First-Time Buyers

Probably the most common call I get is from first time buyers. They always are hungry for knowledge and it is one of the most pleasurable aspects of the business to help them onto the property ladder. Obviously my advice is very mortgage focused but this article has a few tips on the house buying process that you might find useful.

House-viewing checklist: questions you should ask

When you’re buying a property for the first time, there are certain questions you need to ask yourself in order to make the right decision. From the sellers to estate agents to solicitors, you’re bound to deal with a wide range of people on your journey to buying your first home. But what should you be asking yourself and these people? 

Here are some questions you should consider asking if you are not planning to buy a new build property:

Have you considered where you want to live?

You might already have an idea of where you want to live but try not to discount certain areas. Areas that are not great now might be on the brink of change. Look for signs like new shops or cafés appearing and other businesses investing in the area. Think about how much space you could get for your money in one area compared to another (if a spare room or a garden is a priority for you).

Consider how near you will be to family, friends and the amenities you need. How far will you have to travel to work? Is there frequent public transport if you need it?

It is a good idea to walk around an area to get a feel for the neighbours and the local community. You will also be able to spot ‘For Sale’ signs and might find a property that you have missed online.

Why are the current owners looking to sell the property?

This information will help when it comes to putting in an offer. It’s good to find out if they are very motivated sellers who may need to move quickly, or if they’ve just put their home on the market to see what kind of interest it gets.

If they’re looking for a quick sale there could be an opportunity to offer a lower price, especially if you’re in a good position with no chain and a Mortgage in Principle already sorted.

How long has the property been on the market?

The time it takes to sell a property varies depending on local market demand, the price and the type of property, so it shouldn’t put you off if it’s been on for a few months.

Normally, if it’s been on for longer than six months there could be an opportunity to negotiate on the asking price, unless it’s already been reduced recently.

Has the property had any major building work done recently?

It’s recommended that you have a full structural survey on a property you’d like to buy, but you can ask some questions before then as well.

You could ask on the viewing if the house has been extended and how long ago that was. It’s also worth asking if there’s any potential to extend the property, but bear in mind this will need to go through planning permission so may not be approved.

What’s the parking situation?

If your property doesn’t come with a garage or parking space, you’ll have to work out where you can park.

Do you need a disabled parking spot on a main road, for instance? Contact the local council to find out how you can get a designated space.

How much will the bills be?

Ask the estate agent if they know how much the Council Tax is for the area, and also have a look at the Energy Performance Certificate (EPC), available on the property listing, to see how energy efficient the house is.

The EPC will tell you the current rating from A – G and the potential rating it could be if the energy efficiency is improved.

Is the property part of a chain?

This may give you a little bargaining power. If a seller has already found their next property, they may be willing to accept a lower offer to ensure that a move happens quickly.

However, if they haven’t, you might become part of a longer chain, so you need to think about how long you’re willing to wait.

Does the local area have any issues to be aware of?

Investigating the location properly is massively important. Do your research. Visit the house and ask neighbours what they think of the area.

Also, if you’re new to the area and will be commuting by train or bus, try and visit the area both during the day and also at night.

What’s included in the sale?

Get as much information as you can here. For example, will any white goods, such as a dishwasher or washing machine, be included in the price?

Having these essentials already in the property will make the move feel a lot smoother as you spend the following days and weeks unpacking. If you already have your own white goods you may even be able to make some money by selling what’s been left behind.

Who are the neighbours?

How much this answer affects your decision will vary from buyer to buyer. Noisy neighbours who party all night long could be a massive turn-off for some people.

But for others, it might not be such a big deal. Alternatively, a community with really friendly neighbours may make up for any negatives a property has.

Ready to get your foot on the property ladder? 

Thinking about buying your first home? Getting onto the property ladder can be a big step. To discuss how we could help you through the mortgage process, speak to The Surrey Mortgage Broker – telephone 01252 759233 – email richard@thesurreymortgagebroker.co.uk

Energy Efficiency

Having recently taken the plunge and had solar panels installed I thought this article on Energy Efficiency would be worth sharing.

Guiding the way many Britons are making home-moving decisions

It’s no secret that energy prices have been on the rise in recent months, and this is something that is now having a big impact on the way people live their lives. One way that people are reacting to increasing energy costs is by making decisions about where they live based on how energy efficient the property is.

In the wake of the current energy crisis and growing general awareness of our individual carbon footprints, new research highlights that around three in four homeowners (73%) [1] say they are worried about the energy performance of their current home, with around a quarter (24%) saying energy efficiency will be ‘crucial’ to their next home move.

Emitting less carbon

The research has revealed the extent to which energy efficiency is now guiding the way many Britons are making home-moving decisions. Buyers of new-build homes are saving more than £400 per household on their energy bills, and emitting almost 600,000 tonnes less carbon than if last year’s new-build homebuyers had chosen an older property.

If you’re in the market for a new home, be sure to consider energy efficiency as a top priority. You may have to spend a bit more money at first, but you’ll save in the long run. And who doesn’t want to save money?

’Eco friendly’ and ‘Having a good Energy Performance Certificate (EPC)’ were rated as the second and third most important factors respectively, behind ‘Private outdoor space’

Generating valuable savings 

Homeowners of new-build houses and flats will save an average of £435 a year, rising to £555. The average new-build home emits 2.38 tonnes less carbon each year, around one-third of the carbon produced by the average older property.

The research shows that despite new-build homes being, on average, 7.4% larger than older properties, new homebuyers are still generating valuable savings every month. And with more lenders beginning to offer green mortgages – such as lower interest rates for buyers of more energy efficient homes – and stricter requirements for landlords renting out domestic properties, home builders are urging lenders to go further and faster to assist homebuyers in making the right environmental choice.

New-build developments 

Factoring in mortgage calculations, the lower bills paid by new-build buyers should enable even further savings to be made by buyers. The research revealed the pivotal relationship that the new homes industry can play in driving the UK’s burgeoning electric vehicle industry, as 71% of people responded that they would be more persuaded to buy an electric car if their house came with an electric vehicle charging station, which are becoming prevalent on new-build developments throughout the country.

The energy efficiency of homes has become increasingly important in recent years, amid the ongoing crisis surrounding rising energy prices and an enhanced focus on environmental issues. Builders of new-build homes are able to adapt to new technologies, materials and regulations to embed energy efficiency at the point of construction, while owners of existing properties will often find themselves facing disruptive, extensive and costly retrofit works to bring their homes to the same standard.

Energy-efficient home

There are a number of reasons why people might want to live in an energy-efficient home. For some, it’s about saving money on their energy bills; for others, it’s about doing their part to reduce their environmental impact. Whatever the reason, it’s clear that more and more people are making energy efficiency a key factor when choosing where to live.

This trend is likely to continue in the years ahead, as energy prices continue to rise and people become increasingly aware of the benefits of living in an energy-efficient home. So if you’re thinking of moving in the near future, be sure to consider how energy efficient your potential new home is – you might be surprised at just how much of a difference it can make.

Want help with making greener choices?

Increasingly more lenders will reward you with a lower mortgage rate on certain deals when you buy an energy-efficient home. To find out how we can help you with greener choices, contact The Surrey Mortgage Broker – telephone 01252 759233 – email richard@thesurreymortgagebroker.co.uk

Source data: [1] https://www.hbf.co.uk/news/location-location-insulation-new-homes-week-research-shows-desire-sustainability

Move On Up

Things have quietened down as 2022 draws on however many people are still wanting to move house. There are many reason why you might want to move, in fact I’ve just got off the phone with a client who is looking to downsize and is putting their house on the market this weekend.

In this week’s blog I outline a few bits and bobs you might want to get ready.

What documents do you need when selling a property?

Selling a home can be a big undertaking and the process is often unfamiliar as, on average, Britons move once every 23 years, which is a statistic that will no doubt be quite surprising to many [1]. 

It is really important you are able to get advice from the right people at the right time. So if you’re planning to sell your property, making sure that you have the correct documentation all in order is crucial to ensuring that the sale of a property goes smoothly, and avoids further problems down the line.

There are a few key documents that you’ll need to have in order to complete the sale. 

Here’s a brief overview of what you’ll need:

Your Energy Performance Certificate (EPC)

An Energy Performance Certificate (EPC) is a document that contains information about the energy efficiency of a property. The certificate is required by law when a property is built, sold or leased, and must be made available to potential buyers or tenants.

The certificate provides an energy efficiency rating on a scale of A to G, with A being the most efficient and G being the least efficient. The rating is based on factors such as the type of heating and insulation in the property, as well as the number of lights and appliances. The certificate also includes recommendations for improving the energy efficiency of the property.

EPCs are valid for ten years and can be renewed if there have been significant improvements made to the energy efficiency of the property.

The TA6 form

One of the first things your solicitor will ask you to do is complete a Property Information Form, also known as a TA6 form, and a TA7 form if you are selling a leasehold property. The TA6 form is produced by the Law Society and covers 14 separate subjects, including questions about boundaries, any disputes with neighbours, what utility companies you use and so on. 

The Land Registry Title documents

Land Registry Title documents are the official records of who owns a property. They show information about the property, such as its address, size and value. They also show any restrictions or conditions on the property, such as whether it can be used for business purposes.

Title documents are an important part of buying or selling a property. They can help to prove ownership of the property and can be used to resolve any disputes that may arise. It is therefore important to make sure that they are accurate and up-to-date. You can also check on the Land Registry website. 

Legal documents related to the tenure of your home

Do you own the freehold of your home or are you selling a leasehold flat? Or perhaps you’re selling a shared ownership property? Where relevant, you’ll need to provide a copy of the lease and any documents setting out your share of the freehold, for example, a Shares Certificate if there has been a company set up to manage the freehold.

TA10 form for fittings and contents

The TA10 form enables you and the buyers to reach an agreement regarding what will be included in the sale of your property. For example, inclusions may cover items such as white goods and window dressings. The document sets out the agreed inclusions room-by-room to ensure that all aspects are covered and no ambiguity remains regarding what you will and won’t be leaving behind for the new owners. Any items in the garden and outdoor areas can also be covered in the TA10 form.

Permissions

Whether you’ve added an extension or made other significant improvements to the building, you’ll need to demonstrate that any alterations have been carried out in compliance with safety regulations. Of course, not all home improvements require legal permissions, but any works that need planning permission building regulation approval must be backed up by documentation. It can unnecessarily hold up the sale of a house if you subsequently have to search or apply for copies of such permissions, so be sure to have them ready in advance.

Proof of identity

Estate agents, legal representatives and mortgage lenders are required by law to check your identity in order to protect against money laundering. You will need to provide them with proof of identity (including photographic ID) and proof of address. To prove your address you can use either a bank statement or utility bill addressed to your name at the property. A driving licence or copy of your passport will be needed for photo identification.

Management Information Pack (MIP)

In almost all leasehold and occasionally certain freehold transactions, there will be a management company involved. This company will manage the freehold and any shared facilities. When selling a property, they are responsible for providing a management pack to your purchaser’s conveyancer in return for a fee payable by the seller.

MIPs are a collection of varying documents that contain vital information that may affect your purchaser’s decision to proceed with their transaction. It is produced and distributed to the purchaser’s conveyancer so that they can make them aware of any important factors such as future maintenance on the building.

Need help to find the right mortgage deal?

Whether you’re buying, moving or improving your home, we’ll help you find the right mortgage that suits you. Contact The Surrey Mortgage Broker – telephone 01252 759233 – email richard@thesurreymortgagebroker.co.uk

Source data: [1] https://www.openaccessgovernment.org/how-often-do-brits-move/60841/

Mortgage Affordability

Bank of England rips up rules despite rate rises

Following its latest review of the mortgage market, the Bank of England (BoE) Financial Policy Committee has confirmed that it will withdraw its affordability test Recommendation. This will come into effect from 1 August 2022.

Introduced in 2014, the test specifies a stress interest rate for lenders when assessing prospective borrowers’ ability to repay a mortgage. The stress test means borrowers have had to prove they could still afford their mortgage repayments if their mortgage rate were to increase to 3% above their lender's standard variable rate.

Mortgage underwriting standards 

The other Recommendation, the loan to income (LTI) ‘flow limit’, which will not be withdrawn, limits the number of mortgages that can be extended to borrowers at LTI ratios at or greater than 4.5.

The Recommendations were introduced to guard against a loosening in mortgage underwriting standards and a material increase in household indebtedness that could in turn amplify an economic downturn and so increase financial stability risks.

Level of resilience 

The BoE is now ending these rules, announcing that an existing limit on mortgages with a high loan-to-income ratio and the Financial Conduct Authority’s other required affordability checks ‘ought to deliver the appropriate level of resilience to the UK financial system, but in a simpler, more predictable and more proportionate way.’

The move is likely to fuel competition among lenders and removing the restriction may soften any price slump for homeowners. The change could also lessen the impact of lenders’ own decisions to approve mortgages more cautiously, giving support to the market as it enters a more challenging phase.

Want to find out how much you could borrow?

Whether you want to buy a first or new home, or remortgage your current property, we’ll help you find the right mortgage for your needs. To find out more, contact The Surrey Mortgage Broker– telephone 01252 759233 – email richard@thesurreymortgagebroker.co.uk

Mortgage Market Review

What happened to Boris’s plan?

Back in June, then Prime Minister, Boris Johnson announced in a speech some great plans to help British people get in the housing ladder. Unfortunately this has been somewhat overshadowed by his subsequent resignation and the new Conservative Party leadership challenge, with Liz Truss being announced as the new leader on 5th September.

I want to have a look at some of the ideas and see if they could be a reality or if it was just political spin:

Homeownership 

In his speech, the Prime Minister said: ‘The global rise in the cost of living is only making life harder for savers. So we want it to be easier to get a mortgage.’ He also confirmed his ambition to ‘unlock the opportunity of homeownership’ for more people through Right to Buy. 

Mr Johnson also announced he was committed to helping those in a position to buy to access the mortgage finance they need, ensuring people are incentivised to save for a deposit no matter their financial situation, and improving the supply of housing across the country.

‘I want us to deliver on the long-standing commitment, made by several governments, to extend the right to buy to housing associations.’ 

‘Over the coming months, we will work with the sector to bring forward a new Right to Buy scheme. It will work for tenants, giving millions more the chance to own their home. It will work for taxpayers, responsibly capped at a level that is fully paid for, affordable within our existing spending plans and with one-for-one replacement of each social housing property sold.

So the right to buy scheme has been around for a long time, originally introduced under Margaret Thatcher’s government. As part of this he said that for each house sold a new one would be built. A very bold claim and in my opinion pretty hard to do given we are years behind in keeping up with demand now. The scheme extension is to open up the option to buy for those renting from housing associations, this is around 2.5 million people. As yet we have seen no plans as to how this will work.

Mortgage market

‘So today I can announce a comprehensive review of the mortgage market. Reporting back this autumn, it will look at how we can give our nation of aspiring homeowners better access to low-deposit mortgages, and what our own mortgage industry can learn from counterparts around the world who have all kinds of alternative ways of offering finance, managing risk and unbolting the door to ownership,’ said the Prime Minister.

The lower deposit mortgages soundbite is interesting as these have been around for a while except that they all went when lockdown came in back in 2020. a handful of lenders have come back into the 95% mortgage market but it is not back where it was.

Housing shortages 

These measures are designed to help more people onto the property ladder and to address the issue of housing shortages in the UK. This comes after the proportion of 25 to 34-year-olds who own their own homes fell from 55% to 34% between 1996 and 2016[1].

The government is confident that these measures will make a significant difference to those looking to get on the property ladder for the first time, and will help to address the issue of housing affordability in the UK.

As ever it is a case of wait and see. Now that we have a new leader and new cabinet in place will they have the same priorities? With the cost of living ever increasing will Liz Truss focus on short term political gains or look long term?

Ready to discuss your mortgage options

Excited about starting the next big chapter in your life? If you are ready to discuss your mortgage options, we’re here to help – to find out more, contact The Surrey Mortgage Broker – telephone 01252 759233 – email richard@thesurreymortgagebroker.co.uk

Source data: [1] https://ifs.org.uk/uploads/publications/bns/BN224.pdf