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Thinking of selling? Improve Your EPC Rating

Energy bills are on the rise, and we are facing unprecedented times with another energy price cap rise due in October. With this in mind, now could be a good time to improve your EPC rating. Buildings with higher EPC ratings are more popular with those buying or renting.

Rising energy costs

In April this year, the energy price cap increased by 54%, meaning a typical household’s energy bills went up by around £700 a year from £1,300 to £2,000. In October that price cap is set to rise again, taking the average household’s energy bills to just under £3,000. After October, Ofgem is set to change the price cap every three months and bills are expected to remain high until October 2023. Ensuring your home is as energy efficient as possible is now more important than ever, whether you’re looking sell, rent or stay put. A few improvements now could save you hundreds of pounds in the long run.

What is an EPC certificate?

The Energy Performance Certificate (or EPC) rating on your home shows how efficiently your property uses energy. When a property is being sold or rented, this certificate is required and must be made available. It’s valid for ten years.

The EPC certificate is graded from A (the highest) through to G (the lowest) and all properties should aim for a C or higher rating. New build homes usually have the highest rating and are around 60% more efficient than older homes. The average EPC rating in the UK is D.

As well as a property costing less money to run, homes with a higher EPC rating command higher asking prices and sell quicker.

From 2026, landlords must make sure the property they are renting out to tenants has an EPC rating no lower than A, B or C.

Understanding and Improving Your EPC Rating 

The EPC rating of a property is assessed and set by a government-approved energy assessor.  They look at the amount of energy a property uses per square metre and its carbon dioxide output. They look at the heating system, lighting, hot water and the current running cost of the home. It also assesses the savings that could be made when energy-saving improvements are implemented.

The following will be assessed:

  • Windows – are they double or triple glazed?
  • How old is the boiler?
  • Is the boiler energy efficient
  • What thermostat is used?
  • Which fuel source is required for fires – coal, wood or gas
  • Is the property insulated sufficiently?
  • Are pipes and the water tank insulated?
  • Does the property have a renewable energy source or air/ground source heat pumps?
  • Are there water saving systems in place?
  • Are the light bulbs energy efficient?

Improve your rating

  • There are several things you can do to improve the EPC rating of your home.
  • Insulate your loft to prevent 25% of heat escaping.
  • Cavity wall insulation to prevent 35% of heat escaping.
  • Replace your boiler with an energy efficient one and consider using a renewable energy system such as a ground or air source heat pump.
  • Install energy efficient lightbulbs
  • Replace windows with double or triple glazing
  • Seal any draughts.
  • Replace original floorboards with a wood, vinyl or carpet with good quality underlay.

Some energy companies and local authorities will provide funding for insulation, glazing or new boilers depending on your income and the age and efficiency of your current heating system. Contact your local authority to see if you are eligible for a grant under the Green Homes Grant Local Authority Delivery Scheme.

Changing your EPC rating

If you believe your rating is incorrect, talk to the assessor – their name will be on the certificate issued. You can ask them to reassess the property based on why you think there are errors and, as a last resort, you can appeal to the assessor’s accreditation scheme – details will be on your EPC certificate.

 

A Lifeline for First-Time Buyers?

The UK Government recently pledged to turn ‘Generation Rent’ into ‘Generation Buy’ with a review of the mortgage market. The aim is to help people to buy their first property against a backdrop of rising house prices and interest rates, a sharp spike in the cost of living and high deposit requirements – all of which are preventing many buyers fulfilling their dream of home ownership.

The current Prime Minister recently made a speech in which he announced that the government is looking at ways to help first-time buyers access low-cost finance including low deposit mortgages.

As part of his speech, Boris Johnson stated “First-time buyers are trying to hit a continually moving target. By the time they’ve put aside money to secure their mortgage, prices have risen and it’s no longer enough.

“And of course, 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. Reporting back this Autumn [the review] will look at how we can give our nation of aspiring homeowners better access to low-deposit mortgages.”

He also mentioned that over 50% of those who are renting a property in the UK can also afford their repayment mortgage, especially given the high cost of renting. However, out of that number only 6% could secure a typical mortgage as a first-time buyer due to lending constraints.

According to the recent House Price Index from Zoopla, monthly rental payments have gone up by 40% compared to a decade ago, whilst at the same time the average monthly mortgage payment has increased by just 11%. In addition, the average asking price of a starter home is currently £223,117 – this is 56% higher than a decade ago.

The review could take some time to complete so this isn’t a short-term lifeline for those looking to buy their first home now, but it does point towards a more positive outlook. If you are currently saving for a deposit and thinking of buying your first home, talk to us about the budget you’ll need and how things may change in the long-term should affordability rules change. Being able to confirm your budget can really help you to focus.

Every lender in the UK has a different way of calculating how much they are willing to lend their customers. This includes things like your expenditure, mortgage term, your debts, income, size of deposit, whether you are buying alone or in a couple and credit rating.

Call our team to get the latest advice on securing a first-time buyer mortgage on 01698 200050.

Is Now Really the Right Time to Buy a House?

The housing market appears to be at its peak. We are seeing record house prices after two years of unprecedented demand and high competition among buyers. Many people are starting to wonder if they should wait until prices fall to purchase a property.

Since December 2021, interest rates have gone up three times now standing at 1% following last week’s rise from 0.75%. There are signs that the property market will start to slow down or even fall, and the latest interest rate rise can already be felt in the mortgage market as mortgage costs have risen.

With inflation eating away at savers nest eggs, a drop in incomes and the rising costs of energy, fuel and food, we are in a cost-of-living crisis.

Does this make now a bad time to buy a home and should you wait for prices to fall?

House price growth, according to Nationwide, stood at 14.3% in February and 12.1% in March. The recent rate rise has caused mortgages to be more expensive and this should slow down house price growth in the coming months. Predictions from Capital Economics show that mortgage rates could rise from 1.8% in March to 3% next year. How much it will fall is difficult to predict – with many market commentators believing it will be a modest fall and simply a price correction.

Although interest and mortgage rates would still be low in historical terms, it will come as a shock to those who are relatively new to the property market and used to very low rates.

Just as there are forecasts that house prices will fall next year many believe that the market will simply slow down progressively over the next few years. The strong employment market and mismatch in supply and demand will continue to underpin property values.

First-time buyers

Any fall in house prices is usually an indicator of a wider economical downturn and first-time buyers are usually the hardest hit in these market conditions. Even if homes are cheaper, mortgage rates and associated costs will be more expensive. According to analysis by Hamptons, the average first-time buyer purchasing a typical home worth £229,000 with a 10% deposit will be paying an extra £612 compared to when the interest rate was 0.75%. So even if property prices drop, monthly repayments will be higher. It’s important to get sound advice from a mortgage broker who can work out the numbers – because waiting to buy could cost more in the long run.

Renters

For those who are renting, continued high levels of demand are pushing rents up even further. Therefore, for anyone who believes they will be better off buying than renting, now should be as good a time as any to make the transition to home ownership. Waiting for a house price crash could end up costing a first-time buyer in the long run if this doesn’t happen. In addition, Capital Economics predicts that inflation will hit 8.7% this year, eating into any deposits buyers have managed to save.

Existing homeowners

For existing homeowners, there appears to be a rush to fix mortgages for 5 or even 10 years. According to Twenty7Tec, last month almost 7,000 people searched for a 10-year fixed rate mortgage – a 72% increase on the same month last year and a 25% increase in those looking for a 5-year fixed rate. The number of people who were looking for 2- and 3-year fixed rate mortgages fell by more than 50%. With borrowers’ outgoings rising every month – and set to increase further when the fuel price cap rises in October – borrowers are seeking stability with their mortgage outgoings.

We strongly advise you to get independent mortgage advice if you’re not sure whether to wait or buy now – we can look at your circumstances and help you work out how much you will be paying now, and how much you could pay if interest rates continue to rise but the housing market simply slows down rather than seeing big house price falls. Contact us today.

The Spring Mortgage Market

The days are longer, and the weather is warmer – but are we in a new phase for the mortgage market? The latest figures from Google Search reveal that there has been a 400% rise in searches over whether mortgage rates will go up, showing that this is a huge concern for many people looking to purchase a property.

Some recent statistics

According to the government house price index, house prices in the UK have increased 10.9% on an annual basis, with the average property in the UK being valued at £276,755. House prices in the UK have risen by 0.5% since January this year.

In February 2022 the estimated number of property transactions of residential properties with a value of £40,000 or above was 112,240, which is a 20.8% decrease compared to the previous year. Between January and February 2022, UK transactions increased by 4.4% on a seasonally adjusted basis.

In addition, Knight Frank has estimated annual growth of 5% in 2022, with just a 1% growth the year after. It said higher mortgage rates, the cost-of-living squeeze, and increased supply will slow house prices.

The mortgage market

We have now had the removal of the last of the Covid-19 restrictions, but we are seeing the rise in cost of living, interest rate rises and rising inflation. These changes are causing concern among borrowers, but it’s worth noting that we are reverting to pre-pandemic rates, and this is very much an expected and much needed correction. However, borrowers are worried about what this all means for the future of the mortgage market.

If there’s anything that previous crises have shown us, it’s that the mortgage market is resilient and able to adapt to change. When the stamp duty holiday ended, many existing and aspiring homeowners believed that the mortgage market would slow down and prices would fall, but demand just kept on rising. We saw an imbalance between supply and demand with not enough properties to satisfy the number of buyers wanting to buy their first home or move up the property ladder. Following the pandemic we saw a huge shift in buyer priorities with a move away from city centres to homes with more space inside and out, and more rooms to allow for home or hyprid working.

The start of this year has continued the trend of high demand and rising prices despite the interest rate rises – with demand 6% up on the same period last year. In addition, the buy-to-let market has remained strong, and we have seen a shift towards product transfer and remortgaging.

But will the high demand continue into this year? One challenge is the rise in our cost-of-living. Economists from Experian have estimated that the NI rise, energy and fuel price rises, interest rate rises, and the removal of the Universal Credit uplift could add as much as £4,500 a year to the expenses of the average UK household. However, the mortgage market has remained resilient because those with mortgages, including fixed-rate options, are more likely to react when they feel the true impact of rising costs. In addition, those with mortgages are possibly impacted proportionally less than those on lower incomes. In addition, estate agents are continuing to report that demand for new homes is still there.

The latest research from Mortgage Strategy shows that borrowers are taking a more proactive approach to their mortgage needs with Google search data revealing a 3,500% increase in those searching for mortgage broker in their area and are also researching the mortgage market in advance of speaking to an advisor.

If you are considering buying a new home or coming to the end of your current fixed rate deal, talk to us at The Mortgage Hub to find out more about your options and to get advice on the property market in your area.

The Mortgage Guarantee Scheme Gains Popularity in Scotland

The latest data released this week shows that a total of 6,535 homes were purchased using the government’s help to buy mortgage guarantee scheme in the six months between April and September last year. First time buyers account for 84% of those taking out this type of mortgage and the total value of mortgages supported by the Mortgage Guarantee Scheme was £1.2bn.

What is the Mortgage Guarantee Scheme?

The Mortgage Guarantee Scheme was introduced in April 2021 and gave borrowers the opportunity to purchase a new home with a deposit of less than 10%. It can be used to buy both new build and existing homes and unlike Help to Buy it can be by both first-time buyers, home movers and those looking to remortgage. It isn’t available on buy-to-let properties, or second homes and it is only available on properties with a value up to £600,00.

Who’s using the scheme?

The number of people using this scheme has increased significantly with data showing when comparing the total mortgage completion in each region, the scheme appears to have supported a larger proportion of mortgages in the South East and Scotland, but is lower in London, Northern Ireland and the North East.
The average value of a property purchased or even remortgaged through the Mortgage Guarantee Scheme was £196,702. The national average house price stood at £269,945. In terms of value bands, 27% of mortgage completions were in the lowest value band, 63% were on prosperities valued less than £200,000 and 24% were on properties valued above 250,000.

As for house types, the figures show that 34% of mortgages using the scheme were terraced, 28% were semi-detached and 22% were for flats or maisonettes. Detached properties accounted for only 8%.

Housing supply on the rise

According to Propertymark, January 2022 saw a sharp increase in the number of properties that were being listed for sale. The number of new instructions per estate agency branch went up from five in December to nine in January. After three months of decline, this is an 80% increase. Registrations from house hunters also went up and the good news for sellers is that, according to Rightmove, 37& of properties sold above asking price in January compared to 25% in the previous month. In comparison, January 2020 saw only 9% of properties sell above asking.

Whether you are a first time buyer, a second stepper or looking to remortgage talk to us at The Mortgage Hub. We can assess whether you are suitable for the government scheme. Even if you are, it might not be the best deal for you so talk to us to get an idea of the most suitable product available.

First Time Buyer Numbers on the Rise

According to the latest research, the number of first time buyers has topped 400,000 for the first time in 19 years.

The research from Yorkshire Building Society shows that first time buyer transactions reached 408,379 last year. This is 35% higher than the number of first time buyers entering the property market in 2020. This represents half of all house purchases with a mortgage, compared to just 37% in 2007.

Comparing it to the last first time buyer peak, this was 19 years ago in 2002 when 531,000 bought their first home. After the financial crash in 2007, between 2008 and 2012, the numbers were around 200,000 each year with the lowest year on record – 2011 – showing just 188,000 people bought their first home.

The key to the rising figures is the availability of mortgages for those with a small deposit along with affordable rates. It is surprising to see these numbers given the uncertainty that has surrounded homeowners and potential buyers since the start of the pandemic.

However, the need for space to work from home, the stamp duty holiday giving the market a much needed boost, low unemployment rates, the introduction of the Mortgage Guarantee Scheme and low borrowing costs have all created the perfect conditions for those looking to get onto the ladder and driven demand. What’s more, during the lockdown people’s spending fell considerably, which meant that potential buyers could save up a larger deposit faster than anticipated and join the race for space.

At present, demand is still exceeding supply which is pushing up prices. However, market commentators believe that this will level off throughout 2022. Yorkshire Building Society believes that it is unlikely that first-time buyer numbers would continue at this level during 2022 and beyond.

Buying your very first property can be daunting prospect and it’s difficult to know where to start. At The Mortgage Hub, we are here to help and guide you through the entire process. We will provide tailored advice based on your current circumstances and future plans, ensuring that you are aware of all potential costs associated with buying and owning a property. We will then source the best mortgage deal to suit your budget, objectives, and repayment preferences.

Talk to our team today for more information on purchasing your first home – we would be delighted to help.  Call today on 01698 200050.

Freelancer Mortgages 

According to a recent report from Foundation Home Loans, nearly 60% of freelancers believe that it is difficult to secure a mortgage when comparing their opportunities to those in employment.

They survey carried out in August of this year revealed that 59% of freelancers believe it takes longer to secure a mortgage because of their employment status and 51% believe that they have a restricted choice of the lenders available to meet their mortgage needs. In addition, 60% of those surveyed believe that many lenders won’t deal with them due to their freelance status. Self-employed borrowers felt that lenders should take full account of all their earnings and the time they have been working for themselves but also taking a flexible approach and consider each case individually.

Only 39% of the self-employed workers surveyed felt that now was a good time to purchase a home – compared to nearly half of employed respondents who felt now was an optimum time to buy. The research revealed that there is a disparity between perception and reality when it comes to mortgage accessibility, as only 14% of freelancers had been denied a mortgage offer due to their employment status.

Covid19

Freelancers were also asked to share their experiences since the pandemic, with nearly three-quarters reporting no negative financial consequences. In fact, employed borrowers were three times more likely to have fallen behind with loan or credit card payments in the past year than self-employed people – and only 13% of freelancers had required a government grant or loan.

According to the research, self-employed workers were more likely to have a low credit score and less than half had checked their credit file. They were also more likely to have a reduction in income over the last year.

There is a disconnect between the perception of what freelancers believe they can borrow and what is available to them with a belief that they have a restricted choice of mortgage products post-pandemic. A blanket approach isn’t fair given the very unique circumstances that freelancers have.

Only a small number of freelancers are currently being declined for mortgages – so it’s important not to discount a mortgage loan if you have a desire to get onto or move up the property ladder.

We can direct you on the products available and give you a better chance of securing mortgage finance so contact us for advice and information.

UK House Prices – Scotland Outperforms UK Average

According to the latest Halifax House Price Index, annual house price inflation went up to 7.4% in September – this is up from 7.2% with the average UK property price now at a record £267,587. Scotland has continued to outperform the rest of the UK.

House prices in the UK rose by 1.7% in September – this is the strongest rise since February 2007 pushing up inflation to 7.4%, reversing the three-month downward trend in annual growth peaking at 9.6% in May of this year. The average price of a house in the UK is now as expensive as it’s ever been at around £267,500.

There are several reasons for this continued upturn in house prices and the sustained buoyant property market – not just the Stamp Duty (LBTT) holiday (which ended three months later in England than in Scotland), but also the change in buyer priorities and a trend for more internal and external space. Over the past year, the price of flats is up by 6.1% compared to houses rising by 8.9% for semi-detached and 8.8% for detached. Looking at this in asking prices – this means flats have gone up on average by £6.640 and houses by £41,000.

With reports of increasing household bills, potentially rising taxes and NI, as well as fuel bills looking set to go up substantially, there could be lower levels of buyer activity in the coming months. However, borrowing costs are still very low and the job market looks strong which may offset this.

The main factor in rising house prices is the limited supply of available properties, especially in terms of the number of houses for sale, and so this could underpin average prices well into 2022.

Scotland

With an annual growth of 11.5% in September, Wales has recorded the strongest house price inflation of any UK region or nation. This is followed by Scotland which also outperforms the UK national average, with growth of 8.3% and an average house price of £188,525.

Looking to buy?

Talk to our team at The Mortgage Hub if you are looking to take advantage of the current low borrowing rates. We can help you to find and secure the right mortgage for your circumstances.

Fastest Moving Housing Market for Five Years

According to the latest figures from Zoopla, the lack of supply and increasing demand for homes has resulted in the fastest-moving property market in five years.

The latest Zoopla House Price Index released on June 30 shows that house prices have risen by more than £10,000 over the last 12 months as buyers have re-evaluated their living situation.

This increase is the biggest jump in value since October 2016 and as a result over 1.8m properties have been pushed into a higher stamp duty bracket. Due to this unprecedented demand, the average time it takes to sell a home has halved to just 22 days compared to 42 days in May 2019.

In Scotland, house prices have risen by 3% in Glasgow and 2.9% in Edinburgh. The average annual house price growth was 4.7% in May, this is over double the rise of 2.2% in May last year. House prices are rising the fastest in affordable markets.

In terms of buyer demand, this is currently 55% higher than pre-pandemic levels in 2019.

Demand for property – especially family homes – has been driven by a combination of factors. First, the pandemic resulted in a once-in-a-generation re-evaluation of buyer priorities with a quest for more internal and external space. Second, the stamp duty holiday gave the property market a huge boost. Third, we have seen greater availability of high LTV mortgages for all buyers with the introduction of the Mortgage Guarantee Scheme.

In addition, first-time buyers have flocked to the housing market and as they are purchasing a home without having one to sell, they are not replenishing stock levels.

The supply of homes for sale is not keeping pace with demand and as a result, buyers are experiencing high levels of competition for available homes.

In order to get ahead of the game, make sure everything is in order, including a mortgage agreement in principle. As a whole of market broker we will guide you through the full buying process to ensure our clients are in a position to start viewing properties to buy.

For those thinking of selling, now is the ideal time to sell – but it’s worth remembering that at present, it could take longer to find a home due to the current shortage of listings. Again, we would recommend taking advice from ourselves on the process of selling and buying so we can guide you on the best way to do this.

Talk to us at The Mortgage Hub if you are considering your next move and would like advice on securing the right mortgage for your circumstances.

The Rising Availability of 95% Mortgages

According to the latest figures from Moneyfacts, the 95% mortgage market tripled in the last month. At the start of May there were 112 mortgage deals requiring just a 5% deposit whereas at the start of April there were just 34.

Last month we saw the introduction of the Mortgage Guarantee Scheme – the aim of the scheme was to encourage banks to reintroduce high LTV mortgage products after they were largely withdrawn from the market as a result of the pandemic. The scheme enables buyers to purchase a property up to the value of £600,000 with just a 5% deposit and is available to all buyers not just those purchasing their first home. However, buyers using the scheme do need a very good credit rating and many of the 95% mortgages are not available to new-build buyers.

Although there are currently 112 banks offering 95% mortgages, only 40 are using the Mortgage Guarantee Scheme indicating that confidence in returning to low deposit lending has vastly increased and that the scheme was seen as a sign of confidence in the property market, while some lenders decided to launch low LTV products independently from the scheme. In addition to the 95% mortgages, there were also 41 new products launched for 90% mortgages bringing the current total to over 480 compared to just 100 this time last year. Comparing the number of available mortgage products, it is currently around three quarters of pre-pandemic levels. For those with a 20% deposit, there has been an 18% increase in products available compared to the same time last year.

Across all types of mortgages, interest rates are still historically low and borrowers with big deposits can fix for five years at 1.27%. The Bank of England has shown that net mortgage borrowing in March reached the highest level ever recorded. Moneyfacts has reported that the number of residential mortgages increased for the seventh consecutive month in May, while the average two-year fixed rate dropped very slightly to 2.57 per cent while the average five-year fixed rate increased very slightly to 2.79 per cent.

Finally, more good news – deals are on the market for longer with the average shelf-life of a mortgage deal increasing by three days to 32 in April giving buyers longer to secure the right home and mortgage product.

Talk to us at The Mortgage Hub if you would like to find out more about securing a high LTV mortgage. We can scour the whole of the market to find deals that you may not have access to from high street lenders, and can advise you on the best deal for your individual circumstances.