VALUING PROTECTION

A gesture of protection. Life insurance. Security for you and your family. A responsibility. Social protection

Having the confidence to know that everything you hold dear is protected is a good place to be.

Regard protection insurance as something that safeguards everything that is important in your world: your health, your life, your home and your job. If you have a partner or dependants, these are obviously a chief priority too.

CUT TO THE CHASE

Working out the difference between life insurance, critical illness, income protection and buildings and contents insurance can be tricky, especially when they are wrapped up in the blanket term ‘protection’, but don’t let the jargon put you off.

Understanding what is available and choosing the right amount of cover for you and your family is important. Working with us will help you find protection which is affordable and understand the value of each type of insurance, so you are reassured that you are selecting the correct policies to secure your financial future.

Income protection (with no investment link) has no cash in value at any time and will cease at the end of the term. If you stop paying premiums your cover may end.

HOMEOWNERS PUT OFF MOVING DUE TO STRESS

home comfort white dog

If you find yourself recoiling at the prospect of selling up and finding a new property, you’re not alone. Quite apart from Brexit uncertainty and the housing market slowdown, it seems that many homeowners are putting off moving because it’s simply too stressful. Concerns about moving to a new location, having noisy neighbours and high estate agency fees, among others, explain why 60% of homeowners in a recent study1 are reluctant to start looking.

Some respondents even said that moving home was more stressful than getting divorced (34%), having a baby (31%) or starting a new job (27%). It could be worth the pain, however; 62% of those surveyed said they believed that moving could make them happier. Taking action to minimise your stress, then, rather than avoiding it altogether, could make for a smoother transition and a brighter future.

FEAR OF THE UNKNOWN

Not knowing much about the location you are moving to is likely to increase your anxiety, so the best thing you can do is conduct some research. Find out about the schools, healthcare and amenities available in the area, talk to current residents, and see what noise and traffic levels are like at different points in the day/week. Arming yourself with more knowledge should help to alleviate your fears and improve your outlook.

FRETTING OVER THE FINANCES

For many, the prospect of finding a new mortgage is their biggest worry when considering a move. Seeking our advice as early as possible will give you more time to explore the available options and decide what’s best for you, whether this be transferring your existing mortgage, increasing the size of your loan or finding a new provider.

Remember, change can be positive – so if you’re thinking about moving, now could be the time.

1Yopa, 2019

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.

RESIDENTIAL PROPERTY REVIEW – October 2019

Our monthly residential market review is intended to provide background to recent developments in property markets, as well as to give an indication of how some key issues could impact in the future.

Continuing uncertainty in residential property market

The latest Royal Institution of Chartered Surveyors (RICS) UK Residential Market Survey, has reported a decline in home listings coming onto the housing market, with the net balance for new instructions slipping to its weakest point for more than three years at -37%.

This follows the more stable trend seen over the last three months, as ongoing political and economic uncertainty continues to dissuade vendors. As a result, estate agents’ books remain at near record low levels.

The near-term outlook suggests that sales will remain subdued over the next three months and price expectations will see a modest decline UK-wide over this period. However, sales volumes are expected to stabilise over 12 months and more respondents to the survey expect prices to rise, rather than fall over the coming year.

A mixed picture continues to be seen across the UK, with price gains in Scotland, the North West and Northern Ireland, whereas London and the South East retains negative momentum.

UK’s best new building

In the centenary year of the introduction of mass council housing, the RIBA Stirling prize for the best new building in the UK has been awarded to Goldsmith Street in Norwich. This is the first time in the 23-year history of the prize that the award has been won by social housing.

The project has been built by Norwich City Council and comprises 100 terraced homes which are rented out on secured tenancies at fixed social rents. Goldsmith Street offers highly energy-efficient homes using a passive solar scheme where annual energy costs are expected to be 70% cheaper than that of the average household.

Chair of the 2019 RIBA Stirling Prize judges, Julia Barfield said: “This is proper social housing, over ten years in the making, delivered by an ambitious and thoughtful council. These desirable, spacious, low-energy properties should be the norm for all council housing.

Shock interest rate hike on Treasury loans

Councils have reacted with frustration after an unexpected rise in interest rates from 1.81% to 2.82% on new borrowing from the Treasury’s Public Works Loan Board (PWLB). There are fears the rate hike, announced on 9 October, could delay or put a halt to regeneration plans and housebuilding schemes.

PWLB loans totalled nearly £8bn in 2018-19, which represents a 77% year-on-year rise in new borrowing. Many councils used the low-interest loans to invest in regeneration and housing projects and there are fears that housebuilding schemes will cease to be affordable and may have to be cancelled as a result.

Sharon Taylor, District Councils Network spokesperson and leader of Stevenage Borough Council commented: “It is extremely disappointing that the government is to increase Public Works Loan Board rates, at a time when councils’ finances are already under huge pressures. It’s another big blow for local government finance. The need nationally is for good quality, affordable housing. My view is only councils can deliver that. Why would you want to slow that down in the middle of a housing crisis?

House Price Headline Stats – October 2019
House Price Change by Region – October 2019
Average Monthly Price by Property Type – Ocober 2019
Mortgage Activity – October 2019

ARE YOU A LEASEHOLDER LOOKING TO BUY YOUR FREEHOLD? HELP IS ON THE HORIZON

The Law Commission has proposed a raft of new proposals which could make it easier for leaseholders to buy their freeholds. These will be welcomed by homeowners who have been told they must pay exorbitant amounts of money to buy their freehold.

There are an estimated 4.2m leasehold residential properties (one-third houses and two-third flats) in England, and around half of these are on leases with less than 80 years remaining. Ground rents average £370 per year.

One of the proposals that the Commission has put forward is to introduce a simple formula that would mean that eligible leaseholders would pay just ten times their current ground rent, or 10% of the value of the property, to convert their property from leasehold to freehold. It also recommends replacing the current right to purchase a one-off 50-year lease extension with the right to purchase an unlimited longer lease extension without a ground rent.

It also proposes removing the current requirement that leaseholders must own the lease on their property for a minimum of two years before they can buy their freehold.

The final recommendations will be published next year.

FOUR-FIFTHS OF PROPERTIES ARE NOW SOLD BELOW ASKING PRICE

If you’re thinking of selling your property this autumn, then it’s vital to get your house in tip-top condition and make sure you offer it for sale at the right price.With more properties now coming to the market, buyers have more choice. This means that homeowners need to put in a bit more work to make their property stand out from the crowd.

PRICING IN A SLOWER MARKET

Over-pricing can lead to low levels of interest in your property, whereas offering your home for sale at a realistic figure is likely to entice more potential buyers, and can lead to an increase in the amount offered. If several people are interested, you may find that you get bids over your asking price.

START WITH THE BASICS

Many potential buyers tour the neighbourhood before arranging viewings, so kerb appeal is really important. If your front door is shabby and your front garden needs attention, you could find that your property doesn’t get on a buyer’s viewing list.

Before you get photographs taken for your sales material, it really pays to have a good declutter and a thorough clean. It’s particularly important that bathrooms and kitchens look pristine and tidy. Worktops, baths and taps that have seen better days can be very off-putting to potential buyers as they’ll be calculating how much it will cost to replace them.

Research amongst buyers shows that they prefer light rooms in neutral tones, so if you have small rooms that are painted in dark colours, consider getting them painted before you try and sell.

OUTSIDE SPACES

Growing families are often looking for outside space that children can play in. It’s worth spending time tidying flower beds, cutting lawns and putting children’s toys away so that your garden looks its best when you get your photographs taken.

GETTING THE PAPERWORK TOGETHER

Make sure that you have a file of important documents like window guarantees, certificates for gas and electrical work you’ve had done, any planning permission for extensions you’ve had built, council tax bills and other bills that show what the running costs of your home are. That way, you look organised to a potential buyer, and having this information to hand will enable your solicitor to leap into action if you get an offer.

1NAEA Propertymark, 

RESIDENTIAL PROPERTY REVIEW – Sept 2019

Our monthly residential market review is intended to provide background to recent developments in property markets, as well as to give an indication of how some key issues could impact in the future.

Spending Review disappoints property industry

Early in September, Chancellor Sajid Javid announced extra funding for local authorities, but the property industry has expressed disappointment that the Spending Review did little to benefit housing and planning.

Melanie Leech, Chief Executive of the British Property Federation said: “Additional funding for local authorities is much needed and welcome. However, the Spending Review offers little to support new housing delivery or overstretched planning departments.”

She went on to point out that local authorities, working in partnership with the property industry have a vital role to play in alleviating the housing crisis and rejuvenating the UK’s struggling town centres.

Brian Berry, Chief Executive of the Federation of Master Builders (FMB) welcomed the announcement of the Towns Fund of £241 million, which is to be spent on the regeneration of high streets, town centres and local economies. However, he commented: “This must be part of an overarching strategy for new build homes and social housing, which will be key to securing a prosperous post-Brexit Britain. What’s more, we need a retrofit strategy to ensure that our existing homes are fit for the future, and to alleviate the scourge of fuel poverty.

UK rents reach record high

The latest figures from the Association of Residential Letting Agents (ARLA) show the cost of renting rose for the third month in a row, to reach the highest figure on record. The July figures saw almost two thirds (63%) of agents seeing landlords increasing rents, which is a 15% increase from the previous record high in June.

The figures also show that the number of tenants experiencing rent increases was up 31% compared to July 2018, with tenants in the West Midlands worst affected, where 86% experienced a rent increase.

David Cox, Chief Executive of ARLA said: “Following the Tenant Fees Act coming into force in June, rents have continued to rise, which we believed would happen. The fees agents have been banned from charging are still being paid for by tenants, however it’s now through their rent, rather than upfront costs.

He also commented that a fall in the number of properties available has increased competition and increased levels of legislation have added more pressure on landlords, resulting in more leaving the industry or feeling the need to increase rents.

Price growth strong in Scotland and Wales

The latest UK Housing Market Update from Savills, states an expectation that average house price growth will remain flat throughout 2019, revised down from a predicted growth of 1.5%, made in November 2018, under an assumption of an orderly Brexit.

The update states that uncertainty has increased in the residential market since July and will continue to shape the market until the Brexit impasse is resolved.

Wide regional variations in growth continue to be evident. Interestingly, over the last year, nine of the top ten highest price growth local authorities were in Scotland and Wales, led by West Dunbartonshire (11.6%) and Blaenau Gwent (17.9%). In contrast, London was the weakest region, containing six of the bottom ten local authorities for price growth.

Residential Property Review

August 2019

A new era of renting – Build to Rent

A relatively new category in the rental market, Build to Rent, saw total investment of £2.6bn in 2018, an 11% increase from 2017 and it looks likely that this sector will continue to grow quickly.

Whilst home ownership remains an aspiration for many, figures show the private rented sector remains strong, growing from 3.7 million in 2009 to 5.4 million today, with many home-hunters choosing to rent long-term, often due to affordability and flexibility.

In contrast to many private landlords, Build to Rent providers often manage the whole building and seek to offer high levels of service and property management, as well as aiming to build a community.

The attractions of Build to Rent properties may include flexible tenancies with no fees or deposit, a monthly charge which includes all bills, facilities such as spas and gyms, on-site maintenance and community spaces.

Buyers’ market likely in second half of 2019

Recent research from Rightmove indicates that buyers may be able to obtain good deals in the remainder of 2019, with lower prices combined with high stock levels.

The research also shows that market fundamentals such as low interest rates and record employment levels remain strong. Additionally, mortgage availability remains good, as indicated by figures from UK Finance, showing the number of mortgage approvals from the main high-street lenders in May was up by 9.1% year-on-year.

Miles Shipside, Rightmove’s property expert said: “Those who have postponed their purchase should note that estate agency branches have more sellers on their books than at any time for the last four years, so there should be more choice of properties to buy. It could be a good opportunity to negotiate a relative bargain in the second half of the year, if they can set aside the continuing Brexit distractions.

He added: “With activity and prices often weaker in the second half of the year, it will be those sellers who are bold enough to price aggressively who will attract buyers with the confidence to act rather than hesitate. It would appear to be sellers in the upper end of the market who need to be boldest on pricing, as data shows that the middle and lower sectors are holding up better.

Brexit-related uncertainty remains in residential market

In its August Inflation Report, the Bank of England has reported that the housing market remains weak, but there are some signs of stabilisation.

The latest NMG survey, which is a biannual household survey commissioned by the Bank and covers over 6,000 households, revealed an expectation that house prices will decline a little over the next 12 months. The survey also revealed that around 20% of households who expect to move home in the next two years, reported having delayed their move due to Brexit-related uncertainty.

Nick Leeming, Chairman of Jackson-Stops said “The data makes it clear that continued uncertainty as we creep ever closer to leaving the EU without a deal has caused hesitancy in some areas of the property markets. Yet, once a firm decision has been made on when the UK will leave the EU and people decide to get on with their lives, we should expect to see a modest uplift in property prices in the new year.”

IS A 40-YEAR MORTGAGE A LIFELINE OR A LIFE SENTENCE?

Most people who choose a 40-year mortgage do so because they want a low monthly repayment. If you were to take a typical 25-year mortgage, your repayment would be higher. By stretching out the loan, monthly payments decrease.

WHAT YOU NEED TO CONSIDER

While lower monthly payments may be attractive and can represent your best chance of getting onto the housing ladder, there are downsides you should be aware of. Taking out a 40-year mortgage means you’ll pay more in interest, and you’ll find that you build equity, the amount of the property that you in effect own, more slowly.

Even if you don’t actually keep a 40-year mortgage for 40 years, the loan is designed with a 40-year timeframe in mind, so you could find that the interest rate is higher than it would be for a more traditional mortgage term. The chances are you’ll be making repayments in your retirement years, so that’s something you’ll need to consider. It makes sense to check that you can make overpayments if you can afford them and consider swapping to a shorter-term loan when your circumstances allow.

A mortgage is a loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

Residential Property Market Review

July 2019

Our monthly residential market review is intended to provide background to recent developments in property markets, as well as to give an indication of how some key issues could impact in the future.

Average earnings of £54,000 required to buy a home in the city

Property website, Zoopla has released data to show that first-time buyers now need an average income of £54,000 to purchase a typical property in a UK city. This average income figure has risen by 9% since 2016, largely due to higher property prices.

In the 20 cities that account for more than one-third of the UK’s housing stock, Zoopla found that Liverpool had the lowest gross household income required for first-time buyers, at £26,000. In addition to being named the most affordable city for first-time buyers, Liverpool was also the city with the highest house price growth, at 5% over the 12 months to May.

In contrast, an average household income of £84,000 is needed in London and whilst this may appear unattainably high, it is actually £3,250 less than the amount required in 2016 and the lowest figure for four years.

Outside the capital, Oxford and Cambridge require the highest typical household incomes at £69,000 and £72,000 respectively. However, these were down on £71,000 and £76,000 respectively three years ago.

Edinburgh’s prime property market sees slowing price growth

Recent data from Knight Frank shows that annual price growth in Edinburgh was down from 7.6% at the end of Q1 2019, to 4.3% in June. The data also shows a drop of 10% in price growth from the end of 2018.

Edward Douglas-Home, Partner at Knight Frank commented: “A moderation in property values is a sign that, having appeared relatively unaffected by the political uncertainty which has been impacting other prime regional markets since 2016, both buyers and sellers in the city are becoming more cautious“.

Whilst country house prices across Scotland fell in value by 0.1% in Q2 2019, the demand for family houses outside of the city centre has remained robust, especially in traditionally popular areas such as Morningside, Murrayfield and Newington.

The data also indicates that some vendors are in no rush to sell, with new listings across the whole market in Edinburgh being 15% lower in Q2 2019, compared to the same period in 2018.

Improving sentiment as new instructions hold steady

Supporting the emergence of a more stable trend across the residential market, a recent survey by Royal Institution of Chartered Surveyors (RICS) shows respondents reported (in net balance terms) a very modest rise in buyer demand and new instructions holding steady throughout June.

Last month, new buyer enquiries were up 10%, which is the first time since November 2016 where survey contributors reported an increase in appetite from potential purchasers. A further sign of stable market activity, according to Savills, is a continued rise in the number of mortgage approvals and increase in Loan to Value (LTV) ratios, with the national average LTV for first-time buyers now standing at 78%.

SHORTAGE OF SUITABLE HOMES SCUPPERS DOWNSIZING PLANS

Moving Home

Once their offspring have left home, parents can often find the family house is too big for their needs and expensive to maintain. That’s why, as retirement approaches, many people think about downsizing, and moving to a smaller, easier-to-manage home that’s cheaper to run.

However, it seems that suitable properties might not be that easy to find due to a shortage of retirement homes. The think tank Demos2 has estimated that the UK has a shortfall of around 22,800 new retirement properties, homes that are needed just to meet current demand. With an ageing population, this figure is likely to rise steeply over the coming years.

HOUSING SUPPLY PROBLEMS

If older people can’t find suitable smaller properties to move into, then their larger family homes aren’t freed up to meet the demand from younger families looking for the extra space they need to grow. A shortage of smaller properties, in particular bungalows, means that prices continue to remain high.

MEETING DEMAND

The research shows that around three million people aged over 60 would be interested in purchasing retirement properties. At present, many new housing developments are concentrated on providing 3, 4 and 5-bedroom homes, and in some parts of the country there are double the number of 4-bedroom properties on the market compared to two-bed homes.

Research from around the UK3 shows that in Cambridge and Rugby there were three four-bed homes available for every two-bed property. However, in St Helens, Hull and Sunderland two-bed properties outnumbered four-beds.

LOOK BEFORE YOU LEAP

There’s a lot to think about when you’re considering downsizing. If you’re looking to raise cash by making your move, you need to do your sums carefully to ensure that it would be worthwhile after taking into consideration all the various costs involved.

2Demos, 2017 
3Responsible Life, 2019