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. 

Are Interest Rates about to Rise?

I read a report on a mortgage broker news site yesterday saying that markets were expecting a Bank of England interest rate rise in April or May this year. This will of course have a knock on effect on the cost of borrowing from banks and building societies.

The rise(s) will likely be by a quarter of one percent each time so individually the changes will not be dramatic. However there are other factors that have given us historically low interest rates over the last few years.

Those with good memories will remember the Bank of England and UK Treasury Funding for Lending scheme launched in 2012 and designed to encourage lenders to lend to more households and businesses. The scheme (in my opinion) was a success and contributed to a prolonged period of extremely competitive lending in the UK.

There was also another scheme launched in August 2016 that flew somewhat under the radar called the Term Funding Scheme (TFS). This was part of a package of measures to help stimulate growth in the aftermath of the decision to leave the EU in 2016. This included the swift reduction of the Bank of England base rate to 0.25%, the measures “designed to provide additional support to growth and to achieve a sustainable return of inflation”. The target inflation rate being 2%. This TFS scheme comes to an end this month so that means banks and building societies will have to revert back to unsubsidised lending. Potentially this could mean an increase in rates.

Should You Secure A Mortgage Product Ahead Of Any Rise?

The article I read concluded that, assuming the above TFS is not extended, that rates will have to rise and that as mortgage brokers we should make hay while the sun shines. Certainly in the last year I have arranged mortgages with interest rates of under 1% over two years, I don’t think we’ll be seeing that again. Currently I think five year fixed rates do look good value for money with plenty of lenders offering sub 2% deals for five years.

If you are looking to arrange a mortgage now I’d weigh up your options and also consider what personal circumstances may change in the future when making your decision.

While, I would be delighted to help you find the best mortgage deal for your circumstances, I’m not going to scare you into acting today. Get in touch and we can discuss your options, stress test some product, and look at whether now is the opportune time for you to secure a mortgage (or remortgage).

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. 

DIY Mortgages - Advice for those who don't want a Mortgage Adviser

This may seem like a strange post for a mortgage broker to be publishing but I’m going to give you a little DIY advice.

Due to the wonders of the world wide web, you no longer have to trawl the high street and talk to each bank and building society you can to find out who has the best mortgage deal.

There are loads of comparison sites you can access now, from the convenience of your sofa, and you’ll largely get to see the same deals that I can on my system (so why would you need me? Answer here).

How To Compare Mortgage Products

When inputting your details I would try and put as much information in as possible so the data returned is more accurate. Often on the comparison sites when the deals are shown there may be “sponsored” deals at the top. This is a bit like a Google search where the sponsored links are at the top of the page, so make sure you check the deals lower down to ensure you are getting the full picture.

Another thing to look out for are the fees. All the lowest interest rate deals on the market have lender arrangement fees; on average £999. Paying a fee isn’t necessarily always appropriate, depends on how much you are borrowing really.

Valuation fees usually are payable when you are purchasing a property, the amount is dependent on the value of the property so watch out for this as well.

Often overlooked are the cost of legal fees. This is mainly when you are seeking a remortgage. Many lenders offer “free legals” which basically means the lender will pick up the cost of a standard remortgage. In my experience the comparison sites are not very clear on this so often the deals that appear to be the cheapest might not include the costs of legal fees. This can be around £500 so it is often more cost effective to have a deal where the lender pays for this.

You need to be financially confident that you understand the jargon and you know your circumstances so you can narrow down the right deal. Ideally if you are confident then you can apply direct via a lender’s website thus bypassing the wait for their adviser to call you.

The lender will perform their own affordability calculation to establish if you can afford the mortgage so you’ll need to disclose all your financial information to them. As a rule you’ll need to give them details of what comes in (income) and what goes out; personal loans, credit cards, school/nursery fees etc. etc..

Make sure you are prepared to send in your paperwork. They may ask you to email or upload your documents to a secure portal. If this is the case it is probably best to have all your documents scanned in ready before you apply. You will need:

• Copy of your Passport or Driving Licence

• Address ID – utility bill or Mortgage Statement or Council Tax bill (not mobile phone bill)

• Latest P60

• Last 3 months payslips

• Last 3 years accounts if self employed and last 3 years SA302 Tax Calculations with corresponding Tax Year Overviews (from HMRC Website)

• Last 3 months personal bank statements

• Evidence of Deposit/Savings

Once the application is underway the lender may come back and ask for more stuff, depending on how the credit score pans out, and some lenders also ask for clarification on items they see on your bank statements.

All in all it is about being confident that you can understand all the terminology and you have the time to complete the application yourself. It is certainly getting easier these days with all the technology.

The final thing to be aware of though is that if you decide to do it all yourself then you will not be deemed as having received advice. This means there is no comeback on the lender, you can’t have been mis-sold if you sold it to yourself.

You should also bear in mind that if your mortgage application is refused it can affect your credit score. This in turn may affect your ability to secure another mortgage product. Therefore it is important to make sure that your figures add up, you have all the documentation needed, and that you’re confident that your application should be straightforward. One of the advantages of using a mortgage broker or adviser, is that they’re expertise increases the chances of being offered a Mortgage Agreement in Principle and that also helps protect your credit score.

However I wouldn’t let these factors put you off, as I said it’s all about your own confidence to carry out the legwork.

If you decide it is not for you, you know where I am!

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.