to avoid scams online. If in any doubt as to the authenticity of a website purporting to be from a service provider, particularly ones supposedly from our banks, make a phone call or check the web address you have been asked to connect to and compare it with the one on their main website. 

We will be doing other features on How to avoid scams and combatting fraudulent scams and helping you to stay safe.

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Benefits of the recently extended Stamp Duty holiday

On Wednesday 3rd March the Chancellor announced an extension of the Stamp Duty holiday to the 30th of June.

How will this extension benefit you?

Benefit from substantial savings – In England and Northern Ireland, if you are considering moving home and complete by June 30th, you can benefit from the biggest cuts in property purchase tax on properties up to the price of £500,000. In Scotland, the holiday comes to an end at the end of this month but those in Wales will benefit from the tax cut on properties up to the price of £250,000.

Zoopla data indicates that at least 740,000 buyers will have benefited from the Stamp Duty holiday by the time it ends across the UK.

Getting the purchase completed – For those in Scotland there is little time left to take advantage of the scheme, but for the rest of those moving home, the extension to the tax holiday will allow more time for property purchases to reach completion. Without the extension, thousands of deals may have fallen through because buyers may have been forced to find extra savings to meet an increased tax bill.

Buyers have benefited by making substantial tax savings. The biggest cuts are on offer to those in England and Northern Ireland. Spending £500,000 or more on a new home or buy to let investment, you could save up to the maximum in tax of £15,000.

Whilst the Stamp Duty holiday has resulted in greater demand it has also led to higher house prices. Figures from the Land Registry show an 8.5% year-on-year rise in December, defying predictions earlier, in the year that the pandemic would create a reduction in the cost of a home.

For more information click here
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Mortgage guarantee scheme – 5% deposits for home buyers.

During the Spring Budget, Chancellor Rishi Sunak stated that the Government is introducing a mortgage guarantee scheme to help first time buyers and existing homeowners.

For many, it may not be easy to save for a 15% or 20% deposit for a home and this is where the new scheme will be beneficial to those looking to buy their first or next property.

How does the scheme work?
The new scheme will begin in April and both first time buyers and existing homeowners will be able to purchase homes worth up to £600,000 with a deposit of just 5% – enabling the majority of homebuyers to be eligible for the scheme.

Data from property portal, Rightmove, has revealed that 86% of properties currently listed for sale on their site have an asking price of £600,000 or less.

For the scheme to work, the Government will compensate lenders for some of their losses should a buyer default on their mortgage repayments for any reason. In return for this guarantee, lenders provide mortgages worth up to 95% of a home’s valuation or purchase price, so that borrowers can proceed with a deposit of 5%.

As many 95% of mortgages have been unavailable over the past year, the new scheme could be a real game changer, particularly for first time buyers.

Is the scheme only for first time buyers?
The Government has confirmed that the mortgage scheme will be open to all buyers, providing the home you’re buying is worth less than £600,000. Whether you are a first time buyer or looking for your next property, you can benefit from this new scheme.

How to apply for a 95% mortgage under the scheme.
Some of the nation’s biggest banks have committed to the scheme, including Santander, Lloyds, Barclays and HSBC. The usual mortgage affordability checks will still apply.

First time buyers and existing homeowners will need to prove to their lender that they can comfortably afford the monthly repayments after other essential spending has been covered.

If you or someone you know might be able to benefit from this scheme, fill in the form at the bottom of this article and get in touch. We are here to answer any questions you may have.

How does this scheme differ from Help to Buy? 
Under the current Help to Buy Equity Loan scheme, the Government will lend up to 20% of the cost of a newly built home from an approved developer and then shares in any increase (or decrease) of the property’s value.

To be eligible for the scheme the property must be your only property and your permanent residence. The maximum purchase price under the scheme is £600,000.

You will need a cash deposit of at least 5% and then a mortgage of up to 75% to make up the rest. You will not be charged loan fees on the 20% loan within the first five years of owning your home.

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UK Budget 2021 Government Announcement

As your mortgage adviser, we thought it may be of interest to see the latest announcements made as part of the UK Budget 2021, announced today by Chancellor Rishi Sunak. New Mortgage Guarantee scheme As announced in the UK Budget 2021, a new mortgage guarantee scheme will enable all UK homebuyers to secure a mortgage up to £600,000 with a 5% deposit.  This provides many with the opportunity to buy a home without a large deposit. The 95% mortgages will be available from a wide range of lenders and High Street Banks including Lloyds, NatWest, Santander, Barclays and HSBC. Extension to the cut in Stamp Duty The temporary cut in Stamp Duty Land Tax for the housing market in England and Northern Ireland remains until September 2021 – the current limit of £500k remains in place till the end of June, followed by a reduction in the allowance to £250k for the final three months. Financial Support for the Self-Employed Grants are being made available for the self-employed, to claim up to 80% of three-month trading profits up to a value of £7.5k. A further grant is to follow later this year. Covid-19 Response An extra £1.65 billion is being invested to roll out vaccinations across the UK, alongside studying the effectiveness of a third dose of vaccine to improve response rates against future variants. Extension of the Government Furlough Scheme The Government Furlough scheme is being extended until September 2021. Under the scheme, the government pays furloughed employees 80 per cent of their wages, up to £2,500 a month. Employers must pay 10 per cent of these wages in July and 20 per cent in August and September. Hospitality & Leisure Industry Support £5 billion has been set aside for Restart Grants for businesses in the hospitality, accommodation, leisure, personal care and gym industries in England, and a new UK-wide Recovery Loan Scheme set up to give loans to businesses to help them through the next stage of recovery, upto a value of £10m. The 5% rate of Value Added Tax (VAT) for hospitality, accommodation and attractions is being extended until 30 September 2021. Investment is taking place in sport, with £25m pledged towards growing grassroots sport in the UK, and £2.8m set aside to support the UK & Ireland bid to host the 2030 football World Cup.  Taxation Updates Income tax personal allowances will be maintained from April 2022 to April 2026, however Corporation Tax will increase to 25%, from 2023 onwards. Larger businesses will be taxed higher, with those reporting profits greater than £250k a year facing the largest rises. Fuel duty and alcohol duty will also be frozen again for this year too. Talk to us We hope that you find these announcements of interest, and please do let us know if you have any queries around your existing mortgage or are interested in talking further about new opportunities arising from today’s announcement on the new mortgage guarantee programme. The above details are extracted from the UK Government website and correct as of 3 March 2021. Further detail can be found at https://www.gov.uk/government/news/budget-2021. For your local mortgage broker click here

If you are close to getting the keys to your new home and expect to get moving very soon, here is a short guide on how moving home during a pandemic, safely is important.

Before we start, it’s important to remember the three key rules when Moving home:

Hands – wash your hands with soap, regularly, and for at least 20 seconds.

Face – Be sure to cover your nose and mouth, especially when in an enclosed space with people you don’t usually meet with, and where social distancing is difficult.

Space – keep two metres apart as much as possible.

When to put the plans on pause – if you or anyone in your household is experiencing any flu symptoms or tested positive for coronavirus, you must pause your plans to relocate until you’re better. 

Viewing properties safely 

Consider a virtual viewing, if it’s an option. The good thing about virtual viewings is it will reduce the number of face-to-face viewings agents do and minimises the spread of germs.

Virtual viewings are also a great time-saver, it will give you a better idea of whether a house is worth seeing or not.

If you have seen a property you like and you’re keen to do a viewing in person, you should get in touch with the estate agent to book an appointment. During your visit be sure to wear a face mask, avoid touching surfaces, and wash your hands or use sanitiser before and after.

Remember: There shouldn’t be any more than two households within the property at any one time, and viewings should only be arranged by appointment, so ‘open houses’ shouldn’t be happening right now.

How to keep safe when selling your own home.

It is recommended that you’re not in the property during the viewing. 

When interested buyers have arranged to view your home, be sure to open all the inside doors beforehand, this will prevent them from touching the door handles. You can also have some hand sanitiser available to them in case they forget theirs.

After the buyers leave, we recommend disinfecting all surfaces.

How to stay safe during moving day.

Removal firms can still carry out work, assuming all the usual safety procedures are in place.

When packing, aim to do most of it yourself, if you can. Give your belongings a quick spray or wipe-down with a disinfectant before they are handled by someone else.

If you are using a removal company, do your best to maintain distance from the team and wash your hands regularly.

If you’d like to read more on how to move home safely under the current guidelines, you can find more information here.

If you haven’t sorted your mortgage you can get free advice here

If you’re considering buying or selling your home in 2021, here are a few things to consider.

Expect delays
According to Rightmove, there are currently 613,000 properties trying to reach completion. Their latest data revealed that it’s taking 126 days from the time an offer is accepted until legal completion – just over four months to complete the selling process. If you are buying or selling your home this year, be aware that you may experience delays. 

While it may take a while, the process will depend on a few things. For example, if you’re a cash buyer you may be able to move more quickly, however, if you are in a chain, the local searches may take longer than usual.

Stamp Duty Savings
Rightmove estimates that around a million sales currently going through, will miss out on the stamp duty savings. If you are in the process of selling your home and feel you or your buyer may be purchasing a property in the hope to save on stamp duty, speak to your estate agent as soon as possible and seek advice – you may be able to avoid the purchase falling through by renegotiating the price. 

The temporary stamp duty holiday that started on 8th July 2020 is due to end on 31st March 2021. With this in mind, Rightmove recommend that you should not factor in stamp duty savings from the temporary holiday – this will be more beneficial to first-time buyers who are buying a property for no more than £300,000.

The Current Market
Buyer activity has increased since the first lockdown back in 2020, many have reconsidered their housing priorities as the market has remained open during the current lockdown. Rightmove believes there are signs we are surpassing 2020’s new year surge activity.

Research from the online property portal reveals that the number of prospective buyers contacting agents between 2nd and 12th January 2021 was up by 12% and sales agreed numbers were up by 9% on the comparable period last year.

Visits to the Rightmove website have also continued to increase since the start of January and are up by 33% from the same period in 2020.

Resident property data expert, Tim Bannister, explained that the housing market is experiencing a processing logjam, with some homemovers likely to miss out on their stamp duty savings.

He said, “As we enter the new year and a new lockdown, the housing market remains open but is focused on the imminent end of the stamp duty holiday and on the challenges of the pandemic.”
Matthew Smith, Sales and Lettings Director at Thornley Groves in Manchester, said, “Many people have outgrown their homes and, with more people now working from home and undertaking home schooling, it has really focused their attention on getting their properties ready to sell.”

If you are considering buying or selling your home or you are close to remortgaging your home, get in touch with us and we can discuss your options. 

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Further to the Prime minister’s announcement of a national lockdown in England, you may be wondering if You can still move. People are still able to move home. However, those outside of the household or support bubble should not help with moving to a new house unless absolutely necessary. Estate and letting agents and removal firms can continue to work. Those who are looking to move can go to property viewings. You can still move, but it is important that the national guidance on moving home safely, which includes advice on social distancing, letting fresh air in and wearing a face covering are followed. Further information on the national lockdown can be found here. Nicola Sturgeon also announced a lockdown in Scotland. Advice from https://www.gov.scot/publications/coronavirus-covid-19-stay-at-home-guidance/ states that people are able to leave their home for activities in connection with moving home (including viewing a property), or for activities in connection with the maintenance, purchase, sale, letting, or rental of residential property that the person owns or is otherwise responsible for. For home insurance click here