All posts by Holley Samuel

The Spring Budget – New Mortgage Scheme Open to All Buyers

Chancellor Rishi Sunak has now announced the much-anticipated Spring Budget after a challenging year across the globe. He announced a raft of changes including several that will affect the property market and home buyers at all stages. The first change is a government-backed mortgage scheme and the second is an extension to the stamp duty holiday in England and Northern Ireland, which has since been adopted by the Welsh government.

Stamp duty

The temporary stamp duty holiday has been extended until the end of July with a tapered period running until September. In July last year the threshold at which Scottish house buyers start to pay LBTT was increased from £145,000 to £250,000, affecting around 80% of home buyers whereby they would not pay anything.

The policy announced was in response to the stamp duty holiday in England and Northern Ireland whereby no tax would be paid on properties up to the value of £500,000. It was also adopted by the Welsh government.

However, as of today, buyers in the middle of a property purchase will lose out after the decision not to extend it beyond the end of the March. Finance Secretary, Kate Forbes, has said that the temporary reduction to LBTT will end as planned at the end of this month. We hope that pressure from the property industry will push for a change to this proposal.

Mortgage Guarantee Scheme

The spring budget also included an announcement about a 95% LTV mortgage guarantee scheme to enable those with small deposits to purchase a home. This scheme is open to all buyers regardless of whether they have owned a property before. The scheme is due to launch in April and will enable buyers to purchase a home priced up to £600,000 with a 5% deposit.

Since the pandemic many lenders have withdrawn low deposit mortgages as they waited out the economic effects of the last 12 months. As a result, many first-time buyers who had raised deposits before the pandemic found that they were unable to proceed with their home buying plans – even though there was some relief by way of the stamp duty holiday to boost their deposits. They were still faced with raising deposits of 15-20% in order to secure a mortgage.

The scheme is being backed by many of the high street lenders including Lloyds, Santander, Barclays and HSBC.

Asking prices have been on an upward trajectory since the property market opened at the end of June 2020. The national asking price for a first-time buyer property is currently 3.6% higher than in February 2020 and since the Help to Buy mortgage scheme was introduced in 2013, national asking prices have increased by 36%. Our advice is to move quickly before prices rise again following yesterday’s news.

Get advice

Talk to us if you would like to discuss this scheme and to find out more about the mortgage options open to you.

Mortgage Choice at Highest Level Since March 2020

Those looking to move currently have the highest number of mortgage products to choose from since the first national lockdown last March. At present, there are 3,215 mortgages to choose – the highest number for 11 months. Before the lockdown, there were 5,222 mortgages in the market.

Since October 2020 there has been a 42% increase in the number of mortgage deals available. This is the highest four-monthly rise in choice since 2007, according to Moneyfacts. This is a sign that the mortgage market is now stabilising after a difficult year and good news for borrowers looking to secure a good deal on their new home or for those looking to remortgage.

The impact of the pandemic

When the pandemic hit and we went into lockdown, mortgage choice fell sharply, and this continued on several months. Lenders withdrew many products as they waited to find out what the true financial impact of the pandemic would be. Borrowers with smaller deposits were very hard as lenders withdrew many high LTV products, leaving those with smaller deposits very few options. What’s more, many house builders put their release dates on hold impacting those who had a mortgage offer using Help to Buy. In fact, nine out of 10 mortgages for people with a 10% deposit were withdrawn between March and July.
Fast forward to 11 months later and choice is once again improving, particularly for those with small deposits. Lenders are less risk averse as the property market seems to have fared well with rising house prices and stable interest rates.

Options for first time buyers

First time buyers with a 10% deposit saw the number of mortgage deals available rise to 288,88 in January 2021. Not only was there a rise in product choice but the number of deals available quadrupled from October to February. In addition, there has been a fall in interest rates on mortgages. Competition among lenders appears to be returning, with the average cost of a two-year fixed rate for those with a 10% deposit falling 0.09% over the last month, while the cost of a five-year fixed rate deal fell 0.07%.  For those with a 5% deposit, the choice is still very limited and dependant on your circumstances.

Existing homeowners

For those looking to move home or remortgage, the number of deals available to choose from has significantly increased and there are currently around 500 different mortgages available for those with at least 40% equity in their home. In addition, the cost of a mortgage has fallen.

Interest rates charged on a two-year fixed rate mortgage for these borrowers have fallen 0.05%, while rates on five-year fixed rate deals have fallen 0.07%.

At The Mortgage Hub we have access to the whole of the market and will be able to match the right deal to your circumstances. Contact our team today.

Purchasing a New Home? Get Mortgage Ready!

The recent LBTT threshold change, combined with a re-evaluation of homeowner priorities has led to a surge in demand for property in Scotland. The current levels of market activity looks set to continue for the foreseeable future.

In today’s busy market, it’s important that when buying your first or second home, you are prepared and have everything in order – including your finances. This will help to avoid any unnecessary delays when buying your new home.

Your credit score

Lenders will take a look at your credit score to get a general picture of how you manage your finances. It will tell them how much debt you are in, whether you repay the debt, if you have faced any financial difficulty and how much available credit you are using. Take a look at your credit report to make sure it’s accurate, giving yourself time to sort out any problems, and consider how you can improve your score.

In the six months before applying for a mortgage, try not to apply for too many credit cards or loans. Pay your debts on time and if you can, pay your credit card bill in full rather than just meeting the minimum payment. Missing any scheduled payments will impact your credit score and deem you ineligible for certain mortgage products or rates so make sure you don’t miss any payments such as your mobile phone bill, credit card, loans, car payment and any other dents. Your lender needs to view you as financially responsible.

Another simple way to improve your credit score is to make sure you are listed on the electoral register.

Save your deposit

At present lenders are asking for a minimum deposit of 10% when buying a home (less if you are using a government scheme such as Help to Buy (Scotland). The more you can save, the better, as this means you can secure a more competitive rate which will keep your monthly repayments down. Proof of being able to save money is also a good indiction to lenders that you are good with finance. Although gifted deposits are still acceptable.

Stable income

Lenders will look at your employment status, income and employment history when you apply for a mortgage. If you have a regular income you will eligible for more products. If you are considering a job move or career change, you might want to wait until after you have secured a mortgage and bought a home. It can also be harder to prove stable income if you work for yourself so get everything in order if you are self employed including bank statements and tax returns submitted to HMRC.

Get the right advice

As with all major financial decisions, it is important to talk to the experts to find out what you need to do to prepare for your mortgage application. A mortgage broker will not only help you work out the deposit required and the cost of your mortgage  but also the other costs you will need to consider. These include the property valuation, surveyor fees, legal and estate agents’ fees, removal costs, maintenance charges and regular bills once you have moved. Whilst some of these are one-off costs, others are a long-term commitment. Make sure you are aware of all the costs before you even consider taking out a mortgage so that you can plan ahead. Finally, make sure you use a mortgage broker who can look at the whole of the market to secure the right mortgage for your circumstances and will often have access to deals that aren’t available from high street lenders.

If you are considering a mortgage now or in the future, talk to us at The Mortgage Hub and we can help you to prepare.

The Property Market Remains Open

It was announced earlier in the week that Scotland is entering into a new lockdown to curb the spread of Covid-19. Although many businesses have been instructed to close, one industry remains open – the property market.

The current guidance states that all activities in connection with moving home, including property viewings, are permitted to take place. It also includes maintenance, purchase, sale, letting or residential property. The full guidelines are available here.

Marketing your home

Under the current guidelines you are able to put your home up for sale and seek a property to either purchase or rent. However, if you or any member of your household has either symptoms of COVID-19 or a positive test, you must not leave your home for any reason.

Estate agents can take photographs, measure for floorplans and take video footage of your home for marketing purposes and all conveyancing solicitors and mortgage brokers/lenders are still working as usual in order to enable the sale or purchase of a property.

Buying a home

For those looking to buy a home, it is recommended that you first look at the details online and take advantage of online tours. Only if you are seriously considering making an offer, should you visit the property in person and speculative viewings are strongly deterred.

If you do need to arrange a physical viewing of a home, make sure you wear a mask throughout the viewing, avoid asking any questions in person, avoid touching any surfaces and door handles (all doors should be open) and you should wash your hands before and after entering the property. It’s advisable that you visit the home with no more than one person from your household and avoid taking any children with you. Make sure you make an appointment as ‘open houses’ are not permitted. When in the property with an agent, make sure you retain a two-metre distance at all times.

All lenders are working as per usual so you should still be able to seek and apply for a mortgage. Talk to your broker to find out the timescales and to discuss any likely delays.

Selling a home

If you are selling a property during this time, make sure that you keep all doors and windows open when a viewing is arranged. Make sure you are not at home and reiterate to the agent that prospective buyers should not touch any door handles or surfaces. It is a good idea to leave hand sanitiser at the entrance or ask your agent to provide this to prospective buyers.

Moving home

You can still book a removals firm to help you move home, but to minimise any transmission of Covid it is recommended that you pack your belongings yourselves to avoid your items being handled by anyone else. When the removals team is in your home, keep a safe distance of at least two metres and wash your hands regularly. Try and book as early as possible as they are very busy in many areas and could be short staffed due to the isolation rules. When you unpack make sure everything is wiped down.

Are there delays?

If you’re moving home during lockdown there could be delays in the conveyancing process because some solicitors and agents may be operating at limited capacity or clearing a backlog caused by not only the pandemic but also the festive period. If you are about to enter into a legally binding contract, you should discuss the possible implications if someone has to self-isolate or quarantine.  Ask about the protocols in place to manage these risks. Should anyone in your household experience symptoms just as you’re about to complete, you should postpone things by a few weeks.

Can tradespeople come out to my home to carry out work?

The current rules allow tradespeople to carry out essential work in your home, provided they have no coronavirus symptoms, do not have a positive Covid test result and are following all the necessary safety guidance. However, if you are due to have a tradesman enter your home, ask if they have symptoms and double check that they will be using PPE.

We are on-hand to offer advice on all aspects of obtaining a mortgage or remortgaging your home. Talk to our friendly team today.

 

Understanding Home Insurance

Understanding Home Insurance

Having the right insurance is vital – it can protect your home, your income and your belongings. However, once you’ve gone to the effort of obtaining the right policy for you it’s important to make sure you don’t do anything to invalidate your policy.
 
That’s why you need to talk to an independent advisor who knows the policies inside and out – and who can give you advice on the exclusions so that you know your policy pays out when it should, and that you’re aware of what can cause any issues should you need to make a claim.
 
Here’s an example of what can invalidate a house insurance claim:

Locks

If you tick the wrong box when you declare the type of lock you have in your home, and it’s wrong, your policy may be voided as this can have an effect on the premium you pay. The stronger your lock, the more secure your home is deemed to be. In addition, if you have window locks but don’t use them, your insurer can reject a claim if your home is broken into.

Alarms

 If you state that you have a house alarm fitted at your property and it either doesn’t work properly or isn’t used and your home is broken into, your claim could be denied.

Securing your home 

If your home is broken into and there is no sign of forced entry then your insurer may not pay out, even if there is evidence that you have been burgled. In the small print of your policy there should be some guidance in ‘forced or violent entry’ which can indicate your cover. The same goes for your car should that get broken into too.

Vacant property

If you go on extended holidays – usually classed as such if it’s longer than 60 days – then your home is seen as unoccupied and your policy may be invalid, and a claim could be rejected. This goes for both break-ins and any damage due to flood or fire. Some insurers will even stipulate that it cannot be vacant for more than 30 days so check your policy before you take a long trip.

Advertising that your property is vacant

In today’s world of social media, we often post our holiday photographs whilst we are away. However, if you do this and your home is targeted by burglars whilst you’re away, it could invalidate your cover. Many thieves will scour social media to see who’s away and when and use this to gain entry into your home. This could be deemed as reckless by your insurer. If you do want to post holiday snaps wait until you are home stating that you ‘had’ a great holiday or make all of your posts private with a limited audience to close friends and family.

Specify your valuables 

If you have expensive personal belongings and valuables in your home such as jewellery, watches or expensive electronics, it could exceed your insurer’s ‘single item limit’ and you will need to list them separately. Many insurers impose a £2,000 to £3,000 limit. If you fail to specify items worth more than this amount, you may not be covered for these items.

In summary: 

Install high quality working locks.
Make sure your house alarm works and is used.
Ensure your home is locked when you leave.
Specify valuable items.
Don’t leave your home for extended periods of time without telling your insurer and consider using a house sitter.
Don’t advertise the fact that you are away.
Read your policy carefully and be aware of any exclusions.
 

Can I Still Move During Tier 4 Restrictions?

It was announced that from Friday November 20th 11 local authority areas across central and western Scotland, including Glasgow, will be placed in Tier 4 restrictions until December 11th. This means that more than two million people will return to near-lockdown conditions with non-essential retail, hospitality and entertainment venues closed. People will be encouraged to only work from home, avoid public transport and to only leave home for essential purposes such as work or exercise. It will be against the law to travel to a different council district even if it has is in the same tier unless it is for essential purposes.

Many people who are either in the process of moving home or looking to move are understandably anxious as to whether they will need to put their plans on hold. The good news that all aspects of moving home are permitted with the housing market essentially open with people able to move across all protection tiers. In addition, people can move to and from different areas placed in different tiers.

Although agents and office workers have been asked to work from home where possible, businesses can support people to move home in all areas, following the relevant guidance on social distancing.

Mortgage applications and approvals are still going ahead. Here is some of the relevant guidance you may need to be aware of:

In all instances, you must self-isolate if displaying symptoms, have had a positive test, and have been asked to isolate by the Track and Trace service. This means that no-one must visit your property for the purposes of moving home or preparing your property for sale and you must not leave your home until permitted to do so.

  • Valuations and floorplans can be undertaken at the property but where possible, services should be undertaken remotely.
  • Professional photographs and video footage may be taken of your property and you should vacate the property whilst this is being undertaken.
  • The legal requirement for an Energy Performance Certificate (EPC) when a property is built, sold or rented remains.
  • Home reports must still be obtained prior to any property being marketed for sale.
  • Tradespeople are allowed to enter a property for repairs, renovation or building works.
  • When selling your home viewings must be conducted virtually before a physical viewing can take place. Speculative viewings are not permitted.
  • Agents must not drive buyers to the property and only one household can view the property at one time – with only two adults (plus the agent) attending, and children discouraged from attending. Open viewings are not allowed.
  • Viewings must not be carried out by the occupier and if an agent accompanies a viewing, they must adhere to all social distancing rules, wear a face covering and wash or sanitise their hands upon entering and leaving.
  • The estate agent must assess any risk and ensure that the party viewing a property, nor the occupier are displaying any symptoms and have not had a positive coronavirus test.
  • During the viewing all internal doors must be left open and it is advised to open windows.
  • You are advised to clean all door handles and surfaces between viewings and all viewings must be contactless.
  • The length of the viewing must be kept to a minimum.
  • Offers can be accepted and a property reserved in the usual manner.
  • It is advised that you are flexible with moving dates and that contracts have explicit terms to manage the timing risks in the event of coronavirus. All parties must be able to decide on a new moving date if one of the parties should fall ill with coronavirus.
  • Keys must be cleaned before handover.

We are still fully operational so please don’t hesitate to contact us if you have any questions or queries about obtaining for a mortgage.

How to Buy or Sell Your Home as Quickly as Possible

With restrictions looming along with the deadline for the stamp duty holiday ending in March next year, many people want to get moving as soon as possible. Although much of the selling and buying process is out of your control, there are some things you can do to mitigate delays.

Prepare paperwork

Get your paperwork in order as early as you can – instructing a solicitor at the point of putting your home on the market is key. Complete all property forms and supply everything you will need further down the line including building warrants, building regulation certificates, energy performance certificate, title deeds and any warranties or guarantees. This can save time trying to get hold of the right documentation.

Buying a home

Find a solicitor that has capacity – your mortgage broker will be able to assist you with this. As soon as you have found a property to purchase, ask them to organise any surveys and searches that are required.

Organise your mortgage

Using a mortgage broker can save a huge amount of time as they are aware of which lender offers the best rate and will know not only which mortgage provider offers the best deal but what their timeframe is likely to be. Going to a single mortgage provider can be limiting and cost you money in the long run. By talking to a broker at the start of the process – even before you’ve made an offer – can save up to 2/3 weeks. A mortgage broker can also find out your chances of your application being accepted. Make sure you have all the documentation required, this is something your mortgage broker can advise on. This could include payslips, documentation for self-employed mortgages, bank statements, evidence of any benefits, proof of address and identity, tax returns, company accounts, upcoming tax calculations, details of overtime and bonuses, proof of funds and details of the deposit and where it has come from. The great thing about a mortgage broker is that they can tell you in advance what will be required and help you to prevent any delays.

Something that seems to be potentially causing delays at present is that given the recent pandemic, lenders are asking self-employed applicants for 2019-20 tax calculations so doing your tax return early can be sensible and save up to a month in the mortgage processing time.

Understand your buying chain

The shorter the chain, the lower the risk of delays or even sales falling through. Ask your estate agent to assess how prepared and serious your prospective buyers are and whether they have the relevant documentation and a mortgage in principle. It may be more beneficial to take a lower offer from a buyer that has everything in order than face delays and miss out on any savings.

First time buyers obtaining a mortgage can cause lengthy delays as some lenders have withdrawn low lending of late, so chains are more secure if they first time buyer has a mortgage in principle.

Talk to us at The Mortgage Hub if you are concerned about the time it could take to buy or sell your home and secure a mortgage.

House Prices Rise Steadily

According to the latest House Price Index for August, house prices are steadily rising against the backdrop of the Coronovirus pandemic.

UK average house prices increased by 2.5% during the year to August, up from 2.1% in July. On a monthly basis, this was a rise of 0.7 per cent, and an improvement on the 0.3 per cent monthly increase seen in August 2019.

According to the latest Rightmove House Price Index, the national average of a property coming to market is 1.1% higher than the previous month and 5.5% higher in September than a year ago with prices predicted to rise by 7% by December. It also reported that the average time to sell a property was 31 days in Scotland and 50 days across the UK and the number of active buyers is 66% higher than a year ago.

These figures show that prices are rising steadily due to a return to the market after the housing market ground to a halt in April. Following the reopening late June, the level of activity has been nothing short of exceptional.

ONS said house price growth had generally slowed down since 2016 but noted activity seemed to pick up again this year once the property market reopened in May.

Not only did we see a backlog of people who were in the early stages of a move but following lockdown there has been a re-evaluation of buyers’ priorities as many people are now working home full or part time and require additional inside space. With lockdown restrictions in place, the only part of our homes we can currently socialize in is our gardens and so this has led to a flurry of interest in three and four bedroom homes with gardens and less demand for apartments with no outside space.

There has also been a shortage of suitable housing stock coming on to the market leading to greater demand which drives up prices, combined with the effect of the stamp duty holiday for properties up to the value of £250,000.

It is predicted that September will see an even sharper upswing once the figures are all in and that the impact of the stamp duty will start to be seen.

Mortgage rates are at an all time low which means there are some great mortgage deals available at present – further driving people to consider a house move.

Talk to us at The Mortgage Hub if you would like to find out about available mortgage deals suitable for your circumstances.

COVID-19 Property Market Update 

Many existing and potential homeowners are wondering whether to move now or delay their plans until they have a clearer picture of how long the pandemic will last. 

Since the market reopened here in Scotland in June, people have flocked to estate agents to purchase a new home. Properties are going to closing date, achieving record offers overs and competition is fierce as pent up demand combined with government incentives and a re-evaluation of our priorities has resulted in a mini property boom. 

The recent tax break announcement created a flurry of interest from buyers and gave an immediate boost to the housing market – according to The Telegraph, the lockdown resulted in £27bn of lost sales and buyers and sellers have been making up for this ever since.

The prime rural market has benefitted the most as people search for more space and better value. Buyers appear to be prioritising larger properties with more outside space, and they have re-evaluated the importance of proximity to transport links, local amenities and the ability the work from home. 

According to Zoopla, agreed sales fell by 92% during lockdown. Buyer demand, which is measured by the number of property enquiries, has jumped to 46% above pre-lockdown levels with a significant rate of recovery.

The prime rural market has benefitted the most as people search for more space and better value. In July, asking prices reached a new high of £320,265 – a rise of £7,640 (Rightmove) and Zoopla has forecast price growth of between 2% and 3% by the end of the year. Here in Glasgow house prices were 2.3% higher in August compared to 2% in August 2019.

 What is the outlook?

 With few distressed sellers just now – which is usually what drives house prices down in a crisis – it appears that the property market is holding strong. This is due to job and payment retention schemes and the availability of mortgage holidays. In addition, the eviction ban is protecting tenants who can’t pay their rent. 

At its peak, there were 1.9 million homeowners that took a mortgage repayment break – a sixth of all mortgaged homeowners. However, lenders have reported that only a small number of these requested an extension. If these people were to become forced sellers at the end of their mortgage break, but this would still not top pre pandemic property transactions. In addition, Hansen Lu, of Capital Economics, said that when the mortgage break scheme ends, regulatory changes mean that lenders’ own internal forbearance procedures will be more generous than they were ten years ago, and the impact will be reduced.

What’s more, according to the Bank of England, mortgage approvals reached a 13-year high in August as the rush to buy homes continued. The number of mortgages approved hit their highest level since October 2007 with a total of 84,700 mortgages  approved in August, a 28% increase on the previous month’s total.

It’s a seller’s market, so the advice is to sell now and for buyers, there are still some exceptional mortgage deals available. Even with the strict guidelines surrounding house sales, people are still encouraged to go on house viewings especially as initially it can be done virtually as agents increasingly embrace technology. Although many buyers tried to negotiate discounts when the market reopened, agents instead are seeing competitive bidding. Estate Agency is still subjected to social distancing measures and a change in the way they conduct themselves with restrictions on viewings to one member of a household, a ban on open houses and vendors vacating the property during the measuring, photography and viewings. However, this doesn’t appear to have dampened appetite.

Talk to us at The Mortgage Hub on 01698 200050 if you would like to discuss your mortgage options and for general advice about the property market here in Scotland.

Homes Selling at Fastest Rate in 10 Years

According to Rightmove (4 September) one in seven properties are under offer within a week of going to the market following what can only be described as a buying frenzy.

The number of homes selling within one week has hit a 10-year high and since the threshold change for Stamp Duty (LBTT) was announced across the UK in July, the number of sales agreed is up 125% on the same period last year and 28% up on February 2018, Rightmove’s previous high. The stamp duty holiday has accelerated the moves of second steppers seeking larger family homes with space to enable more home working. In addition, the lockdown has highlighted the importance of outside space.

Whilst Scotland has the UK’s fastest selling market, London is the slowest with only one in nine homes sold within the first week that it went to market.

In the 10 years in which Rightmove has been tracking data, they have discovered that more properties are selling now than at any time. The fastest selling properties are three-bedroom semi-detached houses. In London the share is a fifth of agreed sales but in Scotland it’s a third of all sales.

It is believed that the current property boom is being driven by transactions of larger three and four-bedroom family homes as buyers rush to save on LBTT.

Chancellor Rishi Sunak’s decision to raise the nil-rate band from £125,000 to £500,000 for homes across England and Northern Ireland means that buyers are able to save as much as £15,000 when purchasing their home before the March 31st 2021 deadline. The move was followed by similar measures in Scotland and Wales.

However, at entry level, buyers are finding it increasingly difficult to get onto the property ladder as larger deposits are required compared to pre-lockdown.  Lenders have withdrawn several low deposit mortgage deals due to fears of falling house prices and the limit on surveyors being able to conduct physical property valuations. However, these are slowly being introduced back into the market by lenders. High loan-to-value mortgages are still available but have more restrictions.

The good news is that first time buyers can still take advantage of the First Home Fund and Help to Buy (Scotland) to get onto the property ladder with just a 5% deposit, making buying a first home a reality for many.

If you are considering moving, it’s important to act now as there are currently some delays following lockdown – so even if a sale is agreed quickly the sale could take longer to complete.

If you are seeking a mortgage or would like advice on mortgage availability for first time buyers talk to us at The Mortgage Hub and we will endeavour to help.