How will the Interest Rate cut effect my mortgage?

If I was asked a week ago “Will Coronavirus effect my mortgage?” I would have dismissed it as ridiculous. However this morning the Bank of England have announced a slash of the interest rates by 0.5% to 0.25%. 

These are unusual times as one would not expect the Bank of England to be getting involved in a health crisis. The Chancellor has a lot on his plate when he announces his first budget today. It is widely expected he will announce spending plans as part of Boris Johnson’s election pledges but he also has the backdrop of an economic crisis brought on by the Coronavirus.

Firstly mortgage rates, I expect this cut to be a short term measure and would be surprised if the rate was still 0.25% in the summer. However if the rate remains at this level beyond the summer then there is a reasonable chance we could see headline mortgage rates falling a little. Do bear in mind they are very low already, with five year fixed rates being available from a staggering 1.49% (with the right amount of equity/deposit). 

If you have a tracker mortgage then you can expect your rate to drop from 1st April, do check your T’s and C’s just in case your particular tracker deal has a “floor” beneath which your rate cannot fall.

In the budget later it is expected there will be big spending plans but also there is pressure to reduce the burden on small businesses. I think there might be a reduction in corporation tax and possibly a short term reduction in VAT. The worry for the chancellor must be “how can i cut tax and spend more? Where is the money going to come from ?” I guess he could put an emergency tax on toilet roll and hand gel!

I think for the majority of us the rate cut won’t have a massive effect. If the Coronavirus crisis is short lived then we can all get back to normal and live happily ever after. However if things get worse, as some quarters are predicting, then a reduction in the major household outgoings will be welcomed by the general public and will hopefully mean the UK doesn’t slip into recession.

These are unprecedented times and nobody really knows what will happen. The message I’d like to leave you with is: Wash you hands.

Is now a Good time to put your Surrey home on the Market?

The property section of my local paper – the Farnham Herald – is noticeably thin at the moment. It’s a trend we’re seeing across Surrey and the South East. Estate agents have reported that the number of properties on their books has slipped back to the lows experienced in the middle of 2017; the market is decidedly sluggish.

However, there are buyers still out there with first time buyers entering the market, families wanting more space, and older people thinking of downsizing. With interest rates still historically low it could still be the perfect time to put your Surrey home on the market.

And spring is also around the corner. As the weather gets better, potential buyers start to look for new homes and spring is the season when a large amount of buyers enter the market. If you want to sell and buy your next home in Surrey, now’s a good time to start getting your house in order.

Some of the reasons why now is the perfect time to put your home on the market include:

Improved weather

Potential buyers are much more likely to get out in the world and look at available houses on the market when the weather improves. Looking at properties in terrible weather cannot only be bad for the potential buyers when physically looking at the property, but people are less likely to buy around the winter months especially in the build-up to and aftermath of Christmas and New Year celebrations.

Days get longer

With more daylight comes more opportunity for potential buyers to view your property. In the winter months, it can be difficult for people to view properties in the week after work, whereas more light in the spring opens up the amount of time people are willing to view properties. Not only do homes look more attractive in better light, but people are generally in a better frame of mind for a fresh start.

Gardens better

The front garden is often the first part of the property that buyers see and it is important to make a great first impression. With flowers blooming in the spring months and leaves appearing on trees, the look and feel of the property can be warmer and more buyer-friendly.

Perfect time for a spring clean

With the winter months coming to a close, it’s the perfect time to do a big spring clean and make it look its best. The nicer weather means you can do some DIY in and around the property without having to account for the bad weather. A fresh feeling home is a lot more likely to sell than a home that looks tired and lived in.

Buyers prepare for purchase before the summer holidays

A large number of families will be looking to complete before the summer holidays so they have around six weeks to settle in their new home and children will be acclimatised before the new school year in September.

With the above point being said, putting your property on the market and completing before the summer holidays means that more parents are able to view your property without the added stresses of holidays, childcare and taking small children on viewings.

Buyers feel better

The spring months literally put a spring in buyers’ steps and people tend to buy when they are feeling good. Viewing a property on a dark and gloomy day can have adverse effects on how viewers see your property compared to a sunny day with a lot of light flowing through the house.

Low interest rates

With mortgage interest rates still extremely low, and lenders continuing to offer very attractive fixed rate mortgages, many buyers are looking to secure a good rate before any further interest rate rises. There is a base rate rise predicted for April or May, however this is unlikely to put off genuine homebuyers as the changes are not likely to be dramatic. Naturally, if you’re looking to sell your home and buy a new Surrey property, you will also want to take advantage of low mortgage rates too.

Along with preparing your home for viewings, now’s the time to get a Mortgage Agreement in Principle for your next property. These typically last between 3-6 months so if you secure a favourable fixed rate now, and purchase a property, you’ll be able to avoid the increase rate rise later this spring.

If you are struggling to find a mortgage, give me a call and we can explore your circumstances in more detail. Call 01252 759 233 or email info@thesurreymortgagebroker.co.uk.

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. 

How Surrey University is Driving House Prices in Guildford

Guildford in Surrey is the most expensive university town in the country*. With an average house price of £522,815 according to property site Rightmove; this town (actually a city) has seen prices increase by 26% in the last three years.

Therefore if you’re in the Buy-to-Let market, or perhaps you’re interested in buying somewhere for your child to live in while studying, property in Guildford could be a good investment.

While investing in property in a rising market is a great opportunity if you have the cash, there’s another reason to consider buying in university towns like Guildford. The rental income is not to be sniffed at; the average rental value of a house in Guildford is currently £548 per week, or if you want to rent out a room or two, double rooms in shared houses go for between £450 to £750 per month.

If you’re seriously considering investing in a property for your children to live in with the aim of seeing some capital growth, also consider the rental value of any additional rooms that can be let to other students.

Buy-To-Let Mortgages

Unless you have money in the bank, you’ll probably be looking at taking out a Buy-To-Let mortgage to fund your investment. These are different to ‘normal’ mortgages, as they don’t reflect your salary but instead the potential rental income from the property: although you may find it difficult to get a Buy-To-Let mortgage if you earn less than £25,000.

In most cases you will need a larger deposit than if you were buying your primary residence (usually 25% or more of the property’s value), and interest rates are generally higher too. However, most Buy-To-Let mortgages are interest only, so this could be a good product for you particularly if you plan to sell the property in a relatively short period of time – for example after your child has graduated.

When crunching the numbers and weighing up whether or not becoming a landlord is for you, also consider tax. To start with there is Stamp Duty, which now incurs a surcharge of 3% for people buying a second property. Therefore if you were to buy a property in Guildford paying the current average house price of £522,815, stamp duty will be £31,825. Then you must pay income tax on any rent, and finally when you sell you will have to pay Capital Gains Tax if your profits on the property exceed your personal tax threshold.

If you would like to explore the figures with a specific property value in mind, rental income and Buy-To-Let mortgage, get in touch and we can do the sums.

Without a doubt, the Buy-Let-Market has suffered some blows in recent years, especially with changes to Stamp Duty. However, if university towns like Guildford continue to sustain the growth in property prices that they’ve seen in recent years*, an investment could still be a good opportunity.

When weighing up whether a property is a good investment, particularly for the student market, the following factors will help:

University ranking: The University of Surrey in Guildford ranks 35th in the UK and 247th globally, making it a popular choice for many students. It’s also one of the UK’s leading research universities.

Student population: UofS has over 14,000 students many of whom need accommodation.

Availability of accommodation: UofS has 5,000 rooms in halls of residence, which are rented to first year students. 2nd and 3rd students need to find private accommodation off campus.

Rental values: as mentioned earlier, the average rent of a house in Guildford is currently £548 per week. Naturally student accommodation is typically at the budget end of the market, although not exclusively, local estate agents will be able to give a more accurate rental value for specific properties.

Proximity to university: when searching for property to buy for the student market, identify areas that provide easy access to the campus. The UofS is very centrally located close to Guildford city centre and therefore there are plenty of residential areas surrounding it.

Cost of property: whether a property is a good investment or not will depend on the market value, rental value, the cost of borrowing and ultimately on the market itself. While the housing market has slowed, Guildford remains a very popular town for private buyers and landlords looking for investment opportunities.

If you would like to discuss any of the above in more detail or need help finding a Buy-To-Let mortgage, give me a call and we can explore your circumstances in more detail. Call 01252 759 233 or email info@thesurreymortgagebroker.co.uk

* http://www.telegraph.co.uk/property/house-prices/university-towns-house-prices-have-risen-average-22pc-three/

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. 

Budget 2017 - Good news for the First Time Buyer in Surrey?

Sorry folks that I’m a bit late, unfortunately man-flu set me back a week or so, it’s that time of year!

It is also the time of year that we have a budget, formerly the Autumn statement and this time around it was largely unremarkable except for one headline grabbing titbit.

The abolishment of stamp duty for first time buyerswhere the purchase price is £300,000 or less. When buying above £300,000 to £500,000 the normal rules apply but they still don’t have to pay on the first £300,000. Above £500k all bets are off and you are back to the same rules as the rest of us.

With the average house price in Surrey currently standing at £343,289, stamp duty is now £2,164 for a property at that price for first time buyers, saving around £5,000 on the ‘average’ Surrey home.

Personally I think it is a good idea, anything that helps first time buyers has got to be a good thing. However I have spotted a negative comment, The Guardian’s Andrew Sparrow said:

“True, the Office for Budget Responsibility has exposed his main headline-grabbing measure, the abolition of stamp duty for first-time buyers for homes worth up to £300,000, as a £600m gimmick that will just push up prices. But, even though it would be nice to live in a world where bad policy always amounts to bad politics, sadly we don’t, and it is hard to see Hammond suffering any penalty for his home owner subsidy (apart from when he realises he has not got £600m to spend on something else). The Tory tribe (MPs and newspapers) will never complain about a tax cut, and it is not a measure that will be voted down in the Commons. (For example, we can’t even be sure Labour will vote against it.)”

Reading between the lines the Guardian rarely agree with anything the Tories do, so I’m going to take the comment with a pinch of salt.

Although I take the point that potentially house prices could be pushed up I feel that the amount of first time buyers that this will encourage is likely to have a minimal effect on the market as a whole. What it does do is give a helping hand to those who have made the effort to save up a deposit and it is a saving they can put towards their new home.

Policing this could well be difficult. Presumably the responsibility for checking the land registry records will be down to the conveyancing solicitor? The government notes on the plan do not give any guidance on this.

Another point to note is that for joint purchases, both parties need to be first time buyers.

What should have more of an effect on the housing market is the promise to build 300,000 homes a year with support for the house building industry and investment in infrastructure. Five new “Garden Towns” to be built as part of this initiative. Sounds great, not sure where the money is coming from or where they are going to build stuff but I’m sure the boffins in Whitehall have got a cunning plan! Locally the plan to develop an 1800 home settlement at Dunsfold has been approved so I guess a few of these up and down the country will be part of the plan. I do recall this being in the pipeline for quite a few years though, and as far as I am aware no bricks have been laid yet.

So my conclusion, some headline grabbing policies but only time will tell if they will work and, in the case of the housebuilding, rather a long time.

If you’re a first time buyer looking to buy a property in Surrey or elsewhere and need mortgage advice, please get in touch. Call us on 01252 759233 or email info@thesurreymortgagebroker.co.uk.

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.

The Happiest Place in Surrey - Why Move to Woking?

The ONS (Office of National Statistics) annual happiness and wellbeing survey has found that Woking is the happiest place in Surrey! In fact it is the eighth happiest place in the UK.

On average Woking residents rated their happiness as 8.0 out of 10, an increase from 7.4 in the previous year’s survey. The survey looked at four keys areas: Life Satisfaction, Worthwhile, Happiness and Anxiety. Across the first three categories Woking residents clocked up scores of 8.1, 8.3 and 8.0 respectively; and anxiety levels are down to 2.8 (compared to 3.0 in the previous year).

If you already live in Woking you probably know why, but for all those people who perhaps travel through Woking station as they commute to London, here’s why people in people in Woking are so happy.

7 Reasons To Move To Woking

1. Paul Weller is from Woking

I know, you may not rate this as the number 1 reason to be happy, or to move to Woking, but for some of us it’s a key selling point.

1. Property – your money goes further than in some Surrey towns

There is a wide range of housing in Woking and, relative to other popular Surrey towns, prices are fairly affordable. The average house price according to Rightmove is £498,281, detached properties average around £820,086, semi-detached £444,391, and flats £282,463.

1. Regeneration of town centre

Work started on the £460 million redevelopment of Woking town centre in September 17, which will see new retail space, a Hilton hotel, flats and a medical centre; alongside two new public plazas.

1. Easy commute to London

As someone who is already halfway though their journey into London when the train stops at Woking, I’m envious of the commute! There are direct trains into Waterloo (approximately 25 minutes), trains also stop at Clapham Junction and there are plenty of stopping services for other destinations.

1. Green spaces and countryside

Woking is surrounded by countryside including the Surrey Hills – an area of outstanding natural beauty – but it also has plenty of green spaces within it’s town borders. If you want water as well as green space, the Basingstoke Canal passes through the town, providing somewhere to walk, cycle or boat along.

1. Great pantos and culture

The New Victoria Theatre attracts West End shows and also has a great panto every year. As well as this theatre, Woking boasts other cultural venues including the Phoenix Cultural Centre, The Lightbox and the Rhoda McGaw Theatre.

1. Village life on the doorstep

If you don’t fancy living in Woking itself, there are plenty of villages a short distance away that give you the best of both worlds. Consider Knaphill, Sheerwater, West Byfleet, Pryford, and Mayford; all are large enough for your basic needs (shops, schools, doctor surgeries etc.) and are just a few miles out of Woking town centre.

You may also like to read my post on Where To Buy In Surrey If You Commute To London.

If you want to move to Woking and need a mortgage that makes you happy, give me a call!

Call 01252 759233 or email info@thesurreymortgagebroker.co.uk.

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.